The practice of using the Cabinet secretariat’s discretionary funds for “Diet affairs” — buying off both ruling camp and opposition lawmakers to ensure important legislation gets passed smoothly — dates back decades, according to Upper House member Sadao Hirano.
Deputy secretary general of the Liberal Party, Hirano said he was a “conveyer of the secret funds” when he worked for top Diet leaders in the 1960s and 1970s.
In an interview with The Japan Times, Hirano said that as secretary to Lower House Speaker Shigesaburo Maeo between 1973 and 1977 and to Vice Lower House Speaker Sunao Sonoda from 1965 to 1967, he would go to the Prime Minister’s Official Residence to receive money for political scheming.
In those days, the speaker and vice speaker actively took part in mediations between the ruling Liberal Democratic Party and the opposition camp when the two sides clashed over key legislation.
“(As Sonoda’s aide), I usually went to then Deputy Chief Cabinet Secretary Noboru Takeshita for money,” Hirano said, noting the cash reportedly came from the Cabinet’s discretionary fund. “Diet Steering Committee members, including Shin Kanemaru, would come to me when they planned to have dinner with opposition members.”
Takeshita, who later became prime minister, was at the time a key aide to Prime Minister Eisaku Sato. Kanemaru, a later LDP kingpin, was a main go-between in the LDP’s relations with the opposition camp.
Hirano was elected to the Upper House as an LDP member in 1992 after serving as a Lower House secretariat official for more than 30 years — a position that gave him deep knowledge of the inner workings of the Diet.
He later left the LDP and is now known as a close aide to Liberal Party leader Ichiro Ozawa, who was once a key member of the late Takeshita’s LDP faction.
Although the discretionary funds were originally intended to cover costs for intelligence-gathering and diplomatic purposes, the government gradually began to spend them to buy off Diet members, pundits claim.
The government says how it uses the funds, which are traditionally handled by the chief Cabinet secretary, is a secret. Because receipts are not required when the money is spent, the Board of Audit does not chase down the disbursement of the funds.
In April, the Japanese Communist Party released what it claimed were internal documents showing how the funds were distributed to lawmakers in both the ruling and opposition parties as Diet affairs expenses in late 1991 and 1992. According to the documents, Prime Minister Kiichi Miyazawa’s administration used roughly 35 million yen for Diet affairs — in some cases buying expensive suits for opposition lawmakers.
At the time, the government and the LDP were trying to get a bill passed that would enable the Self-Defense Forces to participate in U.N. peacekeeping missions.
In addition, the discretionary funds covered “going-away presents” for lawmakers traveling overseas, according to the documents.
When Diet members announced their intention to go on an “inspection” tour overseas, Hirano customarily handed them up to 200,000 yen, money he received from the Cabinet secretariat.
Hirano said he believes the Cabinet secretariat began the illegal practice of using the discretionary funds allocated to the Foreign Ministry shortly after the Japan-South Korea Basic Relations Treaty to establish diplomatic relations was concluded in 1965.
A large amount of cash was apparently necessary to lay the groundwork on the South Korean side for drawing up the treaty and then to buy off Japanese opposition lawmakers to win Diet approval for the treaty’s ratification, and a new source of funds was needed to cover the costs, he said.
Shifting funds from one government organ to another is banned under the public finance law and the government has consistently denied the practice went on.
Media reports have alleged that until around 1960, the CIA provided funds to LDP leaders to be used for political maneuvering and election campaigns. Both the LDP and the government have denied this.
But the flow of funds had apparently dried up by 1965, and the government started tapping into Foreign Ministry funds for political scheming, Hirano said.
Budgetary allocations for the ministry’s discretionary funds for overseas diplomatic missions jumped from 830 million yen in 1965 to 1.3 billion yen in 1966. Hirano said he believes the sharp increase is proof that part of the money was secretly channeled to the Cabinet secretariat.
The illegal transfer of the Foreign Ministry’s discretionary funds to the Cabinet secretariat attracted public attention last year when a ministry official in charge of VIP trips overseas was arrested for embezzling the ministry’s secret funds.
The scandal prompted the government to reduce budgetary allocations for the ministry’s discretionary funds by 40 percent from the previous year to roughly 3.3 billion yen for fiscal 2002, while the Cabinet’s secret funds were cut 10 percent to 1.4 billion yen.
Freelance journalist Takao Toshikawa said in his book, “Kimitsuhi” (“Discretionary Funds”) that the government mainly used the Cabinet secretariat’s secret funds for intelligence-gathering until Japan and China normalized diplomatic relations in 1972.
“(After Japan and China established diplomatic ties) the government did not need to spend a large amount of discretionary funds on diplomatic purposes,” he wrote. “So secret funds were used mainly for wining and dining during prime ministers’ overseas trips as well as for political maneuvering in the Diet.”
Although Hirano admitted discretionary funds are necessary and should be used to pursue Japan’s national interests, he said the government should publicly disclose how the money has been used after a certain time has passed. By doing so, the government would become more prudent in its use of the money.
“During the Cold War, such expenses may have been necessary since the collapse of the LDP-led government might have turned Japan into a Socialist state,” Hirano said. “But now the Cold War is over, and a democratic country should not try to buy off decisions. The maturity of a nation’s democracy can be tested by how discretionary funds are spent.”
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