Even gangsters get the blues

TOKYO — Kazuhiro Yamada may describe himself as an innocent victim of the recession, but he is unlikely to win much sympathy.

Until he lost his job last year, Yamada, who prefers not to reveal his real name, was a member of the Sumiyoshi-kai, one of Japan’s most notorious crime syndicates, or yakuza.

As a mid-ranking mobster in greater Tokyo, his duties included shaking down businesses for protection money, chauffeuring his bosses around town and, on occasion, providing muscle when his gang’s relations with associates threatened to turn sour.

Then, at short notice, he was unceremoniously dumped for not paying his dues, a non-negotiable condition of yakuza membership from the lowliest mobster to the men at the very apex of their criminal careers.

"Without the organization behind me, what am I supposed to do? Who's going to hire an old man covered in tattoos with a missing digit?” he says of his vanished pinkie, hacked off in a ritual act of penitence for a past misdeed he’d rather not discuss.

“I’m too old for construction work and I can't see how I can learn to type with only nine fingers, so that pretty much rules out a white-collar job.”

Now only just the right side of 50, Yamada is just one of countless gang members feeling the pinch from the global economic downturn and stock market collapse.

After a year in which the Nikkei index shed almost 50 percent and Japan officially entered recession, the yakuza, like other market players, can only look on in horror as the world’s second-biggest economy teeters on the brink of meltdown.

In better times, yakuza foot soldiers bankrolled their hedonism – expensive cars, clothes and women – with a seemingly endless supply of profits from traditional cash cows such as gambling, prostitution, drugs, loan sharking and protection rackets.

It was a time when gangs proudly displayed their insignia at the entrance of their headquarters, swapped information with detectives over drinks in classy hostess bars and dined with senior politicians and wealthy construction magnates.

The legal squeeze began in 1992 with the introduction of the toughest anti-yakuza laws to date, forcing them to conceal their telltale tattoos and swap their gaudy suits for bespoke Italian cloth, as organised crime went white collar.

The change in tactics paid off, but only as long as the economy stayed on its upward trajectory after the lean years of the “lost decade” of 1990s recession.

To stock price manipulation and property sales the yakuza have added wedding and funeral services, talent agencies, and even bakeries and flower shops to its portfolio. It is not for nothing that the Yamaguchi-gumi, by far the biggest of Japan’s 27 gangs, is known as a “Wal-Mart” of the yakuza.

Last year the National Police Agency [NPA], spooked by organised crime’s assault on the property and securities markets, warned that its involvement in the regular economy was “disease that will shake the foundations of the economy.”

Despite promises to take on the mob, the police have yet to make inroads into organized crime. Yakuza membership is not illegal and, unlike their FBI counterparts, Japanese investigators are banned from using wiretapping, witness protection and other tools that would bring the arrests they crave.

According to the NPA Japan is home to 80,000 gangsters, about half of whom belong to the Yamaguchi-gumi, with footholds in dozens of businesses in Japan and the United States, and increasingly, Russia and China.

Takashi Kadokura, the author of two popular books on Japan’s underground economy, estimates the yakuza’s illegal income amounts to as much as 1.6 trillion yen ($17.5 billion) a year. Its financial chicanery is so broad and complex that the size of its legal income will forever be a mystery.

The Securities and Exchange Surveillance Commission has identified more than 50 listed firms with links to organized crime, and the Tokyo metropolitan police has listed about 1,000 yakuza front companies, about 20 percent of them involving real estate.

The public and police remained largely tolerant of the yakuza, which reciprocated by keeping violence to a minimum and ensuring civilians did not become the victims of stray bullets.

But now fears are growing that intense competition for dwindling financial spoils will spark an escalation of the violence.

The past two years have seen several shootings in Tokyo as the Yamaguchi-gumi, keen to expand beyond its western Japan base, attempts to seize control of lucrative parts of the capital such as Akasaka and Roppongi.

“The recession affects the yakuza just like everyone else,” says Jake Adelstein, an underworld authority and former crime reporter for the Japanese daily the Yomiuri Shimbun. “As the economy worsens the spoils will diminish, gang membership will fall and more squabbles and fights will break out.

“They are losing investments in real estate and that means losing jobs as well. The consolidation of businesses through mergers and acquisitions is also freezing them out. Just like the banks, they have loaned money to people who can no longer afford to pay them back.”

Denied their usual incomes, many gangsters are turning to the state for help. Last month officials admitted that hard-up yakuza members had claimed millions of dollars in unemployment and other benefits by producing fake letters of excommunication from their gang bosses.

Yamada, who is selling off his possessions to make ends meet, says he will soon be joining the ranks of the yakuza dispossessed.

“I'm going to go on welfare and then I don't know what I'm going to do,” he says. “To be a yakuza used to be a job for life, but now we're being treated like temporary workers or salesmen. You don’t “sell enough” and its goodbye.

“This is how it is now in the organization. The people at the top live well but everyone else is barely able to make a living. It’s the American business model transplanted to Japan … and it sucks.”

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