Let Me Have A Look At That Memo

A few weeks back I hailed Hiroko Tabuchi of The New York Times for her report on the Olympus investigation and the peculiar investment advice handed out by a pair of banker brothers, the Yoko'os (E).

Last week, Ms. Tabuchi produced a follow up article that makes the startling claims of not only vastly greater losses at Olympus but also the involvement of organized crime, namely the Yamaguchi Gumi. This second claim backs up a statement an annonymous commenter left on my earlier post about the relative paucity of local news coverage of the Olympus scandal, at least as compared to foreign financial outlets and the local coverage of the Daio Paper scandal. If organized crime organizations were indeed behind the coverup at Olympus, domestic reporters would understandably be very, very cautious in their reporting on the affair.

Now I would normally say, "Brava!" to any follow up article that finds even more dirt on Olympus (I have nothing against the company or its employees...well, at least its non-director employees). Only this time I cannot feel but holding back on my applause.

What worries me is the source of the accusations.

Billions Lost by Olympus May Be Tied to Criminals
The New York Times

[snip]

In a memo prepared by investigators and circulated at a recent meeting of officials from Japan’s Securities and Exchange Surveillance Commission, the Tokyo prosecutor’s office and the Tokyo Metropolitan Police Department, officials say they are trying to determine whether Olympus worked with organized crime syndicates to obscure billions of dollars in past investment losses and then paid them exorbitant sums for their services.

The memo — a copy of which was obtained by The New York Times from a person close to the official investigation — appears to link the Olympus losses for the first time to organized crime groups...

Eeeek! A police memo, from a person close to official organization! And that "may" in the title!

The Olympus scandal "may" be linked to the Thai floods. The Olympus scandal "may" be linked to the fall of the Roman Empire.

Ooooh, this is such a bad time to go all Japanese news media practice on a story. In fact, any time is a bad time to go all Japanese news media practice on a story.

When an internal police or public prosecutors memo is leaked to the press "by a person close to the investigation" one can be almost certain that what is about to ensue is a fishing expedition, wherein the investigators arrived with their cardboard boxes and clean out a building or several buildings.

Now given the size of the sums bandied about in last week's article (US $4.9 billion of unaccounted for funds) and the specific mention of the Yamaguchi Gumi, it is possible that the police targets this time are actual Yamaguchi Gumi offices. If so, the police are either a) out of their minds or b) determined to put the Yamaguchi Gumi out of business -- which is, of course, a variation of a).

There is no doubt that if the police and public prosectors did raid Yamaguchi Gumi offices, they would find in the course of their extensive search for evidence of crimes linked to the Olympus scandal enough evidence of other crimes to put hundreds of gang members behind bars - if Japan had the courtrooms and jails to try and house all the suspects, of course.

There is, of course, the possibility that the police memo is all nonsense, meant either to smoke out any leftover questionable acquisitions that Olympus officials may still be hiding, or embarass Ms. Tabuchi for blowing the whistle on the Yoko'os before the police could nab them (one of them at least seems to have disappeared).

We shall see.