Former Nishimatsu Construction Co. President Mikio Kunisawa pleaded guilty Friday to charges in connection with a political funding scandal that cost Democratic Party of Japan chief Ichiro Ozawa his job last month.

During his first trial session at the Tokyo District Court, prosecutors demanded 18 months imprisonment for Kunisawa, 70, claiming Ozawa’s office acted as “the voice of heaven” in deciding the winners of bids for public works projects in Iwate and Akita prefectures.

Kunisawa admitted he was involved in making illegal donations worth ¥5 million via two dummy entities to Ozawa’s fund management body.

The ex-Nishimatsu head is also charged with bringing into Japan money from an overseas slush fund without reporting it to customs, in violation of the Foreign Exchange and Foreign Trade Law.

Also Friday, prosecutors demanded six months in prison for Keiji Fujimaki, 68, former vice president of Nishimatsu, who, along with Kunisawa, admitted being involved in bringing into Japan ¥70 million from an overseas slush fund between February 2006 and August 2007.

The attorneys for Kunisawa and Fujimaki asked for suspended terms for their clients. The court plans to issue its ruling July 14.

“I have caused lots of trouble for society,” Kunisawa told the court. “Slush funds and political donations had been common practice in the industry, and I had considered them a necessary evil to win the competition.

“But having been indicted, I’m ashamed that I could not think of stopping them. I am deeply sorry,” he added.

Prosecutors said the ¥5 million in illicit donations made around October 2006, for which Kunisawa stands accused, was part of a long-term donation scheme that lasted 12 years between 1995 and 2006 and fed ¥129 million in total into Ozawa’s fund body.

According to the opening statement of the prosecution, Nishimatsu established two political groups, in 1995 and 1998, with the aim of making contributions to politicians.

The firm asked reliable manager-level officials to become members of the groups and padded their salaries. The extra payments to the officials were then paid to the political groups as membership fees, prosecutors said.

The donations by the two groups were decided by Nishimatsu, and the scheme lasted until 2006, when the two groups were dissolved because it became difficult for Nishimatsu to continue making such donations amid the decline in its business, prosecutors said.

During Friday’s session, prosecutors said bid-rigging had been an established practice in the Tohoku region and Ozawa’s office had significant influence on decisions over local public works projects in Iwate Prefecture, where his electoral constituency is located.

This eventually led Kunisawa, who had been in charge of a division making political donations for some time before he became president of the company, to start donating funds to Ozawa’s political fund management body via two political groups with the aim of receiving the “heaven’s voice” from Ozawa’s office and winning bids, the prosecution said, adding that Ozawa’s office was also influential in public works bid-rigging in Akita Prefecture.

Prosecutors said the scheme was pernicious as it tried to hide from the public the donations Nishimatsu was making to Ozawa.

Takanori Okubo, a secretary for Ozawa who was in charge of handling his political fund management body, Rikuzankai, has been charged with taking illegal donations from Nishimatsu’s two dummy entities and falsely reporting them as donations from political groups.

Okubo has been released on bail and is reportedly denying the charges. Prosecutors have yet to set his trial date.

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