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Members of the management body for a faction in the Liberal Democratic Party will not face charges for allegedly mishandling donations from Nishimatsu Construction Co.

The decision by the Tokyo District Public Prosecutor’s Office not to issue indictments contrasts with the charges filed earlier this year against the top secretary of Ichiro Ozawa, former leader of the Democratic Party of Japan, over Nishimatsu donations. The scandal pressured Ozawa to resign as DPJ chief in mid-May.

The prosecutors cited insufficient evidence for not indicting Shinya Izumi and the staff of Atarashii Nami (New Wave), which helps run the LDP faction led by Minister of Economy, Trade and Industry Toshihiro Nikai.

Izumi, a former National Public Safety Commission chief who is now a member of the Upper House, oversaw Atarashii Nami’s accounting.

Izumi and others were suspected of stating in official political funding reports that the management body sold ¥8.38 million worth of party tickets to two organizations between 2004 and 2006 despite knowing the two were dummy entities set up by Nishimatsu to make illicit political contributions.

They should have reported that the party tickets were sold to Nishimatsu, and their act constitutes false reporting under the Political Funds Control Law, alleged a civilian political funding watchdog in Osaka that filed a complaint with Tokyo prosecutors April 30.

The law prohibits falsification of funding records or donations under other people’s names. The watchdog group also filed a complaint against Mikio Kunisawa, 70, former president of Nishimatsu, but he, too, was not charged.

The prosecutor’s office said there was insufficient evidence that Atarashii Nami members were aware Nishimatsu purchased the party tickets.

“It is natural (for the prosecutors) to reach such a conclusion,” Nikai told reporters at the prime minister’s office. “I don’t understand why it even became an issue.”

The DPJ criticized the inaction.

“I honestly don’t understand why one was arrested while the other was not,” DPJ President Yukio Hatoyama told reporters.

He was referring to the arrest of Takanori Okubo, who served as treasurer of Ozawa’s fund management body, for allegedly receiving ¥35 million in donations from Nishimatsu between 2003 and 2006 and falsely reporting them.

“It is an unjust decision delivered without a sufficient investigation being carried out,” said Tokuo Sakaguchi, a lawyer for the Osaka watchdog group. “We want to file a petition for a review with the Committee for the Inquest on Prosecution.”

Prosecutors are still probing separate allegations that a Nishimatsu-linked firm leased an office for Nikai’s political organization and subsidized the rent, disguising it as private donations to party chapters, they said.

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