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May 19, 1998

Like the Geisha, the Good-Time Bar Is Endangered


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  • The New York Times: Asia's Financial Crisis
    By SHERYL WuDUNN

    TOKYO -- For six years, Takashi Katakura has made weekly visits to a tiny bar where a cuddly hostess pours whisky for him as he tries to talk business with his colleagues.

    The bill for an evening of drinks for two comes to nearly $500, and his company picks up only half the tab, instead of the full amount as it did in the 1980s.

    Back in those more prosperous times, the rich used to step out of their Ferraris and Bentleys and check their wallets at the door of the bars or plunk down about $8,000 and drink until the money ran out. Between 11 p.m. and 2 a.m. the streets used to be blocked with limousines, and people had to wait a long time for a taxi.

    But now there are no taxi lines. And for Katakura, a wiry, ebullient advertising executive, the bill at the Kei bar may get more expensive yet.

    The entertaining business in Japan is suffering its worst slump in 70 years, partly because of difficult economic times but -- more important -- because of a series of scandals in which government officials were treated to lavish meals and golf outings by banks they supervised.

    The effects have been whipsawing their way around business circles, threatening to dampen the economy further with more cutbacks in traditional gift-giving and entertainment.

    Tokyo and other major Japanese cities are full of little bars and restaurants that charge unbelievable prices, surviving largely on expense accounts. But these days, even at the classy Kei, sales are sometimes down 30 percent, according to the owner, Yoko Miura.

    "No bureaucrats will come," said Miss Miura.

    Some say that the change is a fundamental one and that business is coming to be conducted more openly, so that drinking sessions at such places will no longer be essential to reaching a contract. If so, the little bars could gradually disappear the way most of the great artisans of the Japanese entertainment industry, the geisha, already have.

    As a willowy young hostess in a minidress with a plunging neckline giggled beside him, Katakura looked mournfully at his glass. He agreed that it was inappropriate for government officials to accept lavish entertainment from institutions they oversee. But he still regrets the public hostility toward entertainment.

    "Entertaining bureaucrats is the wrong thing to do," he said. "But because Japan is not quite a democracy, our moral standards have not yet been fully established."

    In an effort to improve them, Parliament is debating new legislation on an ethical code for bureaucrats. The Nissan Motor Co. said recently that it had sent a letter to 300 clients asking them to refrain from giving presents to their staff members or entertaining them, and other companies are likely to do the same.

    The Bank of Japan, the nation's central bank, cut the pay of 98 of its officials for excessive dining out, and the Finance Ministry issued similar penalties for 112 of its employees after an internal investigation into unethical entertainment.

    The problem is that as Japan tries to cut back on business entertainment, it is unclear whether it can do business without it.

    Japan is a highly formal, ritualized country, and against this background it is hard simply to get comfortable and get down to business. So the Japanese developed a tradition of inviting clients, colleagues and government officials to bars or private restaurants, called ryotei, so that people can relax and build relationships and win favors. Even so, it sometimes takes eight hours of eating and drinking and bar hopping before any real information is traded or any real business is conducted.

    "People don't open up in formal settings, so dining is really a part of the Japanese culture," said Yukio Okamoto, a former Foreign Ministry official who now runs his own consulting company. "I don't go home on weekdays until midnight. All my dinners are taken up with meeting people."

    Indeed, Okamoto said that he usually schedules two dinners a night.

    The ties between government and industry may not have been proper, but the entertaining at least served to promote the flow of information between the two sides. Now the banks and the brokerage houses have drastically cut down on their entertaining, and relations between the Finance Ministry and the financial industry have become so strained that the two sides hardly talk to one another.

    "They've ceased functioning," a senior bank executive who insisted on anonymity said of the Finance Ministry. "There is no communication. They are isolated from the market."

    "The scandals have had some impact," said Momoki Koike, who runs his own bar in Ginza. "For securities companies and banks, when the top people get arrested, the subordinates don't feel like going out to drink."

    Roran, one of the most notorious restaurants in the latest wave of scandals, has apparently been forced to shut down for now. A members-only club, it served "no-pan shabu-shabu." As everybody in Japan now knows, this refers to the Japanese meat dish known as shabu-shabu served by waitresses with "no-pan" -- meaning no panties. It was a favorite of a few Finance Ministry officials who have now been arrested for receiving entertainment bribes.

    The Ministry of Finance was the leading guide for the finance industry. For years banks had special liaisons, called Mof-tans, after the English-language acronym, whose job was to cultivate ties with ministry officials to learn about coming rules, seek approval for new products and simply gauge the direction of policy by collecting tidbits of information from the officials.

    "They would call up and say, 'We'd like to talk about something, but we can't talk about it until after 7 p.m.,' " said a Japanese banker, who spoke on the condition he not be identified. The result is that the Mof-tans and other bankers would spend their evenings and their weekends entertaining ministry officials.

    But now the banks and brokerage houses have abolished the Mof-tans and no banker dares invite any government official out to dinner or the golf course.

    One government official remarked that young officials at his ministry are spurning even cups of coffee from corporations, for fear of compromising ethical standards.

    "I can't accept your invitation," said a senior Finance Ministry official after he was invited to lunch recently. "Lunch with a lady? Can you imagine the weeklies snapping my picture?"



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