Internal affairs minister Kunio Hatoyama resigned Friday after rejecting Prime Minister Taro Aso’s request to approve Yoshifumi Nishikawa’s reappointment as president of Japan Post Holdings Co.

Aso, who wants Nishikawa to stay at the helm of the financial, insurance and mail delivery behemoth, immediately accepted Hatoyama’s resignation from the Cabinet.

“It was deeply regrettable that (Hatoyama’s stance) gave the impression that the government and Japan Post were in confusion over the postal business,” Aso said. “This incident had to be resolved immediately.”

Although Nishikawa’s reappointment now seems firm, Aso refused to confirm this.

“I think the government should avoid directly interfering with a private company, even if it is a special case” in which the government fully owns it, Aso said.

The departure of Hatoyama, one of Aso’s closest allies, is expected to deliver a severe blow to the prime minister and his ruling Liberal Democratic Party ahead of the Lower House general election that must be held by autumn.

Hatoyama heads Aso’s main support group in the party and played a key role in September in garnering support for Aso’s ascent to the LDP presidency, and hence the prime ministership.

Speculation is rife that Hatoyama may soon leave the LDP in a bid to initiate a broad realignment of the political parties. Hatoyama’s older brother, Yukio, is president of the Democratic Party of Japan, the largest opposition force.

Hatoyama denied the possibility of joining his brother’s party but didn’t rule out an exit from the LDP. He said he would discuss it with his comrades.

“It is about principles,” Hatoyama told reporters. “What I thought was correct was not accepted — so I decided to manfully leave the government.”

As internal affairs minister, Hatoyama had the power to reject candidates appointed to head Japan Post. His adamant opposition to Nishikawa was rooted in a perceived conflict of interest involving Japan Post’s attempt to sell off Kampo no Yado, its nationwide network of resort inns, at a fire-sale price to Orix Corp., the powerful leasing conglomerate.

Orix chief Yoshihiko Miyauchi was involved in the effort to privatize the postal system.

After Hatoyama’s resignation, Aso immediately decided to appoint Tsutomu Sato, chairman of the National Public Safety Commission, to concurrently serve as internal affairs and communications minister.

Meanwhile, one of Hatoyama’s closest allies also decided to resign from the Cabinet on Friday. Toru Toida, an LDP member, said he will resign as parliamentary secretary to the health minister to follow Hatoyama.

Although Yoshihisa Furukawa, parliamentary secretary to the environment minister, was initially quoted as telling his fellow LDP lawmakers he would follow suit, he later reversed his position, telling reporters, “I have no intention to resign.” The reason for his retraction wasn’t clear.

According to Hatoyama, Aso told him at a meeting Friday that he wants Nishikawa to stay on at Japan Post and asked him to accept the decision on condition that Nishikawa apologizes to him.

“There is nothing as stupid as that compromise proposal,” Hatoyama said. “Nishikawa owes an apology not to me but to the public. He was involved in trying to steal the people’s money.

“I am someone who trusted the politician Taro Aso and had insisted on getting him to become the prime minister,” Hatoyama said. “I think the prime minister’s decision this time is wrong, but I believe he will make the right political decisions from now on.”

Last year, Japan Post decided to sell 70 inns and nine housing facilities to Orix for a mere ¥10.9 billion, but the deal fell through after Hatoyama denounced the deal, calling it opaque.

Nishikawa’s term expires this month, but the Japan Post nominating committee agreed in May to seek his return.

Japan Post, however, is wholly owned by the state, and the internal affairs minister has the ultimate authority to approve its board members.

Hatoyama’s dogged insistence on axing Nishikawa has drawn fire from the LDP-New Komeito ruling bloc. Some in the LDP said they were concerned the heavily publicized spat would hurt Aso ahead of the Lower House election.

Some LDP executives also feared that removing Nishikawa would somehow be perceived as a retreat from the postal privatization initiative spearheaded by former Prime Minister Junichiro Koizumi, who led the LDP to a landslide victory in the 2005 Lower House general election.

It is not the first time Aso’s Cabinet has flubbed. Ex-Finance Minister Shoichi Nakagawa, another close friend and reputed heavy drinker, resigned after appearing to be drunk at a televised news conference for the Rome Group of Seven finance meeting.

And last September, only five days after his Cabinet debuted, then transport minister Nariaki Nakayama bowed out after making several verbal gaffes that insulted schoolteachers and foreigners.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.