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The Finance Ministry has set up a compliance promotion panel to regain public trust that was lost due to scandals such as the alteration of ministry records related to a controversial state land sale to private school operator Moritomo Gakuen.

In the wake of the Moritomo Gakuen scandal, in which land was sold at a steep discount to a private school operator once linked to Prime Minister Shinzo Abe’s wife, Akie, senior Finance Ministry bureaucrat Nobuhisa Sagawa resigned as head of the National Tax Agency in March, while officials involved in falsifying or destroying ministry records were punished.

In an additional blow to the ministry, Vice Finance Minister Junichi Fukuda, the top bureaucrat at the ministry, stepped down in April amid swirling accusations that he had sexually harassed a female journalist.

The panel, headed by Reiko Akiike, an adviser from the Boston Consulting Group, is tasked with transforming the ministry into a scandal-free organization by incorporating outside perspectives.

In October, the panel compiled reform proposals featuring a “360-degree evaluation” system of reviewing bureaucrats’ work performance from multilateral viewpoints, including not only those of superiors but also subordinates and other colleagues, to check for problems such as improper instructions by senior bureaucrats and sexual harassment. The ministry will introduce the system at its head office on a trial basis in January and put it into full use later in 2019.

The proposals also include a compliance education program for senior ministry officials and an upgrading of the whistleblowing system.

Concerns continue, however, that the proposed reforms will end up as a pie in the sky. A ministry survey of some 9,400 officials, including those at local finance bureaus, found many complaints that past reform proposals had not been executed and that senior bureaucrats must take the initiative in reforming the ministry.

In the meantime, Finance Minister Taro Aso maintains a noncommittal stance on the scandals, adding fuel to calls for his resignation from opposition parties.

Aso voluntarily returned his one-year salary of ¥1.7 million as a Cabinet minister over the Moritomo Gakuen scandal in June. Asked by a reporter why the scandal had occurred, however, he said, “I wish I could know.”

In the extraordinary Diet session convened in the autumn after Abe reshuffled his Cabinet, Aso rejected opposition parties’ calls for his resignation, saying, “I will fulfill my duties at full power.”

As the minister in charge, Aso “should endeavor to offer explanations convincing to the public,” Hideaki Tanaka, a former Finance Ministry bureaucrat and now professor at the Graduate School of Governance Studies of Meiji University, said, criticizing Aso for remarks taken to suggest that he has no intention of conducting further probes into the document-tampering.

Noting that large companies have come to assign a considerable number of employees to governance policies and internal controls, Naohiko Matsuo, a lawyer familiar with such issues, said that the Finance Ministry “needs to establish an independent and high-ranking post for the promotion of thorough compliance.”

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