Penetrating The World of Dango

How Navy agents cracked a Japanese bid-rigging scheme

In Japan's $500 billion construction industry, bid-rigging is an established and rarely punished process that goes by the name dango. For the Pentagon, dango is an odious practice that inflates expenses by tens of millions of dollars a year on military projects in Japan. In an unprecedented case, the Justice Department announced last month that 100 Japanese firms had agreed to repay $33 million of excess profits on Navy construction projects. Reason: the companies were caught in the act.

The breakthrough was accomplished by skilled undercover work, Government officials told TIME. In the past, investigators had been unable to penetrate the...

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