With the publication of a suicide note by a former Finance Ministry official and subsequent lawsuit by his widow, the Moritomo Gakuen scandal has returned to haunt Prime Minister Shinzo Abe. But with Abe saying the issue has been settled and Japan finding itself in the midst of the coronavirus crisis, it is unclear how much of an issue it will be in the current Diet session. Here’s a look back at the scandal and most recent developments.

What was the Moritomo Gakuen scandal?

It began in Osaka with allegations of favoritism that led to revelations of a cover-up. Moritomo Gakuen is a private school operator in Osaka that was run by Yasunori Kagoike and his wife, Junko, in June 2016, when they purchased an 8,770-square-meter plot of land in Toyonaka, Osaka Prefecture, to build an elementary school. Moritomo Gakuen’s kindergarten had attracted local and then national and international media attention for its forcing children to recite the prewar Imperial Rescript on Education.

The land had been the property of the government, and the Finance Ministry’s Kinki Bureau, which covers the Kansai region, sold it to Moritomo for ¥134 million at a time when it had been valued at ¥956 million, and the steep discount sparked the scandal. Over the next two years it would be learned that Abe’s wife, Akie, had visited the kindergarten and been named honorary principal of the yet-to-be-built elementary school.

But the cut-rate price for the land raised suspicions of favoritism on the part of Finance Ministry officials in charge of the sale toward Moritomo because of its connections to Akie Abe. The Finance Ministry would claim that the more than ¥800 million discount was offered due to the estimated cost of removing garbage and refuse from the site, a figure widely condemned as excessively high.

In February 2017, asked about the land deal during Diet questioning, Shinzo Abe said that if he or Akie were found to have been involved with the transaction, he’d resign as prime minister. In July 2017, both Kagoikes were arrested for fraudulently receiving state funds for the elementary school.

School operator Moritomo Gakuen had planned to open an elementary school in Toyonaka, Osaka Prefecture.  | KYODO
School operator Moritomo Gakuen had planned to open an elementary school in Toyonaka, Osaka Prefecture. | KYODO

What happened with the investigation after that?

The focus was on whether there were direct links between Shinzo Abe and Nobuhisa Sagawa, the head of the Finance Ministry’s Financial Bureau, which had final authority over the sale of the land. By March 2018, the ministry admitted it had destroyed its notes regarding negotiations with Moritomo Gakuen and that it had erased references to Akie Abe in official documents. That same month, Toshio Akagi, a Kinki Bureau official who had been involved with the deal, committed suicide.

In May 2018, the Osaka prosecutors’ office decided not to indict 38 bureaucrats connected to the Moritomo Gakuen case, including Sagawa, for the falsification of government documents. The office said their investigation could not establish intent on the part of the bureaucrats to deliberately damage the state.

A June 2018 Finance Ministry report and then a November 2018 Board of Audit report confirmed that document falsification had been led by Sagawa. The Finance Ministry punished 20 officials, including Sagawa, based on its report. But the Board of Audit report did not seek punishment of relevant officials or explain why the land was sold at such a heavy discount.

In an unusual move, a March 2019 prosecution inquest panel made up of 11 laypersons concluded that the May 2018 decision by Osaka prosecutors not to go after the 38 bureaucrats was unreasonable for 10 of them. This forced the Osaka prosecutors to once again consider criminal charges. But they decided in August 2019 not to indict any of them, effectively ending the effort to punish Sagawa and other bureaucrats. There the matter seemed finished, with no indictments and no clear understanding of why the huge discount was offered.

What are the most recent developments?

In February, the Osaka District Court found Yasunori Kagoike guilty of defrauding the central government and other parties of nearly ¥170 million and given five years in prison. Junko Kagoike received a three-year sentence, suspended for five years.

But in its March 26 edition, weekly magazine Shukan Bunshun published Akagi’s suicide note, in which he said the instructions to him and other Finance Ministry officials to lower the price of the land for Moritomo and then falsify documents all came from Sagawa. There was no mention in the note of either the prime minister or his wife, however.

Akagi’s widow then brought a lawsuit against Sagawa and the central government, alleging her husband suffered depression after being ordered to falsify documents, and that led to his suicide.

Since then, Akagi’s widow and opposition parties in the Diet have called for the Moritomo Gakuen land deal and subsequent cover-up by the Finance Ministry to be investigated by an outside committee of experts. Akagi’s widow also launched an online petition campaign seeking a public, neutral investigation into the matter, drawing 240,000 signatures by March 31.

In Diet testimony, Shinzo Abe has expressed remorse for Akagi’s suicide. But he and Finance Minister Taro Aso have rebuffed demands for another investigation, saying the matter has been settled by the Finance Ministry’s June 2018 report. Aso said Akagi’s claims were nothing new. However, even some in the ruling Liberal Democratic Party have suggested that reopening the investigation might be wise.

Former LDP secretary-general Shigeru Ishiba, a longtime rival of Abe’s and a possible candidate to replace him as prime minister, told the Foreign Correspondents’ Club of Japan on March 30 that if the government decided not to reopen the Moritomo investigation, it needed to clearly explain the reason why. He also suggested that, as Akagi’s suicide note named specific bureaucrats involved in the cover-up, it constituted new facts that were worthy of investigation.

Will there be another investigation of the Moritomo scandal in the Diet or elsewhere, then?

The answer to that question likely depends on two things. First, the progress of the civil lawsuit that Akagi’s widow has launched against the government and Sagawa at the Osaka District Court seeking ¥112 million in damages for his death.

If the court decides to hear sworn testimony from Sagawa or other current or former Finance Ministry officials, that could produce fresh revelations likely to increase political pressure on the Abe administration and ruling parties to establish a commission to look into what happened.

Second is the Diet’s own priorities. With the uncertainty over the novel coronavirus and the chaos it has already created, including the postponement of the Tokyo 2020 Games, legislators have their hands full with concerns about the present and immediate future. It’s unclear if the opposition parties will want to spend a lot of time on past issues such as the Moritomo scandal if there are more urgent matters in the present that need to be debated and decided upon.

However, a recent Kyodo News poll showed that 73.4 percent of respondents feel that a re-investigation of the Moritomo scandal based on Akagi’s suicide note is necessary. More than two years after Shinzo Abe told the Diet he would resign if he or his wife were found to be involved in the land deal, the scandal continues to be a political albatross around the neck of his administration.

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