CHAPTER TWENTY-FIVE

One gang to rule them all

Saigo was proud to be a member of the Inagawa-kai. There was only one organization that could compare to the Inagawa-kai, and that was the Yamaguchi-gumi. When he’d joined up, the Inagawa-kai was the more powerful of the two. He disliked the Yamaguchi-gumi vehemently, and had his reasons.

The Yamaguchi-gumi isn’t just Japan’s largest organized crime group; it’s a well-known Japanese corporation, founded in 1915, that engages in a wide array of legitimate and sometimes illegitimate business activity, often with extreme prejudice. Robert Feldman, an analyst at Morgan Stanley Japan, once called them Japan’s second-largest private equity group, and he was not incorrect. They are Goldman Sachs with guns — not to mention knives, bazooka launchers, sniper rifles, and assassins.

The Yamaguchi-gumi is a massive organization that employs over 20,000 people full-time. It owns auditing firms, several hundred front operations, and their own network-management and database companies. They control Japan’s entertainment industry even now, and over the years have quietly become part of the backbone of several high-profile IT operations — only getting caught once in 2007, when a member of the Kodo-kai faction was revealed to have taken over the equivalent of Japan’s “classmates.com” — gaining access to the personal data of 3.2 million people. They own a chain of private detective agencies, and keep tabs on their enemies and their friends better than any intelligence agency in Japan does.

If one were writing a pamphlet on the company to attract young college graduates, this would be the way to say it:

The Yamaguchi-gumi Corporation, with large, comfortable headquarters in the international city of Kobe and lovely branch offices, complete with swimming pools and gyms in Nagoya and other major cities in Japan, has a proud history of over 100 years of serving the Japanese people. Our construction, real estate, IT, banking, and entertainment businesses are still thriving in a poor economy, and thanks to one of Japan’s best R & D sections in any company, we have a treasure trove of personal data on the elite in Japan’s business and political world that can be judiciously used for blackmailing such individuals and maintaining maximum leverage in the money markets. Our emphasis on HUMINT and judicious use of force gives us a competitive edge that has given us almost half of the market, while our competitors are gradually being absorbed into the greater operation. We not only offer lifetime employment, but we also offer a generous pension plan.*

The asterisk would serve for the following disclaimer:

A lifetime in the Yamaguchi-gumi does not preclude the possibility of early death. A “lifetime” may also include time served in prison, not necessarily for a crime that you committed, but as a designated fall-guy. However, all members serving time in prison can be assured that we will maintain your family’s living standards until you return.

The Yamaguchi-gumi had generally been good about keeping their pledges. “Family” included common-law wives and sometimes mistresses; if you went to jail for the team, the team took care of them. If you did survive until retirement, the pension plan wasn’t bad. In 2013, the final bonus and severance check for a team member was 50 million yen, according to retired boss Kenji Seiriki. That’s almost half a million dollars. The retirement policy was begun decades before when the Yamaguchi-gumi briefly split into two factions. The Yamaguchi-gumi headquarters offered the pension plan as a means of wooing people back. It worked well.

Harukichi Yamaguchi, a dock worker, small-time gangster, and a fearless leader, gathered fifty stevedores and created the Yamaguchi-gumi. The organization primarily functioned as a dispatch service for laborers with a side business promoting rōkyoku artists. Rōkyoku, also called naniwa-bushi, was a type of traditional Japanese narrative singing, generally accompanied by a shamisen and often about sad subjects; it was the Japanese version of country and western music. Labor dispatch, dock work, and the entertainment business were staples of the Yamaguchi-gumi from the start.

In 1925, Harukichi Yamaguchi turned the business over to his son, and retired. It was during the reign of the second generation of the Yamaguchi-gumi that Kazuo Taoka, a man who would become “the godfather of godfathers” and a friend of Seiji Inagawa’s, joined the Yamaguchi-gumi. He was born on March 28, 1913, in a small mountain village in the Tokushima prefecture. He was the second son, and his father had died before he was born. When he was six, his mother died from overwork, and he was sent to live with his uncle in Kobe. His uncle was violent and abusive, and, in many ways, toughened Taoka up. He learned to fend for himself, and managed to graduate from his school. After graduating, he went to work as a lathe apprentice, but had no patience for the ritual hazing and abuse that was part of traditional Japanese training, and was thrown out for insubordination.

He then became a local ruffian, constantly getting into fights and earning himself the nickname “The Bear” for his fight technique, which was based on gouging the eyes of his opponent before beating them into submission. He was a feared and notorious troublemaker who was eventually put under the wing of the second Yamaguchi-gumi leader, Noboru Yamaguchi, in January 1936.

The Yamaguchi-gumi was constantly at war with other gangs in their areas, and in 1937 a rival gang leader stormed into their office to take revenge for an attack initially launched by the group. Taoka responded by cutting down the man with a Japanese sword. He was subsequently sentenced to eight years in prison.

It was during his prison years that Taoka began to read and study. He was especially interested in the writings of Tōyama Mitsuru, who was a right-wing political leader in early-20th-century Japan and the founder of the Genyosha, a tremendously powerful nationalist group. It may have been Taoka’s inspiration for the Yamaguchi-gumi he served to create.

Mitsuru created Genyosha in 1881. It was a secret society and terrorist organization whose members believed the Japanese should expand and conquer all of Asia. The society attracted disaffected ex-samurai and figures involved in organized crime, and waged a campaign of violence against foreigners and liberal politicians. In 1889, Tōyama and the Genyosha were implicated in the attempted assassination of the minister of foreign affairs, Ōkuma Shigenobu. Taoka clearly took notice of Genyosha’s practices.

He left prison early, thanks to an imperial pardon, on July 13, 1943. While he was still in prison, his oyabun had passed away. There was no third-generation leader of the Yamaguchi-gumi, but the organization still existed. Taoka started his own gang elsewhere in Kobe.

In the aftermath of the war, as he wrote in his bestselling biography, the police weren’t much use. Japan was a lawless place following Japan’s 1945 defeat. The Korean Japanese, the Taiwanese, and the Chinese, who had been oppressed by the imperial Japanese government and forced to labor for the war effort, made inroads into the underworld.

U.S. occupying forces designated them “third-party nationals,” and treated them differently from the defeated Japanese. This gave them access to U.S. military supplies, and enabled them to run the black markets. Gangs of angry foreigners surrounded police stations in Kobe and roamed the streets, taking money and revenge.

In some ways, the 20th-century rebirth of the Yamaguchi-gumi was a response to the domination of the black markets by the Koreans and the resulting disorder. The Koreans had formed their own small gangs, which would rob and pillage from other Japanese, and sell the same goods the next day on the black market. By April 1946, the occupying authorities, known as General Headquarters (GHQ), decreed that everyone residing in Japan had to follow Japanese laws. But the Japanese police found their efforts to crack down on the yakuza hampered by GHQ’s decision to decentralize the police.

At the same time, Japanese gangs were fighting over black-market turf with the Koreans. The former began reviving the old yakuza structure and, rather than wage direct war, they began a successful policy of assimilation, and incorporated many Korean Japanese into their ranks. In some cases, the police backed the Yamaguchi-gumi in an effort to restore order and to limit the power and breadth of the Korean gangs.

As a sign of their “respect” for the Yamaguchi-gumi, the Mizukami police station in Kobe allowed Taoka to be the honorary police chief for a day. A photo of him dressed as a police officer being saluted by the uniformed cops was printed in earlier editions of his autobiography.

In October 1946, at the recommendation of the elders in the Yamaguchi-gumi, Taoka took over as the third-generation leader. The time he had spent in prison reading about the exploits of secret societies and books on business inspired him to issue this order to his new troops: “The yakuza won’t be able to survive if all shinogi comes from illegal activities. Everyone in this organization needs to have a legitimate job.” He was already looking two decades into the future. He revived the construction company set up by his predecessor, Yamaguchi-gumi Construction, and created a Yamaguchi-gumi entertainment division within the company.

By the end of 1945, Yamaguchi-gumi Construction was registered as a joint-stock corporation with 100,000 yen in capital and Taoka as the president. While expanding the business end of the Yamaguchi-gumi, and raking in huge amount of money as the Kobe docks became active during the Korean War, the group began a series of violent gang wars with all the neighboring yakuza in the Kansai area.

Taoka’s strategy was to fight, conquer, merge, and grow. If a weaker gang wouldn’t fight the Yamaguchi-gumi, they’d start the fight themselves. He was also open to assimilating fearless Korean gangs such as the Yanagawa-gumi in Osaka. The founder of the Yanagawa-gumi, Jiro Yanagawa, was a Korean whose family had served as slave laborers during the war, and he had a chip on his shoulder. He was famous for having taken on 100 yakuza members of rival groups with only eight of his men and a few Japanese swords. That kind of fighting spirit impressed Taoka.

Taoka was also a very smart businessman, as well as an acute strategist. In 1957, he set up and registered Kobe Geinosha (Kobe Performing Arts Promotion) under his own name. It quickly become the most powerful showbiz broker in Japan. In 1961, the Yamaguchi-gumi Yanagawa-gumi, after successfully managing a pro-wrestling event for former Sumo wrestler Riki Dozan, created its own promotion company, Yanagawa Geinosha (Yanagawa Performing Arts Promotion).

In 1963, Toei films released Jinsei Gekijo: Hishakaku (Theater of Life: Hishakaku) starting the yakuza film boom, which lasted several years. Taoka is said to have helped finance the first of these films.

Taoka became friends with everyone’s favorite insane nationalist, Kodama Yoshio. Taoka and Hisayuki Machii (the head of the Korean mafia, the Tosei-kai) were elected as board members of the Japan Pro-Wrestling Association. Pro-wrestling had become tremendously popular in Japan, partly due to the influence of the yakuza in promoting it. And even into modern times, promoting sporting events — especially mixed martial arts — has been a lucrative source of revenue for the yakuza. All of this is to say that by 1964, the yakuza weren’t outlaws — they were part of the establishment.

But all that fell apart fairly quickly once the first war on the yakuza began. The Liberal Democratic Party had had enough of the yakuza telling them what to do. In 1964, the police launched their first nationwide major offensive on organized crime. Kobe Geinosha was forced out of business. Taoka bought 4,000 shares of a company called Yoshimoto Kogyo under his wife’s name, and the Yamaguchi-gumi began to use the firm as a front company. Yoshimoto Kogyo is still one of Japan’s major talent agencies. However, the Yamaguchi-gumi’s ties to the organization have been a source of major scandal — resulting in “the Ryan Seacrest” of Japan, Shinsuke Shimada, being forced to retire. It was top news for weeks. And once again, in 2019, members of the talent agency were found to have unsavory relationships with Yamaguchi-gumi members.

The police put tremendous pressure on Taoka to dissolve the Yamaguchi-gumi. The Sumiyoshi-kai, the Inagawa-kai, and almost all the other yakuza groups made a show of dissolving their groups to let the police save face. Machii’s group, the Tosei-kai, dissolved as a yakuza group, and reformed under a new name as The East Asian Love and Friendship Business Enterprise. However, Taoka, now in poor health due to a heart condition and the stress of the crackdown, refused to budge.

He told the police, “I won’t dissolve the group, even if I’m the only man remaining.”

The gang wars among the yakuza had spurned part of the police crackdown, and there was a growing consensus that gang war would benefit no one. The Professor, Susumu Ishii, knowing full well that the Yamaguchi-gumi would eventually try to expand into the Tokyo area, had the prescience to become friends with Taoka’s number two, Kenji Yamamoto, in the organization circa 1971. Seijo Inagawa was in jail for gambling violations, and Ishii was running the organization. Yamamoto contacted Ishii, saying that when he was supposed to leave prison in January 1972, he wanted to greet Inagawa himself — with Yamamoto’s entourage of a few hundred Yamaguchi-gumi members. It was meant as a gesture of goodwill. But when Ishii passed the message along, Inagawa refused, saying, “A gambler like me shouldn’t have a fuss made about his return from prison.” However, the goodwill gesture was appreciated.

A few months after getting out of jail, as scheduled, Inagawa visited Taoka in the hospital, and the two struck up an agreement. They defined their terms and their territory, and all seemed good.

In October 1972, Susumu Ishii, the chairman of the board, and the number two in the Inagawa-kai, and Kenji Yamamoto, the second-in-command of the Yamaguchi-gumi, performed the ritual exchange of sake, becoming brothers on equal terms. Haruki Sho, the only Taiwanese yakuza at the top level of the Inagawa-kai, also became a brother with another Yamaguchi-gumi member. The two groups had reached a peace of sorts.

Taoka wrote his autobiography, which sold reasonably well. It was made into a film starring everyone’s favourite yakuza actor, Ken Takakura, in 1973, entitled The Third-Generation Leader of the Yamaguchi-gumi. Taoka visited the set of the film and gave Takakura advice.

The Yamaguchi-gumi continued its efforts to achieve a state of legitimacy. In 1975, they published their own internal newspaper — with haiku, photos, and essays. The newspaper contained the credo of the Yamaguchi-gumi, printed on the inside front cover:

The Yamaguchi-gumi pledges to contribute to the prosperity of the national body based on the spirit of chivalry. Therefore, gang members are required to embody each clause below:

Esteem highly friendship and unity in order to strengthen the group.

Value fidelity and feel love when in contact with outsiders.

Understand that elders come first and always show courtesy.

When dealing with the world, remember who you are and do not invite criticism.

Learn from the experiences of those who came before you and strive to improve your character.

It seems like an exemplary creed at first glance, but when compared to the credo and rules of the Yokosuka-ikka, something important was missing and is still missing: nothing is banned; everything goes. The credo sounded great and was beautiful, but meant little.

The Yamaguchi-gumi succession wars after Taoka were long, bloody, and brutal. In what almost seems like high comedy now, the Yamaguchi-gumi would occasionally have televised press conferences to announce the end of a gang war or deliver a sort of mid-term report. They were as legitimate as the Tokyo Electric Power Company.

By the time the emperor had died, and the Heisei era had begun in 1989, the Yamaguchi-gumi had become a ruthless, powerful gang with offices almost everywhere in Japan. They aspired to be the one gang that ruled over all. The Yamaguchi-gumi was taken over by the fifth-generation leader, Yoshinori Watanabe, on July 20. Seijo Inagawa was the official “guardian” of the ceremony — an honorary position that also showed the relative strengths of yakuza groups.

Watanabe was not a man of high moral principles. Under him, the Yamaguchi-gumi terrorized anyone in their way, and his second-in-command, Masaru Takumi, rivaled Ishii in his financial wizardry, and certainly excelled Ishii in cunning. He was the yakuza boss who told his men, “From now on, the first thing a yakuza needs to do when he gets up in the morning is read the Japan economic trade newspapers.”

The Yamaguchi-gumi aggressively expanded into Tokyo, with the Goto-gumi paving the way via a labyrinth of front companies and political groups. This helped spur the first anti-organized crime laws to go on the books and the first film to portray the yakuza as they had become. They did not “Esteem highly friendship and unity in order to strengthen the group,” or “Value fidelity and feel love when in contact with outsiders,” and they definitely were not courteous.

When Juzo Itami, the film director, parodied the Goto-gumi in his film The Gentle Art of Japanese Extortion, whose original title meant something closer to The Intervention in Civil Affairs by the Yakuza, the reaction was brutal. Thugs sliced up his face as he was leaving his house. The world was appalled. Goto, who denied any knowledge of ordering the attack, but approved of it because “Itami deserved it for making fun of us”, wasn’t touched at all by the police investigation. The message of the film had been that if you were a civilian bothered by the yakuza, you could work with the police and lawyers to fight them, and you could win. Justice would prevail. But that was not the case.

In 2005, Watanabe was deposed in a bloodless coup, and Shinobu Tsukasa, from the Kodo-kai faction, one of the largest factions in the group, and the most violent, took over the Yamaguchi-gumi and set it on a course that would spur a third wave of police crackdowns.

The sixth-generation head of the Yamaguchi-gumi is known as Shinobu Tsukasa. His real name is Kenichi Shinoda. His yakuza name, said in the proper Japanese way (family name first, and first name last) is Tsukasa Shinobu. It is written with two kanji characters: one meaning “to rule, to govern over all” and the next “to endure, stealthily approach.” The kanji for his name is also the first character for ninja. Everyone knows his name and who he is, so at this point in his career he’d make an unlikely ninja.

A few months after Tsukasa took over, the Yamaguchi-gumi merged with a smaller organized crime group in Tokyo, the Kokusui-kai, and now had a permanent foothold in the area. It rewrote the yakuza map of Japan. The Yamaguchi-gumi was now inside Tokyo, and they would not leave. The Sumiyoshi-kai was not pleased with the new arrangements, and intermittent gang war broke out.

The head of the Kokusui-kai, Kazuyoshi Kudo, was someone that Saigo had met at the usual yakuza gatherings over the years. Kudo seemed very pleased with himself — as a reward for joining the Yamaguchi-gumi, he had been made a senior advisor. When he realised that the role was ceremonial and that the Kokusui-kai had no independence, he became bitter.

In late 2006, there were rumours that the Kokusui-kai might go independent again. In February 2007, Kudo was found in his home with a plastic bag wrapped around what was left of his head. He had a gun clasped in his hand. The police ruled it a suicide. One of the detectives who was at the scene says, “Normally, if you blow out your brains, the gun doesn’t stay neatly in your hand — the recoil snaps it out of your hand. Maybe wrapping the plastic bag around his head was meant to be out of consideration for others — not make a mess. But was it a suicide? We all had doubts, but the gun was in his hand. There you go.”

Meanwhile, the group also took advantage of a succession battle within the Inagawa-kai to cement their power over the Inagawa-kai as well.

Saigo’s junior, Kazuo Uchibori, in the Yamakawa Ikka faction, became a blood brother to Teruaki Takeuchi, a senior member of the Yamaguchi-gumi Kodo-kai.

Tsukasa was not in power for long before losing an appeal in a court case involving arms violations, which resulted in him being sent to prison. His ruthless number two, Kiyoshi Takayama, took over the group, and changed years of previous policy by openly challenging the police, not cooperating with them, and even investigating the investigators — hoping to find materials that could be used to blackmail or intimidate the police into leaving the organization alone.

With the backing of the Kodo-kai, Uchibori also began to rise up the Inagawa-kai food chain, soon surpassing Saigo.

These days, the Yamaguchi-gumi, with the Inagawa-kai effectively under their control, has become essentially the one gang that rules them all.

The yakuza have a saying: “The Yamaguchi-gumi could cost you your life; the Inagawa-kai will cost you your life savings; and the Sumiyoshi-kai is all talk.”

Kudo would have agreed with the first part, as would have many other deceased members of the Yamaguchi-gumi, and those killed by them. Saigo would certainly come to agree with the second part of the saying, and the Sumiyoshi-kai — they would violently disagree. But probably verbally rather than physically, although they have been known to hold their own in a gang war.

What Saigo didn’t like about the Yamaguchi-gumi was their arrogance. Despite their fancy credo, it seemed like there was nothing they would not do for money: human trafficking, fraud, theft, armed robbery, murder. That was the Yamaguchi-gumi he knew. He might be a gangster, but he was an Inagawa-kai gangster. They had standards.

At least, he hoped they did.