JPRI Working Paper No. 27: December 1996
The Japan Lobby: An Introduction
by Robert Angel

What is the Japan Lobby? How does it operate? Has it been effective? What, if anything, should we do about it? At one extreme the Japan Lobby is portrayed as a menace analogous to the way Qing China portrayed British commercial interests and their domestic henchmen, the treaty port compradors. At the other extreme, the Japan Lobby is described as just another interest group seeking to protect and pursue its interests in Washington, a harmless, possibly even beneficial, example of good old Yankee pluralism.

Neither extreme interpretation of the Japan Lobby squares with this author's assessment, perhaps because my perspective on all of this is somewhat unusual. For seven years, between 1977 and 1984, I occupied a key position within the Japan Lobby as president and chief executive officer of the Japan Economic Institute in Washington, D.C. There I registered with the Criminal Division of the U.S. Department of Justice as a foreign agent of the Government of Japan. Since then, as an academic specialist on Japan and United States-Japan relations, I have remained an attentive observer of and sometimes commentator on the evolution of the Lobby's structure and activities.

My own experience and observations lead me to conclude that while the Japan Lobby is far from the pernicious influence described by its most vehement critics, it does differ qualitatively and quantitatively from the American domestic interest groups with which it is cleverly compared by its most brazen apologists. Agents of the Japan Lobby operate within the permeable American pluralist system, but I believe they have quite different objectives and effects from the domestic players with whom they are compared.

Japan's government officials and the intellectuals who influence policy discussions have no difficulty formulating and pursuing policies that they believe will benefit Japan's national interest. They do so without apology, at least at home, and in Japanese. It would be difficult to understand the objectives and operation of the Japan Lobby without accepting the proposition that most of its activity is inspired by the rational desire to further Japan's national interests as these are understood in Tokyo. However, it would be difficult to understand the Lobby's success in the United States without accepting the proposition that Washington has difficulty conceiving and operationalizing its own national interest.

By Japan Lobby I mean Japan's governmental and private sector efforts to influence the policy formulation and implementation processes of the United States through unofficial, non-diplomatic means. This is a political definition that differs from the more legal definitions of lobbying found in American laws intended to regulate that activity.

My definition of the Japan Lobby includes institutional and individual participants in both Japan and the United States. They share responsibility for target analysis, planning, and implementation. But all important decisions are made in Japan, and Japan supplies nearly all of the funding. Japan Lobby participants on the Japanese side include government ministries and agencies, quasi-governmental and private-sector organizations, business corporations and organizations, academic institutions and their cooperative faculty, Japan's version of think-tanks, publishers, public relations firms, and even political parties and the personal offices of well-financed politicians.

In addition, Japan Lobby managers have established several foundations that channel amazingly generous funding to Lobby participants who would find it uncomfortable to receive such funds directly from the Japanese government. The Japanese side of the Japan Lobby, in other words, includes not only those organizations and individuals whose activities are directed toward influencing particular pieces of United States trade legislation, executive branch decisions, or other kinds of traditional "lobbying" as the term generally is understood in Washington, but also what Ivan Hall has called the "mutual understanding industry."

Participants in this latter category may object to being called part of the Japan Lobby. But viewed from Japan's perspective, they represent an important element of the overall effort; and their importance is demonstrated by the huge amount of money channeled year after year into their accounts. Their activities are encouraged and funded so generously precisely because Japan Lobby strategists believe the mutual understanding industry furthers the Lobby's policy objectives.

The Japan Side

Though it is quite easy to identify institutional and individual participants on the Japan side of the Japan Lobby, it is more difficult to identify a locus of central control or to explain the complex process of coordination this massive effort entails. The Ministry of Foreign Affairs asserts overall authority and responsibility. But in years past it has been thought ineffective in economic relations and vulnerable to poaching by MITI (the Ministry of International Trade and Industry), the Finance Ministry, and even the Agriculture Ministry. As Japan's national defense establishment regains stature in the foreign policymaking community, the Foreign Ministry will be hard-pressed to avoid a similar fate with regard to military lobbying.

Widespread elite support for the central government's postwar economic recovery and prosperity promotion policies has to date been more important than any fixed institutional chain of command. But Japan's mature economy and the internal diversification of interests will likely weaken informal coordination in the future. In the meantime, the erosion of cooperative effort may well increase Japan's lobbying expenditures in the United States.

As in the United States, every Japanese government ministry and agency has at least one department charged with disseminating its "message" at home and abroad. Large corporations, too, have their public relations departments, often attached to the office of the chairman of the board of directors. The Foreign Ministry has a whole generously funded public relations bureau (Joho Chosa Kyoku). It is staffed, like other government offices, by expert semi-permanent regular employees and managed by more frequently rotated higher bureaucrats. Most of the latter have studied abroad for a year or so in American or Western European universities. They have, with varying success, overcome their Todai English training and work quite comfortably in English. They often know more about the American political system than most American government officials and usually have been posted in the United States for several years.

Generational change has brought more self confident, openly nationalistic officials into the managerial ranks, even in the Foreign Ministry. Individuals too young to remember much about WWII and the Occupation seem more inclined than their predecessors to notice and comment on the weaknesses in American society. This natural evolution has led some Americans to consider the new generation arrogant and anti-American. Having observed the change over the last twenty-some years, I believe the changes have actually been more superficial than fundamental, and that the basic orientation remains the same.

MITI during the past twenty-five years and the Ministry of Finance during the past ten or fifteen years have both developed their own independent lobbying infrastructure and activities in the United States. In addition to elaborate information collection activities, both have developed sophisticated networks of affiliated institutes that specialize in the care and coddling of foreign, often language-impaired researchers.

MITI and MOF also actively cooperate with the large foundations that have been established to transfer funds to American institutional and individual participants in Japan Lobby activities. These foundations supply funds to scholars and experts presumed by the American public, communications media, and policy communities to espouse opinions or assessments independent of financial consideration. Their value to the Japan Lobby in fact depends upon this public presumption of independence. Therefore, institutions have been created to provide funds in a manner that will allow recipients to maintain their self respect and-even more important to their benefactors-their credibility with the American public and policy community.

The first such organization, the Japan Foundation, was established in 1972, funded and staffed by the Japanese government under the general policy direction of the Ministry of Foreign Affairs, to "promote international cultural exchange and mutual understanding between Japan and other countries." Skeptics at the time cautioned that offers of Japanese government funding might inspire more rather than less distrust and misunderstanding among notoriously independent foreign scholars and think tank experts. But such fears proved groundless. From the very beginning, the most respected American institutions and individuals competed vigorously for the funding offered.

The Japan Foundation proved so successful that in 1980 the Sasakawa interests in Tokyo established the U.S.-Japan Foundation as "a nonprofit, tax-exempt, philanthropic organization, incorporated . . . under the laws of the State of New York as a private grantmaking organization."1 The U.S.-Japan Foundation was founded "to promote greater mutual knowledge between the United States and Japan and to contribute to a strengthened understanding of important public policy issues of interest to both countries." Established with an initial endowment of $47 million from the legal and institutionalized gambling fortune of the highly controversial Ryoichi Sasakawa, the U.S.-Japan Foundation departed from traditional practice by establishing its headquarters in New York with a binational board of directors that included a number of prominent Americans and Japanese, including Ryoichi Sasakawa's son, Yohei. However, the foundation has maintained close contact with Sasakawa interests in Tokyo through a branch office there, an arrangement that has done nothing for its credibility either in Japan or in the United States.

In 1986 the Sasakawa Foundation (recently renamed the Nippon Foundation) and the Japanese motorboat racing industry launched the Sasakawa Peace Foundation. This organization opened an office in Washington, D.C. in late 1992 that in addition to its library and art gallery, provides "financial support to research institutions and educational organizations in the United States." As explained in its organizational description, the office in Washington was established when "the foundation became acutely aware that the people of the United States need up-to-date, accurate information on contemporary Japan. . . . Frank and open dialogue is essential to the future development of relations between the United States and Japan. But dialogue of this nature is only possible when it is based on accurate information and after the participants have been exposed to a variety of points of view." The Foundation intends to promote that objective with its library. In addition to providing information, "the library will actively engage in a variety of academic and cultural activities, among them seminars and symposiums on themes of current interest in both the United States and Japan."

To all of this was added, in 1991, the Center for Global Partnership (CGP), also known as the Abe Fund, after the late Minister of Foreign Affairs Shintaro Abe who initiated it and promoted funding by the Ministry. It is officially a component of the earlier established Japan Foundation, but operates with relative independence to "help achieve closer relations between Japan and the U.S. and to contribute to a better world through the cooperative efforts of both countries."2

In addition to these four main sources of non-contract funding, several large private companies such as Hitachi, Mitsubishi, and Mitsui have also established foundations whose activities are intended to promote mutual understanding.

The American Side

In the United States, organizational and individual participants in the activities of the Japan Lobby can be divided into three general categories. The first is composed of those who are directly paid for specific services, in relationships that usually are clearly defined by contract. The second category covers organizations and individuals directly paid to support and encourage activities that are considered likely to further the policy objectives of the funding organization in Japan, but over which the benefactor foregoes direct control. The third category of participant is similar to the second, differing only in the nature of compensation, which is non-monetary and in support of activities that usually are not controlled directly by the providing organization. Such non-monetary benefits include special access to valuable information, introductions and on-going access to useful people in Japan, or inclusion in activities that enhance the reputation of the recipient in the United States or provide publicity in Japan. Hereafter I will refer to these three types of Japan Lobbyists as Class A (Controlled), Class B (Supported), and Class C (Recognized).

Class A participants include the law, public relations, and consulting firms so often described in analyses of domestic lobbying. Although they differ somewhat in emphases, all three perform for Japanese clients the same services they perform for domestic and other foreign clients: direct representation, information collection and analysis, personal introductions to key government actors, and strategic political advice. Law firms have the advantage of a monopoly on formal legal services, giving them considerable advantage in developing relationships with corporations and government agencies involved in legal trade disputes.3 But all three Class A participants offer lobbying or political representation services, and many if not most of the large law firms offer public relations and political advice. All collect and analyze politically relevant information of interest to their clients. And most, if they have members in the firm with the right connections, provide personal introductions to influential political figures who either determine, implement, or significantly influence government policy.

Most individuals involved in these firms are Washington "formers" of one sort or another, people who arrived in town as elected or appointed officials of the legislative or executive branches of government. They served for a time in a capacity that gave them access to internal government information, knowledge of how the system operates, and personal relationships with other government officials. Often they are identified by political party affiliation, although party sympathies weaken considerably once hourly fees rise much above $100. (Robert Strauss, who was paid $8 million by Matsushita to help it acquire MCA Corporation, was once asked if this fee was not a trifle high for what amounted to several hours' work. Mr. Strauss's response was, "I don't work by the hour anymore. I don't do windows.")4

A number of law firms were established in Washington during the 1950s and 1960s that depended heavily on representing Japanese economic interests. H. William Tanaka, Nelson Stitt, Noel Hemmendinger, Daniel Houlihann and other names repeatedly appear in the registrations for that period, and some of the partners of the law firms originally formed are still active in Washington today. In earlier years, lawyers so involved played more general roles as Lobby advisers, public representatives, and information collectors. They helped to establish the basic framework of the Lobby and to orient its activities. Nelson Stitt and Noel Hemmendinger, for example, proposed formation of the United States-Japan Trade Council in the mid-1950s, first to MITI and eventually to the Ministry of Foreign Affairs.

During its first two decades of operation, Trade Council activities had a strong legal orientation, and the law firm formed by Stitt and Hemmendinger was able to represent a number of lucrative clients in cooperation with Trade Council operations. At the same time, the Trade Council played a central role in the public dissemination of information intended to improve Japan's image as a fair and responsible trading partner. For that reason, Japanese government support and ultimate control of the organization was disguised by laundering the semi-annual checks through an organization associated with the Japan Chamber of Commerce in New York. This was revealed through a Justice Department suit soon before I arrived in 1977 to assume responsibility for the organization's operation and to reorganize it into the Japan Economic Institute, which had a less legal and more public affairs emphasis in its programs.

Foreign lobbyists operate at a disadvantage in their efforts to influence U.S. policy processes when compared with their American domestic counterparts. Both rely on persuasion to accomplish their objectives, but foreign lobbyists are denied two critical tools of the trade: votes and campaign contributions. Political campaign contributions from foreign interests are prohibited by law, and foreign efforts to influence election campaigns, when discovered, usually have an effect spectacularly contrary to that intended. Americans look with suspicion on foreign interference in U.S. electoral politics. Thus, lacking domestic political standing, foreign lobbyists must either borrow the appearance of a domestic political constituency or else present policy arguments persuasive enough to change opinions and influence behavior on the merits of their position.

Japan even lacks a mobilizable Japanese-American community, in significant contrast to other foreign lobbies. Tokyo for years has underestimated the social and political potential of Japanese-Americans, and Japanese-Americans themselves in the decades following WWII were reluctant to support Japan's national interests in the United States. Therefore, until relatively recently Japan has made little effort to emulate the strategies of Greece, Israel, and other foreign countries in mobilizing American citizens with ancestral ties to their homelands.

Even though they cannot contribute directly to American election campaigns, the Japan Lobby has found a way to support the political campaigns of elected officials without violating the law through announcements of intentions to invest in employment-generating projects. State governors, mayors, even United States senators and representatives, have proven eager to take credit for attracting such investment to the benefit of their constituents. They also acquire a powerful incentive to avoid making statements or taking positions that might offend potential investors, or even to behave more positively.

During my years at JEI, I found state and local officials eager to participate in any programs we sponsored in their states, although they knew of our foreign funding and our general policy objectives. Perhaps the most eager to cooperate were state and private representatives of agriculture. Producers and exporters of wheat, corn, soybeans, sorghum, cotton, and animal fats and oils, all openly admitted their interest in currying favor with representatives of their best overseas market. Each year during my tenure as president, the Japan Economic Institute sponsored an annual agricultural conference, held one year in Washington and the next in the capital of one of the large agriculture export states. These were splashy events arranged almost completely by a public relations firm specializing in agriculture. Thanks to the contacts of the firm's owner, they usually included participation of federal Department of Agriculture officials, including the Secretary when in Washington, and state government authorities including nearly always the governor and the state secretary of agriculture. In addition to the presence of print and electronic media, pictures were taken, speeches were transcribed, recorded, and republished. Certified Americans knowledgeable about international business praised the Japanese economy and their own bountiful access to it.

Another aspect of the last twenty-five years of intense lobbying and public relations activities in Washington has been the national embarrassment of the "revolving door." Japan's involvement in this came first to public notice in the mid-1970s when Harald Malmgren, a former deputy special trade representative who served with ambassadorial rank under William Eberle during the Nixon Administration, was paid several hundred thousand dollars by Japanese electronics interests to help settle a trade case.5 Nothing revealed of the activities of Dr. Malmgren or of his Japanese clients was illegal. He simply agreed for an enormous fee to provide advice and serve as an additional channel of communication between the United States government and industry on the one hand and the Japanese government on the other. He applied his expertise, personal connections, and knowledge of U.S. government acquired while serving in a senior capacity to "solving a problem." Although the resulting publicity may have embarrassed both Malmgren and his Japanese clients, the latter must have concluded that his involvement saved them money because Japanese government and private sector clients continue to retain his services.

Washington standards of conduct were somewhat higher then and the press and public were quite surprised by revelation of the details. However, even today, when very little seems to shock those 'inside the beltway,' Washington does draw the line when there appears to be a direct exchange of favors between a lawmaker and a foreign lobbyist. This was the case when the Senate Ethics Committee censured Senator Robert Packwood in part because of meetings described in his diary with Mr. Steve Saunders.

Mr. Saunders is a registered foreign agent for the Mitsubishi Electric Corporation, but between 1977 and 1981 he had worked for Senator Packwood. On November 3, 1989, according to Packwood's diary, the two had a drink together and Packwood asked Saunders to put Packwood's soon-to-be-divorced wife on a $7,500-a-year retainer. Saunders agreed. Three days later Packwood noted in his diary that at the request of Saunders he had stopped off at a Finance Committee meeting to ask two questions that Saunders had provided concerning an issue that involved Mitsubishi. When questioned about this by the Ethics Committee, Packwood said he was aware that Mr. Saunders represented Mitsubishi. As for whose questions they were, Mr. Packwood said, "This is a common thing that all of us do. If someone calls us up-apparently these are questions my staff did, but quite frequently you'll get questions from lobbyists that send you in questions and say will you go in and ask this."6

'Class B' and 'C' Participants

Discussions of the Japan Lobby usually end with the activities of Class A participants, in accordance with American legal definitions of the term. But viewed from Japan, and judged from the allocation of the Lobby's resources, the activities of Class B participants are at least as important as those of Class A.

The activities of Class B organizations and individuals are supported with funds from Japan, but neither the donor organization nor any other Japan Lobby-affiliated organization insists upon direct control of their activities. Financial support is provided to encourage, often even enable, such activity; and to augment its impact on the American political process, there are usually loud public assurances that no strings are attached. This assurance of the absence of strings is vital since public or even elite perception of Japanese control in every case would destroy the credibility of the operation.

Class B Japan Lobby participants include individual experts and facilitators associated with institutions that regularly sponsor seminars, conferences, and research projects that focus on and are funded by Japan. These include think tanks, academic and free-standing research institutes, and Japan studies programs at American colleges and universities, as well as the many organizations that have been established around the country to further U.S.-Japan "mutual understanding," whose programs frequently include policy-relevant topics.

Class B participants in Japan Lobby activities come in several varieties. One is the genuine Japan expert-those specialists with good language skills, long periods of in-country residence, and serious Japan-related publications. Another type has little or no Japan expertise but has maintained for some time an active interest in Japan from within the area of his or her own expertise, often, but not always economics. Such individuals also publish a great deal about Japan and much is made of their work in Tokyo when it supports Japan Lobby policy objectives. Class B participants with minimal area expertise must rely, of course, on helpful organizational and individual Japanese and American intermediaries to do the research that forms the basis of their opinions. Very few feel the need to develop the skills required for genuine independent assessments, even after years of involvement.

Both types of Class B participants are of value to the Japan Lobby. Genuine Japan experts have considerable credibility within the American policy community when its attention turns to Japan, if only because of their limited number. They are carefully cultivated by Japan lest they drift in directions that would run counter to the Lobby's policy objectives. The non-expert-but-active types are vulnerable to manipulation because of their "research" dependency; and the information they receive is generally biased in the direction of the organizations and individuals willing to spend the time and resources required to provide it. Sometimes non-expert participants assume they can "balance" this bias (obvious even to them) by consulting multiple sources rather than relying upon only one. This is especially true of experienced journalists, who use the "get both sides of the story" approach. But as functional illiterates placed in the ring with professional propagandists even the conscientious don't stand a chance, and they often end up even more effectively manipulated since their multiple consultations raise their confidence in their own work.

A third type of Class B Japan Lobby participant claims no Japan expertise at all. Instead, these individuals are acknowledged experts in other fields, such as economics, international relations, or military affairs. They are involved with Japan only as another example of the phenomenon they study. Such individuals, when their views parallel and support the objectives of the Japan Lobby, are often courted, encouraged, and even offered financial support when they are willing to accept it. I do not wish to imply here that every economist who ever penned a favorable word about Japan is an active participant in the Japan Lobby. But those who regularly appear at Lobby-sponsored functions, who serve on Japanese government advisory committees, who frequently contribute articles to Lobby-sponsored publications, and who remain available for public comments that support the Lobby's objectives at a moment's notice are certainly being used to good advantage by the Japan Lobby.

Class C participants differ from Class B participants only in the nature of their rewards. Class C participants include genuine Japan experts, the non-expert-but-active, and specialists in other fields with little knowledge of Japan. Rather than financial support, they receive less tangible payments such as official attention (medals from the Emperor, for example), involvement in well publicized policy discussions, honorable treatment, and perhaps reimbursement of expenses commensurate with their status. Often retired senior government or private-sector officials, these individuals usually have as their chief interest merely to stay 'in the game.'

Idealism also plays a role, particularly among this category of participant since they can assure themselves that they are not in it "for the money." The effect of their participation in Japan Lobby activities, however, is much the same as that of Class B or even Class A participants.

Many Class B and C American participants in the Japan Lobby are likely to protest that Japanese funding has never influenced their work or their conclusions, that they have never been asked to alter their positions in any way, and perhaps that they only accept Japanese funds from 'private,' independent organizations such as the Japan Foundation, whose allocation decisions are recommended by a board of American scholars.

All of this may be true at the level of the individual. But the distinction here is between micro and macro evaluation. Honorable individuals at the micro level can engage in behavior that amounts to something else at the macro level. The experts and facilitators referred to as Class B participants may not be asked as individuals to lobby. They are nonetheless participating in a large, sophisticated, and effective lobbying operation coordinated from Japan to influence American policy processes; and their participation contributes in important ways to that effort.

Universities, think tanks, and public information institutions risk the same difficulty. Like individual scholars, such institutions are presumed to exist for the pursuit and dissemination of disinterested knowledge. To the extent that they sponsor programs funded by Japan and disseminate information largely supportive of Japan Lobby policy objectives, they are performing quite a different function. These days Japan Lobby managers no longer need spend their time persuading institutions of good reputation to accept their funds. The problem has become one of sorting through the applications and avoiding offense when program proposals are rejected.

One of the more blatant recent examples of soliciting Japanese funds was the full-page ad placed in the Nikkei Weekly on August 19, 1996 by Harvard University. "Harvard University is now engaged in fund-raising activities in Japan" it coyly reads at the bottom in small type, "to provide training programs and promote dialogue between the U.S. and Japan and other Asian countries, with an eye on the 21st century." To encourage potential Japanese donors a large list of firms "cooperating in the Harvard University Japan Campaign" is also appended. They include Mitsubishi, Kanebo, Sanyo Special Steel, Nissan Motors, Ohki Corp., and Oji Real Estate.

Area studies in American universities flourished during the Cold War. Government and private foundation funds flowed freely to individual scholars whose work was thought to contribute to national security and to institutions in support of research and training programs that produced experts who "knew the enemy." Programs that focused on the Soviet Union, China, North Vietnam, and other militarily hostile regions were treated best, but other countries were also included. Japanese, for example, was defined as a "critical language" under the National Defense Foreign Language Act and students of and around my vintage were supported quite liberally by federal and foundation grants. Fulbright travel grants covered years of in-country advanced language study and dissertation research.

By the early 1970s, the area studies centers were beginning to find it difficult to attract funding adequate to cover their overhead and to support the considerable cost of their faculty's research and students' training. Even Russian studies, the jewel in the crown of Cold War area studies, suffered "slow financial strangulation." By 1976, Columbia and Harvard universities were reduced to the unusual measure of mounting a joint campaign to raise eight million dollars from the American business community to assure the survival of their Russian institutes.

It was perhaps inevitable, then, that the attention of resource-hungry American scholars of Japan and their academic institutions should turn to Japan for funding. Prior to 1972, apart from some industry-specific support of individual U.S. scholars whose work was useful to the Japan Lobby's activities in fields such as textiles, steel, and automobiles, neither the Japanese government nor business community had given any major institutional support to American universities and colleges. This was partly due to an absence of such a philanthropic tradition in Japan (and tax laws that would encourage it). But there was also the reasonable fear that such efforts would generate public charges that Japan was attempting to buy political influence with its largesse. Signing up virtually the whole United States academic Japanese studies community was more than they could have dreamed of before the 1970s. Yet that is precisely what happened.

In September 1972, Professor Jerome A. Cohen of the Harvard Law School opened the floodgates by announcing that Mitsubishi Heavy Industries would donate one million dollars to support a professorship in East Asian legal studies at the Harvard Law School. The announcement was considered significant enough to deserve a front-page story in the New York Times, and it turned on lights throughout the American Japanese studies community. If Harvard could do it, so could others, and by the end of 1972 the race was on to prepare proposals for presentation to potential Japanese government and business donors.

In June, 1973, the Sumitomo Group announced a grant of two million dollars to Yale University, and an additional one million dollars at the same time to the Japan Society of New York. Not to be outdone by Yale, Harvard University's Edwin O. Reischauer, former ambassador to Japan, appeared in Tokyo carrying a bilingual Japanese studies development plan for fifteen million dollars which he planned to circulate among "leading Tokyo financiers." The following month, Japanese Prime Minister Kakuei Tanaka announced during a visit to the White House for consultation on bilateral relations with President Nixon that the Government of Japan would follow the private sector donations to American higher education with significant grants of its own. A Foreign Ministry official later confirmed that ten of the most prominent American centers of Japanese studies had been selected to receive grants of one million dollars each. They were Harvard, Yale, Princeton, Columbia, Berkeley, Chicago, Hawaii, Michigan, Stanford, and Seattle. The geographic distribution of the grants was surely not accidental.

After the initial flurry of grants in 1973, Japanese corporate or governmental donations of even millions of dollars attracted little media attention. And the fact that financial support for Japanese studies shifted within a few years from United States to Japanese sources inspired no public reaction at all. Nor was much consideration given within the academic community to the implications of American scholars' financial dependence upon the country they studied.

And yet the media reports of the first wave of Japanese government and business grants to the United States are remarkably frank about the donors' objectives in giving the grants. Mr. Koji Asai, former chairman of Sumitomo Bank, told the New York Times that Sumitomo's gift of two million dollars to Yale was made after the eruption of bilateral trade friction to promote friendly relations, and "to promote Japanese-American cultural understanding" (NYT 6/21/73, p. 1). At about the same time a Ministry of Education spokesman told a Times reporter that Mitsubishi's gift of one million dollars to Harvard the previous year was intended to correct Japan's image as an "economic animal," a term coined by a critic of Japan's mercantilist foreign economic policy that had gained some acceptance in the early 1970s. In announcing the details of the ten one-million-dollar grants to American universities, a Foreign Ministry official told a reporter that they were intended to "propagate understanding of Japan all over the United States" (NYT 8/8/73, p 14).

Examples of such statements are endless, and are also reflected in the explanations of the Americans seeking such grants. Harvard University's $15 million proposal for funding delivered in 1973 to Japan noted, according to the New York Times, it "would offer 'an opportunity to take immediate steps which can contribute significantly to understanding and the betterment of relations between Japan and the United States'" (NYT 7/13/73, p 5). Reischauer told the reporters that Harvard sought funding in Japan "because of the high degree of Japanese interest in improving relations with the United States." Perhaps Rodney Armstrong, then executive director of the Japan Society of New York, put it most frankly in comments to the American press concerning the one million dollars his organization received at the time of the Yale grant from Sumitomo. Commenting on the motives of the Japanese donors, he replied, "The attitude there is that in the wake of these misunderstandings, they thought, 'If the Americans don't understand us any better than that, we ought to sponsor some studies so we can understand each other better'"(NYT 6/21/73, p 68).

Implicit in the explanation but rarely examined is the assumption that the trade disputes that began erupting in the late 1960s were caused by American "misunderstanding" of Japan. That is, Americans who opposed maintaining the Cold War free trade framework that allowed the unbalanced bilateral economic relationship to continue to their disadvantage simply didn't have the right 'facts.'

No self respecting academic or scholar could oppose an effort to correct a 'misunderstanding.' That is what scholars do! Of course, the providers of Japanese funding to American universities and colleges were far less interested in correcting 'misunderstanding' and propagating "mutual understanding" through their grants than they were in legitimating their arguments in the United States policy debate. With the cooperation of the American Japanese studies community, they intended to put their case for maintaining the Cold War free trade system to American target audiences, and they so described their objectives to Class A contract public relations and lobbying specialists in Washington.

What Is To Be Done?

American scholars generally apply to five major grant-giving institutions when seeking funds for Japan-related projects. They are the Japan Foundation, the Center for Global Partnership, the U.S.-Japan Foundation, the Japan-U.S. Friendship Commission, and more recently, the Sasakawa Peace Foundation. The only U.S.-funded of these five is the Japan-U.S. Friendship Commission, and it provides only about five percent of the total Japan-related project grants made each year. The Fulbright Program also makes a few grants each year for scholars and graduate students who want to work in Japan.

What accounts for this imbalance in national support for Japanese studies in the U.S.? Did Japan's contribution increase because U.S. funding declined, or didn't keep pace with rising demand? Or did U.S. funding decline because Japan's funding had increased to a point that potential U.S. donors felt uncomfortable contributing to what they perceived as a Japan-dominated enterprise? Both explanations contain elements of truth. In the beginning, Japanese funders found American academics willing to accept their money because U.S. government and foundation support for area studies was declining. But once Japanese funding began to flow freely it became increasingly unlikely that U.S. agencies-government or private-would divert already tight funds into a field already so richly blessed. This led to an academic version of Gresham's Law, where readily available Japanese funding has driven out potential U.S. sources.

A scholar at any major university whose research was heavily funded by tobacco companies, who published papers, gave speeches, gave media interviews, and testified before congressional committees in opposition to the idea that lung cancer is related to smoking would be sure to attract the attention of senior university administrators. They would be concerned about the effect such activities might have on the overall credibility of the university, regardless of the size of the scholar's grant. Yet, the lavish support from Japan's government and business community for university-based scholars whose work supports the objectives of the Japan Lobby has yet to raise concerns within the central administrations of American academic institutions. As American foreign policy gradually adjusts to changes in the international environment engendered by the end of Cold War bipolarity, it is likely that public interest will increase in such funding. This may provide yet another opportunity for the critics of American higher education, who seem especially active in recent years.

Senior academic administrators should give some thought not just to the sources of funds but to the whole university fund-raising enterprise. The trend in academic fund-raising today seems to drive responsibility for raising money as far down the administrative pyramidal structure as possible: from boards of trustees down to presidents; from presidents on down to provosts and deans; and from those primary guarantors of the intellectual integrity of the academic enterprise further down even to department chairs and institute heads, ultimately to land on the desks of individual researchers.

Perhaps the leaders of American academic institutions now competing so shamelessly among themselves could meet informally and agree to provide some genuine administrative insulation between their Japan scholars on the one hand and their funding sources on the other. Such "firewalls" would require funds raised from Japan to be gratefully received but then contributed to the university's general fund with no quid pro quo arrangement on program allocation. MITI's funding of cancer or AIDS research at American universities, as one of my former colleagues recently suggested, would be far preferable to support for yet another seminar intended to promote greater "mutual understanding."

A decidedly second-best strategy would require recipients of support from policy-directed donors and the large Japanese foundations to disclose in each publication or announce at each program the level of support they have received from Japan. Such disclosure should be project-specific and not simply the artistic statement used from time to time by Washington think tanks that only four or five percent of their organization's budget comes from Japan. Such "disclosure" is meaningless since the Japan-related programs are the part of the overall operation that depends on, and may be responsive to, Japanese funding sources.

Academic institutions and think-tanks reluctant to consider the need for reform should be reviewed by the Foreign Agent Registration Section of the Department of Justice to determine whether their activities fall under the legal definition of foreign agency and they should therefore be required to register as foreign agents. Having served in both worlds, I see little difference between the activities of the more sophisticated Class A public relations firms in Washington which are required to register as foreign agents and some of the policy-specific Japan-related programs sponsored by American universities that depend heavily on Japan for their funding.

Even better than passive registration or disclosure would be an effort to collect, summarize, analyze, and make public all information about foreign funding of academic endeavors. Such information could be archived and maintained quite economically on an internet Web site for simple and inexpensive electronic search and retrieval.

As for 'Class A' lobbyists, Japanese government and private interests of course have the right to promote their interests within the pluralistic Washington policy system, either directly or indirectly through hired representatives. The public becomes suspicious and loses confidence only when it appears that participants are trying to hide or misrepresent their activities, giving lobbying the ambivalent reputation it has outside Washington. Sunlight, in other words, is the most effective prophylactic.

The Lobbying Disclosure Act of 1995, which President Clinton signed into law at the beginning of 1996, includes a number of encouraging provisions that over time should help the situation. First, and most important, it expands registration by eliminating some of the more egregious exclusions and clarifies registration requirements. Second, senior officials of the executive branch must now disclose all contacts with lobbyists and furnish detailed, specific explanations. A recent General Accounting Office study concluded that under the old law nearly 10,000 of the 13,500 individuals named in the Washington Representatives book actually should have been registered as lobbyists. The number of registrations has increased dramatically since passage of the 1995 Act.

But compromises required to get the bill through the Senate and the House by the end of 1995 led to the drilling of new loopholes at the very time that old ones were being plugged. Some of these are especially important for representation of foreign interests. Most serious was the provision that excuses agents of non-government foreign principals from registration with the Department of Justice if they are registered as lobbyists with the Clerk of the House or Secretary of the Senate. Prior to passage of the new legislation, foreign agents were required to register with the Department of Justice and to provide the detailed reports of income, contacts and activities, and to register as "lobbyists" with the House and Senate only if they lobbied either of those two bodies.

While at the Japan Economic Institute, I was always registered with the Department of Justice as a foreign agent of Japan's Ministry of Foreign Affairs, but I only occasionally registered as a "lobbyist" when Institute business put me in direct contact with the legislative branch. The Foreign Agent Registration Office was, and is, part of the Criminal Division of the Department of Justice. It is staffed by officials with law enforcement experience, and criminal penalties of considerable weight reinforce their demands.

Registrations with Justice have fallen off sharply since passage of the Lobbying Disclosure Act, indicating that representatives of non-government principals have taken advantage of the new loophole to escape the Justice Department's oversight. This is a step in the wrong direction since neither the Clerk of the House nor the Secretary of the Senate is staffed or equipped to do much more than accept registrations as they come in and try to arrange them in some order. Penalties for non-compliance under the new Act are civil, not criminal, and the legislative registration offices are empowered only to refer suspected cases of non-compliance to the U.S. Attorney for the District of Columbia. In contrast to Justice, they have no powers of investigation or audit to encourage compliance.

As a foreign agent, I would have been delighted with the provisions of the new law that rescued me from the tender mercies of the Department of Justice. As an outside observer, I fear that this change will lead to a sharp drop-off in registration and even less disclosure than before. Under the new legislation those willing to comply can do so more easily. But willing compliers were never the problem. The new legislation has made it easier to avoid compliance for those with something to hide, and it has reduced considerably the penalties for those who are caught.

ROBERT ANGEL teaches political science at the University of South Carolina. He is author of Explaining Economic Policy Failure: Japan in the 1969-71 International Monetary Crisis (Columbia University Press, 1991).


1. See also Hans Baerwald, Fund-Raising in Japan: A Sasakawa Saga, (JPRI Occasional Paper No. 3, May 1995).

2. Quotations all are taken from the descriptions given by the various organizations on their Web sites.

3. See also Thomas Flannigan, Opening Up Japan to American Lawyers, (JPRI Critique, Vol. II, No. 9, October 1995).

4. Washington Post, December 10, 1990. This was before the popular computer operating program called 'Windows.' Mr. Strauss's remark refers to a comment often made by maids who work for upscale households.

5. Mainichi shimbun, April 13, 1978.

6. The Senate Ethics Counsel, The Packwood Report (Times Books, 1995), p. 249.

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