Western media distorts Japan
OCT 25, 2014

Those two favorite targets for Western moralizing about Japanese corporate corruption — Olympus (cameras) and Recruit (information) — are back in the headlines. Both typify the shallowness of much Western reporting in Japan.

Olympus is a first-rate Japanese company credited with saving millions of lives with its advanced endoscope (internal camera) technology. But like many other Japanese firms in the late 1980s it got caught up in Tokyo’s response to Washington demands that Japan inflate its economy to ease massive U.S. trade deficits.

Zaitech — literally financial skill — was the slogan of the day. It called for companies to diversify away from their main business lines and begin trading in land and securities. The result was the bubble economy, followed by the collapse of asset prices in the early 1990s. Companies like Olympus, caught up in the real estate fever of the time, had to decide what to do next.

At the time many held on to their devalued assets, believing Tokyo’s assurances that a soft landing for the economy was on the way. Few could foresee that Tokyo’s planners would embrace the foolish austerity and supply-side policies then popular with U.S. economists. Before long Japan had sunk into the deflationary swamp where it has stayed for the past two decades.

At first Olympus, like many others, tried to postpone declaring losses by using the then-legitimate accounting technique tobashi. But then the Western-influenced mark-to-market economic purists moved in and tobashi was declared illegal. Sure enough, this saw another wave of asset price collapses and company bankruptcies.

Olympus now faced another dilemma; Tokyo had begun jailing directors who had tried to save their companies by continuing to cover up asset losses. It had to get its losses off its books. But as a traditional camera company it knew little about the skilled accounting techniques needed. It tried to muddle through and inevitably fell into the clutches of cover-up charlatans. And as its problems deepened, it turned to a foreign executive, Michael Woodford, to serve as president in a bid to help disguise the continuing cover-up.

In the normal course of events Olympus would eventually have gotten rid of its impaired assets, though at much loss to itself. But Woodford seems to have decided early on that his mission in life was to expose the company’s amateurish accounting moves as evil corruption.

He was sacked on the grounds he did not understand Japan — a reasonable response to his seeming inability to realize the dilemma his company had faced and the role he was expected to play. But for our Western media vultures it was fresh meat — a shining example of a foreigner being persecuted for trying bravely to clean up Japan’s polluted political and corporate stables.

Woodford’s recent book “Exposure — From President to Whistleblower at Olympus” is now gaining the same kind of publicity as that given to the myth that brave Western media intervention was needed to have former Prime Minister Kakuei Tanaka removed from Japan’s corrupt political scene.

The so-called Recruit scandal of the 1980s is a yet another myth being revived as the company recently prepared to list its shares on the market. Recruit was founded in 1960 by a brilliant entrepreneur, Ezoe Hiromasa.

After he graduated from the University of Tokyo, his immediate and first venture was a broadsheet listing job opportunities for graduates. He then had the revolutionary idea of publishing magazines listing accommodations for rent or sale, thanks to which no longer did we, myself included, have to spend days scouring Tokyo’s pokey, inefficient real estate agencies simply to find somewhere to live.

He followed that with magazines listing the job vacancies, which previously job-hunters could only find through feudalistic connections. He purchased at some loss two U.S. Cray super-computers in a bid to show willingness to help ease U.S.-Japan trade frictions. He helped to organize the large-scale resort development that Japan needed to revitalize remote areas. He also pioneered the promotion of women to top executive positions in his company. In short he was exactly the kind of enlightened businessman that Japan needed then, now, and in the future.

But that was not how Japan Inc. decided to see him. For them, he was an unpredictable upstart with a lower-class background. His final and fatal move was to try to improve on Japan’s then highly corrupt system for share placements. In those pre-bubble days anyone able to receive unlisted share issues, especially those involving land, were guaranteed spectacular profits. So Japan’s securities companies would make sure those shares went to their friends — gangsters, sokaiya (corporate extortionists) and sleazy politicians especially.

Ezoe decided the shares in his new real estate subsidiary, Recruit Cosmos, would go a somewhat cleaner route — to the politicians, bureaucrats and businessmen who could or would help him with his ventures. But Japan’s giddy media, seemingly ignorant of how share placements were being made in their own country, decided that this was bribery, even though some of the recipients ended up with losses on their shares.

Ezoe had made little effort to disguise his actions. For more than a year the media had great fun digging out names of share recipients and forcing them into humiliating apology and retirement. They even decided that Ezoe’s use of backdoor funds to obtain that loss-making Cray computer was also evil.

The height of this media hysteria was the trial of Ezoe and former Cabinet secretary, Takao Fujinami, for bribery. At the time, Japan’s university education system and Ezoe’s job magazines were being thrown into chaos by the way companies tried to recruit students long before graduation. To restore some order, Ezoe had got himself appointed to an official education reform committee. And to do that, he had made contributions to Fujinami’s political funds.

Arrested for bribery, Ezoe held out for 103 days in arbitrary detention before being given a 13-year suspended sentence. He died a broken man (I knew him quite well). And while his company has survived and continues its good work, its name is constantly being dragged out by Western media as an especially egregious example of Japan’s corrupt business-political connections.

Let me suggest that if Western media need a mission, it is take a much harder look at how Japan really thinks and acts.


日本企業の腐敗をめぐって、欧米がモラルの教訓をたれるときの格好の標的になっている二つの企業── オリンパス(カメラ)とリクルート〈情報〉── がいまふたたび登場してきた。この二例は欧米が日本で情報発信する際に多く見られる浅薄さの典型だ。


「財テク」─(文字通り金融スキル)─ が当時のスローガンだった。それは、企業が本業路線以外に多様化して、土地や株に手を広げることを要求していた。結果は、バブル経済、そしてそれに続く90年代初めの資産価値の崩壊だ。当時の不動産ブームに巻き込まれたオリンパスのような会社は、それをどう扱うか、次のステップへの決断を迫られた。



オリンパスはいまや新たなジレンマに直面: 政府は資産の損失を隠して自社を救おうとした企業の責任者を逮捕し始めた。損失を帳簿から消さなければならないことになった。ところが伝統的カメラ会社であるオリンパスは、それに必要な会計技法に詳しくなかった。あれこれ試みて、損失隠しのいかさま師の魔手にはめられた。問題が泥沼化し、会社はマイケル・ウッドフォードという外国人役員を社長に任命、その[隠し]をさらにカモフラージュしようとした。

仮に、平常通りの道をたどっていたとすれば、オリンパスはやがては、損失を蒙った資産を処分して、切り抜けることができただろう。── 自身は大きな損をかぶったとしても。ところがウッドフォードは、会社の素人っぽい会計処理努力は、邪悪な腐敗である、自分の使命はそれを暴露することだ、と早い段階から決めていたかに見える。


ウッドフォードの近著「解任」(暴露── オリンパスの社長からその内部告発者へ)がいま注目を浴びている。それはちょうど、田中角栄元首相が日本の腐敗した政治舞台から下ろされるためには、欧米メディアによる大胆な介入が必要だったという神話がもてはやされたのと同じだ。




しかし、日本株式会社は、彼を、そのように見るのを拒んだ。彼は、下層階級の出身から成り上がった、何をやるかわからぬ男、という見方だ。彼が最後にやった、そして命取りになった試みは、当時非常に腐敗した株式分配のシステムを改めようとしたことだ。バブル以前のあの頃は、誰でも上場前の株発行を受け取ることができた。── とくに土地関係の人は誰でも大きな利益が保証されていた。だから日本の証券会社は、その株を自分ら知人に手渡るように念を入れた── 知人つまり、やくざ、総会屋、そしてとくに腐敗した政治家たちである。

しかし江副は、彼の新しい不動産子会社リクルート・コスモス社の株は、何とかもう少し清潔なルートで広めたい── つまり、彼の起業計画を後押ししてくれそうな志ある政治家や官僚、財界人などにしよう── と決意した。ところが日本の軽薄なメディアは、自分の国で株の分配がどのように行われているか、明らかに知らなかったと見える。彼らは、これが賄賂だと決めてかかった。── 実際、これを受け取った人の中にはこの株で損を蒙ったケースもあったのだ。