The Fair Trade Commission searched the Japan Green Resources Agency and some of its 10 contractors Thursday as it opened a criminal probe into them on suspected bid-rigging over projects ordered by the quasi-governmental organization.
The FTC believes that officials of the agency, based in Kawasaki, and the contractors rigged bids for its projects, a violation of the Antimonopoly Law, by creating a list of successful bidders for each project at the beginning of every fiscal year, according to sources.
The officials under scrutiny have already owned up to the misdeeds “in principle” during questioning by the FTC, the sources said.
A special squad of the Tokyo District Public Prosecutor’s Office is also believed to be questioning officials of the agency and the contractors. The FTC will work with prosecutors to file a criminal complaint, they said.
FTC investigators alleged that Japan Green Resources, an independent administrative body under the jurisdiction of the farm ministry, organized rigged bids for geological-survey contracts related to building forest roads.
Senior agency officials allegedly colluded with officials in the agency’s eight regional offices nationwide that were in charge of construction to pick the winning firms or to leak information on contract price estimates.
They created a list of bidders and projects for one year in each regional office and marked which contractor will be successful bidders, and most bidding went according to what was written on the list, the sources said.
The FTC has already found a number of such lists through its inspections since last October and believes they will serve as strong evidence to back charges that the agency led the bid-rigging.
Among the contractors being investigated are quasi-governmental entities supervised by the Forestry Agency, including Shinko Kosaikai and the Japan Forestry Foundation, and five firms, including consultant Katahira & Engineers Inc.
Many retirees from the Forestry Agency and the Japan Green Resources Agency are working for the contractors being investigated and the FTC believes it is likely there is collusion between these firms and government officials, according to the sources. Such employment, known as “amakudari” (descent from heaven), has been blamed for fostering illegal collusive practices.
Last October, the FTC inspected about 30 locations, including Japan Green Resources and its contractors. Earlier this month, the FTC began considering filing a criminal complaint.
The FTC’s investigative power was strengthened when the revised Antimonopoly Law went into force in January 2006.
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