Calls to end Japanese ex-bureaucrats' migration to corporate posts

TOKYO (AP) - As the No. 2 at Japan's state-run highway agency, the unidentified bureaucrat wielded enormous power over the country's major road-builders. 

When he retired in 1990, he did what any top-ranking Japanese mandarin might have done: 

He went looking for a cushy private-sector post at a company he had once regulated. 

The tradition, known in Japanese as "amakudari,'' or descent from heaven, has long cemented the bond between Japan's public and private sectors - and allowed bureaucrats to cash in on their clout after years of serving the state. 

But the practice is coming under heavy scrutiny as investigators round up suspects in the country's biggest public works corruption scandal, fixing a spotlight on the clubby ties between companies and the public servants who are supposed to keep them in line.  

Even business leaders are questioning the practice. 

Since last week, investigators have questioned the unidentified 76-year-old former Japan Highway Public Corp. official and others to collect evidence about bridge contracts allegedly rigged by more than two dozen companies, according to Japanese media reports. 

Investigators refused to comment, citing the ongoing probe. No current or former government officials have been charged with wrongdoing. 

Government officials have focused on damage control, but as a measure of how entrenched "amakudari'' is, authorities are stopping short of moves to stamp the practice out. 

Japan's transport and construction minister, Kazuo Kitagawa, told Japan Highway President Takeshi Kondo last week that agency employees shouldn't meet contractors or ex-agency officials now working for them - for a while. 

In a memo to the agency's employees released on Tuesday, Kondo suggested that officials also refrain from looking for jobs with private-sector contractors, but did not impose any restrictions. 

"I ask that all employees act cautiously, including in job searches, so as not to invite the public's distrust or misunderstanding,'' he wrote. 

Amakudari has flourished in Japan since the end of World War II as corporations dangled financially lucrative offers to lure retired - and well-connected - government regulators into industry. 

Every year, dozens of top bureaucrats find jobs as lobbyists for semipublic and private companies or as advisers for their expertise in navigating the labyrinthine government bureaucracy.  

In 2004, companies hired 86 former ministry and agency officials, down from a peak in the 1980s, according to government data. 

The smooth relations between bureaucracy and industry are credited with contributing so much to Japan's miraculous postwar growth that the potential conflicts of interest were overlooked. 

But the highway scandal is making the problem harder to overlook. 

Prosecutors last month charged 26 Japanese companies and eight executives with allegedly colluding to divvy up 180 bridge-building contracts worth a total of 71 billion yen (US$630 million; euro530 million) in fiscal 2003 and 2004. 

Company executives have reportedly told investigators that retired Japan Highway officials played a central role, that they were hired in exchange for contracts and that agency leaders knew about it. 

The unidentified ex-agency official has acknowledged to investigators that he helped decide the winners of contracts from the Transport Ministry before public bidding began, according to the national Yomiuri newspaper. 

Other retired officials may have passed confidential documents from agency directors to contractors, reports said. 

Last week, prosecutors raided Japan Highway, which manages 8,220 kilometers (5,096 miles) of roads, bridges and ferry routes and is one of four heavily indebted state-run roads corporations. 

Surprisingly, business leaders have been vocal critics of the old-boy network.Officials at the country's influential business lobby, Keidanren, plan to meet next week to consider urging all 1,500 corporate members to stop hiring former bureaucrats, the Nihon Keizai financial newspaper said. 

A Keidanren spokeswoman said the agenda of next Monday's meeting was undecided. 

"We recognize there is a problem with the 'amakudari' system, but we haven't made any decisions what to do about it,'' said the spokeswoman, who declined to be identified. 

The building criticism could embolden politicians to ask for harsher penalties for flouting ethics laws, and that could help Prime Minister Junichiro Koizumi overcome opposition to his plans to privatise inefficient government bodies. 

But battling "amakudari'' won't be easy.  

A law to make bureaucrats wait two years before joining a company was enacted years ago, but the mandarins have used a loophole to circumvent the two-year wait. 

Japan Highway's case is complicated as well. 

Though employees' salaries come from taxes, workers aren't considered civil servants, putting them beyond post-retirement restrictions. 

"Any attempt to ban them from a post-career job might be unconstitutional if it takes away their right to freedom of job choice,'' JH spokesman Osamu Yajima said. - AP

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