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Chief Cabinet Secretary Yoshito Sengoku said Sunday that he saw no problem with political entities he controls giving money to a company run by his eldest son, because the funds were paid as fees for handling some of the entities’ activities.

Sengoku, the top government spokesman and Prime Minister Naoto Kan’s right-hand man, told reporters the three political bodies paid a total of ¥3.2 million, or ¥100,000 per month, to his son’s real estate management company for two years and eight months until last December.

The three bodies had a consignment contract with the company to handle telephone calls and mail, he said, denying any misappropriation of political funds took place.

Earlier in the day, a newspaper report said the funds provided by the political bodies were suspected of being used to cover the son’s costs, including the rent for a judicial scrivener office he represents.

The report may stir loyalties in the ruling Democratic Party of Japan, which is preparing for a Sept. 14 leadership election that is expected to be a two-man battle between Kan and former DPJ Secretary General Ichiro Ozawa. The three political bodies are based in a room in a building in Minato Ward, Tokyo, together with the the offices of Sengoku’s lawyer and his son.

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