-Caveat Lector- from: http://msnhomepages.talkcity.com/ReportersAlley/thecatbirdseat/GoldmanSachs.ht m ---- Lucent Technologies - From CNN.com, 2/9/01: LUCENT TARGETED BY SEC - Telecom equipment maker says it's cooperation with accounting probe. Lucent Technologies is cooperating with a Securities and Exchange Commission investigation of possible fraudulent accounting practices during its last fiscal year, the company said Friday. The SEC probe is focusing on whether Lucent improperly booked $679 million in revenue during its 2000 fiscal year, the Wall Street Journal reported . . . Lucent in December adjusted its revenue statement for the fiscal fourth-quarter, deducting the $679 million, after its own investigation. . . . Shares of Lucent, which have been on a steady downslide since last summer, were down $1.93 at $14.96 . . . Over the past year, Lucent's shares have underperformed the S&P's 500 index by about 70 percent. . . . John Hynie, an SEC spokesman, declined comment on the newspaper's report. . . . PricewaterhouseCoopers, which is the company's auditor, also declined comment. . . . On top of earnings warnings, Lucent has faced job cuts, profit shortfalls and product development missteps in the past year. * * * Press Release, 3/12/97: Lucent provides equipment for military communications upgrade in Hawaii . . . Lucent Technologies announced today it has sold $16 million in network switching equipment to Wheat International for an upgrade of military communications systems in Hawaii. . . . Lucent Technologies was formed as a result of AT&T's restructuring and became a fully independent company, separate from AT&T, on Sept 10, 1996. . . . * * * The Honolulu Advertiser, 2/16/01: Bush May Stop VIP Cruises - The search for survivors and the quest for answers continued yesterday from Oahu to the Pentagon. It prompted President Bush to suggest that the military review its practice of allowing civilians to ride aboard sophisticated warships like the submarine that sank a Japanese fishing vessel seven days ago. . . . At the Pentagon, Pietropaoli confirmed earlier reports that retired Adm. Richard Macke of Honolulu had helped arrange for "individuals for the Missouri Battleship Memorial Association" to tour the sub while on its training maneuvers. He said 14 of the 16 guests were involved with the Missouri association. Yesterday, retired Adm. Robert Kihune, vice chairman and president of the USS Missouri Memorial Association, said he had not seen the guest list and therefore did not know whether any of the association's more than 3,000 members were involved. . . . * * * Wheat International - Profiles: Richard Macke, Senior Vice President - Professional Background: Commander in Chief, U.S. Pacific Command ... * * *Multex Market Guide, 2/9/01: Lucent Technologies, Inc. - 52 Week High: $75.38 ... Recent Price: $15.36 #1 Top Institutional Holder: Barclays Global Investors International - Shares held: 96,482,718 ... Position Value: $2,948,753,000 Other Top Institutional Holders: Teachers Insurance & Annuity Association; Fidelity Mgmt & Research Co; Deutsche Bank Trust; State Street Global Advisors; Smith Barney; J. P. Morgan; Vanguard Group; Morgan Stanley Dean Witter; Putnam Investment Mgmt (Marsh & McLennan); Invesco Inc; and Goldman Sachs . . . Directors and Officers worthy of note: Paul A. Allaire, a Director of Lucent since 1996. Mr. Allaire is also Chairman (since 1991) and CEO (since May 2000, and 1990-1999) of Xerox Corp. Carla A. Hills, a Director of Lucent since 1996. Chairman and Chief Executive Officer of Hills & Company (international consultants) since 1993. U.S. Trade Representative (1989-1993). Director of American International Group; Chevron Corp; and Time Warner Inc. Deborah C. Hopkins, Executive Vice President, Chief Financial Officer from April 21, 2000. Ms. Hopkins joined Lucent after serving as Sr. V.P. and CFO of the Boeing Co. since 1998. She also served as Chairman of Boeing Capital Corporation. Prior to her tenure at Boeing, she served as CFO of General Motors Europe from 1997 to 1998 and as General Auditor from 1995 to 1997. For the Fiscal Year ending 9/30/00, Ms. Hopkins received a salary of $287,083 and a Bonus of $4,650,000, plus other compensation of $228,215, for a total annual compensation of $5,165,298. ------------------------------------------------------------------------ Robert Rubin - Former co-chairman of Goldman Sachs, former U.S. Treasury Secretary; current co-chairman of Citigroup. >From The Buying of the President by Charles Lewis and the Center for Public Integrity: With the pressing need to maintain the trust and confidence of Wall Street, a significant force in the new education of Bill Clinton in late 1992 and early 1993 was Robert Rubin, a man worth an estimated $100 million who resigned as co-chairman of Goldman Sachs to join the Clinton administration. Rubin and his wife made a $275,000 contribution from their personal foundation to the New York Host Committee to the Democratic National Convention. Goldman Sachs helped to fund the Clinton campaign for the presidency, with its officers contributing more than $100,000 in so-called "bundled" money. "Bundled" is the term applied to the aggregate contributions of multiple employees of a single company. . . . Rubin, Goldman Sachs, and the Clinton crowd go way back. Rubin has known longtime friend and White House counselor Mack McLarty for a decade, and in the late 1980s, Goldman Sachs helped to underwrite $400 million in bonds for the Arkansas Development Finance Authority (ADFA). * * * >From The American Populist Review - America's Financial Hoodlums: . . . On March 4, 1933, Franklin Roosevelt was sworn in as US President. The financial oligarchs (for the time being!) had had their day. The Fletcher-Pecora hearings were set up. These disclosed elements of the Goldman Sachs misadventure and shed light on the danger of a single institution mingling the activities of commercial banks with those of an investment/brokerage company and that of the insurance industry. The Banking Act of 1933, more popularly known as the Glass-Steagall Act, was introduced, stipulating that no single institution or bank holding company could engage in both commercial banking and brokerage/investment banking. No commercial banks could own an investment/brokerage company or engage in insurance- The Glass-Steagall Act now brings us up to Robert Rubin, former vice-chairman of Goldman Sachs, later chosen by Clinton as his Treasury Secretary and economic czar. According to the US populist Spotlight, in April 1988, Sanford Weill, the multibillionaire corporate raider and chairman of Travellers Group , the largest financial services conglomerate, phoned Treasury Secretary Rubin, to ask for an urgent meeting. "Why? Do you want to buy the government?" Rubin quipped. "No," said Weill, "just the law." What Weill wanted was not a new law, but "reform" of an old one: Glass -Steagall. Spotlight then interjects with remarks from Holt Cogswell, a veteran and well-known New York bond trader: "Rubin has a long and dirty rap sheet. It goes back to the 1980s, to the smash-and-grab days of former junk bond king Mike Milken." Rubin was then amassing his first $100 million as vice chairman of Goldman Sachs. When Rubin became entangled in the mammoth Milken scandal- "Milken pleaded guilty to a string of felony frauds. That's well known. What's less well known is that so did Robert Freeman, who served as Rubin's deputy and right hand man at Goldman Sachs. The consensus on Wall Street was that Freeman took the fall for Rubin." It was, says Spotlight, not the first time Rubin had bought himself out of trouble. "Rubin was personal banker to Robert Maxwell, the international con man, Israeli agent and thieving media mogul whose corporate empire - energised by embezzlement and excess - was based in Britain. When Maxwell's billion-dollar pyramid of fraud and deceit collapsed with his mysterious death at sea in 1991, Britain's Serious Fraud Squad opened a criminal investigation into Rubin's links to the financial scandal. But the inquiry was cut short when Rubin agreed to pay $250 million - all of it Goldman Sachs money - in restitution to a group of elderly British pensioners mercilessly mulcted by Maxwell. Between 1993 and 1994, Goldman Sachs made fat profits underwriting some $5 billion in Mexican debt issues. When the deal was threatened by the collapse of the Mexican economy, Rubin left his $26 million-a-year job at Goldmans to help straighten out the Mexican mess. When the US Congress stalled a $40 billion Mexican bailout, Rubin launched an (illegal) $50 billion package falsely represented as the "financial rescue of our troubled southern neighbor." In fact, the bailout (grand larceny would be a more appropriate term) was set up entirely to save the profits of Goldman Sachs, Citibank, Chase Manhattan, and their associated Mexican bankers. On Rubin's concealed initiative, $20 billion came from the obscure US Exchange Stabilisation Fund, the designated purpose of which was to prop up the US dollar in any currency crisis. It was not a rescue but an outright scam. Now we return to Sanford Weill's interest in Glass-Steagall and his desire to kill this old Act. In response, Rubin duly drafted "reform" legislation effectively cancelling Glass-Steagall and pushed it through the US Congress. This was primarily done to allow Travellers Group and Citibank, the leading US commercial money centre, to unite into the world's largest financial services conglomerate, to be known as Citigroup. The Glass-Steagall Act had been placed on the books to prohibit just such speculative merging of insurance, banking and stock market activities under a single corporate roof. But, thanks directly to Robert Rubin, insurance companies can now again own banks. Banking institutions can sell insurance and speculate on the stock exchange with their depositors money. In November, with the merger of Citibank and Travellers now legalised, it was announced that Rubin, who quit his Treasury post last June, was to take over co-chairmanship of the new Citigroup conglomerate. Reward for services rendered? Said Cogswell: "If an almanac of high-level corruption is ever compiled, I'm sure Rubin's career will be included as a text book case." Still wondering why the US is in such deep and desperate trouble? * * * >From Dacor.net 5/12/99: Buh-bye, Rubin! . . . The forced resignation of disgraced Clinton Treasury secretary Robert Rubin may have been a result of imminent further exposure of a vast array of corrupt activities, from Treasury's attempted coercion of U.S. Secret Service agents to lie during their Filegate testimony in 1996, and the agents' criminal prosecution as a result of that testimony, to today's New York Times story "CHINA SENT CASH TO U.S. BANK, WITH SUSPICIONS SLOW TO RISE." . . . Treasury was looking the other way and suppressing reports by its Comptroller of the Currency (which regulates national banks) unit as the Central Bank of Communist China illegally moved tens of millions of dollars into a California bank for illegal political and intelligence purposes. However, the final straw that broke Rubin's back could well have been a brilliant investigative journalism article by the USA TODAY's Tom Lowry on May 3, 1999, "Trust Scandal Haunts Goldman/Sullied Bishop Estate owns 10% of Bank/Highly Paid Trustees Facing Accusations, Charges." Mr. Lowry exhaustively details the utterly corrupt activities of Hawaii's giant Bishop Estate in general, and a highly suspect transaction between the Bishop Estate and the personal financial account of Robert Rubin in particular. Rubin is also a former chairman of Goldman Sachs and whose Treasury department regulates both the Bishop Estate and Goldman Sachs, with full awareness of his massive conflicts involving his personal investments, the Treasury department, the Internal Revenue Service, Goldman Sachs, and the Bishop Estate. . . . Mr. Lowry wrote: . . . Treasury Secretary Robert Rubin, who was Goldman Sach's chairman when the firm first approached the estate about an investment, disclosed several years ago that he entered into a business agreement with the estate. He pays the trust more that $100,000 a year, and in return, the estate guarantees that when Rubin leaves government office, the value of his partnership stake in Goldman will not be any less than when he joined the Clinton administration in 1993. . . . Randall Roth, a University of Hawaii law professor who sparked the state's review of the estate with a 1997 essay in the Honolulu Star-Bulletin, says the investment just "looks terrible for Goldman Sachs with this monstrosity of a charity with these huge problems." . . . After the publication of Mr. Lowry's USA Today article, I phoned Clinton Treasury department spokesman Howard Schloss, and my call was taken by a spokeswoman. I asked if Mr. Rubin or Treasury had issued any public statement in response to the charges leveled against Rubin by the USA Today article, and I was told no such statement had been made, other than to say that there would be no comment. I pressed the spokeswoman for the actual terms, the written instrument of the highly suspect put warrant contracts between the Bishop Estate and Rubin, and I was told they were not available. . . . I then began to contact conservative political leaders around the country, and had compiled a list of about 20 leaders of the Congressional majority, conservative media, and conservative investigative entities and foundations. I sent a number of pages of documents on the matter (including the 05/03/99 Lowry USA Today article) . . . to only approximately seven of them, including my making a presentation in person, with documentation, to a powerful conservative member of Congress in Chicago Monday night, May 10. Two days later, Rubin has resigned. I was only just getting warmed up! . . . I commented in my 05/05/99 FreeRepublic article that: ". . . Clinton apologist and treasury secretary Rubin is entangled in a tortured web of conflicts of interest among his secretary of the treasury office, his giant financial transaction with the Bishop Estate, his huge investment in Goldman Sachs, and his oversight of the IRS, including its supervision of the Bishop Estate. Both Chairman Jim Leach of the U.S. House Banking Committee and Chairman Phil Gramm of the U.S. Senate Banking Committee should open investigations and hold hearings on the matter. Their Committees should subpoena Rubin and compel him to testify about his personal dealings retarding the Bishop Estate, his involvement with Goldman Sachs' transactions with Bishop, and his supervision of the Internal Revenue Service's handling of its Bishop Estate tax status investigation." . . . * * *June 12, 1995: Labor Secretary Robert Reich and some congressional Democrats, reacting to Republican demands for welfare and Medicare reform, call for more scrutiny of "corporate welfare." Their sincerity will be tested in the next few weeks with a classic case of corporate shenanigans - if not out-and-out malfeasance - in the business world. Ironically, it involves the largest charity in the country and a growing scandal that could involve Treasury Secretary Robert Rubin and cost the Democratic Party its 50-year hold on the 50th state, Hawaii. . . . * * * Rubin already is besieged by lawmakers who want to know more about his role in the Mexico bailout, a $20 billion deal that royally benefitted his former investment bank, Goldman, Sachs & Co. Rubin was a principal partner at the time Goldman, Sachs invested in Mexico, underwriting billions of dollars worth of bonds and other financial instruments. Of the $5.2 billion already expended to bolster the Mexican economy, a reputed $4 billion was used to pay New York-based firms for their losses. . . . Recently, however, another intriguing facet of the Mexico deal surfaced. Upon joining the Clinton administration, Rubin sought to protect both his investments and his ethics by establishing a blind trust with Hawaii's Bishop Estate, an asset-rich charitable organization. Under the agreement, Rubin pays the Bishop Estate an estimated several hundred thousand dollars, whereupon the Estate promises to cover any losses to Rubin's multimillion-dollar interest in Goldman, Sachs. While Rubin was co-chairman of Goldman Sachs, the Bishop Estate invested $250 million in Goldman, Sachs, about half of its total investment in the firm. . . . The Honolulu Advertiser values the Bishop Estate assets at a whopping $10 billion, 337,000 acres of land in Hawaii, the premier property under the Royal Hawaiian and Sheraton hotels in Waikiki, and part of the Robert Trent Jones Golf Club outside Washington, where President Clinton plays. The Bishop Estate, the wealthiest charitable organization in the country, enjoys close connections to the Democratic power elite in Hawaii and long has been a source of public controversy. Estate trustees are appointed by the Democratic-controlled state Supreme Court and are paid as much as $925,000 a year in commissions, testing an IRS prohibition against excessive personal benefit for nonprofit executives. . . . * * * While the estate was set up for the sole benefit of Hawaiian schoolchildren and now enjoys an endowment larger than Harvard and Yale's combined, it often is faulted for educating only 3,000 full-time students. According to the April 25 Wall Street Journal, only one-third of the Estate's $244 million fiscal 1993 earnings went toward education, while the trust, thanks to its Democratic friends in Congress, has drawn $30 million in federal subsidies for native Hawaiians since 1987. . . . * * * The Honolulu Advertiser reported that four Estate trustees made personal investments of $4 million in a Houston-based energy project [ McKenzie Methane] in which the Estate had invested some $85 million, despite having told state-appointed trust overseers that they had not undertaken any transactions with family member, business associates or employees of the Estate . . . Rep. Spencer Bachus, an Alabama Republican and chairman of the House Banking subcommittee on General Oversight and Investigations, has said that if necessary, he would subpoena Rubin about his ties to the Bishop Estate and Goldman, Sachs. Fueling congressional suspicion is the estate's withholding of a financial statement on the specious claim that its dissemination could lead to "competitive disadvantage and loss to the estate." The statement in question covers July 1, 1992 to June 30, 1993, the same period during which the estate was investing hundreds of millions in Goldman, Sachs. The estate, by law, must disclose its financial records annually with the state Probate Court. Why should a tax-exempt charity arrogantly refuse to divulge information to the public, information that is critical to the state's certification that the estate is being run properly as a charitable trust? . . . At the very least, the House Banking Committee should compel the release of the requisite financial records of America's richest nonprofit and examine the propriety of the Treasury Secretary's insurance deal with the estate and his involvement in protecting Goldman, Sachs against heavy losses in Mexico. . . . ------------------------------------------------------------------------ Sumitomo Bank - This Japanese financial giant pumped around $500 million into Goldman Sachs in 1986. After Goldman's IPO in 1999, Sumitomo held about a 6% interest in Goldman. In Hawaii, Sumitomo formerly owned the majority interest in Central Pacific Bank. * * * Organized Crime Registry: Who Got Yakuza Into Our Banking System? Business Week carried a feature story in its Jan 29, 1996 edition with the headline, "The Yakuza and the Banks" . . . The main focus of the parliamentary debate begun recently is whether tax money should be used to bail out the special housing loan companies, "jusen," whose management collapsed under the weight of trillions of yen in bad loans. . . . The seven failed jusen companies have a combined total of claims amounting to 13.2 trillion yen, at least half of which was lent to the yakuza (organized crime)-related companies at the peak of the economic bubble. . . * * * futuresmag.com, - August 1996: The copper trader who fell from grace . . . Yasuo Hamanaka is a name that has grown in notoriety. . . . Hamanaka, king of the copper market for the past 10 years, now makes losses from Codelco's alleged rogue trader Juan Pablo Davila look like a petty miscalculation. Davila is in a Santiago prison facing charges that as Codelco's chief trader he lost $200 million in an alleged scheme whereby he diverted business to various dealers for kickbacks. Davila says he lost the money on a computer error. But that was only $200 million. This is $1.8 billion, and some market watchers have forecast losses for Sumitomo to reach as much as $4 billion. . . . * * * www.aci.net/kalliste: How to Launder Money in the Copper Market: (Yasuo) Hamamada would often enter the copper market with large-size trades, and slam the copper price in this direction or that. The logic of the pattern of trading would often appear mystifying, creating paranoid uncertainty as to Sumitomo's intentions in the minds of its competitors and counterparties. But it all makes a little more sense when you realize Hamanaka was not only meeting the considerable copper-trading needs of the Sumitomo empire, but also conducting a major money-laundering operation for funds arising from the Southeast Asian heroin trade. The press has lumped this affair into the convenient category of that of one more rogue trader operating without proper management supervision. This in itself is nonsense. First of all, the operating assumption of both the press and the investigating authorities should be that upper management knew very well what was going on, as is usually the case. Second of all, the "trading losses" are related to missing heroin money. Sumitomo is not about to announce that "a large sum of heroin money entrusted to our care is missing." . . . So the loyal Hamanaka takes the fall for "copper-trading losses." * * * Rueter's News Service, 02/16/98: Sumitomo Bank and Bank of Toyko-Mitsubishi (BTM) Linked to Bribery Scandal: Two of Japan's leading banks, Sumitomo and Bank of Tokyo-Mitsubishi, were implicated on Monday in a widening bribery scandal involving officials at Japan's powerful Ministry of Finance (MoF). . . Tokyo prosecutors on Monday issued a fresh arrest warrant against two MoF inspectors . . . on suspicion of receiving bribes from Sumitomo Bank and Bank of Tokyo-Mitsubishi, as well as Sanwa Bank, in exchange for confidential information. . . . Many of them were encroached by Kanto-based yakuza, incurring massive losses in failed stock and land speculation. . . The article by Insider said: "MOF at the end of 1984, through the underground connections of former officials, requested the then leader of Yamahuchi Gumi, the late Takenaka Masahisa, to come to Tokyo and help kick out Kanto-based yakuza from Sogo banks." . . . At the time, Yamaguchi Gumi was in the midst of an internal breakup, and Takenaka needed money. He immediately complied with the request and went to Tokyo to start talks with the Kanto-based yakuza. But immediately after, he was killed by an unknown assassin. However, taking advantage of this situation, Yamaguchi Gumi not only expanded its business territory but also started interacting openly with the bank's top management with the consent of the Ministry. For instance, Sumitomo Bank, originally headquartered in Osaka and weak in Tokyo, acquired a Tokyo-based Sogo bank, Heiwa Sogo Bank, from 1985 to 86. Through the acquisition, the Sumitomo offices in Tokyo increased, leading to their ascent to the number one position in the nation's banking industry. That was made possible by the Ministry and then Finance Minister Takeshita Noboru at the front, and Yamaguchi Gumi in the back. . . . ------------------------------------------------------------------------ Triads - From The Laundrymen: . . . The Triads are the most notorious of the Chinese mobs -- a blood brotherhood that materialized in the seventeenth century to overthrow the Ching Dynasty. When their rebellion ultimately failed two centuries later, many of their members fled to Hong Kong, Indochina, and North America. Independent units linked by an oath of fraternity, the Triads do everything from drug trafficking and money laundering to business extortion and burglary. They are the primary force within Southeast Asia's Golden Triangle. Spanning the mountains and valleys that cut across the borders of Laos, Thailand, and Myanmar -- which used to be called Burma -- the region produces anywhere from 60 to 120 tons of heroin annually. A kilo of this Triad-distributed drug wholesales between $400,000 and $600,000. Cut to 6-percent purity, the street value can easily reach $10 million. Triad is unquestionably the most powerful force in the world's heroin trade . . . * * * Police in Hong Kong have identified 57 active Triad organizations, which have offshoots in Taiwan, the Philippines, Vietnam, and Australia. But their real future lies in North America. . . . Today, Chinese gangs are securely established in San Francisco, Los Angeles, New York, Toronto, and Vancouver. They have long had a presence in London, and are now beginning to show up in places where they have no traditional ties, such as Germany. Police there recently raided ninety Chinese restaurants, questioned 653 people, arrested 102 of them, and seized 24 false passports, more than $1 million in cash, large amounts of cocaine and heroin, and several weapons. They also uncovered evidence of what the police described as "Mafia-type" money laundering schemes. . . . * * * >From Year of the Rat: . . . Our Tale of Three Cities -- Macao, Los Angeles, and Phnom Penh (the capital of Cambodia) -- explains how ethnic Chinese criminal gangs, called Triads, created their own money conduit to the Clinton White House, for their own benefit and for their business partners in Beijing. They visited the White House many times, made illegal contributions to the Clinton-Gore reelection campaign, and were photographed at the place of honor beside the president and vice president of the United States. . . . The Chinese Triads and the Sicilian Mafia share certain characteristics-- they're in the same lines of business. A 1998 U.S. Justice Dept report listed Triad business as "narcotics trafficking, money laundering, contract murders, illegal gambling, loansharking, extortion, interstate prostitution rings and alien smuggling." . . . As the Canadians point out, since a major goal of the Triads is to infiltrate legitimate business, their own appearance of legitimacy is important: "Triad members work very hard at ingratiating themselves with police, government officials and politicians. The easiest way for them is by making substantial donations to charitable organizations, joining service clubs, donating funds to universities, sometimes obtaining honorary doctorate degrees, or contributing to political parties ... Public photographs of Triad figures with politicians is another favorite technique." . . . As early as 1982, Triad leaders were trying to buy access to the Democratic Party. Before he fled the country for South America, New York City Triad leader Eddie Chan was bragging about his political contributions to former Congresswoman Geraldine Ferraro's (D-NY) reelection campaign. The amount of money he actually contributed wasn't really that high-- $1,000 according to the New York Times-- but it's useful to show intent. A decade later-- the Clinton-Gore era-- the money would really begin to roll in. . . . ------------------------------------------------------------------------ Yakuza - From tripod.com: Yakuza Stretch Tentacles Overseas . . . Like most growth-oriented enterprises, the yakuza have not confined their illegal -- and legal -- business activities to Japan. In the late 1960's the Japanese mob took advantage of the sharp rise in Japanese tourism and began organizing "sex tours" to various countries in Southeast Asia. The yakuza also began to recruit -- or, more probably, to coerce -- women from the Philippines, Taiwan, South Korea and other Southeast Asia countries to work as "hostesses" in mob-controlled brothels in Japan. The overseas push proved similarly lucrative for drug trading -- primarily of Korean, Taiwanese and other sources of methamphetamine (known as "speed" on U.S. streets). Gunrunning also evolved into a profitable activity since the sale of guns is controlled so strictly in Japan that the black market price for handguns can be as much as $5,000 to $7,000. Gangsters typically have bought the guns abroad, mostly from criminal elements in China, Taiwan, Hong Kong, the Philippines and the United States, and sold for exorbitant prices on the black market back home. . . . * * * American law enforcement officials maintain that until 1974 yakuza activities in the U.S. were relatively limited, both in nature and scope. Not surprisingly, given its geographic proximity and brisk tourist trade, Hawaii initially attracted Japanese gangsters. Their focus there was on fleecing their own countrymen on yakuza-organized tours that included patronizing yakuza-run bars, restaurants, brothels and other entertainment. As the yakuza's economic power has grown, however, they have focused greater attention on picking other fruits from the U.S. market. In this regard, mobsters found that, partly due to its heavy tourist traffic, the fiftieth state was a prime market for selling Asian-made methamphetamine (usually at a cut-rate price compared to U.S.-made speed) and/or trading these drugs for handguns. . . . * * * >From its Hawaiian beachhead the Japanese mob has moved on to the mainland, stopping first in southern California but continuing its reach up the coast to such cities as San Francisco, Portland, and Seattle. As the yakuza have cultivated ties with other organized crime groups operating in the United States, American law enforcement officials have observed the Japanese mob in gambling centers, such as Las Vegas and Atlantic City, as well as in Newark, New Jersey, New York City and Boston. . . . While the primary focus of the yakuza's dealings with other organized crime groups still appears to be the trafficking in drugs and handguns, U.S. officials, aware of the Japanese mob's expanded activity in the "above-ground" business world in Japan, have become increasingly worried about the extent to which the yakuza have been able to commingle their illicit profits with legitimate Japanese investment in the United States. * * * Yakuza in Business and Politics. The yakuza has always been involved in politics and business right from the start. The groups are always hungry for more power and money, wherever they can find it. . . . In 1987, Noboru Takeshita was elected prime minister in Japan. There were always suspicions of gangster ties in the election. When questioned on the accusations in 1992, Takeshita denied knowing at the time that the yakuza were involved. . . . The Liberal Democratic Party kingmaker was made to resign from politics in October 1992 when he admitted to receiving Y500m ($4 mil) from a delivery firm, Sagawa Kyubin. The owner of the firm, Hiroyasu Watanabe, paid the kingmaker for trying to help save his business. . . . With the anti-yakuza countermeasure act in place, the future for the yakuza seems bleak, at least in Japan. The North American expansion could do very well, as they channel nearly $10 billion into legitimate investments not only in the US, but in Europe as well. * * * >From U.S. News and World Report, 4/13/98, by David Kaplan: Yakuza, Inc. . . . U.S. investors are spending billions of dollars to snap up huge portfolios of bad loans from Japanese banks. What the local banks aren't telling their new customers is that behind much of their economic woes stand Japan's wily crime syndicates. In the late 1980s, the yakuza became major players in the nation's wildly speculative real-estate market. Japanese crime experts now believe that as much as 40 percent of the banking industry's bad loans are tied to organized crime, representing a whopping $235 billion . . . The gangs have played such havoc with efforts to clean up the banking mess that one former top Tokyo cop calls his nation's economic crisis a "yakuza recession." . . . At the front lines of this crisis, suddenly, are American investors, among them a Who's Who of equity funds, investment banks, and real estate trusts.. Over the next few years, U.S. financial companies hope to spend more than $20 billion on the bad-loan portfolios, according to real-estate specialists at Ernst & Young. Goldman Sachs, Merrill Lynch, Morgan Stanley, and others are betting that their experience in liquidating property will pay off big in Japan. The firms are paying as little as 10 cents on the dollar for Japanese properties that range from downtown high-rises to abandoned golf-course developments. . . But the risks for U.S. investors are substantial. Yakuza experts warn that Western capital has never before collided with Japanese organized crime in such a major way. . . * * * Risky business. . . . Investors may be unprepared for what awaits them. "You've got inexperienced guys from New York coming here who don't know what they're getting into," says an investment banker with years of experience in Tokyo. . . . In November, a mysterious fire struck the home of a top executive at the Japan subsidiary of Cargill Inc., the U.S. argibusiness giant. Cargill was among the first foreign firms to buy portfolios of bad loans. When the fire occurred, Cargill executives were suspicious of foul play. * * * The majority of bad loans in Japan are tied to real estate. Japanese authorities are also considering whether to allow securitization of bad loans, a tool the U.S. used effectively in cleaning up the savings and loan industry. But the sale of securities based on yakuza-tied debt could make for unusual bedfellows. Conceivably, pension-fund holders in Sarasota or Sacramento could end up earning interest on mafia-run brothels in Osaka. . . . * * * U.S. News obtained a ... portfolio of 108 properties offered to Western investors by Mitsui Trust & Banking Co., one of Japan's largest banks. Thirteen of the properties ... are held by Azabu Building, a company that might not mean much to Americans but is quite familiar to Japanese police. In early March, Azabu's president, Kitaro Watanabe, received two years in prison for hiding some $18 million in assets from creditors. Azabu properties, moreover, are protected by groups tied to Tokyo's largest crime syndicate, according to police. ... The issue is sensitive enough that not one banker interviewed for this story -- American or Japanese -- would talk on the record. It's easy to understand why. "These guys are a nightmare to deal with," said a Tokyo banker responsible for collecting bad loans. . . . In 1993, Tomosaburo Koyama, a vice president of now bankrupt Hanwa Bank ... was gunned down outside his home. Koyama headed a section of the bank that collected problem loans, and police believe the murder is tied to a dispute with a local yakuza gang. A similar slaying occurred a year later, when the manager of a top branch of Sumitomo Bank was found shot through the head in his apartment building. Since 1991, assailants have committed dozens of violent acts against Japanese companies, including assaults, arson, and 21 shooting attacks on the homes of corporate executives. . . * * * It is not well understood in the West that key portions of Japan's financial industry-- debt collection, bankruptcy management, consumer finance -- are heavily influenced by the yakuza. * * * What pushed the gangs so deeply into the financial world was Japan's Bubble Economy, the huge speculative boom that sent real-estate and stock prices soaring in the late 1980s. In terms of sheer market capitalization, the Tokyo Stock Exchange became the world's largest; the Osaka stock market bumped London's Bourse to fourth place. The value of real estate in Tokyo, on paper, was said to exceed that of the entire United States. These overinflated assets became the collateral for a seemingly endless amount of credit extended to virtually any business in Japan --and the yakuza cashed in big. . . . To Japanese who watched the gangs, it soon became clear that all this money was transforming the underworld. This new breed of criminal was dubbed the keizai yakuza, the economic gangster, and became the stuff of legend from Ginza nightclubs to Manhattan art auctions. . . * * * Dirty Money. The Bubble popped in 1990, plunging Japanese property and stock markets to lows from which they have yet to recover fully. Last January, the Ministry of Finance offered what analysts say is the first accurate accounting of the size of the bad loans left from the Bubble's collapse -- nearly $600 billion, an amount larger than America's S&L debacle, in an economy less that half the size. Cleaning up the S&Ls, moreover, seems easy compared with what the Japanese face. The S&Ls were looted largely by white-collar crooks, not by violent crime syndicates. Much of the money lent to the gangs has simply disappeared, hidden away in mob investments, spent on fast living, or lost with deflating stock and property values. . . . Faced with gangsters, ultra-nationalists, and unresponsive police, U.S. investors may find it hard to resist making handsome payoffs to the mob. "On the big discounted properties, you may have to cooperate with organizations like mine," advises godfather [Ryuma] Suzuki (who runs the Sumiyoshi-kai, a $1 billion crime syndicate with 7,000 employees). "Things can get a little rough out there." Privately, some U.S. investment bankers admit they may have to grease the wheels in order to clear their new properties." The profit potential is big enough, says one, that there's money to be made even after Suzuki's commission of 40 percent. . . . * * * But such decisions will have repercussions on both sides of the Pacific, say yakuza watchers. If the gangs are paid off, it means a large infusion of American cash into the Japanese underworld -- not a welcome thought for the United States, where yakuza practices have ranged from drug smuggling to extortion and money laundering. Nor does it help the small band of Japanese reformers like Nakabo, who are struggling to change their system. A more immediate threat, perhaps, is that posed to the investors themselves. As Japan's banking industry found, the gangs do not easily go away. Until now, the yakuza have largely American business alone, but that may now change. "In the short term, you're getting an opportunity to make a profit," says former FBI man Godfrey. "But you're exposing yourself to paying off organized crime, and that could spill over to the rest of your business." As the Japanese like to say . . . "Dealing with the yakuza is like feeding a tiger. If you try to stop, the tiger will eat you." * * * >From The Laundrymen: . . . The Yakuza, Japan's equivalent of the Italian Mafia, is said to consist of at least 165,000 members and to have an annual turnover approaching $70 billion. A centuries-old traditional alliance made up of thousands of warrior clans, whose members identify themselves with multicolored tattoos, one of its more effective tactics has been company extortion. The Yakuza approach publicly held corporations and threaten that unless the company comes up with protection money, they'll disrupt the shareholders' next annual general meeting. . . . They are also into dealing drugs, and seem to have cornered the "ice" market in Hawaii -- ice being crystal methamphetamine, a staple of drug users in the islands . . . * * * At least fifty major properties in Hawaii are said to be owned by Japanese criminals. The FBI scored a big win there in 1992 when they lured Mitsuo Yoshimura out of Tokyo and into a Honolulu resort hotel. He thought he was there to finalize a $5 million "ice" deal. Arrested on U.S. soil, the 43-year-old boss of the Kyokushin-kai faction became the first, and to date only, Yakuza leader to be convicted in the United States. * * * But according to a former Yakuza member who testified before a Senate investigations panel, Hawaii is not their only area of interest in America. Hundreds of millions of dollars of Yakuza money has been poured into hotels and golf courses around the country. Many of the private Japanese gambling clubs that dot midtown Manhattan are also believed to be backed by Yakuza groups. . . * * * When they first went international, they relied almost entirely on banks to launder their money. At the beginning of the 1970s, however, the Yakuza discovered stockbroking. With the help of Malaysian Chinese gangs, they opened brokerages in Malaysia and Singapore. As their business grew, they moved quickly into Hong Kong, Australia, New Zealand, Indonesia, and the Philippines. It is alleged they've now opened shop in the United States. . . . * * * Cash is funneled in one end, and shares in legitimate companies that pay legitimate dividends come out the other. . . . * * * ------------------------------------------------------------------------ ------------------------------------------------------------------------ Last Updated on May 2, 2001 by The Catbird ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, All My Relations. Omnia Bona Bonis, Adieu, Adios, Aloha. Amen. Roads End <A HREF="http://www.ctrl.org/";>www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! These are sordid matters and 'conspiracy theory'—with its many half-truths, mis- directions and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. 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