Funds scandals risk DPJ Diet plans

LDP to focus on Hatoyama, Ozawa probes

by Alex Martin and Jun Hongo

The Democratic Party of Japan-led government kicks off its first ordinary Diet session Monday focusing primarily on fighting the recession, but Prime Minister Yukio Hatoyama will also be forced to deal with DPJ money scandals.

The 150-day session through June 16 begins only days after prosecutors searched the private office of DPJ strongman Ichiro Ozawa — the party secretary general dubbed the “shadow shogun” — and the office of his fund management body over accounting irregularities in connection with a ¥400 million Tokyo land deal.

Offices of Kajima Corp. were also searched as shady ties are suspected between the general contractor and Ozawa over public works projects in the Tohoku region, which is Ozawa’s home ground.

Hatoyama himself remains an easy target for the opposition’s attacks.

He recently paid a ¥570 million gift tax on ¥1.1 billion he received over seven years to 2008 from his 87-year-old mother, Yasuko, part of the founding family of global tire conglomerate Bridgestone Corp.

Some of the money is thought to have been recorded as Hatoyama’s political donations from fictitious or deceased people.

The true test during the upcoming Diet session, therefore, will be whether the DPJ can endure the attacks on Hatoyama and Ozawa by the Liberal Democratic Party, the main opposition force, political analysts said.

The opposition camp has hinted it will do anything to make the most of the opportunity, possibly going as far as requesting that Hatoyama’s mother testify at the Diet on the shady contributions. LDP President Sadakazu Tanigaki has even demanded the resignations of Ozawa and Hatoyama over the funds scandals.

By dodging these potentially fatal blows to his administration, Hatoyama wants to focus on the smooth passage of the second supplementary budget for fiscal 2009 and the fiscal 2010 annual budget to avoid a double-dip recession.

But even during the process of exchanging blows at the budget committee, all parties will be jockeying to come out on top in the July House of Councilors election.

“Obviously, this Diet is connected to the upcoming election,” Keio University professor Yoshiaki Kobayashi said.

The DPJ is looking to stabilize its rule by gaining a majority in the Upper House, while the LDP is seeking to begin a comeback process from its historic loss in the general election last August.

“The DPJ is set to finish off the LDP” as the Diet opens, while the LDP must counter effectively and demonstrate its vitality to voters, said Kobayashi, an expert on politics.

Hatoyama’s goals for the Diet session include passing the supplementary budget by the end of this month and quickly moving on to the fiscal budget in time for its passage in March. The DPJ will then get busy on key bills to follow through in its August election pledges, including providing monthly child care allowances.

But some experts say checking off the first items on Hatoyama’s list won’t be easy, with one concern being the appointment of Naoto Kan as finance minister, despite his lack of experience in this field.

The veteran lawmaker’s sudden appointment — which came as a result of the resignation of his predecessor, Hirohisa Fujii, earlier this month — is a cause for worry, critics said, since he will be grilled on the budget details despite not being the architect of the plan.

“There is a chance that Kan’s appointment can become a support rate booster for the DPJ, since he has more flair than his predecessor,” said Koichi Nakano, a professor of political science at Sophia University.

But while acknowledging the veteran’s debating skills, Nakano added that Kan is not known as a lawmaker with a keen knowledge of finance and the economy.

Other analysts say passing the two budget plans should be the least of Hatoyama’s concerns, since the ruling coalition can and will rely on its majority when push comes to shove.

Meanwhile, the LDP’s ability to take the offensive during the Diet session is in doubt after it failed to do so in the extraordinary session last year.

Sophia University’s Nakano warned the LDP needs a reality check if it truly believes just focusing on the DPJ funds scandals will result in a return to power.

“The chances of the LDP winning the Upper House election are close to none” if the poll were held now, the analyst said, adding the former ruling party needs a fundamental shift in policies to win back voters.

Recent reports show that while Hatoyama’s Cabinet has been losing public support, which has dropped to about 50 percent, the LDP hasn’t seen its popularity gain momentum.

Excessively attacking the funds scandals could also backfire. Hatoyama’s LDP member younger brother, Kunio, earlier admitted he, too, similarly received money from his mother.

The resignation of LDP heavyweight Toshiro Nikai from party posts last month was also related to shady donations to his camp from Nishimatsu Co., the same source as another Ozawa donation scandal, for which his ex-top aide, Takanori Okubo, is standing trial for cooking the books.

Instead of taking the easy path by exploiting the DPJ’s missteps, which mainly occurred before the party came to power, the LDP needs to spell out to voters how it would run the country if given the chance again, Nakano said.

Once the budget clears the Diet and assuming the DPJ parries the LDP’s thrusts, Hatoyama’s mission will be to present bills that appeal to voters.

Experts said the DPJ tried out its new powers during last year’s extraordinary Diet session, but getting the job done and coming up with policies voters can accept will be the objective this time around.

And a key that could reshape the ruling and opposing camps could be the bill to grant local-level voting rights to permanent foreign residents.

While the DPJ has supported the idea in the past, the move got a boost after Hatoyama revealed in South Korea in October that his team will consider submitting a bill to grant such voting rights. Although, the LDP and some DPJ members oppose this legislation, Ozawa added to Hatoyama’s comments in December, saying at a news conference in Seoul that it should be submitted as a government-backed bill.

Setting the bill in motion is in line with Hatoyama’s belief that Japan should play a prominent role in an East Asian community. It will also coincide with the 100-year anniversary of Japan’s annexation of the Korean Peninsula, experts said.

But another merit of allowing voting rights to permanent foreign residents lies in the fact that New Komeito — the former junior coalition partner of the LDP — strongly supports the measure.

“If all goes as planned, this bill will split the opposition camp and enable the DPJ to quickly strain New Komeito ties with the LDP. That’s also a reason why this bill is crucial” for Hatoyama, Sophia University’s Nakano said.

While ties between the DPJ and its coalition partner, the Social Democratic Party, will be strained in May when the fate of the relocation of U.S. Marine Corps Air Station Futenma is decided, the foreigner suffrage bill could also threaten the DPJ’s relationship with its other coalition partner, Kokumin Shinto (People’s New Party). Kokumin Shinto chief Kamei Shizuka was quick to oppose the planned bill.

But Keio University’s Kobayashi implied that the suffrage bill is a risk worth taking, especially considering July’s election.

“You have to consider that some of the LDP’s Upper House seats were obtained through its collaboration with New Komeito. If that link is severed, it will be a major blow to the LDP,” he said. “And pursuing that strategy will give the DPJ the outcome it is hoping for.”