The political funds controversy hanging over the Democratic Party of Japan is likely to start boiling Tuesday when prosecutors decide whether to indict DPJ President Ichiro Ozawa’s top secretary, Takanori Okubo, whose period of custody ends the same day.

Pundits say a decision to extend custody may trigger Ozawa’s resignation.

Until more details of the investigation are disclosed, however, it is unclear how badly the allegations will affect the DPJ and its bid to grab power in the general election that must be held by fall.

Some political observers say the scandal hasn’t hurt the party as much as expected, but others say the damage has wreaked havoc on the main opposition party.

They also say that, despite media reports, there is no one prominent enough to replace Ozawa and rally public support for the DPJ.

“The current situation doesn’t seem so bad for the DPJ. But it isn’t good, either,” said Satomi Tani, professor of political science at Okayama University.

While the situation could change drastically Tuesday, the scandal hasn’t been fatal to the DPJ, Tani said, noting approval rates for Prime Minister Taro Aso, president of the ruling Liberal Democratic Party, are still sagging.

Okubo was the chief accountant of Rikuzankai, Ozawa’s fundraising body, which allegedly received ¥21 million in donations from scandal-tainted Nishimatsu Construction Co. between 2003 and 2006.

It is illegal for companies to donate to individual politicians. They must instead donate through registered political parties or their branches.

Tomoki Takeda, associate professor of political science at Daito Bunka University, said the scandal has inflicted “quite big damage” on the party ahead of what is expected to be a snap election.

Before the incident, “the public seemed to have some hope for the DPJ because the party might really win the election,” he said. But that mood appears to be fading, in light of recent opinion polls.

Takeda said the DPJ has attempted to shape itself into a party that can lead the country under Ozawa, but has had trouble differentiating itself from the LDP because neither the ruling nor opposition camps have solid solutions to pressing policy issues.

The donations scandal just reinforces that problem, he said.

“When a scandal like this happens, with Ozawa in the middle of it, the public can’t help viewing Ozawa’s DPJ in the same way it views the LDP,” Takeda said, adding that the DPJ might lose nonaffiliated voters.

Because voters cannot count on either side, the public may be hoping to see a political realignment occur beyond existing party lines, Takeda said.

For members of the DPJ, the allegations are likely to impact their election strategies, regardless of the impact.

“It will probably affect the election,” said Azuma Koshiishi, chairman of DPJ Upper House caucus, at a news conference last week. Koshiishi said the party still supports Ozawa and will continue to seek the public’s support.

The top DPJ executives have been defending Ozawa, at least officially, and no one in the party has openly criticized him.

DPJ Secretary General Yukio Hatoyama said the situation will turn serious if Ozawa is found to have been involved in helping Nishimatsu win public works bids in return for donations. But if the charge against Okubo is simply a violation of the Political Funds Control Law, Ozawa won’t have to resign, he said.

Political Funds Control Law violations are usually handled by submitting revised funds reports.

Regardless of the outcome of the investigation, Ozawa has staked his political career on the next general election. If he decides to step down now, it could be the end for him.

“I think there is no next time. And Ozawa himself probably knows that well,” Okayama University’s Tani said.

Katsuya Okada, DPJ vice president, is considered the front-runner to replace Ozawa if he resigns, media reports say.

Some in the LDP reportedly said the DPJ will become more invigorated if it goes into an election with a new leader. At least one expert agreed.

“Changing the leader is one option, and the party will be rejuvenated if Okada becomes its leader,” Takeda of Daito Bunka University said.

But Takeda also said that since public distrust in the DPJ and politics itself has increased, any change in DPJ leadership is unlikely to generate a surge in support.

Tani was more pessimistic about the DPJ rejuvenation theory. He said there are no strong candidates, and Okada probably doesn’t have enough clout to unite the party over the long term.

The party leader is the one who needs to organize the campaign strategies, he said.

“Simply put, I think Okada may not be able to lead the party as an election campaign machine,” Tani said.

When it comes to election maneuvering, Ozawa is reputed to be a skilled electioneer.

“If there was someone like (U.S. President Barack) Obama in the DPJ, it would be a different story,” Tani said. “But it doesn’t seem likely.”

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