Only 23 out 70 companies accused of rigging bids

[Taro Toporific]

Japan's Anti-Monopoly Watchdog Warns Cos.
Forbes - Oct 15
Japan's anti-monopoly watchdog accused 23 companies Friday of rigging bids for public bridge projects, and ordered them to immediately end the practice or face possible penalties.
The Fair Trade Commission raided 70 companies last week in a widening crackdown mainly against members of the Japan Bridge Association. ...

[dimwit]

Japan's Anti-Monopoly Watchdog Warns Cos.
Forbes - Oct 15
Japan's anti-monopoly watchdog accused 23 companies Friday of rigging bids for public bridge projects, and ordered them to immediately end the practice or face possible penalties.
The Fair Trade Commission raided 70 companies last week in a widening crackdown mainly against members of the Japan Bridge Association. ...

Only 23!!!???

Actually bid rigging is a Japanese cultural tradition like Whale Hunting, and screwing for Gucci. :P

[Captain Japan]

I think the real key to understanding what a joke this is can be found here:

If charged and found guilty, the companies could each face fines equivalent to as much as 6 percent of the value of the contract awarded.

Of course the answer is to factor in the potential 6% penalty as a cost ...But seriously, this is hopeless. Until jail time is proposed this is going to continue forever, which I suppose is what everyone really wants.

And as Taro insinuated in the title for this story, the true percentage of bids which are rigged in Japan is very nearly 100%.

[dimwit]

... as Taro insinuated in the title for this story, the true percentage of bids which are rigged in Japan is very nearly 100%.

Then my question is who did the other 47 companies bribe to keep their names off the list?

[Captain Japan]

It must be that time of the year...
Prosecutors to probe 5 Niigata city officials over bid-rigging
Kyodo

The Niigata District Public Prosecutors Office has decided to open criminal investigation against five Niigata city officials allegedly involved in rigged bids for the city's public works projects between 1999 and 2003, sources close to the case said.

The prosecutors are likely to bring charges against the five who have been identified by the Fair Trade Commission in relation to bid-rigging that has implicated 113 companies, including major construction firms Kajima Corp., Shimizu Corp. and Taisei Corp., and local construction companies.

Prosecutors are expected to raid the offices of the five Niigata city officials probably this week, the sources said.

I just love how they give these folks enough advance warning to get the paper shredder warmed up. Classic.

[Mulboyne]

Japan Times: Law of probability proves bid-rigging is rife
The bid-rigging took place at breakfast, recalls the son of a former official at the Tokyo Metropolitan Government's Port and Harbor Bureau. For two decades from the late 1960s, construction company staff would stop by, explaining why they needed a public works contract. "People say bid-rigging is anticompetitive, but that's not true. The competition took place in our sitting room," said the official's son, declining to be named.
The government decided earlier this month to raise the penalty for bid-rigging by 70 percent. But it's going to be tough to uproot such a long-established practice of evenly distributing opportunity, the son of the former Tokyo official said. "You only get caught if you coordinate bids without going through the right contractors, politicians and government officials," he said.
How common are rigged bids? No evidence exists, but in almost all contracts, the winning bidder clinched the deal within 5 percent of the maximum limit set by the government, according to Kanemoto. "The probability of this happening, over and over, if market principles ruled? Virtually zero," the professor said.

[Captain Japan]

But it's going to be tough to uproot such a long-established practice of evenly distributing opportunity, the son of the former Tokyo official said. "You only get caught if you coordinate bids without going through the right contractors, politicians and government officials," he said.

Dirty bidding in Niigata sewage project leads to councilor's arrest

NIIGATA -- A senior official of the Niigata Municipal Government was arrested Tuesday for leaking the designing price of a sewage facility to a local company to help it win a contract on the work, prosecutors said.

Takayuki Yuki, 55, a councilor at the municipal government's urban development bureau who previously headed the sewage construction division, is accused of obstruction of a public tender banned under the Anti-Monopoly Law.

In a raid on the city hall in October 2003, the FTC confirmed that 113 companies, including Kajima Corp. and Taisei Corp., fixed bids for 368 construction contracts worth 60.4 billion yen between April 1999 and September last year. In July, the commission warned the firms involved against the illegal practices under the Anti-Monopoly Law.

[Captain Japan]

Takayuki Yuki seen in happier times
Arrests made in corruption case that FTC had dropped

NIIGATA (Kyodo) A senior official of the Niigata Municipal Government and the head of a local construction company were arrested Tuesday on suspicion of rigging bids for public works projects.

This action by the Niigata District Public Prosecutor's Office was unprecedented in that the Fair Trade Commission had earlier decided not to file a criminal complaint over the case.

It is the first time since the Antimonopoly Law took effect in 1947 that prosecutors have moved on a bid-rigging case dropped by the FTC.

Thus far, 113 companies -- including major construction firms Kajima Corp. and Taisei Corp. along with local construction companies -- have been implicated in a series of bid-rigging scandals involving the Niigata Municipal Government, according to the FTC.

[Taro Toporific]

[Captain Japan]

[dimwit]

[Captain Japan]

Questions arise over Haneda bidding process
Asahi

The transport ministry has contacted the Fair Trade Commission over suspicions of collusive bid-rigging on the Haneda Airport expansion project, the largest public works contract ever awarded in this country.

On March 23, the ministry awarded the 584.2-billion-yen contract to the only bidder in the project, the 15-firm consortium led by Kajima Corp.

But allegations surfaced that construction industry ``coordinators'' kept rival shipbuilders from bidding on the project to build a fourth runway at the Tokyo International Airport at Haneda.

Several general contractors told an Asahi Shimbun reporter that they were instructed by officials at a large general contractor not to sign on with a competing shipbuilders' consortium....more...

[Captain Japan]

Here is a breakdown of the Kajima team:



Here is where they'll be working at Haneda:



Assuming the winning bidder contained the "coordinators," figuring out just who they were is guesswork.

[dimwit]

Prosecutors to search 47 firms over bid-rigging

The Yomiuri Shimbun

Prosecutors will search 47 companies suspected of involvement in rigging bids for bridge projects through two industry associations, sources said Sunday.

More than 300 investigators will be dispatched Monday for a search expected to last several days, following a decision by the Fair Trade Commission to file criminal complaints against the firms, the sources said.

rest of the story here

Japan - the only country where they warn companies they are about to search them. However, I don't think they are being nearly as helpful as they could, they didn' tell them which documents to shread.

[Captain Japan]

Firms monopolized deals for second Tomei Expressway
Asahi

Twenty-nine members of two suspected bid-rigging groups have won 93 percent of steel-bridge contracts for the second Tomei Expressway, a mammoth project already criticized as wasting public money, sources said.

The contracts, worth a total of 76.8 billion yen, came from Japan Highway Public Corp. A former official of the highway corporation, who now holds a senior post at one of the companies at the center of the scandal, helped to coordinate the collusion, the investigative sources said.

Japan Highway's construction department in Shizuoka and its Chubu Branch placed 29 bridge-building orders for the expressway in the four years to fiscal 2004, according to bidding records obtained by The Asahi Shimbun through the information disclosure law.

Of those 29 projects, 27 were won by member companies of the two collusion groups known as ``K-kai'' and ``A-kai,'' the sources said.

The companies' winning bids for the 27 projects were in a range of 93.75 to 99.18 percent of the projected prices set by Japan Highway....more...

[Captain Japan]

14 officials arrested in bid-rigging scandal
Asahi

Prosecutors on Thursday arrested 14 officials of 11 firms as more details emerged about the bid-rigging scheme that clinched billions of yen in bridge-building contracts for their collusion ring, sources said.

Eight of the companies, including Yokogawa Bridge Corp., the nation's leading bridge builder, are believed to have led the big-rigging setup that involved at least 47 firms, the sources said.

The suspects, accused of violating the Anti-Monopoly Law, were in charge of sales at their companies. Prosecutors suspect they were the ones who decided which firm would win a contract and how the collusion would be carried out.

The bid-rigging ring revolved around two groups, called ``K-kai'' and ``A-kai,'' the sources said.

The 47 member companies of the two groups have long held a monopoly on contracts for steel bridge projects from public and government-related agencies, a market worth more than 350 billion yen annually, the sources said....more...

[FG Lurker]

Bid-rigging route leads to Japan Highway
Asahi Shimbun, May 31, 2005

Japan Highway Public Corp. effectively approved bid-rigging practices for its steel bridge projects in a scheme coordinated by a retired official of the debt-ridden, state-run company, sources said.

The retired official now holds a senior post at Yokogawa Bridge Corp., the nation's largest steel bridge contractor.

At the start of every recent fiscal year, Takashi Tanaka, a deputy manager of the bridge-building section of Mitsubishi Heavy Industries, visited the retired official at Yokogawa Bridge headquarters in Tokyo's Minato Ward and elsewhere, the sources said. Their discussions focused on how to distribute Japan Highway bridge projects for the fiscal year among members of two industry groups, sources said.

(Full Story)

I wonder how long it will take the cops to uncover the kickbacks that must've been paid in this scam? I think we'll see some JH officials in our Suicide Party Cars thread soon...

[FG Lurker]

Quiet crusader seeks to be bane of Japan's bid-riggers
FT.com, May 31, 2005

Hiroshi Muramoto hardly looks the part of a revolutionary. Middle-aged and with a slight paunch, he is fond of laughing at his own jokes and making puns.

But over the past year he has been fighting a quiet crusade to end dango, where suppliers agree in advance on bids to be submitted, a practice that has helped shut out foreign competition.

[...]

It comes as no surprise to Mr Muramoto, the Japanese head of Fentek, a European ship and dock fender maker. He has been struggling to win his first order as a subcontractor for a public-works project. Even though Fentek's bids have been a lot lower than competitors', he has failed.

Mr Muramoto said: "Managers and employees doing business with public officials are well aware of bid-rigging . . . but it is considered essential to avoid excessive competition and is hardly considered a crime in Japan."

(Full Story)

Very interesting story, definitely worth a read. Hopefully Mr. Muramoto doesn't end up in Tokyo Bay chained to a cement block.

Does anyone know how long FT.com articles stay around? If it isn't long then I will edit this to have the whole text -- worth the space on FG in my opinion.