Contrite Hatoyama refuses to resign over scandal

Prime minister sorry for 'sloppy' funding, says he will pay gift tax

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“A large amount of falsified reports were brought to light today (by prosecutors). I take this judgment seriously and realize keenly my responsibility,” Hatoyama, who had refused to comment on the issue, told reporters Thursday.

While refusing to quit over the scandal, the prime minister said he is ready to pay the gift taxes, including arrears.

Hatoyama’s former secretary, Keiji Katsuba, 59, was indicted without arrest Thursday for falsifying reports of the prime minister’s fund management body. Daisuke Haga, 55, a secretary in charge of accounting, also received a summary order of a ¥300,000 fine for failing to oversee the malpractice.

But the prosecutors decided not to indict Hatoyama due to lack of evidence to prove he was a party to the false entries.

Katsuba was indicted for allegedly violating the Political Funds Control Law, faking an accounting report for Hatoyama’s fund management body, Yuai Seikei Konwakai. He listed approximately ¥400 million as coming from fictitious donors — including some who were deceased — which in fact derived partly from the more than ¥1 billion that Hatoyama’s mother, Yasuko, provided to the fund management body between 2003 and 2008.

Hatoyama also admitted he may have paid Yuai Seikei Konwakai more than the ¥10 million individual limit he is allowed, but claimed it was his understanding that funds in excess of the limit constituted a loan that would later be repaid to him.

“I completely entrusted Katsuba with my assets,” Hatoyama repeated Thursday, claiming he passed his own money to his former secretary without being aware of how it was being used.

“Accusations that things were handled far too sloppily can’t be denied,” he said.

Although Hatoyama revealed he handed a written statement on Dec. 18 denying his involvement in cooking the books, he said he avoided speaking in public because his comments would have interfered with the ongoing investigation. On Thursday, Hatoyama chose to face reporters at a Tokyo hotel instead of at the prime minister’s office in an apparent effort to separate the scandal from his office.

“I felt impatient being unable to explain the details” during the investigation, he said.

Hatoyama’s 87-year-old mother, heiress to tire maker Bridgestone Corp., submitted a statement to prosecutors earlier this month claiming she was not aware of how the money was going to be used.

Liberal Democratic Party lawmaker Kunio Hatoyama, the prime minister’s younger brother, has already paid gift taxes and resigned from key party posts after it was revealed he also received shady donations from their mother.

Hatoyama chose to follow his brother in paying the gift tax but not in stepping down.

Resigning as prime minister “would be abandoning my responsibility to the nation, which has high expectations” for the Democratic Party of Japan-led administration, he said, repeating in the news conference that unlike past cases of bribery, his mismanagement was not intended to profit from the private sector.

“I will take criticism sincerely, correct what needs to be corrected and fulfill my mission as a lawmaker,” he said.

While the prosecutors are likely to terminate the investigation into the falsified reports, opposition parties are ready to bring Hatoyama down going into January’s ordinary Diet session. The indictment is an additional blow to the his administration, which is already seeing support rates dip below 50 percent after 100 days in office.

“I don’t think (the two indictments) will not affect” the Diet proceedings, Chief Cabinet Secretary Hirofumi Hirano said Thursday. But he backed Hatoyama, saying he does not need to step down.

The task of the Cabinet is to handle the economic downturn and provide social care for the nation, Hirano said, adding it is important for Hatoyama to “show his leadership and push forward the government.”

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Former secretaries of Prime Minister Yukio Hatoyam Keiji Katsuba – , Daisuke Haga (below)

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