Tax authorities on Thursday raided the house and company in Yokohama of a senior secretary of LDP lawmaker Koichi Kato, investigative sources said.

Saburo Sato, 61, who serves as a representative of Kato's office, is suspected of hiding hundreds of millions of yen in income.

Sato oversees the accounting for Kato's Tokyo-based fund-management body, and is widely known in political circles as the "safe-keeper" of the former Liberal Democratic Party secretary general.

The Tokyo Regional Taxation Bureau raided Kosho, a harbor transportation firm in Yokohama that was set up by Sato in 1975. Investigators from the bureau emerged from the office in the afternoon carrying dozens of cardboard boxes filled with various documents.

According to the sources, the taxation bureau suspects Sato received approximately 250 million yen from Rising Production Co., a talent management agency whose executives have been accused in a separate tax evasion case.

The sources said that, during the probe by tax authorities, Sato admitted to having accepted 100 million yen in loans. Sato said, however, that he has already repaid these loans.

Tetsuo Taira, founder and former president of the talent agency that manages pop singer Namie Amuro and is now called Freegate Promotion Co., had close ties with the administrative office of Kato and had met the lawmaker on several occasions, according to the sources.

Taira, who has been indicted on charges of evading corporate taxes, was arrested Oct. 18 along with eight others on suspicion of evading about 938 million yen in corporate taxes in the three years to August 1999.

The flow of questionable funds to Sato surfaced as the tax bureau examined evidence gathered during their investigation into the Rising Production case, the sources said.

In addition to the money from the talent agency, Sato may also have received hundreds of millions of yen over the past three to four years from construction companies in Yamagata Prefecture, Kato's constituency, the sources said.

Tax authorities suspect that Sato did not report any such income, they added.

Kato's office released a statement from the lawmaker in the evening denying any connection to the suspected tax evasion case.

The lawmaker added, nevertheless, that he felt responsible, adding that he will apologize to the public over the affair.

Sato had no comment on the investigation.

Sato began representing Kato's office in the mid-1990s. He is known in political circles in Tokyo's Nagata-cho for his fundraising capabilities, while Kato is known as a close political ally of Prime Minister Junichiro Koizumi.

Kato was once considered a leading candidate for the prime ministership, but his political fortunes have dwindled after his failed rebellion in late 2000 against then Prime Minister Yoshiro Mori.