• Kyodo

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A Gifu Prefecture official recently fired for misappropriating money in a slush fund scandal that has rocked the government here was arrested Monday night for allegedly pocketing at least 5 million yen of it, police said Tuesday.

Michio Kishita, 49, is the first person arrested over the scandal, which involves multiple slush funds totaling an estimated 1.7 billion yen. More than half of Gifu’s employees have been reprimanded.

The slush funds were built up over 12 years and nearly all sections of the prefectural government were involved.

Police searched Kishita’s house and several other locations, including a labor union office where he worked.

Kishita, who was fired for misappropriating funds, is suspected of taking 10 million yen from a slush fund in the prefectural employee labor union bank account, on April 11, 2001, and transferring half the money into bank accounts he and his family members controlled, according to police.

The remaining 5 million yen was placed in a separate union bank account under a different name. Kishita is believed to have withdrawn the other 5 million yen later, according to investigators.

Kishita was vice chairman of the union at the time of the alleged withdrawals.

Police said he has owned up to the initial charges, which for now pertain only to the 5 million yen he placed in accounts held by him and his family.

But prior to his arrest, Kishita told Kyodo News: “I absolutely did not use the money for personal purposes. The prefecture has accused me by coming up with circumstantial evidence.”

Gifu Prefecture filed a complaint against Kishita in mid-September, reprimanded him over the 10 million yen misappropriation and dismissed him later that month.

He was hired in March 1975. At the time of his dismissal, he was an assistant to a prefectural administration chief and was also managing an inn for local government employees.

“We take it very seriously that we had to press a criminal charge against a fellow official, which resulted in the arrest. We will keep an eye on the investigation,” Gifu Gov. Hajime Furuta said.

Furuta revealed the existence of the slush funds in July, saying it was used to pay for entertaining officials and union activities.

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