OKAYAMA — Nationally and internationally, Japan’s banking mess has received a lot of press coverage and is generally considered by politicians, media pundits and business leaders to be the nation’s most urgent problem.
But for growing numbers of ordinary Japanese, it’s not the insolvency of international banks but of local governments that is the biggest worry.
Osaka Prefecture, facing a 500 billion yen a year deficit for the next decade, is bankrupt. Kanagawa Prefecture recently declared a state of fiscal emergency, and Tokyo may soon have to do so as well.
Other prefectures, including Hyogo and Fukuoka, face the repayment of billions of yen for various projects that are failing or have already failed.
Okayama Prefecture, while in a better state than some of the more worse-off prefectures, faces a debt of nearly 1 trillion yen, which a prefectural report earlier this year estimated at 500,000 yen per resident. A series of restructuring steps was announced.
Not surprisingly, many in Okayama have been demanding to know just how the prefecture got itself into such a mess, and where the money went.
On top of white elephant projects, public anger at media revelations that government officials faked expense accounts and extravagantly wined and dined big business leaders led to calls for bureaucrats to open their books. This, however, was easier said than done. “Public disclosure laws in Japan are nowhere near as strict as in the U.S. Here, bureaucrats can delay requests indefinitely, hand out partial information with sections blacked out, and in general prevent the public from its basic right to know how its money is being spent,” said Ryuzo Shigeta, director of Okayama Ombudsman, a civic group that has been tracking prefectural government spending.
It wasn’t too long ago, Shigeta said, that trust in the plans of local bureaucrats was such that few people would challenge them. However, as Okayama’s finances worsened, due in part to ill-conceived third-sector projects, which involve both private companies and investment by the local government, the public’s willingness to challenge officials grew.
In response, Shigeta, a local merchant, hooked up with other ombudsman networks around Japan and helped found an Okayama branch in 1995. The group now consists of about 20 people, he said, many of whom are lawyers and experts on freedom of information laws.
Over the past few years, Okayama Ombudsman has tried to keep tabs on food, drink, travel and entertainment expenses of prefectural officials, constantly submitting demands for information and questionnaires about how and why tax money was spent. For the most part, however, they have been rejected.
A prefectural public relations representative, however, claimed that Okayama is working with the ombudsman group to rectify any future problems. “Ombudsman groups in other prefectures have had better luck than we have in getting official disclosure. Okayama, however, is among the worst for disclosing information,” Shigeta said.
Recently, one of the projects Shigeta and Okayama Ombudsman have been fighting to get more information on is a failed third-sector project for the Resparle shopping center. The center, which sits beside Okayama airport, included restaurants, a public bath and lodging facilities.
Opened in July 1996 by the Okayama Prefecture Airport Development Corp., the center closed last April with accumulated debts of 360 million yen. Okayama Prefecture, along with other similar prefecture-related organizations, had an 80 percent stake in the project. “We’ve asked the prefecture about the losses and how they were incurred, but have had little luck in obtaining detailed answers so far,” Shigeta said.
Likewise, Okayama Ombudsman is working through an ombudsman group in Kurashiki in the prefecture to obtain information on what happened to tax money invested in Chibori Park, a third-sector amusement park that has gone bust. “That’s an especially difficult case, as Kurashiki officials are even more reluctant to release information than Okayama officials,” Shigeta said.
Shigeta’s group has also been responsible for uncovering examples of prefectural overspending. “In May of this year, after repeated demands to look at the accounting records, we were shocked to learn that a prefectural health center had paid 310,000 yen for an umbrella holder that costs about 5,000 yen retail, and spent 430,000 yen on a simple wooden table that you can buy for about 10,000 yen at any local furniture store,” Shigeta said.
Other discoveries of apparently wasteful outlays included a bench that cost 410,000 yen and a stove for a kitchen that cost 110,000 yen. “All told, the center spent 3.2 billion yen on furnishings,” Shigeta said.
While Okayama Ombudsman remains committed to ferreting out examples of wasteful spending on the part of the prefecture, Shigeta said ombudsman groups nationwide are organizing to fight a practice that U.S. trade negotiators know only too well: bid-rigging in the construction industry. “A major problem with many of these third-sector projects is that they are a cover for bid-rigging and illegal cooperation between local governments and the construction industry, which jacks up construction costs knowing the prefecture will just issue more bonds to make up the difference. As a result, ordinary citizens get stuck with the bill through a higher tax burden,” Shigeta said.
“Unfortunately, as ombudsman members nationwide have learned, it’s very difficult to get detailed information on the workings of such projects. But these practices, and those who propagate them, are responsible for the destruction of many local governments, both economic and environmental.
“In America, information is sometimes withheld because officials fear a threat to national security. In Japan, information is usually withheld because officials fear a threat to job security,” Shigeta said. (E.J.)
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