The Cable

Obama takes on… the Yakuza?

The Obama administration slapped new sanctions Thursday against one of Japan's largest organized crime groups, showing more resolve to fight Japanese organized crime than the Japanese government.

"Today's action casts a spotlight on key members of criminal organizations that have engaged in a wide range of serious crimes across the globe," said David Cohen, Treasury undersecretary for terrorism and financial intelligence, in announcing sanctions on the Yamaguchi-gumi as well as Kenichi Shinoda, its kumicho ("godfather") and its wakagashira ("deputy godfather") Kiyoshi Takayama. "Today's designations are just the first under our new our sanctions authority to target transnational criminal organizations and isolate them from the global financial system."

The Treasury Department said that Shinoda and Takayama play key roles in directing all Yakuza activities and are involved in international drug trafficking, human trafficking, extortion, prostitution, fraud, and money laundering.

"Today's action is designed to protect the integrity of the U.S. financial system, to prevent U.S. financial institutions from being used unwittingly to facilitate the unlawful activities of these groups, and to deny the named individuals and entity access to the U.S. economy," Treasury said in its statement.

The sanctions represent the first concrete implementation of an executive order President Barack Obama signed last July promising to go after transnational criminal organizations.

There's only one problem: The Japanese government doesn't seem to be on board. The National Police Agency (NPA), which is in charge of organized crime, has been uncooperative with the U.S. efforts to keep the Yakuza out of the United States and does not share its database of Yakuza bosses and associates with the FBI, DEA, or Homeland Security Investigations (formerly ICE), according to Jake Adelstein, the author of Tokyo Vice, an insider's look at the Yakuza in Japan. The NPA has also rarely acted on the hundreds of tips the United States passes along about child pornography coming out of Japan.

"The Yamaguchi-gumi is the Wal-Mart of organized crime. If you count smaller Yakuza groups under their umbrella, they are more than half of the market of Japan's 79,000 Yakuza members and associates. They also support the DPJ and ruling coalition of Japan," said Adelstein, adding that the Yamaguchi-gumi has ties to Olympus and TEPCO, two firms that operate within the United States.

"The reaction of the Japanese ministry of justice and the National Police Agency to Obama's executive order last year was one of shock and shame. This latest announcement is a slap in the face of Japan, telling them to really do something about their organized crime problem, which is spilling into international waters," he said.

Without help from Japanese officials, it's difficult for the U.S. law enforcement community to get a handle on Yakuza activities. For one thing, only the Japanese government can identify Yakuza officials, because tracking them requires knowing their names, their date of birth, their faces, and the Kanji symbols -- Japanese characters -- they use to identify themselves.

But in the Japanese system, the Yakuza are legally recognized entities that operate freely and have clear links to banks, legitimate businesses, and leading politicians.

"The Yakuza exists openly in Japan with fanzines and magazines," Adelstein explained. "They are heavily involved in the stock market and there are politicians with known Yakuza ties in national politics."

That kind of institutional corruption crosses borders, bleeding heavily into the U.S. economy. The Japanese police estimate that roughly 40 percent of foreign exchange trading companies in Japan are Yakuza-affiliated.

"With so many Japanese companies invested in the U.S. and with so many American companies investing in the Japanese stock market, which is yakuza infested, it becomes a matter of U.S. national security," Adelstein said. "Because of the yakuza's deep involvement in the Japanese economy and Japan's economic ties with the U.S., the actions of the Yakuza effect the U.S. economy, therefore it's not just a Japanese problem."

Jake Adelstein

The Cable

Another Obama fundraiser turns out to be a bad ambassador

Candidate Barack Obama promised to end the time-honored American practice of appointing ambassadors who have no experience in foreign policy, but President Obama has completely ignored that promise, appointing fundraisers to dozens of ambassadorships all over the world.

Today, the State Department revealed that another fundraiser turned ambassador ran her embassy into the ground ... only to return to fundraising and leave the State Department to pick up the pieces.

According to a new State Department inspector general's report on the U.S. Embassy in the Bahamas, Ambassador Nicole Avant presided over "an extended period of dysfunctional leadership and mismanagement, which has caused problems throughout the embassy" since she was appointed by the president in 2009. Prior to being America's envoy in the Caribbean, Avant was Southern California finance co-chairwoman of Obama's presidential campaign and vice president of Interior Music Publishing.

According to her glowingly positive Wikipedia page, Avant spent her time in the Bahamas "focused on five priority initiatives: Education, Alternative Energy, Economic and Small Business Development, Women's Empowerment and Raising awareness of the challenges facing people with disabilities."

But according to the State Department's internal investigation, Avant was away from the embassy an inordinate amount of time -- mainly shuttling back and forth to her home in Los Angeles -- and when she was in town, she worked from her residence most of the day.

Avant was absent from the embassy 276 days between September 2009 and November 2011, including 102 "personal" days and 77 "work travel" days to the United States, of which only 23 were on official orders.

"Her extensive travel out of country and preference to work from the Ambassador's residence for a significant portion of the work day contributed to a perception of indifference," the report states. "The frequent absences of the Ambassador contributed to poor mission management."

Avant was out of touch partly because she didn't interact often with the State Department or anyone else in Washington, according to the inspector general. She left that to her deputy chief of mission, whom the report identified as also being poor at management and administration.

"The Ambassador had not had frequent policy-level interaction with the Department or other Washington agencies. At the beginning of her tenure, she relied unduly on her former DCM to attend to day-to-day contacts with the desk and other offices in the Department," says the report. "Interviews in Washington likewise revealed that the front office of the Bureau of Western Hemisphere Affairs and other Washington agencies were not in regular contact with the Ambassador about the conduct of her mission. This lack of regular contact contributed to the Ambassador's sense of isolation from the Department."

Avant did take several steps to establish the embassy's equal employment opportunity program -- but not until the inspector general's visit. The embassy's program for young Foreign Service officers was neglected, critical security upgrades were not made, and the embassy paid rent on a vacant office for two years.

One might think there aren't important issues to deal with at a tropical post like the Bahamas. But the IG begs to differ, and made clear that the 154 American and 61 locally hired staff need good leadership.

"The Bahamas is a critical partner in ongoing efforts to ensure the security of the south-east flank of the United States. As it fights drug and human trafficking with U.S. and international support, the Bahamas seeks to maintain its status as a global financial center and as an important tourist destination," the report states.

Under Avant's tenure, it goes on, "cables written in the past year show little political reporting or analysis on international crime, drug smuggling, and illegal migration or on prevention of terrorism."

The inspectors visited the embassy in September and October of 2011. Avant resigned in November.

Since resigning, Avant has been active on the campaign trail. According to a Jan. 31 White House pool report, she joined Michelle Obama at a Beverly Hills residence for a fundraiser along with her husband, Netflix Chief Content Officer Ted Saranados, and Jeffrey Katzenberg, Steve Bing, Quincy Jones, Harvey Weinstein, and other celebrities.

A Feb. 15 pool report spotted her dining with Obama at a $35,800 per plate dinner that included George Clooney, Jim Belushi, and Los Angeles Mayor Antonio R. Villaraigosa.

Avant is only the latest fundraiser cum ambassador who caused trouble for the boss. Fundraiser/Ambassador Howard Gutman caused a controversy in Belgium last year when he made statements appearing to blame Israel for anti-Semitism.

And fundraiser/ambassador Cynthia Stroum left the U.S. Embassy in Luxembourg in a state of dysfunction after creating an environment that was ""aggressive, bullying, hostile and intimidating," according to a Feb. 2011 State Department investigation.

If the Obama administration is looking for a new envoy to the Bahamas who can right the ship, your humble Cable guy would like to put forth himself for the assignment ... we promise not to use up our personal days.