Senior officials at a major publishing company embroiled in a bribery scandal involving the Tokyo 2020 Olympics failed to use the firm's whistleblowing system because they feared reprisal or apathy, or were unaware the recourse existed. 

According to a third-party committee's report, the officials at Kadokawa Corp. were aware that giving money to a former executive of the Olympic organizing committee constituted bribery and felt uncomfortable with the prospect.

The report details why the publisher’s officials still couldn’t stop the offense and even didn’t use the company’s whistleblowing system, despite the legal protection afforded to those who use such a mechanism from receiving unfair treatment on the basis of their reporting.

A third-party committee set up by Kadokawa published the report on the scandal earlier this year.

Senior officials of Kadokawa, including its former chairman Tsuguhiko Kadokawa, have been indicted on suspicion of bribing Haruyuki Takahashi, a former executive of the organizing committee for the Tokyo 2020 Games.

They are accused of paying him a total of around 70 million yen ($480,000) to get the publisher selected as an Olympic sponsor.

According to the report, before Kadokawa paid Takahashi, the publisher’s intellectual property legal department informed the company’s senior officials, including the head of the section responsible for Olympic-related matters, that the payment could constitute a bribery offense.

Other senior officials at the company shared that view, the report says. Still, the publisher paid Takahashi.

During an interview by the third-party committee, the head of the section responsible for Olympic-related matters said, “While I had some uncomfortable feelings about the payment, I couldn’t say we shouldn’t do it.”

The report pointed out that the reason the publisher’s officials felt this way was that they didn’t want to offend Kadokawa, who held so much influence in the company.

But the report also revealed that one official at the section responsible for Olympic-related matters ceased to be involved in paying Takahashi after informing the section’s head of the desire to have no connection with the matter.

But no one, including this official, used the company’s whistleblowing system.

The system allows Kadokawa’s officials to secretly report cases where other officials at the company might have compliance issues, such as breaking the law or engaging in anti-social activities.

The committee heard that one senior official was even unaware that the whistleblowing system existed when the publisher was going to pay Takahashi.

However, the official told the committee, “(Even if I had been aware of the system,) I would have thought that if I used it, people in the company would find out.”

The official told the committee “There is no way I wouldn’t be worried about retaliation. (When the publisher was going to pay Takahashi,) I wanted to continue working at Kadokawa. So I didn’t think I would dare to try to stop the payment by taking such action (internal reporting).”

Another official told the committee, “I thought that even if one official voices concern, the payment would be made anyway and there would be only negative consequences (for the whistleblower) such as getting demoted, for example. I was resigned to the thought that the payment couldn’t be stopped.”

Taking into account such views, the report said that the reason Kadokawa’s officials didn’t use the whistleblowing system was their “resignation that the company would do nothing even if they made a complaint as well as concern that there would be negative consequences from making a complaint.”

The report also added, “Some officials in the company are not aware of the existence of the whistleblowing system in the first place. That suggests that the system was not something that the company’s officials were familiar with.”

To change this situation, “It’s important for Kadokawa to express with its behavior that it seriously expects its officials to make reports through the whistleblowing system,” the report said.

It said that some companies actively ask their officials whether they are aware of any compliance issues.

It also added that some other companies commission outside firms to conduct tasks regarding whistleblowing, including investigation of cases, to protect whistleblowers’ anonymity.

The report proposed that Kadokawa put in place arrangements that are right for the company.