Entertainment at lurid shabu-shabu establishment got bankers, bureaucrats in hot water

In a special "wide" review of "Incidents of the Heisei Era involving money and women," Shukan Shincho (Dec 27) takes a loving look back at the scandal that rocked the Ministry of Finance in the early 1990s -- following the crash of Japan's "bubble economy."

It goes without saying that abuses regularly occurred in the cozy relationship between business and government; but while executives were known to invite bureaucrats out for a night of wining and dining in order to "exchange views" and "cement relationships of trust," certain lines had still been drawn in terms of limitations of the types of hospitality that could be extended. For example, inviting a guest to romp at a shop where sex was included on the menu was a definite no-no.

Enter Lou-Lan, an upscale shabu-shabu restaurant in the Shinjuku adult entertainment district, whose main attraction along with the tasty stew was attractive young waitresses clad in short skirts with nothing underneath. In other words, a no-pan shabu-shabu.

Lou-Lan's floors, it should be added, were spotless and buffed to a state of high reflectivity. Just the kind of view a weary, overworked member of the ministry needed to loosen up on his night out -- without crossing the arguably ambiguous line regarding sex.

"Around that point in time, Japan was under pressure from Europe and the U.S. to liberalize its financial markets, so government administrators were facing a period of major change ," recalled a veteran business journalist. "Then the bubble collapsed, and banks and other financial organizations had to contend with a huge amount of bad debt. The most important thing to know was which branches were going to be targeted for audits.

"Around this time, restrictions toward company entertainment became relaxed to the point of overindulgence," recalled Katsuhiko Kumasaki, a former senior investigator in the Tokyo prosecutor's office.

Finally in January 1998, charges of bribery -- in the form of lavish, semi-undraped entertainment -- were filed against a number of financial institutions, and four officials at the Ministry of Finance were also arrested.

"Up to that point, wining and dining members of the bureaucracy had not been considered a violation," said Kumasaki. "They were tolerated because they afforded a beneficial opportunity for exchanging views. But it was generally agreed that being entertained at a no-pan shabu-shabu restaurant was taking things too far."

Back then, if a bank wanted to open a new branch or offer some type of new financial service, it could not do so without the ministry's approval. This led to a steady stream of bureaucrats being entertained at Lou-Lan -- and for this transgression 112 of them were eventually subjected to disciplinary measures.

"Looking back at it all, the no-pan shabu-shabu incident was the greatest, most decisive factor in the ministry's loss of trust," a former ministry bureaucrat told Shukan Shincho. "Up to then, while abuses may have occasionally occurred, the ministry still enjoyed the perception by many as 'working hard for the public.' Afterward, such abuses as corruption and the amakudari ("descent from heaven") system of post-retirement perks in private industry) -- not to mention a sexual harassment scandal by a senior official -- became widely known."  

So tainted were those involved in the no-pan shabu-shabu scandal that to this day, the ministry's OBs (old boy, i.e., former staff members) have never followed the practice of meet up for reunions.

© Japan Today