How Burly Men With Missing Digits Influence Japanese Politics : Yakuza: Once brotherhoods of cast-offs guided by grisly rituals, Japan’s gangs are now businessmen looking for market share.

The specter of Susumu Ishii is haunting Japan. Although he died more than a year ago, Ishii’s role as the head of Japan’s second largest organized-crime syndicate continues to bedevil the country. Investigations are exposing an enormous and ever-growing web of scandal and corruption enmeshing Ishii, right-wing fanatics and street thugs and Japanese businessmen and politicians. So far, the scandal has torn apart the most powerful faction in Japanese politics; it has sent Prime Minister Kiichi Miyazawa’s approval ratings plummeting, and it may yet bring down the Japanese government.

But the larger significance of the scandal known as the Sagawa-Kyubin Affair transcends momentary political shifts. It offers an unusually clear X-ray of the inner workings of the Japanese political economy, a system so badly infected by influence-peddling that the role of yakuza --Japan’s crime syndicates--has grown to become part of the sinew that holds Japan’s body politic together. Perhaps only a breakup of the ruling Liberal Democratic Party is likely to bring an end to yakuza influence. That might be healthy, but it could also undermine the stability of the political system.

To begin to understand the problem is to understand the scandal. In 1987, LDP faction leader Noboru Takeshita, in a heated contest to succeed Prime Minister Yasuhiro Nakasone, felt his chances were being hurt by a tiny, radical-right group called the Kominto. From loudspeakers on their agit-prop “sound trucks,” the Kominto tried to embarrass Takeshita by damning him with mocking praise as a politician “good at making money.”

To call off the trucks, Takeshita’s chamberlain, LDP kingpin Shin Kanemaru, asked Hiroyasu Watanabe, the president of the Tokyo branch of Sagawa-Kyuin, a trucking firm with mob ties, to approach Ishii. In exchange for an obscure act of penance by Takeshita, Ishii agreed to help and, the next day, the trucks disappeared. In due course, Takeshita became prime minister.

Ishii, in turn, touched Watanabe for a series of loans and guarantees worth $1.45 billion (U.S.), which Ishii used to buy up a golf course, to invest in the United States and Europe, where yakuza influence is rapidly spreading, and to speculate in the stock market, with the help of brokerage firms Nomura and Nikko, whose executives of also bought $29 million worth of golf-club memberships from Ishii.

Because Ishii died suddenly in September, 1991, many questions remain unanswered. Why were Kanemaru and Takeshita so afraid of a few sound trucks run by a crackpot right-wingers? Why was Ishii inclined to help Takeshita? And most important, how is it that an acknowledged mob boss was able to become such an integral part of the Japanese business and political Establishment? The answers can only be understood in the context of the historical role of the yakuza.

Like mushrooms sprouting after the rain of U.S. bombs, the yakuza emerged after the war in cities like Osaka, Hiroshima, Nagasaki and Tokyo as surrogate families for disaffected and disconnected youths. They reinvented themselves as inheritors of a crazy quilt of Japanese traditions--from highway gambling to the samuri ethic of Bushido . They covered themselves with tatoos of mythical stories and gods, even as they made their money in more earthly fashion--at first by running labor pools and selling black-market goods, then by using their muscle to control the rackets of extortion, gambling and prostitution.

Like the Mafia in America, the yakuza saw themselves as a kind of underground “businessmen.” But far more than the Mafia, the yakuza also imagined a certain nobility in their work, offering a place for the cast-offs and ne’er-do-wells in Japanese society. The yakuza ‘s reverence for the traditional Japanese ethic of reciprocal loyalties between the oyabun (boss/father) and the kobun (follower/child) made something honorable out of something corrupt. The oyabun/kobun relationship is at the heart of the ritual of finger-severing: a gruesome rite of atonement in which the kobun presents his fingertip to the oyabun as an act of repentance. This dual reverence for capitalism and Japanese martial traditions made the yakuza natural allies for Japan’s right-wing and, in the Cold War era, zealously anti-communist Americans.

In the postwar years, the yakuza were unofficially condoned by politically conservative elements within the U.S. Occupation command, even as they were nurtured and protected by politicians who would later form the far-right wing of the Liberal Democratic Party. What united all three groups was virulent opposition to communists and “fellow travelers.” In this anti-left crusade, the yakuza were employed as foot soldiers who did the dirty work of breaking strikes and busting up demonstrations.

In the 1960s and ‘70s, the Japanese government sought to heal the country’s divisions by manufacturing an economic “miracle.” To the miracle-working businessmen, the yakuza were content to play the sorcerer’s apprentice; they moved into corporate extortion.

In a society that prefers to avoid confrontations and an economy that favors managers and lenders over the rights of stockholders, the yakuza played an increasingly organic role. Disputes between companies, for example, were often solved, not by lawyers, but by burly men with missing digits who “pressured” parties to settle their differences.

At the same time, yakuza became expert at “getting out the vote” for right-wing LDP candidates, as well as raising money for their causes. Of course, many politicians had nothing to do with the yakuza , and the economic bureaucracy and Japan’s blue-chip firms were believed to have been largely untainted. Even less pure politicians were often pushed into relationships--like Takeshita may have been--not because they were ideological allies of far-right groups but because they needed the yakuza to get fringe groups off their backs. Thus the yakuza --whose membership had grown to around 150,000 in the ‘70s--acted as a network of barnacles tenaciously clinging to the underside of Japan’s ship of state.

The barnacles surfaced in the 1980s, when the wealth and power of the yakuza expanded as swiftly as Japan’s bubble economy. In the frenzy of real-estate speculation that fueled Japan’s growth, the yakuza made billions of dollars by acting as jiageya , literally “land raisers,” who forced people to move out of their homes on behalf of real-estate tycoons out to reap enormous profits by razing old neighborhoods and crowding the Tokyo skyline with high-rise office buildings. Soon they began to search out more legitimate business investments in which to launder their money. In particular, Ishii’s gang diversified into real-estate management, furniture imports and cosmetics.

Some of the yakuza ‘s new capital inevitably found its way into the campaign chests of politicians. For these gifts, the yakuza sought the same thing as mainstream businessmen--influence.

It’s important to note that the yakuza ‘s role in the web of influence-peddling is surfacing at a time when parts of Japanese society are trying to root out its crime syndicates. Community groups have been banding together to resist yakuza drug-peddling and extortion. And the police, once content to keep the peace by maintaining informal contacts and unofficial reciprocal guidelines with yakuza , have been cracking down on the yakuza ‘s more overt criminal activities. On March 1, a new law was passed permitting police to identify groups as criminal based on the past prison records of its members. This is an important law in a country where the crime gangs operate as openly as corporations--complete with name cards bearing the gang name and rank of the bearer.

But there is also a problem with the new law. While it will chase cheap hoods out of organized crime, it will also drive the remaining gang members underground or deeper into outwardly respectable businesses. A rather amusing indicator of yakuza claims to respectability came from the No. 2 man of Japan’s largest crime syndicate who protested that the new law violates his constitutional rights to freedom of association. A leader from another gang declared that his group is contributing to Japan’s prosperity by helping people, “just like lawyers and other businessmen do.”

When gangsters assume airs of respectability, it is ironic evidence of powerful centrifugal forces in Japan.

According to the conservative estimates of the national Police Agency, Japan’s crime syndicates now earn more than $10 billion a year. This money is changing the yakuza ‘s character from old-world brotherhoods to viciously competitive modern business groups, in which the old signatures--swords, missing fingers and tatoos--are giving way to fax machines, cellular phones and computers. In search of greater “market share,” the rival yakuza syndicates will continue to try to supplement drug sales and prostitution by trafficking in “influence” with the party in power--the LDP--a group of personal fiefdoms the yakuza increasingly resemble.

For the astoundingly docile Japanese public, now increasingly angered by the scandal and a deep recession, Sagawa- Kyubin may be a catalyst for reform. Yet that reform will only be possible if voters are willing to dismantle the LDP. And that will be difficult because of the absence, to date, of a credible opposition and because the influence-peddling and mob ties that so outrage voters are the very things that keep the LDP’s political machine wealthy and formidable enough to buy its way out of the most spectacular scandals. Somewhere the ghost of Susumu Ishii is laughing--and the joke is on Japan.