The Liberal Democratic Party has provided 100 million yen on “moral grounds” to support scandal-hit KSD, a mutual-aid foundation for small firms, LDP Secretary General Taku Yamasaki said Friday.

The payment, made Tuesday, is viewed as a de facto return of party membership dues KSD shouldered as part of an effort to recruit LDP members from among its ranks. The case is linked to a bribery scandal involving two former LDP lawmakers.

However, Yamasaki denied the party had paid back membership fees provided by KSD, saying the LDP was not obliged to return the money because it received the dues legitimately.

He insisted that the 100 million yen is meant to provide financial support for the foundation, because the LDP should be held “morally responsible for the misunderstanding and confusion” it caused among small business managers belonging to KSD in connection with membership drives.

Acting on instructions from Tadao Koseki, its former director, KSD recruited for the LDP from among its members, spending close to 1 billion yen in LDP membership dues in three rounds of membership drives prior to the House of Councilors elections in 1992, 1995 and 1998, according to KSD sources.

The membership drives were part of Koseki’s efforts to campaign for former LDP heavyweight Masakuni Murakami and ex-LDP lawmaker Takao Koyama. All three are on trial for bribery.

Some KSD members claimed they became LDP members before they realized it, fueling suspicion that money offered to KSD by small business owners was misused to boost support for the party. Yamasaki said the LDP examined cases in which KSD members were registered as party members allegedly without their consent.

“I suppose there might have been cases in which membership registrations were conducted without confirming applicants’ intentions,” he said.

But he pointed out that such confirmation is difficult because party officials usually only check membership application forms, which are brought to party offices in large volumes.

“The party is not legally responsible because the issue of KSD payment of party membership dues was an internal problem for KSD,” Yamasaki said.

He also said lawyers of both sides finally agreed on provision of the 100 million yen in consideration of the need to strengthen KSD’s financial basis, although an LDP payment of 200 million yen was once discussed.

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