Whistle-blowers expose Olympus, Yomiuri Giants in battle of bad-mouthing

Japan’s dirty laundry hung out


TOKYO – In Japan’s good old days (ie last year), badmouthing the boss was something done behind the scenes, or not done at all. 

In the past few weeks, mudslinging has gone public, with some of Japan’s biggest names smearing the reputations of even tycoons and prime ministers. 

It’s not only gaijin (foreigners) such as ousted Olympus president Michael Woodford who are spilling the beans about the sumo wrestling behind the scenes in corporate Japan. 

Hidetoshi Kiyotake, ousted general manager of the Yomiuri Giants, the most famous sports team in Japan, has been lambasting his former boss, Tsuneo Watanabe, a media tycoon described by foreign writers as a “shogun” or “a cross between Rupert Murdoch and Richard Nixon.” 

 Watanabe, 85, has mounted a public counter-attack, launching a million-dollar defamation suit against Kiyotake, and saying a few choice words of his own about former prime ministers including Junichiro Koizumi and Yukio Hatoyama.  Many cynics are questioning whether this release of pent-up frustration will actually change anything in Japanese culture, which has long been touchy about criticism. Much will depend on how courts in Japan deal with the Yomiuri libel suit, and whether police investigators in Japan and abroad will expose any criminal wrong doings about Olympus in coming weeks. 

An investigative panel established by the firm, led by former Supreme Court judge Tatsuo Kainaka, announced on Tuesday that it had indeed uncovered an complex scheme to cover up $1.5 billion of investment losses that was devised by a group of top executives. The probe is not authorized to pursue a criminal investigation. 

Any arrests or convictions in these cases could add further public pressure on the government to hold nuclear industry executives more culpable for the catastrophic failure at the Fukushima reactors. 

As is often the case in Japan, “gai-atsu” (outside pressure) has sparked the trend. 

When Woodford, a Liverpool native, greeted a packed house of foreign and Japanese press at the Foreign Correspondents Club of Japan (FCCJ), he tapped the wooden podium and quipped “this is for my personal security”. He then asked “Can I say ‘pissed off’ in Japan?” 

Though he doesn’t speak Japanese, Woodford said he toiled for 30 years in Olympus before becoming Japan’s “only gaijin salaryman president”. 

He said Olympus wrongly acquired “three Mickey Mouse companies”, sacked him for blowing the whistle, and used “black propaganda” to discredit him. “They’ve taken the company to its knees, not me. They wrecked the company by siphoning off all this money on this nonsense,” he said of the executives. “They were slapping me – ‘Know your place. We run the company, not you’.” 

He said his former boss, Tsuyoshi Kikukawa, could hire and fire whomever he wanted. “I felt like a puppet.”  He said another Olympus executive told him “get out this weekend” from his Tokyo flat, and to “take a bus to the airport” instead of the company limousine. Woodford said he shot back: “Are you a policeman? Are you going to take them (mobile phones) off me?” 

Woodford said he then rushed to the ice cream area in Tokyo’s Yoyogi Park. “I felt quite safe there.” 

Referring to the new president’s first presser in Japan, he said that “if that had happened anywhere but Japan, there would have been cabbages thrown at him”. 

While joking with most foreign and Japanese reporters, he also skewered Japanese media for running “articles on Page 4 that looked like the Olympus Public Relations department.” He called one Japanese woman at the FCCJ “Mr Kikukawa’s favorite reporter.” 

He blamed Japan’s “internal decline” on “mediocre managers”, companies making products “that people don’t want to buy”, and an internationally perceived “drop of quality”. “There’s no creative destruction in Japan,” he said, citing two “unwritten rules” about Japan’s system of cross-shareholdings: “You never sell, and you never criticize.” 

He called Japan’s recruiting system “a sausage machine” that emasculates new graduates. “Japan needs people who are going to challenge and scrutinize,” he said. “I wouldn’t run a company in a harmonious way. I’m shaking the tree. Some monkeys, and a few gorillas, have fallen out.” 

He said the Olympus incident will discourage foreigners from seeking leadership positions in Japan. “Do you think after my experience they will be queuing up?” 

During the presser, Woodford asked journalists to put up their hands if they thought he was right to go to the foreign media first, not the Japanese police. “The fact that most people agreed with his decision not to go to the Japanese authorities is an indictment of the whole system,” Karen van Wolferen, author of The Enigma of Japanese Power and 15 other books that have sold more than a million copies in Japanese, said after the presser. 

The American Chamber of Commerce in Japan and other foreign associations have called for Japanese corporations to appoint more independent outside directors and deal more openly with collusion and conflicts of interest. 

But Yukio Edano, Japan’s minister of economy, trade and industry, said that other countries might be worse. “To say that Japan has no corporate governance is going too far, way too far,” Edano said. “Historically, looking at past cases related to corporate governance, Japan is at least at the same level as the US or even better, in term of effort and results.” 

While Kikukawa and others at Olympus have kept a low profile, former Olympus president Toshiro Shimoyama told Gendai Business magazine that it was “a mistake to bring a foreigner on as president”. 

The Economist, among others, had fun with this. “If every foreigner who didn’t understand Japanese culture were fired there would hardly be a gaijin businessman left in the country.” 

Nobody, meanwhile, could accuse Kiyotake of not understanding Japanese culture. A journalist and former section chief at the Yomiuri Shimbun, Japan’s largest daily with about 10 million readers, he ran to the press when his boss allegedly threatened to run him out of the castle. 

On November 11, Kiyotake, 61, publicly criticized Watanabe, 85, who owns Yomiuri Shimbun Holdings, for “a serious violation of compliance” by allegedly meddling in the company’s baseball affairs. Watanabe denied the allegation, and the Giants fired Kiyotake a week later for “inappropriate action”. 

Watanabe declared to reporters a few days later: “I have lined up 10 top-class lawyers. Court affairs are what my side excels in. I have never lost a court battle.” The mainstream Japanese press also turned on Kiyotake, accusing him, among other misdeeds, of hiring 10 foreign players. 

Kiyotake said he chose to speak at the FCCJ to reach Japanese freelancers normally outside the restrictive kisha-club system of staff reporters with cozy ties to official sources. Speaking only moments after Woodford, Kiyotake said he wanted to protect players and coaches from future bullying, and he wanted “people in American sports teams to understand what’s happening here”. 

“They are trying to create confusion by claiming it’s a family squabble or a mud-slinging match,” Kiyotake said. “In the Yomiuri [newspaper], there are people who can’t speak out. If you were told by the most powerful person in the organization, ‘You are going to be destroyed’, you would feel terror in your heart.” 

Watanabe countered with a two-hour interview at Yomiuri’s main competitor, the Asahi Shimbun. “I am democratic,” he said. “While there are some media that have called me a dictator, I think that’s interesting and it also sells.” 

He then allegedly called former Yomiuri owner Matsutaro Shoriki, known for promoting nuclear energy in Japan, “a dictator”. When Asahi asked if Yomiuri could have an editorial policy differing from his opinion, he said point blank: “That does not happen very often.” 

He confirmed that Democratic Party of Japan (DPJ) kingmaker Ichiro Ozawa asked him in 2007 to pass on a message to then-prime minister Yasuo Fukuda to form a grand coalition to break a political deadlock. “It would not be bad to have a cabinet that could implement what is included in Yomiuri’s editorial policy,” he said. “If it is a cabinet that tries to implement policy according to the editorial stance of the Asahi Shimbun, we would have to work to topple it.” 

According to the Asahi, he also accused the ruling DPJ of having “two very bad prime ministers”. He chastised former prime minister Yukio Hatoyama for allegedly writing on his blog what Watanabe told him off the record. “I feel that politicians have really sunk to low levels.” 

He said he liked younger politicians such as Shinjiro Koizumi, who “is not as eccentric or haughty as his father [former prime minister Junichiro Koizumi]”. 

But he said current leader Yoshihiko Noda “might not be too bad”. “I feel he is close to about 80% of our editorial stance. He is honest and is eager to act.” 

At one point of the interview, according to Asahi, he declared, “Since I have said so much about the Kiyotake incident, I won’t say anything more. Silence is golden, hah, hah, hah.” 


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