National

Gift scandal extends to Kepco's Kyoto branch, utility says

KYODO

Managers of Kansai Electric Power Co.’s Kyoto branch received gifts worth ¥2.6 million ($24,300) from a former Fukui Prefecture town official and allowed the office to place orders with a construction company that had close links to the official without the bidding process, the utility said Saturday.

Three former vice presidents of the Kyoto branch received cash and gift coupons from Eiji Moriyama, the late deputy mayor of Takahama, Fukui Prefecture, in the expanding gift scandal involving the utility and the former official of the town that houses one of the company’s nuclear power plants.

Kansai Electric had placed eight “special orders” between September 2014 and December 2017 with Yoshida Kaihatsu, which had close connections with Moriyama, without tendering a bid.

The construction firm, based in Takahama, took the orders, including those for a company dormitory and power distribution stations in Fukui Prefecture and northern Kyoto Prefecture. Moriyama lived in the city of Kyoto before dying in March at age 90.

Kansai Electric concluded in a report of its internal probe released last Wednesday that the three former vice presidents did not breach internal rules and their behavior was not inappropriate.

A total of 20 people at the Osaka-based utility are known to have been given cash and gifts, including shopping coupons and gold coins, worth ¥318.45 million over a number of years by the former deputy mayor of Takahama, which has heavily relied on Kansai Electric’s nuclear plant economically.

The recipients initially revealed were mostly those who worked in the nuclear power business. But the recent additional disclosures show employees working in other operations were involved in the gift transactions.

The three former vice presidents of the Kyoto branch were among the 20 people revealed by Kansai Electric to have received gifts. The company declined to disclose the names of the three.

Six of the 20 people, meanwhile, returned gifts worth ¥159.08 million in February last year, shortly after tax authorities launched a formal investigation, sources familiar with the matter said Saturday.

The six included Chairman Makoto Yagi and then-Executive Vice President Hideki Toyomatsu, the sources said. The gifts were returned after the Kanazawa Taxation Regional Bureau opened an investigation in January last year into Yoshida Kaihatsu.

The widening money scandal has re-exposed collusion between the nuclear industry and government officials. At a news conference Wednesday, Yagi disclosed that Moriyama began offering even more gifts following the March 2011 earthquake and tsunami in the Tohoku region, which triggered the Fukushima nuclear crisis.

Out of the ¥318.45 million, Toyomatsu, who was head of the utility’s nuclear power division, received one of the biggest sums: ¥110.57 million.

The taxation bureau found that Yoshida Kaihatsu had created slush funds by booking fictitious subcontracting fees and had provided a ¥¥300 million commission to Moriyama.

The bureau searched Moriyama’s home several months after beginning its probe and found a large amount of cash and gifts, with memos confirming the six had returned them.

The authorities verified that the six had received some ¥180 million in total, of which a portion has not been returned.

Yagi said at the news conference that they returned the gifts when they did because “it became an environment in which (Moriyama) would accept them.”

The utility said the executives had been trying to return the gifts but could not as Moriyama had refused to accept them and became angry.

Moriyama was deeply involved in the bidding process and construction of reactors Nos. 3 and 4 at the Takahama nuclear plant, which began operation in 1985, according to Kansai Electric. He served as deputy mayor from 1977 to 1987.

After retiring from the municipal government, he worked for Kanden Plant Corp., a subsidiary of the utility.