Japan's fugitive execs have called DOJ's bluff

TOKYO -- Are the fugitive Japanese businessmen indicted for alleged price fixing calling the U.S. government’s bluff?

As many as 20 executives from Japanese suppliers are on the lam in Japan, evading U.S. indictments for bid rigging.

Some have left their companies. Others are still gainfully employed by the companies for which they allegedly fixed prices.

But all are international fugitives in the eyes of the U.S. Department of Justice. And Last week, the Justice Department indicted two more.

They are Hiroya Hirose from the ball-bearing maker NSK Ltd. and Masakazu Iwami from bearing and steering supplier JTEKT Corp.

Calls to NSK earlier today found that Hirose was still employed as the section head of NSK’s West Japan Automotive Unit, despite being indicted on felony charges carry a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals.

Calls to JTEKT did not reach Iwami. A spokesman later said the company could not comment on personnel matters.

JTEKT’s “no comment” contrasts with the more open replies of several other Japanese suppliers, including Bridgestone Corp., Tokai Rika Co., Takata Corp. and Toyo Tire & Rubber Co.

Those companies forthrightly confirmed, when asked, that their own indicted employees had since “left” the company.

Since Automotive News published its exclusive investigation of the legal standoff over indicted Japanese execs on Monday, I have been barraged by queries from incredulous readers asking why Justice doesn’t go after these international fugitives.

Especially the ones still working for the same companies.

Aren’t these suspects thumbing their noses at the American legal system? Doesn’t the DOJ want better enforcement of what has snowballed into the biggest antitrust crackdown in U.S. history ($2.4 billion in fines, and counting)?

Extradition may be the only way to get these people. Lawyers say the fact they have been indicted indicates that negotiations for a plea deal have broken down. The suspects essentially have opted to take their chances dodging the DOJ in their homeland.

To be sure, the DOJ has dangled the threat of extradition. But bringing these people back is easier said than done.

While the DOJ can request extradition, it needs Japan to cooperate in delivering the suspects. Unfortunately for U.S. prosecutors, Japan’s Ministry of Justice weighs the disparity of punishments when deciding whether to hand over its citizens.

As we reported, individual price fixers are penalized with little more than a slap on the wrist in Japan. Lawyers here say Japanese authorities are loath to send someone to a U.S. prison for a crime that carries no time at all in Japan.

That backs the DOJ into a corner. If the DOJ gambles on extradition, it runs the risk of being stonewalled with egg on its face. The request could foment diplomatic tensions and burn political capital that might better be spent on other matters.

And besides, the DOJ can rightly argue a big success in putting as many execs as it has behind bars: 26 so far and counting.

In fact, simply indicting the execs is punishment in its own right, even if they continue working in Japan. The indictments essentially end their international business careers.

It puts them on Interpol’s top-level watch list, meaning they could easily be nabbed the moment they leave Japan’s shores.

So it seems that the indicted execs hiding out in Japan -- and even more brazenly, the companies that still employ them -- have indeed essentially called the DOJ’s bluff.

They are rolling the dice that extradition is a hollow threat. And so far, the DOJ has done nothing to prove them wrong.