Staff writerNearly three years ago, comedian and Diet member “Knock” Yokoyama shocked the nation by winning Osaka Prefecture’s gubernatorial election as an independent, despite entering the race only three weeks before the voting.Yokoyama won because voters, angry with the former governor for his involvement in numerous financial scandals, wanted someone clean and honest. He vowed to be the “governor who would never hesitate to say ‘I’m sorry.'” But as 1998 begins, Yokoyama finds himself begging for forgiveness for everything from bureaucratic corruption to the worst local government deficit in the nation. “The governor has, at times, been very depressed over the state of the prefectural economy,” an official said on condition of anonymity. “I think he may be wondering why he took this job.”To his credit, Yokoyama has not given up on bureaucratic reforms or efforts to create a more responsible government. Citizens’ groups praise his attempts to force the bureaucracy to be more accountable, and according to a recent newspaper poll, his approval rate is nearly 65 percent. Last year, after two local watchdog groups uncovered misuse of public funds by prefecture officials, Yokoyama appointed a task force that ultimately discovered that every bureau in the prefectural government was operating its own secret, illegal slush fund.In December, he announced that bureaucrats stole nearly 1.3 billion yen and that it would be returned to the public coffers. But despite public approval in dealing with the slush funds, Yokoyama still faces his most desperate challenge: Osaka Prefecture is all but bankrupt and could lose its financial autonomy within a year.The extent of the problem was known for some time but made headlines last January after a prefecture-backed project near Kansai International Airport went bankrupt. Combined with a tax revenue base that declined from about 1.5 trillion yen in 1991 to about 1.2 trillion yen in 1997, and a loss of cash reserves to pay off local bonds, Osaka Prefecture found itself short of cash when it came time last March to prepare the 1997 fiscal budget.Although the deficit, nearly 244 billion yen, was eventually covered, financial authorities warned that the well was dry and that the real problems would begin this year. In late November, as discussions for the 1998 fiscal budget began in earnest, Yokoyama surprised the bureaucrats and the public with a special message that appeared in major daily newspapers: “Osaka Prefecture’s financial condition is now dangerous. In fiscal 1998, we will face a cash deficit of 60 billion yen and this will likely climb to 200 billion yen in fiscal 1999.”Under law, such deficits will force the central government to take action. Osaka Prefecture would probably be declared a deficit-financing entity by the Home Affairs Ministry and would be forced to undertake major restructuring. “This means that we would lose much of the control over our budget to Tokyo,” said Mitsuyo Hara, a prefecture official.The fiscal 1998 budget will be finalized later this month, but cuts in personnel and services are already taking place. This week, a plan was announced to send nearly 300 prefectural employees to the private sector for indefinite periods. The companies will pay the majority of their salaries, while the prefecture will cover their social security.Yokoyama has also promised a review of large-scale construction projects. “It’s important to determine what we need and what we don’t need,” he said. Among the prefecture’s largest projects are Kansai International Airport and the adjacent Rinku Town complex. Rinku Town, despite recent announcements that a group of Taiwanese companies and a Daiei subsidiary would locate there, has lost an estimated 3 billion yen and faces repayment of nearly 180 billion yen in long-term bonds.

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