A textbook case
If you’re interested something that’ll really shake up your vision of the world, by all means, don’t bother clicking here. Japan’s latest scandal to serve up a tasty stew of collusion, bid-rigging, and the revolving door between government and public or semi-public corporations involves bridge-building:
A former director of Japan Highway Public Corporation played a pivotal role in fixing contracts for JH bridges, The Yomiuri Shimbun learned Friday.
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He compiled the list [of contracts pre-allocated to various construction firms] following JH’s customary announcement of the list of orders to be placed for the fiscal year. He would then have Takashi Tanaka, the deputy chief of the bridge division of Mitsubishi Heavy Industries Ltd., distribute his own list of predetermined contractor winners to the companies.
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The arrests are related to a scandal involving bridge projects ordered by the Construction and Transport Ministry under which two cartels divvied up the public works projects amongst member companies.
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The retired JH executive once was a central figure in Kazura-kai (vine society), an association of former JH officials who had landed cushy jobs at bridge building companies in a practice known as amakudari, or descent from heaven. Members of the group met regularly and handled sales at JH on behalf of their new employers.
The former JH director’s list of predetermined contract allocations covered nearly 100 large projects each year. Sources have pointed out that it would have been difficult for him to do everything on his own, therefore, Kazura-kai members are suspected of involvement in allotting JH orders to specific bridge builders.
Obviously, as a supporter of free markets, I don’t approve of any of this for one second. I do, however, feel a great deal of sympathy for young and talented Japanese people moving into public-sector jobs. The whole system has been designed so that they spend most of their careers making less money than their schoolmates who moved into private industry, with the express expectation that they’ll be able to cash in on their connections through their post-retirement jobs. Not the sort of work for an idealist.
This might also be a good time to note that the 2001 reshuffling of the federal ministries does not seem to have occasioned the dawn of efficiency and transparency in federal doings that had been promised. Then, too, these things take time. If there’s one thing bureaucrats know how to do, it’s cling to power with the tenacity of barnacles. Scandals are always depressing, but they at least represent some gains for public accountability. In Japan’s huge and boondoggle-prone construction sector, every little bit helps.