The controversy swirling around the alleged pirating of trade secrets from International Business Machine Corp. by representatives of Hitachi and Mitsubishi Electric has churned up strong emotions among Japanese businessmen who believe that the two companies may have been unfairly entrapped in a scheme set up by IBM and the FBI.
In Japan's group-oriented society, a public dispute of the magnitude of this industrial espionage case is deeply embarrassing, quite apart from any questions of possible involvement or culpability. But the underlying tone of resentment in the Japanese press reflects a sizable gulf between Japan and the United States in accepted business practices..
Hitachi and Mitsubishi Electric have denied any wrongdoing. At separate press conferences today, however, they appeared to step back from earlier disclaimers.
Hitachi officials said today that Kisaburo Nakazawa, a senior company executive who Hitachi said authorized payments for IBM computer secrets, had been told by American intermediaries that the information he had arranged to get was stolen property.
According to Hitachi officials, however, Nakazawa did not believe these assertions because he thought they were part of a ploy to inflate the price of the information. Nakazawa, who was unavailable for comment, was charged by the U.S. Justice Department Tuesday with conspiring to transport stolen property.
After denying any invovlement in the case whatsoever, Mitsubishi Electric officials acknowledged today that Takaya Ishida, a company employe, had paid more than $20,000 for similar information.
The officials, however, categorically denied any illegal operations were involved. Ishida is one of eight Japanese company employes arrested in California this week in connection with the case.
Editorials in this morning's major Japanese dailies broadly acknowledged that Hitachi and Mitsubishi Electric may have overstepped the bounds of routine information gathering which is common to international market competition in computers. They generally expressed dismay, however, at the FBI's use of undercover agents to expose the alleged scam.
"It is regrettable if the Japanese companies involved resorted to excessive means," said the Yomiuri Shimbun. "But it must be pointed out that use of undercover agents is considered repugnant in Japan and resort to such means is permitted in Japan only in investigations concerning narcotics."
Evidence obtained by Japanese authorities through undercover operations is, for the most part, not accepted as evidence by the country's law courts. As a result, officials here have hinted that Japan may be under no obligation to extradite the 12 company employes in Japan who were charged in the case, even though a treaty providing for extradition under certain conditions exists between Japan and the United States. U.S. authorities have yet to make a formal request for extradition proceedings.
A Mitsubishi Electric spokesman said today, "we have done nothing illegal. We do not have a guilty conscience." He said that the firm's American lawyers have indicated they could build a strong defense around the question of the FBI's methods.
"Many Japanese businessmen," one well-placed Japanese industry observer said, "feel that Hitachi and Mitsubishi were entrapped by IBM and the FBI, and basically were not guilty of any wrongdoing."
He suggested that rivalries between Japanese companies in the fiercely competitive domestic market here, in a broad range of industrial and consumer goods, had created a business environment in which "industrial spying is a common, everyday thing."
"Penalties for this kind of activity are less harsh in Japan than in the United States," he added. In order to survive in Japan's highly competitive market, companies here "must increase their market share and to do that they must know what the competition is doing." Some of these methods, he suggested, may have been inadvertantly used in the United States by Japanese companies doing business there, although he said most Japanese companies familier with differing American business customs have made efforts to adapt their own practices.
Other knowledgeable observers, however, asserted that intelligence- gathering is an essential fact of life for all world computer and computer component producers, regardless of a company's national origin, and that the line between the legality and illegality of some of these operations is a fine one.