Former Nissan executive Greg Kelly, left, faces a charge involving ex-company chief Carlos Ghosn, in Tokyo. Photo: AFP

Roger Schreffler is expanding his series on the post-Carlos Ghosn Nissan board of directors based on information from more interviews and newly obtained documents, of which four installments were published in September. This is part 8. Read part 1 herepart 2 herepart 3 here, part 4 here, part 5 here, part 6 here and part 7 here.

On November 20, 2018, the day after Carlos Ghosn and Greg Kelly were arrested in Tokyo, a friend of Kelly’s reached out to a colleague at Nissan headquarters and asked him to help find Kelly a Japanese lawyer. The person took the request to Hari Nada, Ghosn’s and Kelly’s main accuser, who was running the CEO office.

Nada’s response shocked this member of Nissan management. “You will not get that f**kface a lawyer!” declared Nada. “That f**kface” had worked 30 years at Nissan, rising to the rank of executive vice-president and representative director. He was a valued member of Carlos Ghosn’s management team.

Friends and acquaintances alike say he is honest, a good family man, a churchgoer and a competent lawyer – not a likely candidate to plan and carry out a major financial crime, not to mention a crime for which he would receive no personal gain.

Indeed, it turns out, Kelly is innocent – he must be innocent, because there was no crime.
We also believe there was no crime involving Ghosn, but explaining his story is more complex. We shall do that in Part 9 of the series, the focus of which will be on the Kelly trial – which by proxy is Ghosn’s trial.

New information has come into our possession – notably an explosive summary of a group of lawyers’ July 3, 2019, interview of Nada, in which he exonerates Kelly, plus our own interview with an individual directly involved with the Ghosn compensation discussions.

These new disclosures make it clear that (here’s the original Japanese version) the charges against Kelly – and by extension the first two charges against Ghosn – were fabrications.

Those charges in plain English involved concealing from Japanese regulators 9.3 billion yen (US$82 million) in deferred income over an eight-year period.

The problem with the charges: As we reported in our May 31 interview with Ghosn and will discuss in more detail in Part 9, there was no deferred income, at least according to the record involving Kelly. That record shows that Kelly’s intention always was to create employment opportunities for Ghosn after retiring from the top post at Nissan and to deter him from going to a competitor.

It appears to be likewise regarding Ghosn, based on the timeline we’ve put together from the record starting as early as September 2013, five years before Kelly’s and Ghosn’s arrests. A summing up of this evidence, including more on Ghosn’s situation, is coming in Part 9 of this series.

The setup

Nada’s November 20 outburst came one week after he had phoned Kelly in the United States and convinced the American to travel to Japan on the pretext of attending a meeting involving a sensitive board issue.

Nada promised Kelly he would be back home in Tennessee in time for the Thanksgiving holiday and a scheduled late-November pre-op with his surgeon for early December neck surgery (for spinal stenosis) at Vanderbilt Medical Center in Nashville.

Nada made the call on November 13, 2018, six days before carrying out a sting he’d engineered with the Tokyo prosecutors’ office, aided by Michael Yoshii, a Latham & Watkins LLP lawyer, who participated in the July 3 interview.

Nissan vice-president Hari Nada. Photo: Nissan

We now know that Nada, who had copped a plea on October 31, 2018, to avoid criminal prosecution, had lied to Kelly to lure him to Japan.

Kelly, our sources have informed us, had been reluctant to travel to Japan and felt he could have participated in the meeting by video conference as had been the custom at Nissan for a number of years with executives participating in meetings from places as far away as France, the United States, Mexico and China, wherever the three Alliance partners – Nissan, Renault and Mitsubishi Motors – had major regional operations.

An acquaintance revealed that Kelly had planned to spend a quiet Thanksgiving with his wife and mother-in-law at his home in Brentwood, Tennessee, a Nashville suburb.

He finally relented when Nada offered to have him picked up at his home and flown to Japan on a Nissan corporate jet, to be flown back in time for the November 22 holiday, his pre-op for his surgery several days later and surgery on December 7.

Our sources say he was in too much pain to fly commercially – and, moreover, that Kelly, unlike others in the organization including Nada, made it a practice not to use company jets even for business travel.

Command performance

Unbeknownst to Kelly, Nada surreptitiously taped the conversation and then triumphantly played it in his 21st-floor office at Nissan’s headquarters while handing out a call transcript to members of in-house lawyer Christina Murray’s task force, who were finalizing details of their part in the Ghosn and Kelly sting.

The others who were listening didn’t know at the time about Nada’s plea agreement and criminality.

Seated in the room, in addition to Nada, Murray and members of Murray’s team, was Yoshii, who would comment that Nada (who had entered into a plea agreement just two weeks before) “put on a command performance” to persuade Kelly to travel to Japan.

According to a person briefed about the meeting, Yoshii and Nada were glib, even jocular, about what they’d done as if they’d just won a big sporting event. But have no doubt about it: They had just cast the die to destroy a human life – two, counting Ghosn’s.

First-class ticket to hell

After arriving at Tokyo’s Narita International Airport about 5 pm Tokyo time on Monday, November 19, 2018 (Ghosn flew separately into Tokyo’s Haneda Airport 50 miles away), Kelly entered a van presumably arranged by Nada to take him to his hotel in Yokohama.

Around 20 minutes into the ride, according to an account from a person who is following the case, the driver pulled over at a prearranged stop on the East Kanto Expressway, where several members of the Tokyo prosecutors’ office entered and commandeered the vehicle.

Kelly was driven to the Tokyo Detention House in Kosuge, a small village in the northeastern part of Greater Tokyo. Immediately upon arrival, he was strip-searched in front of several prison officials and forced to change into a light blue prison suit. His daily interrogations started almost immediately, we were told.

His stay at the Tokyo Detention House, a maximum-security prison despite its innocuous-sounding appearance and name, was brutal. It would be characterized by Mississippi Senator Roger Wicker, in a speech before the US Senate in September 2020 when Kelly’s trial was starting in Japan, as “cruel,” “unfair,” “harsh” and “shameful.”

Specifically, according to our sources, he spent five weeks in solitary confinement, 37 days to be exact, in the dead of winter in an unheated cell, initially without winter clothing. On a number of nights, temperatures fell into the 30s Fahrenheit.

Lights would be on in his cell 24 hours per day, and during the day he would have to sit in the corner, legs stretched forward, not allowed to stand up and walk around for exercise.

Because he needed neck surgery, Kelly was constantly in pain. He was only allowed to leave his cell during daily interrogations with prosecutors and several times per week, for less than an hour at a time, for outside exercise. He was only allowed to shower two times per week.

Daily interrogations, our sources revealed, averaged five to six hours with no lawyer present. We were told that the prosecutors pressed Kelly to incriminate Ghosn. He didn’t, instead choosing to play the long odds and try to win his acquittal in court.

Not surprisingly, despite Nada’s initial refusal to provide Kelly legal support, we learned, Kathryn Carlile, a Nada loyalist known to her detractors as “Nada’s enforcer,” eventually recommended a lawyer who, our sources claim, urged Kelly to plea bargain and confess.

Kelly declined Carlile’s offer and chose instead one of Japan’s best defense lawyers, Yoichi Kitamura, who has taken on Japan’s “hostage justice” system in the past and won.

Former Nissan executive Greg Kelly, who is charged with financial misconduct, speaks during a March 2020 interview with AFP at his apartment in Tokyo. Photo: AFP / Behrouz Mehri

Good Japan and bad Japan

It is important that we not gloss over Kelly’s treatment at the hands of his captors and consider it acceptable or even legal by international standards or Japan’s own constitution.

Prolonged solitary confinement is regarded as torture in most developed democracies. In fact, the United National General Assembly, in revising its “Standard Minimum Rules for the Treatment of Prisoners” in 2015 (the so-called “Nelson Mandela Rules”), put a 15-day limit for holding a prisoner in isolation.

Kelly was kept in solitary confinement for 37 days before being granted bail; Ghosn, 109 days. Michael and Peter Taylor, the American father and son who helped Ghosn escape, spent more than 100 days each in solitary.

This puts key players in the broader Ghosn case in the 0.2 percentile, usually reserved for violent and drug-related crimes including death-row inmates. “The Carlos Ghosn case, including Greg Kelly and the Taylors, is an aberration,” said William Cleary, a Japan-based expert on Japanese law with a doctorate in Japanese criminal procedure. “It’s totally unique.”

Beyond this, Japan regularly violates the due-process provisions in its constitution regarding prisoner treatment. Those are relatively new provisions that arose in the post-World War II constitution that was written in 1946 by US Occupation officials seeking to pull the country in a new direction after a history of treating prisoners brutally.

Reform of the judiciary was among the priorities in that effort.

Said Cleary, who provided expert witness testimony on behalf of the Taylors in their extradition case last year: “They succeeded, of course, in the wording of the provisions but failed in realizing that it would be tatemae or lip service by the Japanese authorities.”

Among the constitutional violations that still define the Japanese criminal justice system today, according to Cleary: “Prosecutors ignore such constitutional ‘rights’ as the right to a speedy trial and the right to be informed of the charges ‘immediately’ upon arrest and have the assistance of counsel ‘at all times.’”

Also: that “no person shall be compelled to testify against himself” and that “confession made under compulsion, torture or threat, or after prolonged arrest or detention shall not be admitted in evidence.”

This brings us to Kelly: After enduring pain for more than five weeks, he was finally released on Christmas Day in 2018. According to multiple sources, Kelly’s lawyer, Yoichi Kitamura, made a compelling case to the presiding judge that Kelly badly needed surgery.

Word is that then-US ambassador (now the junior senator from Tennessee) William Hagerty, also used his influence behind the scenes.

Greg Kelly after his release on bail. Photo: The Tennessean

Kelly would finally have his surgery for spinal stenosis at Japan’s Tsukuba University Hospital on January 4, a month late. His American surgeon, rated as one of the best in the US, has yet to examine him to determine the extent of any neurological damage from his incarceration and the delay in surgery.

His wife, Dee, who had not been permitted to speak to him even by phone until the day of his release, arrived in Japan in time for his surgery.

Not only Nada but also Yoshii, who was in the room when Nada distributed the November 13 call transcript, knew that Kelly was scheduled for his pre-op on November 26, the first Monday after Thanksgiving, and surgery on December 7. There is no doubt about that, we’ve been told.

Three years have passed since Kelly’s release. His trial is complete, including 64 days of hearings and testimony from 16 witnesses. He is awaiting the verdict next March. His life has been on hold since Hari Nada lured him to Japan.

As we previously reported, besides Ghosn and Kelly, no one else at Nissan has been arrested; the automaker has gutted its senior management team and the company has reported massive financial losses.

The Renault-Nissan-Mitsubishi Alliance, we’ve reported, has been severely damaged, perhaps beyond repair. And while Nissan shareholders have lost more than 40% in their stock value, the automaker has succeeded in covering up misconduct in its senior management ranks.

A development in the story is that William Hagerty, the former US ambassador, is no longer operating behind the scenes. And as a member of the influential Foreign Relations Committee in the US Senate, he found an ally to take up Kelly’s cause: the newly confirmed US ambassador to Japan, Rahm Emanuel.

In introducing Emanuel to the committee for his confirmation hearing in October (Emanuel was confirmed on December 18), Hagerty elicited a commitment from Emanuel to make Kelly’s “return home” to Tennessee a “top priority.”

What that means is still anybody’s guess. But we can speculate that Emanuel, who reportedly is scheduled to arrive in Japan in January armed with the knowledge that Kelly is innocent as more documents become public, won’t brush things under the carpet. We suspect that it won’t be diplomacy as usual if Kelly is convicted.

A veteran correspondent for Ward’s Automotive, Roger Schreffler is also a former president of the Foreign Correspondents’ Club of Japan.