Troubled by Scandal : Some in Japan Feel Lost on Moral Map

Kiyoshi Kishimoto was trained to sing folk ballads, the kind with morals attached, in which virtuous samurai are rewarded in old age for their earlier acts of benevolence.

Words failed him, however, when he tried to write contemporary lyrics in the tradition of the Kawachi ballad, which is named for his native region near Osaka. Things were just not the way they were supposed to be. The golden rule was no longer in evidence. Everything had been turned around.

“If you do bad these days, you’re rewarded,” Kishimoto lamented the other day. “If you cheat, you’ll make a lot of money.”

A Pragmatic People

The Japanese are a pragmatic people. They are notorious tax evaders, and they have long been inured to seamy politics, dirty business and institutional corruption--partly because they feel that nothing can be done about it, partly because just about everyone sees that the system can sometimes work to one’s advantage.

But with the advent of the Recruit scandal, the sordid affair of insider trading and influence peddling that is unraveling Prime Minister Noboru Takeshita’s administration, some Japanese are asking whether their moral compass might have gone haywire somewhere in the economic miracle of the past four decades.

Kishimoto, for one, found his muse when he decided to write satirical songs, lampooning corrupt politicians and other shady characters in the news.

He started a trilogy on the Recruit scandal with a ditty, “Arrest Ezoe,” which ridicules Hiromasa Ezoe, founder of Recruit Co., an employment services and publishing concern.

Ezoe is the man who doled out billions of yen in political “donations” and hot stock to grease the track for the expansion and diversification of his corporate group. Takeshita and his aides got about $1.5 million of the money in the form of donations, loans and stock profits.

The sarcastic bard, who is known by his stage name, Kikusuimaru, delves into Ezoe’s childhood and concludes, “He’s the owner of a hungry soul.” The lyrics are set to bouncy Japanese folk music, giving a decidedly absurd tone to what is by Japanese standards a scathing attack on malfeasance.

Another song goes: “These bigwigs make piles of money, using their state authority. . . . In one second, they can collect as much cash as it takes a wage-earner a year to make.”

Kikusuimaru may not be a Japanese Bob Dylan in terms of lyricism, but he has a similar message: that the times are changing.

Usually, political satire attracts scant notice in Japan, where popular humor tends toward slapstick rather than subtle irony. But Kishimoto has become a minor celebrity of sorts, touching a national nerve with his songs about the Recruit scandal, and there is a two-week waiting list for his cassette recordings.

It is too soon to know for sure whether the public outrage over Recruit will mark a watershed in the way people examine ethical standards, or whether the noise will simply die down and fit into an established pattern of ritual atonement and renewed malaise.

Indeed, a fair number of Japanese have reacted to the disclosures of corruption with a fatalistic sigh, a cynical yawn or a shikata ga nai --”it can’t be helped.”

Still, when Takeshita took responsibility for his fund-raising irregularities and announced last week that he would soon resign, a whiff of fundamental change was in the air. At the very least, it is a time to pause for some serious public hand-wringing.

“Our politicians are a disgrace,” said Kei Aiko, 59, an office worker interviewed in Tokyo’s Otemachi financial district. “But after all, the blame lies in Japanese society. We created them.”

Takashi Ishihara, chairman of Keizai Doyukai, the Japan Assn. of Corporate Executives, suggested in a speech that perhaps too much emphasis has been placed on sales and profits in the past and that the “egocentric way of management” has caused problems with overheated competition.

Business ‘Breeding Ground’

“I think we cannot deny that the business community more or less provided the breeding ground for (the Recruit) scandal,” said Ishihara, who is also chairman of Nissan Motor Co. His call for Takeshita’s resignation was believed to have been instrumental in the prime minister’s capitulation after months of stubborn resistance to the growing furor.

The Recruit excitement comes at a time when new affluence has given the Japanese more time to step off the economic treadmill and ponder the concepts of wrong and right, unfair and fair, dirty and clean.

“This is the first time the population has gotten so angry about a scandal,” said Seijiro Watanabe, a lawyer and former prosecutor who has for many years waged a lonely campaign against rampant fraud in Japan’s securities markets. “I always thought Japanese had a poorly developed concept of fairness, but in the Recruit affair people have been reacting the way Americans might.”

That is not to say the Japanese are becoming more like Americans, or even that they should. In fact, that is a prospect many reasonable people here would abhor, viewing the abject poverty, violent crime any many social injustices in the United States and other advanced Western industrialized countries.

Japan’s low crime and relatively equitable income distribution is predicated on an ethos of social harmony that undeniably has a high degree of moral integrity.

The frame is different, though. Rather than adhering to absolute concepts of morality, to which Judeo-Christian cultures subscribe, Japanese society moves on the rails of something anthropologists call “situational ethics.” The golden rule here concerns itself with particular results, not an abstract and immutable concept of law. A crime occurs when there is a victim, and the perpetrator is caught, not when an immoral act is committed.

That is why a Japanese can spend time in jail for causing a fatal traffic accident but receive a suspended sentence for rigging prices in the stock market.

Japanese have been slow to embrace the idea that securities fraud is wrong, critics say, because the postwar boom in the stock market has enriched even small investors to the point where it is not clear who has been victimized by collusion.

Betrayed Sense of Fairness

Righteous indignation over shady stock dealings in the Recruit scandal had perhaps more to do with a betrayed sense of situational fairness than with alleged moral turpitude among the more than 150 politicians, bureaucrats and businessmen who had the privilege of buying Ezoe’s hot stock at artificially low prices.

The Recruit insiders were revealed to have made huge, tax-free profits at a time when the general populace was recoiling from the ruling party’s unilateral imposition of an unpopular 3% consumption tax.

The real rub was that the opportunity gap between the haves and have-nots seemed grossly unfair, not that the stock transactions might have constituted bribes or that members of Parliament were up to the same old dirty tricks in raising political funds.

“We weren’t really surprised about the scandal,” said Yutaka Sakamoto, who owns a small toy store in the Tokyo residential district of Ebisu. “The feeling was, ‘Oh, they’re doing it again.’ But still, it didn’t seem right that these people should be allowed to make a killing when we have to work for our living.”

The same value of situational fairness accounts for why the Japanese are world-class tax scofflaws. More than 90% of self-employed taxpayers are caught hiding income; in a government audit of 2,206 large companies last year, all but one cheated on taxes.

“Japanese have a completely different sensibility (than Westerners) about upholding the law and paying tax,” said Toshio Ogawa, another former prosecutor-turned-lawyer. “Historically, authority has never been vested in the people; it’s all been promulgated from above. So there’s no shame in breaking the law, especially when it comes to hiding income from the tax authorities.”

Tax matters aside, the average Japanese is generally subservient to officialdom and not inclined toward petty graft. Few individuals would dream of attempting to bribe a traffic cop or pay off a building inspector. Japanese also maintain an uncanny pact of mutual trust, and this country is a good place to lose a wallet, because it will probably be returned. Last month, hikers found two bags of cash in a bamboo grove in Kawasaki--totaling some $1.4 million--and immediately turned them in to authorities.

Giving Lavish Gifts

But it sometimes seems that personal bribes have a place in Japanese society. Most people are accustomed to lavishing gifts on social benefactors, and at times this has overtones of buying influence.

A gift cannot be too generous when important decisions are being made, such as a child’s entrance into a private school. Scandals periodically emerge where eager parents get caught bribing administrators at medical or dental colleges with piles of cash.

It is at the corporate level, however, where a pattern of bribery emerges clearly. As in most Asian societies, and in some Western ones too, kickbacks are the norm. The corruption spreads to the political world when it comes to the pork barrel--police say about half of all bribery arrests involve payoffs between construction companies and politicians, mostly provincial, who have influence over how public works contracts will be awarded.

There are some signs that the prevailing social mood is generating more sympathy for formal law and order.

In this spring’s batch of graduates of the Legal Training and Research Institute, which is Japan’s single passageway to the legal profession, the number choosing to become prosecutors instead of judges or lawyers increased by 25% over the previous year.

14 Arrested So Far

That happens during most major political scandals, when sudden glory is bestowed upon the Public Prosecutor’s Office. Special prosecutors have arrested 14 people in the Recruit scandal so far, including one of Japan’s most venerable businessmen, two former elite bureaucrats and Ezoe. Prosecution of politicians has not progressed beyond the rumor stage.

Suicide is yet another element in what the Wall Street Journal’s Stephen Kreider Yoder dubbed the “Kabuki drama” of the Recruit scandal. Ihei Aoki, Takeshita’s trusted aide, took his own life, presumably to shield his boss. Aoki handled Takeshita’s finances and dealt in the unlisted stock issue of the Recruit subsidiary that was at the core of the case.

About two dozen other political aides have committed suicide as the result of postwar scandals. Suicide is considered a virtuous act for a loyal retainer who has potentially incriminating evidence against his lord--and an appropriately logical thing in terms of situational ethics.

Where the morality play will go from here is anybody’s guess. The indictment of money politics stops short of serious debate on how to draw the line between graft and good will in the context of a pervasive system of gift-giving.

Wedding Gifts Expected

In their defense, members of Parliament complain that they must raise large sums of money to meet their constituents’ expectations that, when they attend weddings and funerals, the politicians will invariably arrive with envelopes of cash in hand.

And constituents are all too willing to oblige politicians needing campaign donations, because they know this is how they will get bridges built, licenses granted and regulations changed.

“The people are to blame too,” said Kikusuimaru the singer. “But not many of us understand that. It’s a lot easier to just dump the blame on the Liberal Democrats.”