The Tokyo District Court has decided to allow former Construction Minister Eiichi Nakao to be detained for another 10 days through July 11, sources said Sunday.
The veteran Liberal Democratic Party member was arrested Friday on suspicion of accepting some 30 million yen in bribes in 1996 from Tokyo-based construction firm Wakachiku Construction Co. in exchange for using his influence to have the firm selected as a designated bidding company for public works projects.
Nakao was serving as construction minister in 1996.
Sources said that Wakachiku’s chairman, Hiroshi Ishibashi, allegedly met with Nakao on several occasions between May and October 1996, requesting his firm be listed among the government’s designated bidders.
The company, whose initial strength was in waterfront civil engineering, had been attempting to diversify at the time from dredging and reclamation to harbor and onshore civil engineering. Investigators believe that was the scene against which Wakachiku executives approached Nakao for a bite of the thick public works pie.
In the business year that ended in March 1997, Wakachiku received a large number of contracts for onshore civil engineering projects despite the company’s overall decline in contracts amid the economic slump following the burst of the asset-inflated economic bubble.
The firm’s earnings report for that year shows its overall contracts dropped 11 percent from the previous year to 142.9 billion yen, due mainly to a 23 percent fall in marine engineering works. Onshore contracts, however, rose 5 percent to 48.3 billion yen.
Investigative sources earlier said that Heo Young Joong, who is implicated in the Itoman Corp. scandal, introduced Wakachiku executives to Nakao in May 1996.
Heo, a 53-year-old Osaka real estate developer on trial for conspiracy to damage the now-defunct trading house Itoman, then allegedly introduced a vice construction minister to Wakachiku executives in the summer of 1996, they said.
Heo allegedly spoke to lawyers at a Kyoto hotel in July 1997 about brokering meetings between Wakachiku Construction executives and Nakao and the vice construction minister, the sources said, adding Heo also talked about Nakao’s alleged bribe-taking in his talks with the lawyers.
Nakao, a veteran politician of the ruling Liberal Democratic Party who stood unsuccessfully for re-election in the June 25 general election, was arrested on suspicion of receiving the money from Wakachiku.
Wakachiku is affiliated with Ishibashi Sangyo, an oil material sales company that has accused Heo of swindling it out of promissory notes worth about 18 billion yen. He was arrested and later indicted in the case.
Nakao, who was first elected to the House of Representatives in 1967 and won nine subsequent lower house elections, also served as minister of international trade and industry and chief of the Economic Planning Agency.
While on trial in September 1997, Heo was permitted to visit South Korea to attend a memorial service. He disappeared in the country in mid-October that year and was captured in Tokyo on Nov. 5, 1999.
Heo faces breach-of-trust charges on dubious art transactions he allegedly conducted between his company and Itoman. The deals led to Itoman’s collapse and absorption in 1993 by Sumikin Bussan Kaisha Ltd., a subsidiary of Sumitomo Metal Industries Ltd., ending Itoman’s 110-year history.
Kan calls for scrutiny
The Democratic Party of Japan said Sunday that it may demand former Construction Minister Eiichi Nako be summoned as a sworn witness before the Diet to clarify his alleged receipt of 30 million yen in bribes.
On a Sunday morning TV program , Naoto Kan, policy affairs chief of the DPJ, called on the Diet to scrutinize public works projects in light of the recently revealed money-for-favors scandal involving the former minister.
“We should hold intensive deliberations on public works in the upcoming special session. And if necessary, we would like to have (Nakao) summoned as a sworn witness,” Kan said.
If the Liberal Democratic Party, which Nakao belongs to, does not agree to hold intensive deliberations, he said, “We have to take a very firm attitude.”
Nakao, a veteran LDP member, was arrested Friday on suspicion of receiving 30 million yen in bribes from Wakachiku Construction Co. in 1996, while he was construction minister.
It is believed the money was Nakao’s reward for exercising his influence over the ministry in selecting the firm as one of those designated to participate in bidding for public works.