The Liberal Democratic Party should return the money provided to it under the guise of party membership fees by an affiliate of the scandal-tainted industrial mutual aid organization KSD, the leader of the LDP's key coalition partner said Sunday.

The KSD affiliate is alleged to have channeled hundreds of millions of yen to the LDP as "party membership" fees for tens of thousands of nonexistent members.

Takenori Kanzaki, chief of New Komeito, told a Fuji TV program Sunday morning that the practice could amount to illegal forgery of private documents.

"I think the LDP should return the money provided in such form to the KSD side," Kanzaki said.

Kanzaki also said Masakuni Murakami, a senior LDP lawmaker with alleged close ties to KSD, should testify under oath over the scandal while the fiscal 2001 budget is being debated in the Lower House.

The LDP wants the testimony of its members over the scandal to take place after the budget clears the Lower House so that it will not affect the budgetary deliberations.

9 million yen to secretary

An affiliate of scandal-hit mutual-aid foundation KSD paid a total of about 9 million yen in salary over one year to a secretary of then House of Councilors member Takao Koyama, according to sources familiar with the case.

The 9 million yen brings the total to 20 million yen that the KSD welfare cooperative paid in salaries to the secretary and two other secretaries to Koyama, 57, who asked KSD founder and leader Tadao Koseki, 79, to arrange payment of the salaries, the sources said.

Koyama, an Upper House lawmaker of the ruling Liberal Democratic Party, was arrested Jan. 16 on suspicion of accepting a 20 million yen bribe in 1996 from KSD in exchange for parliamentary activities to benefit the foundation. He left the Diet after his arrest.

The sources said Koyama hired a private secretary in March 1998 and asked Koseki to pay the secretary's salary. The secretary, who received a monthly salary of about 600,000 yen, had received a total of about 9 million yen when he left the affiliate in May 1999, the sources added.

Koyama later employed two former officials of the Labor Ministry as private secretaries from April-December 1999 and January-October 2000, respectively. The KSD affiliate paid a total of 11.6 million yen to the pair as salaries, the sources said.

A special squad of the Tokyo District Public Prosecutors Office investigating the KSD scandal has determined that the salaries to the pair were a bribe but the salary to the first secretary was not, investigative sources said.

On Tuesday, Koyama was indicted on charges of accepting the 20 million yen in bribes from KSD and served a fresh arrest warrant on suspicion of having had KSD pay his secretaries' salaries.

Koseki was indicted in November and December last year on charges of misusing a total of 2.5 billion yen of KSD funds.