Almost every day it seems another politician is making headlines over a money scandal. Four members of embattled Prime Minister Shinzo Abe’s Cabinet — administrative reform minister Genichiro Sata, and farm ministers Toshikatsu Matsuoka, Norihiko Akagi and Takehiko Endo — have been forced from their positions by revelations of misuse of political funds. Matsuoka even took his own life.
In response, the Liberal Democratic Party-led ruling coalition passed a revision of the Political Funds Control Law in June to tighten regulations. But the move appears to have had little real effect.
Following are some facts about the political funds law and its apparent shortcomings:
What is the aim of the Political Funds Control Law?
Established shortly after the end of World War II, the law was intended to avert political corruption by ensuring transparency in the movement of funds.
Though politicians were required to disclose information on their political funds, there were no restrictions on the number or amount of donations, nor was there any punishment for wrongdoing. Over the years, the law has been revised a number of times in the wake of various money scandals.
What does the law say now?
The current law stipulates that all political organizations, estimated at around 70,000, are obliged to submit a report annually on their revenue and expenditures. All donations of ¥50,000 and above must be reported, including the contributor’s name and address. By the same token, all expenditures of ¥50,000 or more for political activities must be itemized, and the reason for the outlay given.
But before the June revision, ordinary expenditures, such as for utilities, offices and personnel fees, did not have to be itemized and no receipts were required. With the revision, political funding management bodies — the organizations that handle each politician’s money for political activities — must now attach a receipt for every ordinary expenditure, excluding personnel fees, of ¥50,000 or more. But other political organizations, such as support groups, still do not have to itemize and attach receipts for recurring spending.
How did Abe’s Cabinet ministers apparently fall through the cracks of the law?
A major failing of the law was the exclusion of ordinary expenditures, said Tomoaki Iwai, a political science professor at Nihon University and a specialist on political funds. Because there were no regulations on detailed reporting of office fees and the like, all one had to do to keep money hidden was to shove it into the ordinary expense column of the funding report.
The opposition parties slammed the June revisions as “full of loopholes.” Why?
The ruling bloc limited the target groups only to political funding management bodies. Although lawmakers can only have one such organization, they are entitled to have any number of other bodies, such as support groups, and the money they want to keep hidden could go to these groups’ funding reports.
Furthermore, lawmakers could break down the expenditures into payments under ¥50,000, thus sidestepping the requirement to attach receipts.
What were the recent money scandals involving environment minister Ichiro Kamoshita and Yoko Kamikawa, the state minister on gender equality and population issues?
They both had “mistakes” in their annual political funding reports. Both Kamoshita and Kamikawa had lent money to their political funding management bodies, but in Kamoshita’s case the amount did not add up correctly in the reports, while Kamikawa failed to report the loans. But they did not resign because their cases were considered unintentional and due to carelessness.
According to Iwai, it is common for lawmakers to “lend” money to their political funding management bodies because in this way it becomes public money for them to use in political activities.
Farm minister Takehiko Endo resigned Sept. 3, just eight days after he was appointed, to take responsibility for a scandal in which a farm mutual aid association he headed inappropriately received government subsidies. This was not directly related to the Political Funds Control Law.
Why do money scandals keep emerging?
Iwai says the reporting system itself has flaws. “The accounting has always been sloppy, and once you submit your report, no one checks it for accuracy,” he said.
Currently, the funding reports are scattered among the internal affairs ministry and local governments, depending on where the organizations are registered. Anyone who wants to view the reports must go to the ministry or local governments to do so, and no copies can be made.
Iwai argues there should be one central body where all the reports are filed in a unified database so that the general public can have easy access to the information.
But more fundamentally, politicians’ ethics are being questioned. They are supposed to be representing the public and not be blinded by greed.
“Lawmakers often say they need a lot of money for political activities,” but there are ways to cut back on the spending, Iwai said. “Do they need to spend a lot of money holding meetings at expensive ‘ryotei’ (Japanese-style restaurants known for their outrageous prices) or use money to hire (women as) party companions? No.”
What is the punishment for breaking the law?
People found guilty of intentionally making false reports face up to five years in prison and a fine of up to ¥1 million. They also lose the right to run in elections and vote for a specific period.
Some LDP lawmakers are saying another revision is needed. What ideas are they floating?
Just three days after the crushing defeat in the July 29 election, then LDP Secretary General Hidenao Nakagawa announced the party was considering making ordinary expenditures, excluding personnel fees, of ¥1 and more subject to disclosure, with receipts attached. And this would cover not just the political funding management bodies but other organizations tied to lawmakers.
But many LDP lawmakers voiced opposition to the suggested revision. Since Abe reshuffled the party’s executive lineup Aug. 27, new Secretary General Taro Aso has also expressed his concern over the proposal. He told a news conference Sept. 4 that the party needs to have a thorough discussion of the revision, adding that it might not be submitted to the extraordinary Diet session that started Monday.
The largest opposition Democratic Party of Japan, on the other hand, has expressed its intention to submit a bill to revise the law during the current Diet session to oblige all 70,000 political organizations to itemize all expenditures, excluding personnel fees, of ¥1 or more and attach receipts.
Why is the LDP backing down?
Aso said the party must take into consideration the freedom of political activities, which is guaranteed in the Constitution. But professor Iwai said that using “the freedom of political activities” as a reason not to strengthen regulations does not make much sense “unless lawmakers have something to hide.”
Iwai also said he thinks part of the reason comes from the fact that it is just plain troublesome to collect and attach all of those receipts. But “every company does it, so lawmakers should be able to do so, too,” Iwai said.