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A senior official of the Niigata Municipal Government and the head of a local construction company were arrested Tuesday on suspicion of rigging bids for public works projects.

This action by the Niigata District Public Prosecutor’s Office was unprecedented in that the Fair Trade Commission had earlier decided not to file a criminal complaint over the case.

It is the first time since the Antimonopoly Law took effect in 1947 that prosecutors have moved on a bid-rigging case dropped by the FTC.

The prosecution investigators searched several locations, including the office of a municipal government section handling construction of sewage systems.

Takayuki Yuki, 55, a former chief of the sewer section and now an executive of the urban development department, and the company president, Tadashi Uchida, 68, have admitted to the allegations, prosecutors said.

Yuki allegedly leaked to Uchida part of the planned spending amounts for a contract to build a sewage system in March 2002. Uchida’s company then won the contract, the prosecutors said.

Yuki’s arrest is the first under a law that took effect in January 2003 aimed at cracking down on government officials’ involvement in bid-rigging.

The two arrests also came as a surprise as the FTC decided earlier not to file a criminal complaint over the case.

Prior to Tuesday’s action, the prosecutors took the rare step of searching the FTC and seizing documents collected by the commission.

Documents collected by the FTC, based on the provisions of the Antimonopoly Law, cannot be used as evidence in a criminal investigation without going through a procedure of this kind.

The FTC, which does not have enforcement power, conducts its investigation only on a voluntary basis — via the “cooperation” of people allegedly involved in bid-rigging.

The documents collected by the FTC reportedly identify Niigata officials involved in the bid-rigging.

Thus far, 113 companies — including major construction firms Kajima Corp. and Taisei Corp. along with local construction companies — have been implicated in a series of bid-rigging scandals involving the Niigata Municipal Government, according to the FTC.

The commission says the companies rigged about 370 bids for sewage and construction projects from April 1999 to September 2003.

Several city officials allegedly leaked information about the maximum bid price.

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