National / Politics | ANALYSIS

Ministerial scandals highlight inadequate controls on political funding

by Reiji Yoshida

Staff Writer

Another day, another political funds scandal for another Cabinet minister. But people watching should ask: why now, so suddenly?

The drama — some would call it a farce — has involved ministers appointed after Prime Minister Shinzo Abe reshuffled his team on Sept. 3.

In just two weeks, four ministers, most notably industry minister Yuko Obuchi, have suffered allegations of significant financial irregularities, and a fifth minister was accused of violating the election campaign law. Two of them, including Obuchi, were forced to resign.

And there may be more ahead.

Media outlets and weekly tabloid magazines have been busy scrutinizing the funding reports of other ministers, in particular those who joined the Cabinet on Sept. 3 and those who replaced the two ministers who have since resigned.

Hiroshi Kamiwaki, a professor of constitutional studies at Kobe Gakuin University and a key member of a citizens’ group that examines how politicians are funded, said until now the media have overlooked suspicious entries in fund reports because of the complicated and inadequate way political funds are declared.

One problem is that journalists have “just checked funds disclosed in Tokyo” without seeing the big picture, Kamiwaki said.

A politician is obliged to operate a single body to manage his or her political funds, which theoretically handles all receipts and expenses.

But anyone can set up support groups that will benefit a particular politician, and the politician can also serve as the head of a local chapter of his or her political party. They often do.

The Political Funds Control Law does not prevent cash transfers between a politician’s fund management body, affiliated support groups, and the party’s local chapter. They frequently exploit this, moving funds around and making it difficult for a third party to track a politician’s total income and expenditure, Kamiwaki said.

“In many cases, you can’t tell which groups are (affiliated with) a Diet member. You will learn that only after checking” the flow of funds between many different groups, according to Kamiwaki.

The Political Funds Control Law was drastically revised in the 1990s, in response to a spate of major corruption scandals involving Japanese politicians.

It was designed to prevent corporations from providing bribe-like donations to politicians, and experts say it has succeeded to a great extent.

On the other hand, the revised law imposes few effective controls on how a politician can use his or her funds, because the lawmakers who drafted it were anxious to ensure that the revision didn’t place limits on the freedom to engage in political activity.

This means politicians can use their funds largely how they would like, with little threat of censure. Indeed, in most cases of allegedly murky expenses, politicians have been allowed simply to “correct” the entry in their political fund report without being punished.

Since many politicians receive a share of the grants that the government gives to political parties, there should be tougher regulations on their expenses, Kamiwaki said.

The party subsidies were introduced at the same time as the revision to the funds control law, in a bid to eradicate corruption. They are supposed to be provided to qualified political parties only.

But local party chapters, which are often headed by lawmakers, can freely donate money to any political group — including those affiliated with the Diet members themselves, according to Kamiwaki.

“If a party receives a political fund subsidy, which is taxpayers’ money, there should be (stronger) regulation of the use of political funds by politicians,” Kamiwaki said.

“If they don’t want regulations, political fund subsidies should be abolished instead.”

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