The arrests have sparked a more wide-ranging debate on the relationships between bureaucrats and the companies they regulate. At another time, close ties between government and industry were seen as a strength of the Japanese system because they allow informal consultations and the testing of policies. Banks and other financial and nonfinancial firms admit to having special groups of employees whose only job is to develop and maintain friendly relations with relevant ministry functionaries. Whatever the industry, the relationship-building usually takes place outside regular business hours in the form of dinners or, sometimes, golfing weekends, trips and other leisure activities. These lengthy affairs are supposed to provide the time to develop close personal ties and to discuss issues in depth.
Critics now say that they also serve as a convenient channel to curry favor with key bureaucrats.
Japanese executives are in a quandary over how to respond. Because the nation's legal and regulatory system is deliberately vague, bureaucrats have a great deal of discretion in interpreting and implementing laws and rules. Understanding how a bureaucrat might implement a rule or knowing whether he thinks a company's proposed action would violate a regulation naturally are an important part of a company's operations. Executives argue that they must consult often and closely with bureaucrats to conduct business on the right side of the law. Firms are unwilling to stop entertaining ministry officials unless their competitors make a similar vow.