This article concludes a two-part series. See Part 1 here.
Michael and Peter Taylor – clearly collateral damage in the greater story of what US Senator Roger Wicker called Nissan’s “boardroom coup” against Carlos Ghosn – are now at the mercy of Japan’s hostage-justice system.
The former Green Beret Michael and his son Peter face maximum jail time of three years. They are not going to get a fair trial.
In fact, they will not be tried at all because they won’t be granted bail, and because the Taylor family is of modest means they cannot afford a protracted trial. They will have to cop a plea.
We need look no farther than former Nissan director Greg Kelly’s ordeal to see the Japanese legal process in action. Sixty-four-years-old, Kelly has been stuck in Japan for 28 months.
Even though his lawyers have completely destroyed the prosecution’s case, Kelly still faces a possible 15-year prison term if convicted. And conviction is still more likely than not. He could die in Japan – because he wouldn’t confess.
Mike Taylor, in conversations we had over a two-month period before his extradition, is well aware that his legal options might be limited. He has hired a veteran lawyer, a former prosecutor, to represent him and Peter. In fact, Shuji Iwamura is not just any lawyer. He is the former chief prosecutor in the Tokyo District Prosecutors Office.
That may or may not turn out to have been a good move. It’s hard to find a defense lawyer who is willing and able to buck the Japanese system. We can hope that Iwamura, because of the sempai-kohai, “senior-junior,” system that pervades Japanese society, will manage to get the ear of his former juniors in the prosecutor’s office, some of whom have risen to leadership positions.
Still, as a practical matter, the Taylors will have to confess even though the charges against them – helping someone jump bail – are relatively minor, assuming both father and son were involved, which to me is not at all clear. They are expected to formally make their confessions in May as part of a plea deal still being negotiated.
Traded for an arms purchase?
Extraditions between the US and Japan are rare.
The three I am aware of involve: a violent crime (Japan’s Kazuyoshi Miura, who was accused of murdering his wife in Los Angeles and was finally extradited 27 years after the crime); drug-smuggling (American Jonathan Octavio Nunez, a former member of US military, who smuggled US$2 million of drugs into Japan); and massive financial fraud (Junzo and Paul Suzuki, the Japanese father-son team, who were allegedly involved with engineering a $1.5 billion Ponzi scheme in Las Vegas).
And if we consider extraditions that haven’t occurred, top of the list are the three Takata Corporation executives, who allegedly covered up faulty airbags that led to the deaths of nearly 20 Americans. Four years after the US attorney for the Eastern District of Michigan issued warrants for their arrest, the three executives are still living free from prosecution in Japan.
The Taylors’ case fails by orders of magnitude to compare in intrinsic importance to the US of any of the above.
So there must be something special about the case. Speculation from multiple sources is that the US State Department agreed to turn the Taylors over in order to facilitate a major defense contract for Japan’s next-generation fighter jet.
The timing of former deputy secretary of state Stephen Biegun’s support of the extradition is not likely to have been coincidental, in my opinion. Biegun, a Mike Pompeo appointee who served as envoy to North Korea during the Trump administration, sided with the Japanese while still in office in early November, one month before the Japanese government announced that Lockheed Martin Corporation would join the Japanese Defense Agency’s fighter jet project as a subcontractor.
The State Department declined to comment. I left multiple detailed messages in the voice mail of Richard Visek, the department’s acting legal advisor and a Biden administration appointee. A State Department spokeswoman acknowledged she had received my messages, then referred me to the Department of Justice.
Visek declined to intervene, although in a letter I’ve seen he acknowledged that the Taylors had served more than nine months in the Norfolk County Sheriff’s Office jail in Massachusetts, their habeas corpus rights having been denied.
Biegun’s official support of Japan’s harsh interrogation techniques was cited in the federal judge’s ruling that the extradition could go ahead, which ignored the fact that Japan boasts a more than 99% conviction rate – almost entirely by way of confession – and ranks among the world’s most egregious in this regard along with Saudi Arabia, Singapore and China.
Shamefully, the Massachusetts federal judge, Indira Talwani, didn’t investigate whether the Taylors would be granted a fair trial in Japan and whether their due process rights would be respected. She completely ignored Senator Wicker’s statement about Japan’s “cruel, unfair, harsh, arbitrary and deplorable” treatment of Greg Kelly.
Her ruling defending torture, I must say, speaking as an American, should give pause to any citizens who think our government has their backs.
“Although the prison conditions in Japan may be deplorable,” she wrote, “and although the criminal procedures that the Taylors may be subjected to may not satisfy American notions of due process, those allegations do not constitute the ‘severe physical or mental pain or suffering’ contemplated by the regulations and, therefore, the Taylors failed to establish that they are more likely than not to be subjected to torture in Japan.”
The main charge: ‘harboring’ a criminal
Specifically, the Taylors have been charged with “harboring a criminal,” a charge that, according to Hiroshima lawyer William Cleary, has never before been applied to violating bail conditions.
“Indeed,” Cleary wrote to the US federal court in Boston, “there is not a single prior case where Japanese prosecutors charged a person, successfully or unsuccessfully, with enabling a person to violate his or her bail conditions.”
And “harboring a criminal,” he added, “applies only to persons escaping from confinement … or avoiding arrest after they have escaped from confinement.”
Neither of these applied to the Taylors in part because Ghosn was not a criminal. He was out on bail awaiting trial. No trial date had been set more than a year after his arrest.
Moreover, based on the way the prosecutors were handling the Ghosn case – illegally leaking damaging information, re-arresting and silencing him when he tried to tell his story at the Foreign Correspondents’ Club of Japan and threatening his wife – Ghosn, now 67, had good reason to believe he would never leave Japan alive.
And in the case of Peter, Mike’s son, he was already on the ground in China, nearly 1,000 miles away, when his father, Ghosn and George Zayek, Mike’s longtime business partner and family friend, allegedly arrived at Kansai International Airport in Osaka. Thus he couldn’t have “harbored” anyone by definition.
Peter did not travel to Osaka. He left separately from his hotel for Tokyo’s Narita International Airport east of Tokyo and a 7pm flight to Shanghai.
His father, Ghosn and Zayek, according to the court record, arrived at Shin Osaka Station shortly after 7pm, exiting the station at 7:24pm, then left Japan for Istanbul and eventually Beirut shortly before midnight.
Regardless, the Taylors have been charged with harboring a criminal and are going to have to confess even if that means admitting to things they didn’t do or that are in grey areas of the law. That’s the way the game is played in Japan: You’re guilty until you prove your innocence – and of course, you’re guilty if, to get the whole thing over with, you provide a confession.
The case against Mike Taylor
Regardless of whether the US Justice Department prosecuted the Japanese case correctly – the feds were clearly working for the Japanese government and, by withholding exculpatory information, against the interests of the American public.
It’s indisputable that Mike Taylor was caught on film going through passport control in Osaka and entering Japan with two large black boxes.
He and his longtime partner, George Zayek, can be seen checking into a hotel room at Kansai International Airport in Osaka, and the prosecutors have them boarding a train bound for Tokyo Station. The prosecutors also have them leaving the Grand Hyatt Tokyo with Ghosn and Peter, each carrying luggage.
They have them re-entering their Kansai airport hotel with Ghosn, then leaving the hotel without him. Allegedly, Ghosn was in one of the musical equipment boxes. They then have them arriving at Kansai International Airport with the large black boxes and boarding a private jet to Istanbul.
The case against Michael is pretty much cut and dried – assuming that helping someone jump bail is a crime. However, it is still not clear if there will be a sense of proportion when Mike’s case is eventually adjudicated.
The case against Peter Taylor
The case against Peter is more complicated and largely circumstantial because exculpatory evidence exists that I can’t share other than to say that Peter’s company, Promote Fox LLC, appears to have been doing “public relations” work for Ghosn.
Peter bills himself as a digital marketing expert who, according to the court record, was involved with “reputational marketing.”
Ghosn, as most of us who have followed the story know, had hired a team of PR specialists. You could see some of them walking around the room when Ghosn held his Beiruit press conference eight days after his escape.
Peter, according to the evidence I’ve seen, joined that operation. The fact that he speaks Arabic and lives most of the year in Beirut, made him potentially useful. It also fits into the big picture of Ghosn’s trying to rebuild his reputation.
Whether Peter can overcome the charges against him remains to be seen given that Tokyo prosecutors don’t seem care about “innocent until proven guilty,” a fundamental legal principle Japan struggles with. But to that end, it appears that two thirds of the $1.3 million Ghosn and his son, Anthony, paid to Peter’s company as widely reported in the media ($862,500 of that total, according to court records) might be tied to legitimate business matters.
Corporate damage
Overlooked in most of the reporting is that, as a result of Nissan’s boardroom coup, the automaker’s share price fell nearly 70% over the next four and a half months, resulting in a $12 billion loss in market value before a slow recovery began.
But even today, 28 months after Ghosn’s ouster, Nissan’s market cap is only halfway back and the automaker is projecting a 200 billion yen ($1.8 billion) operating loss and a nearly 530 billion yen (nearly $5 billion) net loss when it closes its books this week.
“Nissan is effectively back where it was when Ghosn arrived in 1999 to restructure and revitalize the organization,” said Koji Endo, veteran auto analyst at SBI Securities. In fiscal 1999, Ghosn’s first year, it reported a net loss of 684 billion yen ($6.3 billion) and was on the verge of bankruptcy.
By any measure, this is the largest financial scandal in Japanese corporate history – and by scandal, I don’t mean the offenses that Ghosn and Kelly are alleged to have committed. I mean the one caused by Nissan’s Japanese management and the prosecutors’ office.
The Olympus scandal involved the underreporting of $1.7 billion in corporate losses; the Toshiba scandal, overreporting $1.2 billion in profits.
All executives involved in both scandals, Toshiba and Olympus, received suspended sentences and thus no jail time. Mike Taylor already has served more than nine months in a Massachusetts jail and nearly one month in the Tokyo Detention House.
Nissan declined to be interviewed for these articles.
Roger Schreffler is a veteran correspondent for Ward’s Automotive and a former president of the Foreign Correspondents’ Club of Japan. He notes that his usual work is straight reporting rather than opinion writing but says that, in this case, “I’ve taken sides, and must declare so up front. In my opinion, it’s the prosecutors who should be on trial.“