American Dream Campus in Kobe Turns into Nightmare

A Kobe branch campus of a U.S. community college opened with much fanfare in 1990, but in a few short years its reputation was in tatters, and its former president in U.S. prison.

By BRIAN L. COVERT
Special to Asahi Evening News

When a branch campus of the Washington state-based Edmonds Community College opened its doors in Kobe in 1990, it symbolized some of the finest ideals that American education could offer to Japanese students.

By the time EdCC Kobe closed its doors for good one year ago this month, its former home-campus president was in a U.S. federal prison, its prior Japanese sponsor was mired in bankruptcy and the school’s reputation was in tatters.

“It’s a story of losers,” says Eric Colon, 59, a former administrator and teacher at EdCC Kobe. “The only divine justice is that fortunately, several of the students have been winners — which, after all, is a very good moral for it.”

The EdCC project was born in 1988 from negotiations between Thomas Nielsen, then-president of the EdCC home campus in Lynnwood, Washington, and Hirotoshi Mizota, a longtime Kobe City Assembly member and president of a local flag-making company with diverse investments in factories, nursing homes, private schools and property.

With Mizota as financial sponsor, EdCC Kobe opened its state-of-the-art facilities with great fanfare in April 1990 in the hills of Kita-Suzurandai to about 600 Japanese and American students.

Like other American college branch campuses that rushed into Japan, EdCC Kobe straddled two distinct systems.

Its U.S. home campus, subsidized mostly with local public money, was formally recognized by the federal and state governments. No such status was enjoyed in Japan, where most of these branch campuses were regarded as private or local tie-ups involving no Japanese national taxpayer money.

Since schools like EdCC Kobe were not recognized as educational institutions by the Japanese Education Ministry — “We are not even aware of the number of U.S. branch campuses in Japan,” quipped a ministry official — the schools’ survival depended solely on the management of sponsors like Mizota.

Mizota quit the Kobe City Assembly in 1991 in a high-stakes bid to win a seat in the Upper House of the Diet the next year, an election he lost miserably. His timing could not have been worse: Japan’s economic bubble had begun to burst.

A second EdCC Japan campus was opened in spring 1993 in Tokyo under a different Japanese sponsor to help boost the numbers of students coming into the Kobe campus. EdCC Tokyo was shut down just three months later, as its Japanese sponsor, Masao Saito, reportedly disappeared with nearly 20 million yen in student tuition fees, plus salary payments due to staff.

Mizota’s once-thriving empire headed straight into bankruptcy that summer, leaving at least $800,000 (103 million yen) unpaid to the EdCC home campus in Washington.

A new sponsor for EdCC Kobe was soon found in Jun Maeda, managing director of Planners International Ltd., a global management company on Kobe’s Rokko Island.

But despite the best intentions of Maeda and others to rescue the school’s name in Japan, EdCC records and court documents show that other internal and external factors — some publicly revealed here for the first time — were working against those efforts:

• Ties between the home campus and a study-abroad agency in Okinawa that was recruiting Japanese students directly to Washington, unbeknownst to Maeda and the EdCC Kobe campus staff.

• The Great Hanshin Earthquake of January 1995, which left only minor structural damage to the eight-story Kobe campus building, but caused a further drop in students and financial aftershocks to sponsor Maeda.

• A fund-raising letter campaign that was set up just one month later between Nielsen and a Japanese information research firm in Tokyo, NAFCO Research, asking EdCC Kobe graduates for donations of up to 100,000 yen purportedly to help restore the home-campus library — again, without the foreknowledge of Maeda and the Kobe campus staff.

• Business overtures Nielsen made to Japanese lumber companies on behalf of Gary Chern, a Lithuanian immigrant friend in Washington. Chern was sentenced last year to nearly five years in federal prison for conspiracy and extortion in a separate kidnapping case that U.S. government prosecutors charged was tied into a Lithuanian crime syndicate called the “Little Doctors.”

• Early-morning raids in April 1995 on the homes and offices of Nielsen and his close business contacts in Washington state by the FBI and the Internal Revenue Service. The crackdown was part of an extensive investigation into alleged bribery, mail fraud, money laundering and tax violations by the EdCC president. “I did not take bribes,” Nielsen told the local media.

• The discovery — by collaborating journalists in Japan and the United States — of documents originating in the Japanese Justice Ministry and a private business-listing service that showed Nielsen as an executive officer and 25-percent shareholder in a Tokyo-based travel agency and trading firm then known as Ken & Associates Inc. Nielsen denied any knowledge of such records.

• Nielsen’s guilty plea in July 1996 to accepting $97,570 (12.6 million yen) in bribes and unreported income of $108,000 (14 million yen) in illicit deals with foreign companies and others involved in the school’s international programs — including about $54,000 (7 million yen) in bribes from Mizota, the first EdCC Kobe sponsor. The evidence included a copy of a secret written agreement Nielsen had made with Mizota during the initial 1988 negotiations, stating that both sides “will do their best” to enable 98 percent of EdCC Kobe students to graduate with degrees. It also guaranteed that Nielsen and another home-campus official would receive “personal royalties” out of tuition monies paid by future EdCC Kobe students.

When contacted for an interview, Mizota said he had no recollection or documentation of the dealings with Nielsen, and refused to comment further.

Nielsen was ordered to return about $75,000 (9.7 million yen) to EdCC and agreed to pay $131,000 (17 million yen) to tax authorities. He is now an inmate at a minimum security prison in Sheridan, Oregon, serving the second year of a two-year sentence.

• The surprise announcement in February 1997 by current EdCC home-campus president Jack Oharah that the Kobe campus operations, which were considerably scaled down and moved to Rokko Island the year before, would be closed for good due to financial concerns and low student enrollment. Maeda maintains he was not informed of the closure beforehand.

“I think that educationally, a lot was accomplished in spite of a whole lot of handicaps” during those seven years, says Garry Lingerfelt, 57, former chief administrator of EdCC Kobe, now retired. “And I think that concept (of U.S. branch campuses in Japan) is something that ought to be encouraged.”

Many EdCC Kobe graduates, like Naomi Goto, agree.

“American colleges in Japan offered an alternative, and people like me could rebuild their lives,” says Goto, 21, of Hiroshima, a high school dropout who was later accepted at EdCC Kobe in its heyday.

Goto, now busy finishing her undergraduate studies in psychology at the University of Massachusetts at Amherst, says “Edmonds helped me to find a new way of going forward and pursuing my hopes.”
______________________________________
Brian L. Covert is a freelance journalist living in Nishinomiya, Hyogo Prefecture.