Undeclared income haunts Hatoyama

LDP quick to play up latest fabrication scandal

by Jun Hongo and Alex Martin

Prime Minister Yukio Hatoyama faced a new scandal Monday when it was revealed he failed to declare income from stock sales, giving the opposition ammunition heading into a three-day Lower House Budget Committee session.

“This is a personal affair of the prime minister,” Chief Cabinet Secretary Hirofumi Hirano told reporters in an apparent attempt to contain the fallout.

Earlier in the day, reports swirled that Hatoyama did not declare ¥72 million in income obtained through stock sales in 2008.

Hatoyama already faces flak for filing falsified fundraising reports, a sore spot brought forward by the opposition, particularly the Liberal Democratic Party, during the first day of the committee session.

LDP Secretary General Tadamori Oshima slammed Hatoyama for failing to explain why his fundraising reports listed dead people and nondonors as financial contributors.

“I say for your own sake as the prime minister that you should clarify the details to the public,” Oshima said during the committee session.

Hatoyama apologized for failing to declare the income and claimed he “was not aware” of the mistake. He blamed a communications breakdown with his office personnel. He declined to provide further details, saying any comments on the issue could affect the ongoing investigation. His office meanwhile said the tax report has been corrected.

The LDP locked horns with the Democratic Party of Japan administration on other matters as well, hitting the Cabinet hard for weakening ties with the U.S.

“The Cabinet is showing signs of inconsistency and arrogance,” Oshima said, urging the government to quickly decide on where to relocate U.S. Futenma air base.

Former LDP Secretary General Koichi Kato and former Chief Cabinet Secretary Nobutaka Machimura, another LDP stalwart, took issue with the DPJ’s apparent shift in relations with Washington.

“The Cabinet is causing discord” with the United States on a number of fronts, Machimura warned.

Hatoyama replied that his team is assessing the 2006 accord reached with the U.S. on relocating the Futenma base, explaining that a decision may not be reached in time for President Barack Obama’s visit to Japan next week.

“We do not intend to prolong our review, but we are not at the point to set a time limit,” Hatoyama said, noting the issue “doesn’t need to be decided in time for President Obama’s visit.”

The appointment of former Vice Finance Minister Jiro Saito as the new chief of Japan Post Holdings Co. also drew fire, with Oshima saying it “goes against the political pledge of the DPJ” to end bureaucrat-led politics.

Hatoyama replied that Saito worked for the private sector after retiring from the Finance Ministry and that the appointment doesn’t amount to giving top bureaucrats lucrative jobs.

Hatoyama meanwhile renewed his assurances he plans to cap fresh bond issues to cover government deficits. He said his team will seek to keep new bond issuance for fiscal 2009 below ¥44 trillion, a figure the previous LDP administration initially estimated.

Asked about next year’s budget plans by DPJ member Banri Kaieda, Hatoyama acknowledged tax revenues will probably slump.