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A 'MOF-Tan' Casts Light on Japan's Murky Collusion

A bank executive tells how he courted finance ministry officials to get special favors.

By Cameron W. BarrStaff writer of The Christian Science Monitor / February 6, 1998


Businessmen do it. Bureaucrats do it. Just about anybody Japanese does it. Offering a dinner out or sending a gift is as much a part of this culture as raw fish.

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Now these practices are suddenly under scrutiny - and being relabeled a form of bribery that slows Japan's economy - as prosecutors investigate ties between bankers and the government officials who watch over them.

Yesterday an executive at one of Japan's largest banks sat in the sunlit lounge of a Tokyo hotel and explained the bankers' side of the story. He spent two years in the early 1990s as a "MOF-tan" - a bank executive responsible for courting officials at the Ministry of Finance (MOF) in search of precious information.

Speaking on the condition that neither he nor his bank be named, he was restless, almost sheepish. But he insisted MOF-tans are necessary in a nation where vague laws and regulations give bureaucrats broad powers.

Japan's MOF collects taxes, sets the budget, and regulates the financial industry - jobs that most countries divide among several agencies to avoid an overconcentration of power.

Another banker, also speaking on condition of anonymity, says his colleagues quip in frustration that MOF approval is needed "to buy a pencil."

"To do business in these circumstances we need information," says the former MOF-tan. "And to get the information we sometimes need settai - the wining and dining of officials, often at great expense, by business executives. The banker says he confined his settai to pricey restaurants, exclusive clubs, and the golf links, but he acknowledges that the practice has its underside. A weekly magazine is reporting, for example, that one bank employed a full-time prostitute for the benefit of government officials.

Eliminating the excesses of settai would mean changing the very system that orders the world's second-largest economy, he argues. "Please write that we need deregulation," he adds, with a weak smile. But despite many calls for radical change, it seems likely that reforms will be piecemeal and plodding, in the Japanese fashion. "We are bound to change - that's definite - but very slowly," says Toru Nakakita, a professor of economics at Tokyo's Toyo University.

One reason change may come slowly is that the Ministry of Finance is a powerful beast satisfied with the status quo. Another is that conveying things obliquely, relying on "feelings" rather than clearly spoken words, is part of what makes Japan Japanese.

Sumiko Iwao, a professor of social psychology at Keio University here, notes that gift- and entertainment-giving "is the core of Japanese communication."

"This has been a beautiful tradition in many respects, rather than saying things directly ... [although] I really think Japan needs to learn an international standard of communication."

The investigation burst into public view on Jan. 26, when prosecutors tramped through the front door of the ministry as television cameras recorded their entry. The raid alone astounded many people, since the ministry has long been seen as sacred territory where even the nation's law enforcers feared to tread.

Since then one MOF official has committed suicide, its highest-ranking bureaucrat and the finance minister have resigned, and two top bank inspectors are under arrest. Each day brings new revelations about the practice of settai and the coziness of officials and bankers.

Yesterday the prime minister apologized in parliament for the scandal and vowed to clean up the civil service. Ministry officials have responded with a mixture of silence, denials, and humble-sounding affirmations that "there is no excuse."

A society in gradual turmoil