A meeting of the clans - leaders of
Japan's principal Yakuza families. Second from the
left is Yoshio Kodama, boss of the Yamaguchi-Gumi, the
largest Yakuza clan in Japan.
Below that is a 1994 article published at the John
Carroll University website (http://www.jcu.edu) by Tim
Weiner, that describes how the CIA gave sustenance and
support to the Japanese right - including Yakuza boss
Yoshio Kodama - during the 1950's and 1960's.
October 9, 1994
C.I.A. Spent Millions to Support Japanese Right
in 50's and 60's
By TIM WEINER
-- In a major covert operation of the cold war, the
Central Intelligence Agency spent millions of
dollars to support the conservative party that
dominated Japan's politics for a generation.
The C.I.A. gave money to the Liberal Democratic
Party and its members in the 1950's and the 1960's,
to gather intelligence on Japan, make the
country a bulwark against Communism in Asia and
undermine the Japanese left, said retired
intelligence officials and former diplomats. Since
then, the C.I.A. has dropped its covert financial
aid and focused instead on gathering inside
information on Japan's party politics
and positions in trade and treaty talks, retired
intelligence officers said.
The Liberal Democrats' 38 years of one-party
governance ended last year when they fell from power
after a series of corruption cases -- many involving
secret cash contributions. Still the largest party
in Japan's parliament, they formed an awkward
coalition in June with their old cold war enemies,
the Socialists -- the party that the C.I.A.'s aid
aimed in part to undermine.
Though the C.I.A.'s financial role in Japanese politics
has long been suspected by historians and
journalists, the Liberal Democrats have always
denied it existed, and the breadth and depth of the
support has never been detailed publicly. Disclosure
of the covert aid could open old wounds and harm the
Liberal Democrats' credibility as an independent
voice for Japanese interests. The subject of spying
between allies has always been sensitive.
The C.I.A. did not respond to an inquiry. In
Tokyo, Katsuya Muraguchi, director of the Liberal
Democratic Party's management bureau, said he had
never heard of any payments.
"This story reveals the intimate role that
Americans at official and private levels played in
promoting structured corruption and one-party
conservative democracy in post-war Japan, and
that's new," said John Dower, a leading Japan
scholar at the Massachusetts Institute of
Technology. "We look at the L.D.P. and say it's
corrupt and it's unfortunate to have a one-party
democracy. But we have played a role in creating
that misshapen structure."
Bits and pieces of the story are revealed in
United States Government records slowly being
declassified. A State Department document in the
National Archives describes a secret meeting in a
Tokyo hotel at which Eisaku Sato, a former Prime
Minister of Japan, sought under-the-table
contributions from the United States for the 1958
parliamentary election. A newly declassified C.I.A.
history also discusses covert support sent that
But the full story remains hidden. It was pieced
together through interviews with surviving
participants, many well past 80 years old, and
Government officials who described still-classified
State Department documents explicitly confirming the
Kennedy Administration's secret aid to the Liberal
Democrats in the early 1960's.
The law requires the Government to publish, after
30 years, "all records needed to provide a
comprehensive documentation of major foreign policy
decisions and actions." Some State Department
and C.I.A. officials say the Kennedy-era documents
should stay secret forever, for fear they might
disrupt Japan's coalition government or
embarrass the United States. Other State Department
officials say the law demands that the documents be
A Secret Operation That Succeeded
The C.I.A.'s help for Japanese conservatives
resembled other cold war operations, like secret
support for Italy's Christian Democrats. But it
remained secret -- in part, because it succeeded.
The Liberal Democrats thwarted their Socialist
opponents, maintained their one-party rule, forged
close ties with Washington and fought off public
opposition to the United States' maintaining
military bases throughout Japan.
One retired C.I.A. official involved in the
payments said, "That is the heart of darkness
and I'm not comfortable talking about it, because it
worked." Others confirmed the covert support.
"We financed them," said Alfred C.
Ulmer Jr., who ran the C.I.A.'s Far East operations
from 1955 to 1958. "We depended on the L.D.P.
for information." He said the C.I.A. had used
the payments both to support the party and to
recruit informers within it from its earliest days.
By the early 1960's, the payments to the party
and its politicians were "so established and so
routine" that they were a fundamental, if
highly secret, part of American foreign policy
toward Japan, said Roger Hilsman, head of the
State Department's intelligence bureau in the
"The principle was certainly acceptable to
me," said U. Alexis Johnson, United States
Ambassador to Japan from 1966 to 1969.
"We were financing a party on our side."
He said the payments continued after he left Japan
in 1969 to become a senior State Department
The C.I.A. supported the party and established
relations with many promising young men in the
Japanese Government in the 1950's and 1960's. Some
are today among the elder statesmen of Japanese politics.
Masaru Gotoda, a respected Liberal Democratic
Party leader who entered parliament in the 1970's
and who recently served as Justice Minister,
acknowledged these contacts.
"I had a deep relationship with the C.I.A.,"
he said in an interview, referring to his years as a
senior official in intelligence activities in the
1950's and 1960's. "I went to their
headquarters. But there was nobody in an authentic
Government organization who received financial
aid." He would not be more explicit.
"Those C.I.A. people who were stationed in
the embassy with legitimate status were fine,"
he said. "But there were also covert people. We
did not really know all the activities they were
conducting. Because they were from a friendly
nation, we did not investigate deeply."
Recruitment Was 'Sophisticated'
The recruitment of Japanese conservatives in the
1950's and 1960's was "a pretty sophisticated
business," said one C.I.A. officer. "Quite
a number of our officers were in touch with the
L.D.P. This was done on a seat-by-seat basis"
in the Japanese parliament. A second C.I.A. officer
said the agency's contacts had included members of
the Japanese cabinet.
As the C.I.A. supported the Liberal Democrats, it
undermined their opponents. It infiltrated the Japan
Socialist Party, which it suspected was receiving
secret financial support from Moscow, and placed
agents in youth groups, student groups and labor
groups, former C.I.A. officers said.
Obstructing the Japanese opposition "was the
most important thing we could do," one said.
The covert aid apparently ended in the early
1970's, when growing frictions over trade began to
strain relations between the United States and Japan,
and the growing wealth of Japan made the
agency question the point of supporting politicians.
"By that time, they were
self-financing," a former senior intelligence
official said. But the agency used its longstanding
relationships to establish a more traditional
espionage operation in Japan.
"We had penetrations of all the cabinet
agencies," said a C.I.A. officer based in Tokyo
in the late 1970's and early 1980's. He said the
agency also recruited a close aide to a prime
minister and had such good contacts in the
agriculture ministry that it knew beforehand what Japan
would say in trade talks. "We knew the fallback
positions" in talks over beef and citrus
imports, he said. "We knew when the Japanese
delegation would walk out."
Useful though it may have been, the inside
information rarely gave American trade negotiators
the upper hand with the Japanese.
'The Reverse Course' Of American Policy
The support for the Liberal Democrats had its
origins in what some historians call "the
reverse course" of American policy toward Japan
after World War II.
From 1945 to 1948, the American forces who
occupied Japan purged the Government of the
right-wing militarists who had led Japan into
war. But by 1949, things had changed. China went
Communist. The Soviet Union exploded its first
atomic bomb. Washington was fighting Communism, not
ferreting out rightists.
The American occupation forces freed accused war
criminals like Nobusuke Kishi, later Japan's
Prime Minister. Some of the rehabilitated
politicians had close contacts with organized crime
groups, known as yakuza. So did Yoshio Kodama, a
political fixer and later a major C.I.A. contact in Japan
who worked behind the scenes to finance the
These politicians also drew support from a group
of retired diplomats, businessmen and veterans of
the Office of Strategic Services, the World War II
precursor of the C.I.A. The group's leader was
Eugene Dooman, an old Japan hand who quit the
State Department in 1945 to promote "the
During the Korean War, the Dooman group pulled
off an audacious covert operation, bankrolled by the
Japanese conservatives needed money. The American
military needed tungsten, a scarce strategic metal
used for hardening missiles. "Somebody had the
idea: Let's kill two birds with one stone,"
said John Howley, a New York lawyer and O.S.S.
veteran who helped arrange the transaction but said
he was unaware of the C.I.A.'s role in it.
So the Dooman group smuggled tons of tungsten
from Japanese military officers' caches into the
United States and sold it to the Pentagon for $10
million. The smugglers included Kodama and Kay
Sugahara, a Japanese-American recruited by the O.S.S.
from a internment camp in California during World
The files of the late Sugahara -- researched by
the late Howard Schonberger, a University of Maine
professor writing a book nearly completed when he
died in 1991 -- described the operation in detail.
They say the C.I.A. provided $2.8 million in
financing for the tungsten operation, which reaped
more than $2 million in profits for the Dooman
The group pumped the proceeds into the campaigns
of conservatives during Japan's first
post-occupation elections in 1953, Howley said in an
interview. "We had learned in O.S.S., to
accomplish a purpose, you had to put the right money
in the right hands."
By 1953, with the American occupation over and
the reverse course well under way, the C.I.A. began
working with warring conservative factions in Japan.
In 1955, these factions merged to form the Liberal
The fact that money was available from the United
States soon was known at the highest levels of the
On July 29, 1958, Douglas MacArthur 2d, the
general's nephew, who was then United States
Ambassador in Tokyo, wrote to the State Department
that Eisaku Sato, the Finance Minister, had asked
the United States Embassy for money. Sato was Prime
Minister of Japan from 1964 to 1972 and
received the Nobel Peace Prize in 1974.
Ambassador MacArthur wrote that such requests
from the Government of Prime Minister Nobusuke Kishi
were nothing new. "Eisaku Sato, Kishi's
brother, has tried to put the bite on us for
financial help in fighting Communism," his
letter said. "This did not come as a surprise
to us, since he suggested the same general idea last
Sato was worried, an accompanying memo explained,
because a secret slush fund established by Japanese
companies to aid the L.D.P. was drained.
" Sato asked if it would not be possible for
the United States to supply financial funds to aid
the conservative forces in this constant struggle
against Communism," the memo said. While it is
unclear whether Sato's request was granted directly,
a decision to finance the 1958 election campaign was
discussed and approved by senior national security
officials, according to recently declassified C.I.A.
documents and former intelligence officers.
In an interview, MacArthur said the Socialists in
Japan had their own secret funds from Moscow,
a charge the left denied.
"The Socialist Party in Japan was a
direct satellite of Moscow" in those years, he
said. "If Japan went Communist it was
difficult to see how the rest of Asia would not
follow suit. Japan assumed an importance of
extraordinary magnitude because there was no other
place in Asia from which to project American
A Close Call In 1976
In 1976, the secret payments were almost
A United States Senate subcommittee discovered
that Lockheed Corp., seeking lucrative aircraft
contracts, had paid $12 million in bribes to Prime
Minister Kakuei Tanaka and the Liberal Democrats.
The conduit was Kodama -- political fixer, tungsten
smuggler and C.I.A. contact.
Then a retired C.I.A. officer living in Hawaii
phoned in a startling tip.
"It's much, much deeper than just
Lockheed," Jerome Levinson, the panel's staff
director, recalls the C.I.A. man saying. "If
you really want to understand Japan, you have
to go back to the formation of the L.D.P. and our
involvement in it."
Levinson said in an interview that his superiors
rejected his request to pursue the matter.
"This was one of the most profound secrets
of our foreign policy," he said. "This was
the one aspect of our investigation that was put on
hold. We got to Japan, and it really all just
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