Key Ozawa aide arrested over illegal funds

Compiled From Kyodo, Staff Report

The chief secretary of Ichiro Ozawa, head of the Democratic Party of Japan and a leading candidate to be the next prime minister, was arrested Tuesday on suspicion of accepting illegal corporate donations, prosecutors said.

Takanori Okubo serves as chief accountant of Ozawa’s political body, Rikuzankai, which allegedly took money from scandal-tainted Nishimatsu Construction Co., according to investigative sources.

Ozawa is in line to become prime minister if his party wins the next general election, which must be held by autumn.

Rikuzankai allegedly got the funds from two groups headed by an ex-Nishimatsu official, breaking the political funds control law, the sources said.

Corporate donations are prohibited by law except to political parties or their organizations for managing political funds.

The law also prohibits donations made under the name of another person or body.

Experts said Okubo’s arrest deals a blow to the DPJ, which is attempting to promote itself as a viable alternative to the ruling Liberal Democratic Party while the LDP’s leader, Prime Minister Taro Aso, is suffering from historically low public support ratings.

“The opaqueness surrounding Ozawa’s political funds has been his Achilles heel. The damage to the DPJ will be severe,” said Tomoaki Iwai, a political science professor at Nihon University in Tokyo. “Attention may be focused on whether he should resign or be summoned to the Diet as a sworn witness.”

While some junior DPJ members called for Ozawa’s resignation Tuesday, most in the party appeared to be standing by him.

Earlier in the day, DPJ Secretary General Yukio Hatoyama told reporters that the accusation by investigators, already reported by the media before the arrest, is “a frameup” by authorities.

“Ozawa has made clear all the money that was coming in and going out, and there aren’t any problems. (The accusation) is a frameup,” Hatoyama claimed.

Ozawa has claimed that all the funds were properly managed and that Rikuzankai took the money believing it had come from political organizations, not the construction company.

Mikio Kunisawa, the former president of Nishimatsu, was served a new arrest warrant Tuesday in connection with the allegations by the special investigation department of the Tokyo District Public Prosecutor’s Office, theinvestigative sources said.

Kunisawa was already indicted in February for allegedly telling subordinates to bring millions of yen into Japan from overseas for slush funds without reporting the money to customs authorities in violation of the foreign exchange and foreign trade law.

Aso declined to comment on Okubo’s arrest.

“I believe that the prosecutors are handling (the case) appropriately,” Aso said. “I will not comment on individual cases.”

However, he strongly denied that this turn of events would affect his decision on when to dissolve the Lower House and call for a general election.

“We are implementing fiscal and economic measures at the moment,” Aso said. “The dissolution has nothing to do with this (arrest).”