This article first appeared in Les Echos.
TOKYO - The building is brown and narrow. The old, worn blinds are closed. This is the Roppongi neighborhood in the heart of Tokyo, just opposite the prestigious Ritz-Carlton. At exactly 10 a.m., three men, all in their forties and wearing stylish grey suits, welcome a passenger in a black sedan. They bow curtly. He is probably a "kobun," one of the godfather's partners. He is escorted under umbrellas inside the six-story building, where Japan's third-largest yakuza organization, the Inagawa-kai, has been established since 1972.
The headquarters address appears on the calling cards of the 3,300 members of the organization, which police officers have been visiting more often. Even American legal authorities have been redirecting their decisions to freeze assets of senior members of the organization toward this building. In 2009, a plan to move the offices to another neighborhood caused outcry from residents of the selected site. The organization gave up.
With the blessing of political and economic elites, the yazuka have been trying with futility to build themselves a new chivalrous image. Instead, they are being hunted down and forced to reinvent themselves to survive.
"The goal is to make them disappear completely," says Lieutenant Tetsuya Yamamoto, deputy director of the National Police Agency (NPA), which is in charge of the fight against the "boryokudan," or "violent groups." The very word "yakuza" refers to a losing hand in a very ancient card game, and authorities no longer use it.
Like other mafia clans across the country, the Inagawa-kai are distant successors of 17th century professional gamblers and merchants. They prospered in broad daylight for decades around Tokyo and Yokohama, regulating black markets.
Never explicitly forbidden, yakuza organizations were able to secure control over prostitution, entertainment, illegal gambling and usury to small companies and private individuals, before becoming involved in economic life. Companies entrusted them with their dirty work, the strong-armed negotiations that the Japanese legal system could no longer resolve. At their peak in the 1960s, there were more than 180,000 members. But as of last year, there were only 53,000, according to the NPA. "The social demand that once existed for the yakuza has gone," explains lawyer Hideaki Kubori.
Extortion and surveillance
But in Kabukicho, a tough Tokyo neighborhood, they still patrol under the flirtatious neon lights and posters of young women in bikinis. Every week, magazines following their activity write about the arrest of yakuzas trying to extort, say, massage parlors that offered more than muscle relaxation or a denuded hostess bar. In these businesses, gangs always demand protection money in exchange for the surveillance of the premises or help in recruiting girls, sometimes from abroad. It is said to amount to the equivalent of 1,100 euros per month, per business.
"Payments, exclusively cash, officially refer to the hiring of green plants, paintings or hot towels," a specialist says. Nearby, they still run underground casinos, known as "killing rooms," designed to rip off rich players. In late 2011, the CEO of Daio Paper, a major family business, was investigated after admitting he tapped more than 120 million euros of the company's money to pay off his debts. He mentioned unlucky bets in Macau, but local tabloids discovered he frequently visited some of Tokyo's rigged betting rooms.
In its latest white paper, the NPA also highlights revenues generated by drug trafficking, but the number of arrests linked to narcotics continues to diminish. Only 12,951 arrests were recorded in 2013. They were essentially related to the import or distribution of amphetamines such as crystal meth. Cocaine and heroin never really made their way into the archipelago.
Apart from this traditional mafia activity, the yakuza are still attempting to extort or control the industries that made their fortune in the 1970s. "For a long time, they were very active in real estate," explains Landry Guesdon, a lawyer from the Iwata Godo firm. A former Morgan Stanley employee remembers the acquisition of a building in the 2000s whose seller coundn't get his tenants to leave. To "convince" them, he called on a yakuza organization that would send muscles around to let their pitbulls run around in the hallways, where recalcitrant grandmothers lived. Beefy and tattooed guys would also calmly do their stretching exercises, shirtless, in the elevators.
"At the time, these pressure methods were commonplace, but things are changing," the businessman says, noting that their presence in investments is running out of steam. Like all businesses, the yakuza became overly indebted in the 1980s acquiring property and golf courses before the bubble burst. They still haven't repaid their debts.
New scams
From these prosperous times, when they controlled hundreds of "legal" real estate or construction industry companies, they have maintained influence in the construction segment and still seem able to summon up a strong workforce in an archipelago that's paralyzed by a collapsing working population. Several criminal organizations are suspected of participating in the Fukushima dismantling site, where radiation requires rapid team renewals. Others have reinvented themselves in hazardous or municipal waste management.
"Major foreign groups in the same sector have even had to abandon their projects on these markets," says Guesdon. But the income made with these activities is poor, and traditional companies are resisting. "In major stock market groups, directors are no longer suspected of collusion with the yakuza," Hideaki Kubori says.
Just a few years ago, they still had to give in to the "sokaiya" blackmail. These yakuza amassed equities from a specific company and threatened the groups to make scenes during general meetings of shareholders or to humiliate the managers. Mitsubishi Motors, Nomura Securities and even the Dai-Ichi Kangyo Bank (now integrated into the Mizuho Financial Group) have all had to give in. "The legal arsenal against organized crime has been reinforced, and this kind of racket has disappeared," the lawyer notes.
A major cleaning
Tokyo no longer has time for the yakuza. Since an anti-gang law was implemented in 1992, their activities have been criminalized and organization godfathers are now held liable for all the comings and goings of their members. In 2011, new rulings targeting companies suspected of knowingly maintaining economic relations with mob members led to a major cleaning. In foreign companies, retired police officers are now often consulted to review clients that are too insistent or potential partners that are deemed suspicious.
The country's banks have reopened their files after being caught in 2013 selling auto insurance policies to gang members, whose incomes weren't investigated. They simply let their clients sign a clause - as do all people who wish to open an account or be party to a commercial agreement in Japan - assuring they weren't linked to the mob. Punished by regulators, financial institutions now claim to be without reproach.
Every month, Atsushi Fukasawa, a member of the Iwata Godo cabinet, goes to bank agencies around the country to officially close the accounts of yakuza who appear in a new, national database. "The police are always in a room next door," the lawyer explains. "I give them a bag with their money inside. And they leave. They never complain, for fear of being arrested," the lawyer explains.
Now outcasts, the yakuza are sinking into secrecy and are trying to refine their strategy. After the 2008 financial crisis, they reportedly recruited qualified traders and analysts to sharpen their knowledge in financial markets and set up new scams. Sometimes, they are still implicated in the bankruptcies of businesses listed in ancillary markets. In secret, they accumulate company equities and try to manipulate market prices by launching rumors or using information gleaned by their networks, confidential information let slip by a manager during pillow talk with a friend whose love isn't free.
