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On Aug. 31, Tokyo Shimbun ran two articles about money and politics in preparation for the upcoming election season. One focused on the Political Funds Control Act, which places restrictions on political donations but does not require the recipients to report how these funds are spent. Individuals cannot donate money directly to politicians. They have to give it to the party or a political group. Then the money is distributed to member politicians.

According to Tokyo Shimbun, this feature of the law accompanied reforms enacted in 1994 to limit plutocratic tendencies by addressing where political funds come from, but expenditures were not discussed. This system remains the same after almost 30 years, even though some political parties find it actually lacks transparency. For one thing, it makes it difficult to root out political wrongdoing in the Diet, since parties aren’t legally compelled to report how they spend their money and so it’s difficult to accuse anyone of misusing funds.

In the second article, Tokyo Shimbun focuses on public funds, meaning money given by the central government to political parties for “policy activities.” Who or what receives the money in the party is reported, as well as the amount spent — but not how the money is spent. One of the reasons the Japanese Communist Party does not accept subsidies from the government is this lack of transparency.

For its part, the ruling Liberal Democratic Party says it is clear about how it spends these funds, but Tokyo Shimbun says that the LDP only reveals who receives the contribution. After that, it’s not clear where the money goes to.

The Tokyo Shimbun articles were researched with the help of Yoichiro Tateiwa, founder of the investigative journalism group InFact. Tateiwa, a former reporter for public broadcaster NHK, questioned each political party about its use of funds, and his own ongoing series for InFact has investigated the secretive link between money and politics.

Portions of the series address what Tateiwa calls the “dark” nature of the LDP’s funding practices. What’s conspicuous about the LDP system is that the secretary-general receives a very large amount of money compared to other LDP members. According to InFact, Toshihiro Nikai amassed around ¥3.7 billion between 2016, when he became secretary-general, and 2019. The same is true for previous holders of the secretary-general position.

In response to Tateiwa’s questions, the LDP said that its members properly spent the money on behalf of the party for the purposes of “expanding the party,” drafting legislature and research. The secretary-general receives more money due to the nature of his role in the party, and not for his individual political needs.

When Tateiwa visited Nikai’s constituency in Wakayama Prefecture, what he saw and heard bore out this claim. In the politest terms he wrote that the place looks depressed, and one person he talked to said that, while they support Nikai, the secretary-general doesn’t do the region any favors, even when his constituents ask for them.

So what does Nikai spend that money on? Since the LDP isn’t required to report where the expenses go, nobody knows for sure. In trying to find out, Tateiwa met someone with connections to the LDP who agreed to discuss the matter after gaining Tateiwa’s assurance that he would use no statement that could be traced to the person. In a note, Tateiwa says that InFact’s editorial policy is to not use anonymous sources, but he made an exception in this case.

When he asked the source why Nikai has so much money at his disposal, the source mentioned two terms, “mochidai” and “kōridai,” political code words for money used to help determine election outcomes. The source said that the amounts were even larger in the past, and Tateiwa explains that in 2001 the LDP was spooked by a citizens group that tried to bring criminal charges against the party for misuse of funds, but the prosecutors found “no suspicion” of wrongdoing.

While the amounts have declined somewhat since then, however, they are still huge, and Tateiwa wonders if the money should be taxed as miscellaneous income. According to the source, if the tax agency asks, the LDP can simply say it is using the money for non-taxable policy activities. And since the Political Funds Control Law doesn’t require it, the party doesn’t have to show — even to the tax agency — where the money goes.

The source says that such a large sum of money can have a big effect on the outcome of an election, and that is the secretary-general’s job. But when Tateiwa pressed them about reporting these funds as campaign expenses, which is required, the source said they were and then tried to get up to leave. Pressing further, Tateiwa asked, in an indirect way, about the money Nikai gave to LDP lawmaker Katsuyuki Kawai for his wife’s Upper House election campaign in July 2019. Kawai was later convicted of vote-buying. Was that money from the policy activities fund? The source said they didn’t know, but “it would be natural to think that way.”

Associate professor Shinichiro Tanaka of the Chiba University of Commerce told Tateiwa that the law covering political funds has been revised a number of times over the years but always within a framework that serves the LDP, which has been the ruling party almost continually since 1955. Consequently, the purpose of the law, which is to guarantee transparency, has not been achieved. Tanaka thinks that the new Digital Agency may improve matters, since it could hasten and unify reporting practices that are now done on paper and differ from one prefecture to the next.

However, the problem isn’t one of will, it’s one of intent.

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