Japan Press Weekly

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2020 July 1 - 7 [POLITICS]

Ad agency Dentsu pockets taxpayers’ money thanks to cozy ties with METI and COVID-19 subsidy program

In the process of outsourcing the government policy of providing subsidies to coronavirus-affected small businesses, the main contractor, Service Design Engineering Council, which was established mainly by Japan’s giant ad-agency Dentsu, pocketed about two billion yen in tax money by outsourcing the project to Dentsu. Then, the ad agency siphoned about 10.4 billion yen in subcontracting the project to its subsidiaries. Such an act of intermediate exploitation, “nakanuki” in Japanese, came under fire. The reason behind this is the cozy ties between Dentsu and the Ministry of Economy, Trade and Industry.

Dentsu’s act of getting a rake-off from the amount of commission paid by the government for subcontracting the project is regarded as “nakanuki”. In one of the most widely used Japanese dictionaries, the term is defined as an act of an unnecessary middleman to skim off the profits of sellers and buyers. In the past, there were similar Japanese terms, “Pin-hane (skimming off the top)” and “Uwamae wo haneru (taking a rake-off)”.

The word “nakanuki” was used to refer to disintermediation, i.e. sellers trading directly with buyers or consumers by cutting out middlemen such as wholesalers. The term “nakanuki” was also used to describe fare dodging. A Japanese slang dictionary designates the term as a pickpocket trick of returning a wallet secretly to a person after removing all the cash.

The act of secretly “pulling out” taxpayers’ money from the government project is unacceptable. In addition, it is unforgivable for the Abe government to close the Diet amid the coronavirus crisis by “pulling out” itself from public opinion calling for its accountability.

Past related article:
> Government should be accountable for corruption allegation regarding coronavirus-related subsidy program [June 8, 2020]