The Quake That Hurt Kobe Helps Its Criminals

When an earthquake toppled entire neighborhoods here in January, the most striking and impressive thing for many Americans was the almost complete lack of looting.

These days, the looting has arrived — on a huge scale, but in a very orderly and Japanese way. There are no hoodlums smashing windows, but criminal gangs known as yakuza are muscling their way into the demolition and construction business: knocking down damaged buildings, putting up new ones and hauling their profits to the banks.

The reconstruction of Kobe may cost well over $120 billion, making the earthquake the most expensive natural disaster in human history. Japanese police and journalists who follow the yakuza full time estimate that the gangs pocket at least 2 or 3 percent of all construction spending in Japan, and in this case its percentage could be higher.

The biggest yakuza gang, the Yamaguchi-gumi, has its national headquarters in Kobe, where it is already active in the construction industry, and it knows the turf well. Experts say that the yakuza could therefore earn billions of dollars from the rebuilding work.

Thus one of the biggest beneficiaries of the Kobe earthquake, which killed 5,500 people and put the country’s busiest port out of commission, could end up being Yoshinori Watanabe, the godfather of the yakuza. Mr. Watanabe, 54, is said to be positioning his gang to rake in a hefty share of the construction spending.

Mr. Watanabe’s own home and headquarters, a closely guarded fortress occupying a full city block in a posh residential neighborhood, apparently was unaffected by the earthquake. One of his office buildings in another part of Kobe was burned to the ground, but by and large he emerged unscathed — but not particularly talkative.

“There is no one here who can talk to you,” said a bodyguard whose shaved head gleamed in the afternoon sun as he shooed away a reporter who dropped by the headquarters. The bodyguard, who emerged from behind a steel door guarded with video cameras and floodlights, wore a blue suit with a white shirt, and he bowed — not quite low enough to be polite — as he explained that no one would be back that afternoon. Or that evening. Or the next day. Or, perhaps, ever.

Then, as the bodyguard asked, then advised, and finally ordered the visitor to leave, a Mercedes with tinted windows hurtled down the street, and another bodyguard opened a steel garage door to admit it. As the Mercedes entered, a private parking lot with about a dozen luxury cars could be seen inside the compound.

At the other end of Kobe, in the leaning homes and rubble of Nagata Ward, one of the poorest areas of the city, the director of a demolition company watched proudly as one of his shovel cars tore apart a collapsed house to prepare the site for a new home. The man said his company owned six shovel cars and many dump trucks, and he seemed to know a bit about the yakuza.

“There are lots around, because they control plenty of demolition and construction companies,” he said, adding, “Of course, I’m not one of them.”

His hand, though, suggested otherwise: a fingertip had been sliced off. That usually means that someone is a yakuza, because gangsters show their remorse when they have done something wrong by cutting off a finger at the last joint.

The man said that demolition work is not so profitable in itself, because the city of Kobe set limits on how much can be charged for a truckload of rubble. “But unless you do these jobs, you can’t get the construction jobs coming up next, building roads or working as subcontractors on building projects,” he explained.

That is what the police worry about most these days.

“They’ll do demolition jobs until around the end of the year, and they’ll make some money, but not a huge amount,” said Akifumi Hyakumoto, a police superintendent in Kobe. “But when they start building highways, ports and buildings, so much more money will be involved. We think the yakuza will go after the big money then.”

The police say they have their hands tied, however, because much of the yakuza construction work is legal. To be sure, the yakuza may cut corners — like threatening rival companies so that they do not offer lower bids — but the construction business is both lucrative for the yakuza and much less risky than smuggling guns or narcotics.

The Yamaguchi-gumi has about 23,000 members around Japan, controlling the sex trade, gambling, protection rackets and narcotics. They insist that they adhere to a high moral code of protecting the weak, and for that reason they tend to kill only rival gang members and do not normally attack ordinary citizens.

Japan traditionally tolerated the yakuza’s existence as an organization, while imprisoning members who became too bold or violent. This may have been in part because the authorities figured that criminals will always be around, so one might as well leave them in organizations that control them.

In the last few years, however, the police have used new laws to mount an offensive against the yakuza. In addition, the gangs were hurt by the economic slowdown that has pinched Japan for several years.

In a concession to the financial difficulties of some of his aides, Mr. Watanabe last year reportedly reduced the honorarium that he expects from each of a select group of lieutenants to about $8,000 a month from $10,000. In all, Mr. Watanabe gets about $1 million a month in such gifts from his aides, the police say.

The police say that the earthquake came at a perfect time for Mr. Watanabe. He has been trying for years to reorient the Yamaguchi-gumi toward business areas that are not blatantly illegal, and the yakuza have a longtime presence in the construction and demolition industry.

In addition to running their own companies, the gangsters are said to disrupt construction sites of other companies unless they receive substantial “greetings fees.” The gangs also sometimes supply day laborers for construction sites, in exchange for a fee.

As part of the Yamaguchi-Gumi’s effort to improve its public image, Mr. Watanabe ordered his aides in January to hand out free food and water to those made homeless by the earthquake. The police believe that the yakuza bullied businesses into giving them the food free or at a discount.

“Right after the earthquake, the yakuza came here and set up a stand to serve noodles for free, and I was kind of impressed,” said one woman who was made homeless in the quake. “But then afterward, they asked for a written testimonial saying how great they were, so they could take it to city hall and get more construction business.”

Now, according to that woman and several of her neighbors, the yakuza are quietly going around and buying up land at fire sale prices. With many families now short of money, some property in Nagata Ward is selling for just one-third of its price before the earthquake.

For those who don’t want to sell, yakuza loan sharks are offering cash — but the security is the land that people own. Neighbors said that one mobster is offering loans from his spectacular three-floor colonial-style home, evidently well built, for it is surrounded by the rubble of more fragile homes that collapsed.

“It’s too frightening to take money from them,” said one middle-aged woman who lived nearby, as she spoke in a hushed voice on her doorstep.

“There was a doctor living over there who guaranteed his brother’s loan from the yakuza,” she said. “Then the interest mounted very quickly, and they couldn’t pay back the debt. So the doctor lost his clinic.”

The yakuza found other ways to get money as well. Seventeen members were arrested for applying for emergency relief funds for which they were ineligible. One gangster received funds eight times before being arrested.

“The earthquake ripped apart society,” said one Japanese journalist. “It created cracks so deep that you can see things that are normally hidden, like the way the yakuza operate.”