Despite moves to amend the Political Funds Control Law after a recent scandal involving a 100 million yen political donation by a dental lobby to a faction of the ruling Liberal Democratic Party, experts are skeptical about whether such efforts will actually give it teeth.
Lawmakers are currently debating the feasibility of capping donations between political bodies established by industry associations and those set up by politicians.
The largest LDP faction, formerly led by former Prime Minister Ryutaro Hashimoto, allegedly failed to report the check it received from the Japan Dental Association in 2001.
But whether such changes will root out money scandals remains to be seen, experts say, because the nation’s politicians have always tried to exploit legal loopholes to secure funds.
The Political Funds Control Law has been amended five times since its enactment in July 1948. In terms of money, politics does not have a clean public image.
Experts say there are more effective means than tightening restrictions on the actual donations.
“The essence of political funding reform is to increase the transparency of political donations,” said Masaki Taniguchi, an associate professor of the University of Tokyo’s Graduate School for Law and Politics.
He said that even if the recipient of a political donation does not properly report it, he or she likely would be able to escape criminal liability by filing a revised report later. The recipient is only in real trouble if investigators can prove that the donation went unreported due to serious negligence or was an act committed with criminal intent.
To increase transparency, Taniguchi suggested that the law be revised to severely punish those who falsify reports on political donations of a certain amount, regardless of whether the act was accidental or intentional.
The law bans companies and organizations such as labor unions from making contributions to individual lawmakers, their political fund management organizations or other political bodies. It also limits to 100 million yen annually the amount of donations they can make to a political party or its political fundraising organization.
But there are no such restrictions on donations between political groups established by politicians and industry associations, such as the political arm of the dental association at the center of the recent scandal.
The ruling bloc and opposition parties are separately discussing revisions to the law to cap donations between political bodies. This in theory would limit donations between the political arms of lobbies and politicians’ political fund management bodies, for example.
The LDP and ruling coalition partner New Komeito have agreed to set a ceiling of 50 million yen. The opposition Democratic Party of Japan wants the cap set at 30 million yen.
But Taniguchi said such limits are pointless because “it is already clear that political bodies will exploit some (legal) loophole” to avoid quantitative regulation.
Following the imposition of ceilings on donation amounts, a political body could simply set up as many affiliates as it needed to maintain its total political contribution level at the same level as before, he said.
Limiting the number of political bodies and affiliates would run counter to the freedom of association guaranteed by the Constitution, he said.
“The issue of politics and money always boils down to the issue of legal control. But legal control always leaves a way (for politicians and lobby groups) to exploit some loophole,” Tomoaki Iwai, professor of politics at Nihon University, said during a recent TV debate.
Lawmakers are also considering ways to deal with the practice of diverting donations, in which contributions earmarked for a specific lawmaker are made to his or her political party or its fundraising body before making their way to the lawmaker’s pocket. Lawmakers are obliged to report political donations only if they come directly from a political lobby.
It is suspected that the LDP’s fund management body was used to channel donations from the dental association to individual politicians.
“The problem is that the practice has been used as a means to launder money,” Iwai said.
The origin of contributions paid to lawmakers through a political party or its fund management organ can be concealed, clearing the way for industry lobbies to bribe lawmakers.
To stamp out this practice, donations made on condition that they be given to specific lawmakers or political bodies should be banned, according to DPJ policy affairs chief Yoshito Sengoku.
But the LDP is against the proposal, saying it would be hard to legally define the practice.
Experts say it would still be difficult to track money because diverted funds can be filtered through various channels, including a political party and its numerous branches across the nation.
“Individual legal measures such as those being discussed (among lawmakers) are nothing but a temporary expedient,” Iwai said. Politicians “must go back to the drawing board and discuss how to reduce demand” for political funds.
DPJ chief Katsuya Okada said recently that it is costly for politicians to maintain their support groups and the political party branches they represent in their constituencies.
As an example, he said that the combined expenditures of his party branch in Mie Prefecture and his political support group amount to about 120 million yen a year.
He said an average DPJ lawmaker needs to raise at least 10 million yen on his or her own — in addition to 10 million yen given by party headquarters — to pay for upkeep.
Taniguchi of the University of Tokyo proposed strengthening the power of a political party’s headquarters to raise funds, possibly by boosting current government subsidies to political parties from the current 35 billion yen a year, while limiting the number of local party branches that can collect contributions.
“It takes a lot of money for individual lawmakers to engage in political activities now,” Taniguchi said. “Trying only to tighten regulations under the current circumstances will just lead politicians into playing a cat-and-mouse game with the law, making them search for more ways to collect illegal contributions.”
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