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Koichi Kato, a former lawmaker of the Liberal Democratic Party, failed to declare some 80 million yen in taxable income in the three years through 2001, informed sources said Monday.

Tax authorities have accordingly levied about 30 million yen in additional taxes and penalties on Kato, the sources said, adding that the former LDP secretary general has now revised his tax returns.

The income initially went to Kato’s political-fund management body.

It is unusual for tax officials to rule that a lawmaker has used funds of this kind for personal purposes and to rule that taxes were not paid on them, the sources said.

Before his resignation from the House of Representatives in April over a tax evasion scandal involving an aide who served as representative of the political fund managing body, Kato was widely viewed as a future prime minister.

Prosecutors have already decided not to launch a criminal tax-evasion case against Kato as they believe it would be difficult to prove that he had acted with malicious intent.

Kato’s payment of back taxes and fines effectively closes this investigation.

According to the sources, Kato ordered the fund management body to deposit roughly 1.5 million yen in his personal account every month.

More than 90 million yen was transferred in this manner in the four years to 2001, they said.

The money was used for rental fees on his condominium in Minato Ward, Tokyo, to pay his credit card expenses and to feather a bank account in the name of his mother, who resides in Yamagata Prefecture, according to the sources.

Tax officials ruled that, of the amount spent by Kato in the three-year period in which the statute of limitations on tax payments still stands, roughly 80 million yen was used for private expenses and thus constitutes personal income.

Kato initially maintained the condominium served as a base for political activities, as well as a residence.

He stepped down as a lawmaker after promising to follow any instructions tax authorities issued in connection with the money.

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