LDP turmoil continues as three major factions announce dissolution

In an unexpected move that sent shock waves through Japan’s political establishment Friday night, three major Liberal Democratic Party factions announced they would disband amid a slush fund scandal.

The party’s largest faction, formerly led by Shinzo Abe, the faction most recently led by Prime Minister Fumio Kishida and the one led by former Secretary-General Toshihiro Nikai each made formal announcements Friday and declared they would cease to exist as political groups.

“I would like to express my sincere regret for the loss of trust of citizens and everyone involved over the large amount of (faction) money, in the expense report,” Ryu Shionoya, chairman of the Abe faction, told reporters Friday evening, in reference to political slush funds that were not recorded in legally required political funds reports.

He added that he didn’t intend to abandon the party or step down as a lawmaker and didn’t specify a timeline for the administrative procedures for the dissolution.

Former parliamentary affairs chief Tsuyoshi Takagi, who spoke to the press with Shionoya, also denied he would step down as a lawmaker, adding that “there are various ways of taking responsibility.”

His eyes filled with tears as he talked about his ties with Abe, who led the faction for less than a year before he was assassinated in July 2022.

Most lawmakers in the Abe faction are believed to have received slush funds, with the total projected to be around ¥500 million over the five year period between 2018 and 2022. More than 10 senior members of the faction allegedly received over ¥10 million in such funds.

The disbandment of the factions represents a key moment in the history of Japanese politics and marks the beginning of a new, uncertain phase for the LDP. However, whether Friday’s decisions to dissolve three factions will be enough to restore soaring public distrust of the party and the prime minister remains to be seen.

An intra-party panel established earlier this month by Kishida will issue an interim report next week and likely formalize the party’s departure from faction politics, at least on paper.

But on Friday, the turmoil had already come to a head.

Questions about the future of the ruling Liberal Democratic Party's powerful faction system had grown stronger throughout the day after Kishida’s surprise announcement the night before that he was thinking about disbanding his own faction.

“In order to restore trust in politics, I’ve said the Kochikai will be abolished,” Kishida clarified on Friday morning, referring to the faction he chaired until last month.

The 47-member Kishida faction, officially known as the Kochi Seisaku Kenkyukai, is the LDP’s fourth-largest faction and the party’s oldest. It was founded in 1957 by former Prime Minister Hayato Ikeda.

Former members include other previous prime ministers such as Masayoshi Ohira, Zenko Suzuki and Kiichi Miyazawa. Chief Cabinet Secretary Yoshimasa Hayashi and Foreign Minister Yoko Kamikawa are some of the sitting members of the Cabinet currently affiliated with the group.

Kishida’s sudden announcement came after his faction became caught up in the slush funds scandal, which continues to shake his administration and the LDP.

Kazuo Sasaki, the former treasurer of the Kishida faction who resigned last month, was indicted Friday for false statements in violation of the Political Funds Control Law. Prosecutors believe that ¥30 million was not detailed in the faction’s political fund balance reports over a three-year period to 2020.

Tokyo prosecutors are investigating several LDP factions amid allegations they failed to report revenue from sales of tickets for fundraising parties that was kicked back to members who sold more than a faction-determined quota.

Kishida has described what happened as an administrative oversight. He said Thursday that he had notified the internal affairs ministry, which is in charge of political funds reports, of the discrepancy.

The prime minister has not offered a timeline as to when his faction might be abolished. Jiji Press, citing a senior faction member, said it could happen after the release of the government’s political reform panel.

Support for ending the faction system is also growing among the public and political parties themselves. A Jiji Press poll on Thursday found that 56.3% of respondents thought the LDP should dissolve its factions, while 15.4% said it should not. The remaining 28.3% did not choose a side.

The decision late Friday capped a long day for the Abe faction, which saw its disgruntled junior members, under the helm of former general-council chairman Tatsuo Fukuda, meet with the senior leaders to present them a formal request for a faction disbandment.

Speaking to reporters, Shionoya referred to the illegal practice of underreporting income collected through fundraising parties as the result of lawmakers being “misled” by administrators. The former were told that it wasn’t necessary to report the extra income collected through the parties, Shionoya said.

Both Shionoya and Takagi said they were not aware of what other junior lawmakers referred to as “hushing practices,” referring to lawmakers being instructed not to talk about the kickbacks..

According to media reports, the practices had stopped after Abe took over as leader, but resumed after his death.

Another former secretary-general, former education minister Hakubun Shimomura, who was excluded from the new leadership last year, said that he intended to fulfill his responsibilities as a lawmaker in restoring trust and accountability.

“I think that the faction must take responsibility for the great disappointment and growing distrust of the Liberal Democratic Party itself,” Shimomura said. “It’s natural that the faction dissolves.”

None of the Abe faction executives will likely be prosecuted, as investigators weren’t able to prove conspiracy in the underreporting practices.

The faction headed by Nikai is also being investigated by prosecutors. They suspect the faction failed to report over ¥200 million in revenue from their fundraising parties between 2018 and 2022, prior to which the five-year statute of limitations would not apply.

Hitoshi Nagai, the faction’s accountant, who has admitted to not recording the funds, was indicted Friday.

Prior to the formal announcement, Nikai faction member Hideki Miyauchi had left the building that houses the group's headquarters sobbing and saying that Nikai had decided to disband the faction.

“Chairman Nikai made a major decision to try and restore trust, so it’s difficult to comment further" Miyauchi said, adding only that Nikai told the members that the LDP needs to make a fresh start.

Some 80% of LDP lawmakers belong to officially recognized political factions, which are required by law to submit detailed funding reports. Now, the scandal and backlash against factional politics have actually led to efforts by unaffiliated members to organize themselves.

On Thursday, 19 unaffiliated members met at parliament to establish an informal group. They were led by Ryosei Akazawa, who is on good terms with former LDP Secretary-General Shigeru Ishiba, and Manabu Sakai, who is close to former Prime Minister Yoshihide Suga.

Ishiba chaired his own group until 2021, while Suga has long been a critic of factions. The former prime minister was named an adviser to the political reform panel.

On Friday, the group of unaffiliated members praised Kishida's decision to abolish his own faction.