interview by Bill Clifford
photographs by Martin Richardson

His message: the yakuza's jig is not up until the people wake up. While society sleeps, Miyawaki cannot.

What motivated you to pursue a career in crime fighting?

I joined the National Police Agency in 1956 for two main reasons. The Japanese had lost their axis of values after the war, and I worried about what that meant for social stability. Before the war, we shared one value system that was embodied in the Imperial Rescript on Education. When the war ended, I was in junior high school and we students were ordered by MacArthur's headquarters to take our calligraphy brushes and blacken out with ink the basic moral principles written in our textbooks. Suddenly many new values were taking root. The year I entered Tokyo University, in 1950, there was a big protest, a boycott of final exams led by communist students. I thought that peace and order would be threatened and the role of the police would become more important.

So you were concerned for the country's stability. What was the other reason?

Most people respected the Emperor, but many had not yet developed a respect for Crown Prince Akihito. I feared that if Emperor Hirohito passed away while society was in a volatile stage, the minds of the people would become even more confused and the Communist Party would incite chaos. I saw my mission as helping to stabilize the social environment.

When did you first tangle with criminal syndicates?

A year after I joined the NPA, I met Mr. T, a top figure in a Tokyo yakuza gang. His specialty was recovering debts. Some people would hire yakuza for their muscle to pressure delinquent issuers of tegata [promissory notes] to pay up. Other times, gangsters would devise scams for circulating forged tegata or would have gang members pose as victims of tegata fraud to cheat banks. In such commercial scams yakuza found profit working both sides: as trouble makers and as fixers.

Who was Mr. T? A source, a friend? What happened to him?

He became a very famous leader of a rightist group, which is now dissolved.

Can you identify him by name?

After this interview. And off the record. [chuckles]

During your career, you were assigned to special units investigating boryokudan, or yakuza gangs.

In February 1962, when I was in charge of investigating felonies in Oita, there was a big murder case. A policeman vanished one evening and his naked body was found a week later, dumped in a cave. We suspected yakuza committed the crime because a major conflict among gangs was simmering in northern Kyushu. My task was to investigate these groups. So even though my regular assignment was to handle local murder, rape, arson and robbery cases, most of my energy was spent investigating yakuza, developing resources and gathering information about their activities.

What was the most successful crackdown in which you participated?

There were many, many problems; many, many cases. The New York Times back in 1978 carried a couple of articles about a police-civilian crackdown program I set up in Osaka to isolate the gangs through neighborhood protection programs. One community put tens of thousands of yellow stickers that said, "We don't want violence," on every house, including those of gangsters. Instead of raids, the police summoned older gang leaders to sit like dunces on a wooden chair and denounced them hundreds of times. The shame method paid off: several organized gangs and many more loose gangs disbanded. Isolation and strict enforcement aimed at shutting down fund-raising activities are key to an anti-yakuza strategy.

Did you become Japan's leading yakuza expert by solving a famous case?

I don't think I'm a yakuza specialist and I don't want to become one. I do believe, however, that my sense of crisis is the most acute among retired and current police officials. I was perhaps able to absorb more than other people when I came in contact with the yakuza, learning who these criminals are and what they do. And I've got many friends who know about yakuza activities:

magazine writers, for example, attorneys, prosecutors.

This network, and your sense of a yakuza crisis . . . is this something your colleagues didn't develop?

A few colleagues did. But keep in mind that there are several police administrations, and I think the anti-yakuza administration is the weakest of all the police operations.

Why?

There are many reasons, but the main one is the lack of study by career officials. They become high-ranking police bureaucrats on the basis of success in examinations. What they lack is interest, first-hand knowledge and the leadership needed to organize lower-ranking officers to deal with the problems of organized crime.

Is fear a reason? Or corruption?

Basically, it's an administrative failure stemming from the their lack of a comprehensive perspective of the yakuza presence in society, in business and political circles. They have little information and few contacts.

You call the present situation a "yakuza recession." How did they become strong enough to undermine the banking system?

The yakuza have been developing their commercial and financial acumen for years. Even before the war, the bosses had jobs in construction and finance. The rank-and-file gangsters were skillful--and brutal--korikashi [loan sharks]. We heard many tragic stories about people who couldn't pay off their debts being forced to hand over their daughters to prostitution racketeers. But the scale was still small until the economy took off in the sixties. That's when the sokaiya, the corporate extortionists, flourished. Then the revision of commercial law in 1982 made payoffs to the sokaiya illegal. Even so, in the late eighties, there were still about 1200 sokaiya, which included 100 gangsters. And, of course, all were at least indirectly affiliated with gangs.

And from there?

They began to use their muscle in so-called "legitimate" businesses--kigyo shatei and kinyu buroka, or forms of corporate and financial racketeering such as money lending, dumping, art rentals and construction. When the bubble burst, the intermingling began to be exposed: news stories about political kingpin Shin Kanemaru and his scandalous ties to the Inagawa-kai, a major crime syndicate, and about Setsuo Tabuchi of Nomura Securities, who resigned after reportedly lending huge sums to a yakuza boss and helping him in a stock manipulation scheme.

Yet even as these scandals were coming to light and the landmark Anti-gang Law of 1992 was enacted, the yakuza's shadow hardly seemed to recede.

The law has been partially effective. But the NPA has to change its method of counting yakuza. I'm afraid the latest figure--some 79,000 official boryokudan members--is too low. It's probably over 100,000. In Hong Kong, in Manila, in Los Angeles, there are many yakuza who are not counted by Japanese police but are harming the financial system through money-laundering and other activities. And use of the term "boryokudan" has created problems because the law covers only officially designated boryokudan, excluding other organized crime figures. My definition of organized crime is the integral fabric of human links and the money-trail. It includes major borrowers, ex-bank officials and criminal organizations. To grasp this concept is essential. Without it, any countermeasures will be off target.

The official government calculation of bad loans weighing on the books of Japanese banks is about ¥37.4 trillion--some analysts say twice that or more. How much is connected to mobsters?

It is very difficult to explain. Very, very difficult. Take, for example, So-and-so Kosan, a big company in Osaka.

You mean Sueno Kosan, the real estate company that reportedly borrowed heavily from jusen, or housing loan firms, which hold mortgages on some Sueno buildings that gangsters apparently work out of?

There are several kosan, several big borrowers in Osaka. People think that some are yakuza-related companies based on their instincts. If someone has trouble with such a kosan, they might receive threats from gangsters, and they realize they're dealing with a yakuza-related company. But if you ask the Osaka police whether that firm is yakuza-related or not, the police hesitate to say.

Why the hesitation?

They have no evidence.

None?

The police bureaucracy in general has no perspective on the cumulative money dealings of yakuza. The police should study such techniques as the U.S. Federal Bureau of Investigation's economic analysis system so they can investigate the movement of money.

Why isn't there such a system?

The postwar experience has been to become rich in a very short period. Our eyes were fixed on what was ahead, directly in front. We had no side vision, police included.

You were widely quoted in the press when you gave a percentage on how much of the bad debt was linked to the mob.

I cannot estimate, but I can say the more you know about yakuza activities, the more you will be able to count as yakuza-related bad loans.

But what about your figure that about 10 percent of the bad-loan mess was directly tied to yakuza and another 20 percent indirectly?

I gave that quote only one time, even though it was cited a lot. At the Foreign Press Center last year somebody asked me what percentage of Japan's non-performing loans was yakuza related. I said it is impossible to calculate, but some reporter urged me, "Please give any figure, your best guess." So I said at least 10 percent was black at that time and perhaps an additional 20 percent gray. But that's a feeling, not a quantitative measure. If you look at real estate collateral related to yakuza, there are various types of involvement--squatters, rapidly changing tenants, tenants who can't speak Japanese, tenants who unknowingly played into the mob's hands by setting up a legitimate office. It is very difficult to calculate.

If the authorities don't know how much money is at stake, how can they expect to collect it?

The bodies that officials are planning to set up to recover the so-called "collectible" bad loans will not collect much money from crime syndicates anyway. It's too late. The statute of limitations on many cases would apply. And organized crime has an excellent defense.

What do you mean?

They have good crisis management. Their self-protection is almost perfect. Recent newspaper reports that a major borrower from jusen had a yakuza on its board just reflects sloppiness on the part of that particular yakuza. People who read that article may conclude that other corporate borrowers don't have ties to organized crime. But most of them do--I cannot say which ones, but people familiar with these borrowers have an idea.

You say "so-and-so." Do you know the names of the companies and can you reveal them?

As I said, I don't think of myself as a specialist of yakuza, but many think I am a specialist so I have to take responsibility for my remarks. So it is hard to say which is yakuza and which is not.

Can you at least identify the yakuza gang lords, the people who are controlling those companies?

I won't say.

You know, but you can't say?

Mmm . . . . It's the same reason why Osaka police cannot say. I guess many think some of those firms are yakuza-related, but . . . .

What happens if you do say? What happens if you or the Osaka police were to disclose names--is it something other than a question of adequate evidence?

If the police say one firm is yakuza-related and this is reported, then the accused firm goes to court. That, of course, means I have to cut out much time to give evidence. Same for the police. That would be a strategic mistake.

To spend time in court?

To spend time and give certain information in public.

But if the police agencies or the Ministry of Finance don't disclose how much money is involved, won't people fail to sense the crisis linking the boryokudan to the bad debt?

Part of the problem is Japanese journalism. Some journalists have failed their responsibility.

Because of fear or something else?

Some veteran journalists have a habit of always looking around but hesitating to break the story. When the story does come out, they are all ready to jump in, though it could have been reported earlier. In this case, Nikkei broke the financial-shadow-of-the-mob story in early November, and as all the papers followed, their fears became less and less.

What about the Ministry of Finance, which regulates not only the financial markets but also tax policy, customs--all areas that yakuza can penetrate? Why did it take them until late last year to admit that yakuza were embroiled in the bad-loan fiasco?

I think it's safe to say the ministry was not interested in how organized crime was involved. The ministry's banking bureau saw their interest as solving the problem of loans "on the books"--not on the street. Since organized crime did not fall directly under its jurisdiction, some bureaucrats claimed the police should take responsibility.

In order to calm public anger about the jusen plan and what essentially is a partial bailout of gangsters, the authorities must show they are trying to break the ties between the mob and banks. Is there a strategy and will it work?

It will be extremely difficult. Actual collection will be very low, not just for debt on jusen balance sheets, but overall. I'd be concerned if the percentage itself becomes the issue, but it would be a great achievement if even one-third of all bad debts could be recovered. What would be welcome is if, in the process of investigating and collecting, the authorities spotlight organized crime's involvement so that the people realize how gangsters have developed very sophisticated strategies, how they have in many ways escaped the reach of the police. I don't really expect this to happen.

How can the police play an effective role in the housing loan bailout body, the Jusen Resolution Trust Corporation?

Lately, the police focus on "micro" issues, like how many smuggled guns and drugs you can seize at the border rather than grasping how organized crime has become an integral part of the economy; and how to prevent it and reverse it. So even if we imitate the U.S. Resolution Trust Corp.--the bailout body for savings and loan institutions in the 1980s--don't expect much in the way of results.

Some people have mentioned you as a candidate for heading up the JRTC. Do you want the job?

No, because I'm not qualified and would not exert effective leadership. Effective leadership requires thorough knowledge of commercial and financial laws as well as the understanding of how to apply them. But someone from the special investigation division of the Public Prosecutor's Office would be good. I want to remain an outside observer, to continue to speak out on the political system, how the decision-making process works. But I don't want to be labeled an expert. That's why, although I write and make speeches, I haven't appeared on television since I retired from the NPA.

Even if the authorities don't have the power to make yakuza repay, can they seek to terminate yakuza ownership of real-estate companies or other firms by sting operations for tax evasion or other infractions?

As I said, we can't expect to get big results from the jusen. What is important is that police develop a perspective that organized crime is no longer lurking in the shadowy "underworld," but has penetrated the "omote shakai," the surface society. The NPA needs to revise its estimate of how much the yakuza are raking in. The 1989 estimate, ¥1.3 trillion annually, is too low. The agency's first estimate, in 1978, was also around ¥1 trillion yen. But in the 10 years between the two surveys, the national income doubled. Some in the media claim that it should be revised to ¥2 trillion or more.

What else needs to be done?

A system of countermeasures should include investigating tax evasion. It's a very effective tool to punish the whole range of economic mafia, the jiageya and others who disrupted the economy.

Will the biggest banks be actively investigated and punished if they are found to have been cooperating with the mob?

I'm very pessimistic.

And the politicians?

I'm very pessimistic. Part of the problem is the special structure of public works in Japan. Critics said Kansai International Airport could have been made for half the actual budget, which they said was inflated in part because of yakuza's wheel greasing. In this context, I think cleansing the political world of gangster influence is one of the next big challenges in Japan.

What about politicians in the ruling coalition who have admitted receiving political contributions from borrowers which tapped the jusen?

If laws were broken, of course politicians should be investigated. But the cabinet ministers and others coming forward are admitting things which were legal. Political contributions were not against the law. In the bubble era when everyone was flush, money flowed to politicians. Journalists have to put this in the right perspective. Everybody was doing it.

Which does not necessarily make it right. Especially if those lawmakers are about to push through legislation for a bailout partially funded with taxpayer money.

This guy or that who received political funds--which were relatively small in the case of jusen--is not the main story. What is important is that decades were spent catching up with the West, and everything rusted--politics, the economic system, ideas, journalism. We have to rebuild, and the chance to do so is now. Politicians, bureaucrats, journalists and police must perform their responsibilities and establish order. Many scholars believe that organized crime is a pathological problem that thrives in the underworld, where things are damp and dark. But I think the nature of organized crime is to make inroads into the surface world. Our biggest problem is that there is no responsibility or morality in the surface society. The bubble economy was not just an aberration in the financial system but a culmination of forces over a half century. That's what we must keep in mind when we consider the banking crisis and yakuza involvement--it's been building up for years.