Construction company Kajima Corp. and two political secretaries named in recent scandals competed for work on the same hospital building project in Yamagata Prefecture in the late 1990s, industry sources said Thursday.

Mitsuro Ozaki, 56, a business consulting firm executive and former secretary to House of Representatives member Michihiko Kano, tried to arrange a bid-rigging deal for constructing the hospital before the bid was conducted, they said.

The Yamagata Prefectural Government conducted bidding for the project in March 1998. Seven joint ventures participated. But Kajima, in a joint venture with two other firms, won the bid at 15.2 billion yen, the sources said.

Kano, formerly with the ruling Liberal Democratic Party, is currently deputy head of the Democratic Party of Japan, the nation's largest opposition party.

Ozaki eventually gave up after learning that senior officials of Kajima's Tohoku branch had tried unsuccessfully to bribe Yamagata Gov. Kazuo Takahashi for the bid in 1996, when the project was first floated, according to the sources.

Ozaki told people around him that he did not want to be involved in the deal if it was going to be "complicated," they said.

Yamagata police started investigating in March 1999, when Kajima's attempted bribery came to light, but nobody was arrested. Police suspected that Kajima had proposed paying off the mayor with 20 million yen.

The Yamagata District Public Prosecutor's Office also investigated the case after a citizens' group filed for prosecution but decided to drop it after failing to establish the charge.

Ozaki was arrested Tuesday along with Mayor Yoshishiro Kimura, 59, of Ishioka, Ibaraki Prefecture, on suspicion of helping Hitachi Ltd. win a bid for a public works project.

Meanwhile, Saburo Sato, 61, a senior aide to Koichi Kato, former Liberal Democratic Party secretary general, had also proposed making a similar deal with local companies for a bid for ventilation and sanitary installation works for the hospital, the sources said.

However, Sato bailed out of the deal after a local company, mentioning Ozaki's name, rejected the proposal.

Bidding for the ventilation and sanitary installation works was conducted together with the bidding for the main construction project in 1998.

The bid was successfully won by a three-firm joint venture, including the company that is believed to have asked Ozaki for an arrangement.

Sato has recently been questioned by prosecutors on suspicion of holding about 400 million yen in a personal account as part of an alleged tax evasion scheme, investigative sources said Monday.

Construction industry sources alleged that Sato received kickbacks from construction firms in Yamagata Prefecture in return for "favors" in connection with public works projects.

The favors Sato is believed to have granted involved gathering information from local governments and acting as the mediator between construction companies and top-level officials at the request of the companies.

Sato aide implicated

SENDAI (Kyodo) A 52-year-old consultant who was a secretary to House of Representatives member Takao Sato received kickbacks from general contractors over shopping center construction and public works projects, industry sources said Thursday.

The former public secretary to Sato, a member of the main opposition Democratic Party of Japan, heads a consulting firm in Sendai. He allegedly received mediation fees from construction firms and subcontractors by helping them win large construction projects, the sources said. The projects apparently concerned several shopping centers run by Jusco Co., which renamed itself Aeon Co. in August, in Miyagi and Yamagata prefectures as well as public works projects in Sendai.

Tax authorities, who suspect the consultant failed to declare more than 100 million yen in income he earned in commission fees from contractors, are planning to file a criminal complaint against him with the Sendai District Public Prosecutor's Office.

Hitachi Plant raided

Prosecutors on Thursday raided the Tokyo headquarters of Hitachi Plant Engineering & Construction Co., a subsidiary of Hitachi Ltd., and its branch in Mito, Ibaraki Prefecture, over a bid-rigging case involving a 1999 public works tender.

The search follows the arrests Tuesday of Yoshishiro Kimura, the mayor of Ishioka, Ibaraki Prefecture, and Mitsuro Ozaki, 56, a former aide to the Democratic Party of Japan's deputy leader, Michihiko Kano, as well as five others, including Hitachi Plant employees, by the Tokyo District Public Prosecutor's Office. All are suspected of involvement in the bid-rigging case.

Ozaki is an executive at Gyosai Toshi Kaihatsu Kenkyujo, a Tokyo consulting firm he set up after he quit as Kano's secretary in 1994.

Kimura is suspected of leaking information on a public waterworks project to Ozaki a few days before bidding for the tender opened in March 1999, investigative sources said.

The tender involved a contract for electrical equipment to be used in a water purification plant ordered by a waterworks enterprise jointly set up by the city of Ishioka and the neighboring village of Tamari. The tender was won by Hitachi with a bid of 883 million yen, which was 3 million yen lower than the price targeted by Ishioka.

Ozaki later paid Kimura 2 million yen for the information in August 1999, and Hitachi Plant remitted 5 million yen to a bank account controlled by Ozaki's consulting company the following month.