The ruling Liberal Democratic Party faction to which Prime Minister Junichiro Koizumi once belonged is suspected of failing to submit official reports on details of funds distributed to its member lawmakers, sources said Saturday.

The practice went on for several years until recently, including the period it was nominally headed by Koizumi just before he became prime minister in 2001, the sources said.

The faction, currently led by former Prime Minister Yoshiro Mori, provides its member lawmakers with funds, with the amount estimated at 100 million yen a year. Details, however, of the money flow were not included in the group’s funding reports from 1998 to 2003, according to the sources.

Lawmakers in their first or second term as a Diet member are typically given 2 million yen, while those in their third or fourth term receive 1 million yen, according to the sources.

This is a long-established practice common among major LDP factions, through which factional leaders maintain the allegiance of their members through financial support.

The money was reportedly distributed twice a year, in July and December. Veteran lawmakers who have held Cabinet positions are not given such funds, the sources said.

However, in the portion of the annual political funds reports listing “donations and grants,” the faction only reported money ranging from 40 million yen to 95 million yen under “other expenditures,” and did not provide specifics such as where the money was disbursed.

The Political Funds Control Law stipulates that both revenue, such as donations, and expenditures exceeding 50,000 yen must be listed.

Annual fund reports by other LDP factions detail how much was distributed to each lawmaker.

Several lawmakers belonging to the Mori faction confirmed to Kyodo News that they receive funding support from the faction.

But Yasuo Fukuda, former chief Cabinet secretary under Koizumi and currently representative secretary of the Mori faction, denied that the faction distributed any such funds to its members.

The faction has compiled its annual funds report in accordance with the law, Fukuda said in a reply to Kyodo.

The period in which the suspected flow of funds is not mentioned in the annual funds report starts in 1998, when Mori took over the faction from the late Hiroshi Mitsuzuka.

While Mori was serving as prime minister from 2000 to 2001, Koizumi acted as chairman of the Mori faction and was in a position to know about the practice, the sources pointed out.

Koizumi left the faction when he became prime minister in April 2001.

Political observers say the revelation may become a point of dispute in the current Diet session in light of public attention on the credibility of the political fund reporting system.

Last year, the LDP’s biggest faction came under fire for false reporting of political funds, and former Prime Minister Ryutaro Hashimoto stepped down as head of the group. The faction’s accountant has been convicted for failing to report 100 million yen that the faction received in 2001 from the scandal-tainted Japan Dental Association.

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