Ex-Ozawa secretary spills beans

LDP gets former aide to describe DPJ kingpin's coverup of Nishimatsu shenanigans

by Jun Hongo and Alex Martin

Tension ratcheted up a few notches at Democratic Party of Japan headquarters this week when prosecutors raided DPJ Secretary General Ichiro Ozawa’s office in connection with a shady Tokyo land purchase by the kingpin’s fund management body.

Wasting no time in capitalizing on the scandal, the Liberal Democratic Party trotted out a former secretary in Ozawa’s camp to air comments the party leader allegedly made to cover up his misdeeds.

Ozawa gave orders to “hide files, to get rid of anything that could cause trouble,” Kei Kanazawa, who worked under Ozawa’s former secretary, Tomohiro Ishikawa, told reporters after speaking to LDP lawmakers Thursday.

Kanazawa was referring to a scandal that Ozawa’s ex-chief secretary was indicted for last March, which allegedly involved ¥21 million in illicit donations from Nishimatsu Construction Co. to Ozawa’s political funds management body, Rikuzankai. Prosecutors suspect dummy firms were used to hide the transfers.

Though Kanazawa’s statements had more to do with the Nishimatsu scandal than this week’s raid of Ozawa’s office, his remarks were seen as also suggesting Ozawa’s involvement in the latest case. Details have already been reported to investigators, Kanazawa said, adding he was willing to speak on the issue at the Diet if requested.

The DPJ’s “shadow shogun,” Ozawa remains mum on the issue, citing ongoing the investigation as reasons for not saying anything. But observers say the scandals could slowly but steadily disrupt the DPJ administration.

The latest Ozawa scandal follows a classic story line involving construction firms, vested interests and veiled monetary transactions. The parties being questioned are Rikuzankai, DPJ lawmaker Tomohiro Ishikawa, who was in charge of the group’s accounting, and construction giant Kajima Corp.

At the heart of the story is a ¥340 million property in posh Setagaya Ward that Rikuzankai purchased in October 2004. Ishikawa allegedly violated the Political Funds Control Law by cooking the books and deliberately leaving the specifics of the transaction unregistered.

Although Ishikawa told investigators that Ozawa’s personal assets were used to make the purchase, prosecutors are probing whether the money actually came from other sources. Wednesday’s investigation of a Kajima Corp. office with ties to projects throughout Ozawa’s electoral district in Iwate Prefecture suggests the construction giant may have played a role in providing funding for the land.

Officials at Kajima Corp. subcontractor Mizutani Construction Co. have reportedly testified to handing ¥50 million to Ozawa’s camp at the time the Setagaya land was bought.

Many see Ozawa as having a decisive voice in determining which company is awarded construction deals in his home district, a power that inevitably attracts shady money transfers. But Ozawa has claimed no laws were intentionally breached in the process of the ¥340 million purchase.

Nihon University political science professor Tomoaki Iwai said that while chances are slim that Ozawa will ever face charges for his role in the scandal, it nevertheless casts a shadow over his political clout within the DPJ.

Money scandals are nothing new in politics, with some undoing big-name lawmakers.

In the Recruit Co. scandal that rocked the political arena in the late 1980s, the Tokyo-based human resources and classified-ad company gave out preflotation shares in a Recruit subsidiary, Cosmos, to lawmakers and prominent figures in the business world.

When Cosmos later went public in 1986, its share-price rocketed, to the benefit of those in on the scheme — including then Prime Minister Noboru Takeshita, whose Cabinet was later forced to resign.

Iwai, a political funds expert, said that although Ozawa will likely face intense scrutiny in the upcoming regular Diet session, he won’t be forced to address the matter in the Diet because the DPJ would have to give its consent.

“But the string of scandals has definitely cut down Ozawa’s influence within the party,” Iwai said, adding this in turn will weaken the role Ozawa plays in Diet proceedings.

Iwai added that for Prime Minister Yukio Hatoyama — often criticized for his indecisive stances — this could be a rare chance to exercise leadership and present to the public a strong, reliable image, if he, too, can shake the separate money scandal involving him.

“But all that will depend on whether he has the guts for it,” Iwai said. “In either case, there’s no doubt that the DPJ will need to keep its distance from Ozawa — you never know, if worse comes to worse, the party might have to do without him.”