Police on Wednesday searched the offices of a youth exchange association headed by former Prime Minister Yoshiro Mori on suspicions that it fraudulently received 250 million yen in government subsidies.

Investigators from the Tokyo Metropolitan Police Department searched the World Youth Visit Exchange Association, a nonprofit organization based in Chiyoda Ward, Tokyo, on suspicion of receiving the money by padding expense accounts.

Association officials told police some of the money was used to cover expenses, including personnel costs, and by members of its staff for eating and drinking, but most is unaccounted for, according to sources close to the investigation.

Police said they are questioning senior association officials over the issue.

Masahiro Arimatsu, head of the education ministry’s Youth Division, said the ministry was unable to confirm any wrongdoing during a regular inspection of the association in December.

The alleged infractions took place in the five years to fiscal 2003.

“If illegal activities are discovered in the course of the (police) investigation, we will demand that the subsidies be returned,” he said.

The association was established in 1965 and became an incorporated foundation in 1969 under the education ministry, which has since become part of the Education, Culture, Sports, Science and Technology Ministry.

It dispatches Japanese students overseas and invites foreign students to Japan under various exchange programs with more than 10 countries, including the United States, Germany and China.

According to police, the association obtained subsidies from the ministry through such means as padding the number of students participating in the programs and by submitting invoices for fictitious travel expenses it had travel agencies write.

The association is mainly supported by public funds from the ministry but also receives subsidies from the Japan Keirin (bicycle racing) Association and other public organizations and corporations.

Mori is chairman of the association, while former transport minister Jiro Kawasaki is a managing director and Liberal Democratic Party policy chief Fukushiro Nukaga is a director.

Mori’s office said that should the allegations prove to be true, it would be very regrettable, adding that it would cooperate fully with the investigation.

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