In December 1957, an American businessman stepped off a plane at Tokyo International Airport in Haneda, his expression serious behind his glasses. J. Kenneth Hull, an executive at US aircraft manufacturer Lockheed, had flown from Los Angeles to sell a supersonic fighter jet to Japan. He could not have imagined that his mission would, nearly two decades later, ignite the biggest political scandal in postwar Japan.
In February 1976, the US Senate Subcommittee on Multinational Corporations, chaired by Senator Frank Church, revealed that Lockheed had funneled more than 3 billion yen into covert operations in Japan. The payments included bribes to right-wing fixer Yoshio Kodama and high-ranking government officials, all part of a campaign to sell the TriStar (L-1011) commercial aircraft to All Nippon Airways (ANA). Marubeni, Lockheed's agent, had created receipts for the slush funds under the code name "peanuts." In July 1976, the Tokyo District Public Prosecutors Office arrested former Prime Minister Kakuei Tanaka for crimes committed while in office. Tanaka has since been seen as the embodiment of plutocracy and the most corrupt politician in postwar Japan.
Yet focusing solely on Tanaka and the TriStar deal misses the essence of the scandal. The morning after the illegal payments were exposed, reporters gathered at Tanaka's home in Mejirodai, Tokyo. One of them, Kotaro Nogami of Kyodo News, later recalled in his memoir Seiji Kisha (Political Reporter) that Tanaka replied with quiet but decisive voice: "This will become clear very soon. It's something that has been going on for a long time."
Kenneth Hull understood those words. Two days after his arrival in Tokyo, on Christmas Eve 1957, Japan's Defense Council met to discuss the Air Self-Defense Force's next-generation main fighter jet. More than a decade after the war, Japan's economy was recovering, and large-scale purchases of fighter jets were anticipated—a "100-billion-yen sales war." Lockheed was at the back of the pack. Grumman's F-11 Super Tiger was a formidable rival, offering similar speed but better takeoff and landing performance. In April 1958, the Defense Council, chaired by Prime Minister Nobusuke Kishi, informally decided to adopt Grumman's fighter.
Lockheed did not give up. Two months later, Hull met with Kodama through an interpreter. Kodama was a fixer extraordinaire, with connections spanning politics, business, and even the yakuza, and wielded significant influence over the ruling Liberal Democratic Party (LDP). Born into poverty in Fukushima, Kodama was an aggressive ultranationalist. During the war, he ran the "Kodama Agency" in Shanghai, China, procuring supplies for the Japanese military—often by looting from the local Chinese population. After the war, he was arrested as a Class A war criminal but later released, using his repatriated fortune to support the formation of the Liberal Party, which merged with the Democratic Party in 1955 to create today's LDP.
Kodama's power was at its peak when Lockheed approached him. He did not disappoint. In August 1958, the Lower House's Audit Committee decided to take sworn testimony from officials of the Defense Agency and the Defense Council regarding the fighter selection. Until the following spring, the circumstances leading to the Grumman decision were relentlessly scrutinized. The Secretary General of the Defense Council stated that, after Grumman was selected, he received a phone call from Ichiro Kono, chairman of the LDP's General Council, who told him, "I want you to do the right thing for Lockheed as well." The lobbying had begun.
In June 1959, the F-11 project was canceled. That summer, a government mission visited the United States to re-examine each aircraft model, and a report was submitted to the government. In November, the National Defense Council decided to adopt the F-104. Although Grumman had been tentatively selected, the contract went to Lockheed instead. Even at the time, rumors of political maneuvering circulated. The opposition Japan Socialist Party went so far as to decide to summon Kenneth Hull to testify before the Diet. It wasn't until much later that Lockheed admitted to sending cash overseas.
In May 1977, a year after Tanaka's arrest, Lockheed's Special Review Committee published a report on payments related to overseas sales. The report included payments to "a third party in Japan" that began as early as June 1958, during the F-104 sales campaign. By January 1969, a total of 629 million yen had been paid. These payments, made through Kodama, were the hidden engine behind the reversal of the fighter decision.
A legacy of opaque procurement
The Lockheed scandal exposed a pattern that would haunt Japanese politics for decades: the intertwining of money, influence, and defense procurement. The F-104 deal set a precedent for how foreign arms makers could operate in Japan, using local fixers to sway decisions. The scandal also highlighted the vulnerability of Japan's postwar political system, where the LDP's dominance and the lack of transparency in defense purchases created fertile ground for corruption.
Today, Japan's defense procurement faces new challenges, from drone production hurdles to debates over hypersonic capabilities. The Lockheed scandal remains a cautionary tale, reminding policymakers that the integrity of procurement processes is as vital as the hardware itself. As Japan strengthens its defense ties with allies like India, the lessons of 1976 are more relevant than ever.
