Siemens scandal - AbsoluteAstronomy.com

of January 1914 was one of several spectacular political scandal

Political scandal

A political scandal is a kind of political corruption that is exposed and becomes a scandal, in which politicians or government officials are accused of engaging in various illegal, corrupt, or unethical practices...

s of late Meiji

Meiji period

The , also known as the Meiji era, is a Japanese era which extended from September 1868 through July 1912. This period represents the first half of the Empire of Japan.- Meiji Restoration and the emperor :...

and Taishō period

Taisho period

The , or Taishō era, is a period in the history of Japan dating from July 30, 1912 to December 25, 1926, coinciding with the reign of the Taishō Emperor. The health of the new emperor was weak, which prompted the shift in political power from the old oligarchic group of elder statesmen to the Diet...

Japanese politics, leading to the fall of the cabinet

Cabinet of Japan

The of Japan is the executive branch of the government of Japan. It consists of the Prime Minister and up to fourteen other members, called Ministers of State. The Prime Minister is designated by the Diet, and the remaining ministers are appointed and dismissed by the Prime Minister...

of Yamamoto Gonnohyoe

Yamamoto Gonnohyoe

, also called Gonnohyōe, was an admiral in the Imperial Japanese Navy and the 16th and 22nd Prime Minister of Japan.-Early life:...

. It involved collusion between several high ranking members of the Imperial Japanese Navy

Imperial Japanese Navy

The Imperial Japanese Navy was the navy of the Empire of Japan from 1869 until 1947, when it was dissolved following Japan's constitutional renunciation of the use of force as a means of settling international disputes...

, the British company Vickers and the German industrial conglomerate of Siemens AG

Siemens AG

Siemens AG is a German multinational conglomerate company headquartered in Munich, Germany. It is the largest Europe-based electronics and electrical engineering company....

.

The Japanese navy was engaged in a massive expansion program, and at the time, many major items (such as advanced warships and weaponry) were still being imported from Europe. Siemens had secured a virtual monopoly

Monopoly

A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...

over Japanese naval contracts in return for a secret 15% kickback to the Japanese naval authorities responsible for procurement.

In 1914, the British firm of Vickers

Vickers

Vickers was a famous name in British engineering that existed through many companies from 1828 until 1999.-Early history:Vickers was formed in Sheffield as a steel foundry by the miller Edward Vickers and his father-in-law George Naylor in 1828. Naylor was a partner in the foundry Naylor &...

(via their Japanese agents Mitsui Bussan

Mitsui

is one of the largest corporate conglomerates in Japan and one of the largest publicly traded companies in the world.-History:Founded by Mitsui Takatoshi , who was the fourth son of a shopkeeper in Matsusaka, in what is now today's Mie prefecture...

) offered the Japanese naval authorities a more lucrative deal, involving a 25% kickback, with 40,000 Yen for Vice Admiral

Vice Admiral

Vice admiral is a senior naval rank of a three-star flag officer, which is equivalent to lieutenant general in the other uniformed services. A vice admiral is typically senior to a rear admiral and junior to an admiral...

Matsumoto Yawara, the former Chief of the Navy Technical Department, specifically involving the procurement of the battlecruiser

Battlecruiser

Battlecruisers were large capital ships built in the first half of the 20th century. They were developed in the first decade of the century as the successor to the armoured cruiser, but their evolution was more closely linked to that of the dreadnought battleship...

Kongō

Japanese battleship Kongo

Kongō was a warship of the Imperial Japanese Navy during World War I and World War II. She was the first battlecruiser of the Kongō class, among the most heavily armed ships in any navy when built. Her designer was the British naval engineer George Thurston, and she was laid down in 1911 at...

. When the German headquarters of Siemens found out about the deal, they sent a telegram to their Tokyo office demanding a clarification. An expatriate employee of the Siemens Tokyo office (Karl Richter) stole incriminating documents indicating that Siemens had previously paid a bribe of 1,000 pounds sterling to the Japanese navy in return for a wireless contract, sold the documents to the Reuters

Reuters

Reuters is a news agency headquartered in New York City. Until 2008 the Reuters news agency formed part of a British independent company, Reuters Group plc, which was also a provider of financial market data...

news agency together with a copy of the telegram, and fled back to Germany.

Japanese newspapers, notably the Asahi Shimbun
Asahi Shimbun
The is the second most circulated out of the five national newspapers in Japan. Its circulation, which was 7.96 million for its morning edition and 3.1 million for its evening edition as of June 2010, was second behind that of Yomiuri Shimbun...

immediately reported the details of the corruption scandal, and the issue was raised in the Diet

Diet of Japan

The is Japan's bicameral legislature. It is composed of a lower house, called the House of Representatives, and an upper house, called the House of Councillors. Both houses of the Diet are directly elected under a parallel voting system. In addition to passing laws, the Diet is formally...

by members of the Rikken Doshikai

Rikken Doshikai

The was a political party active in the Empire of Japan in the early years of the 20th century. It was also known as simply the Dōshikai.Founded by Prime Minister Katsura Tarō on February 7, 1913, the Rikken Dōshikai largely served to support his cabinet against criticism by the Rikken Seiyūkai...

political party

Political party

A political party is a political organization that typically seeks to influence government policy, usually by nominating their own candidates and trying to seat them in political office. Parties participate in electoral campaigns, educational outreach or protest actions...

. Both the Army and Navy Intelligence Services and the Kempeitai
Kempeitai
The was the military police arm of the Imperial Japanese Army from 1881 to 1945. It was not an English-style military police, but a French-style gendarmerie...

launched investigations.

The Japan Weekly Chronicle newspaper reported that an Admiral Fuji of the navy procurement office had confessed to receiving payments from Vickers of a total 210,000 yen in 1911 and 1912 on various occasions, reminding its readers that whether or not the money was received illegally under Japanese law, it was certainly illegal under the British Corrupt Practices Act of 1906.

Large scale demonstrations erupted in Tokyo

Tokyo

, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...

in early February 1914, which turned violent on 10 February 1914 and 14 February 1914. Public opinion was further outraged when it was revealed the massive scope of the naval expansion program would have left room for little else in the government budget, and that the government was therefore planning to raise taxes. Although Prime Minister Yamamoto was not directly implicated, and he took steps to dismiss naval officers in charge of procurement and shipbuilding, public dissatisfaction continued to grow, and Yamamoto was challenged to explain the bribery allegations before the House of Peers.

After both houses of Diet refused to pass the 1914 Navy budget, Yamamoto resigned on 24 March 1914, bringing down his entire cabinet with him. In May, a military court martial reduced ex-Prime Minister Admiral Yamamoto and Navy Minister

Ministry of the Navy of Japan

The was a cabinet-level ministry in the Empire of Japan charged with the administrative affairs of the Imperial Japanese Navy . It existed from 1872 to 1945.-History:...

Admiral Saito Makoto

Saito Makoto

Viscount was an admiral in the Imperial Japanese Navy, two-time Governor-General of Korea from 1919 to 1927 and from 1929 to 1931, and the 30th Prime Minister of Japan from May 26, 1932 to July 8, 1934.-Early life:...

in rank, sentenced several leading members of the navy procurement department to prison, heavily fined both Vickers and Siemens and banned them from future participation in contracts.

With the start of World War I

World War I

World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...

a couple of weeks later, Vickers was asked to restart production on the Kongō, and the men involved were all pardoned and rehabilitated.

The Daily Telegraph newspaper edition of 21 January 1914 reported that Karl Richter had been arrested in Germany for his theft of the incriminating papers, and sentenced to two years in prison.

See also