An affiliate of scandal-hit mutual aid foundation KSD hired buses used at fundraising parties for Takao Koyama, an Upper House member arrested on suspicion of accepting bribes, sources close to the case said Friday.

The affiliate, Hoseiren, disbanded in November, spent some 4.8 million yen on chartered buses for Koyama's fundraising parties, which were held twice a year in 1996 and 1997, the sources said.

Another affiliate of KSD, KSD Tourist, arranged the charter of about 10 buses on each occasion. Hoseiren also paid about 600,000 yen to charter buses for another of Koyama's parties in January 1999.

Family members of Tadao Koseki, the indicted founder and former president of KSD, hold a large equity stake in KSD Tourist, according to the sources.

Koyama, 57, was arrested Tuesday for allegedly taking 20 million yen in bribes in exchange for asking questions in Diet panels aimed at helping KSD obtain government approval for business plans.

KSD is a mutual aid organization that helps small-business owners obtain industrial accident insurance coverage.

Koyama denies bribes

Upper House lawmaker Takao Koyama, who was arrested Tuesday, has denied that he received 20 million yen in bribes in 1996 from KSD, a foundation under the former Labor Ministry, sources close to Koyama said Friday.

Koyama has also told the Tokyo District Public Prosecutor's Office that he was not requested to ask questions in the Diet in favor of KSD, a provident society that, among other things, arranged industrial accident insurance for small businesses, according to the sources.

The prosecutors believe Koyama, who resigned from the Liberal Democratic Party shortly after his arrest Tuesday, received the money in October 1996 from KSD founder and former President Tadao Koseki, 79, in return for putting the questions earlier that year and in 1995 at sessions of Diet panels.

Koseki was indicted in December for breach of trust by misusing KSD's money.

Meanwhile, sources close to the case said Friday that a KSD affiliate shouldered the cost of buses chartered for Koyama's fundraising parties.

Hoseiren, which was disbanded in November, spent some 4.8 million yen on chartered buses for Koyama's fundraising parties held twice a year, in 1996 and 1997, the sources said.

Another affiliate of KSD, KSD Tourist, arranged to charter about 10 buses on each occasion.