Kimitaka Kuze was recently forced to resign as chairman of the Cabinet-level Financial Reconstruction Commission for receiving illegal benefits and payments from companies. This dealt a heavy blow to the credibility of Prime Minister Yoshiro Mori and stirred a strong sense of distrust in Japanese politics at home and abroad. The following points should be noted in the scandal:

* Mori appointed Kuze to the post even though he knew Kuze had received benefits from Mitsubishi Trust and Banking Corp. This raised doubts about Mori’s seriousness in promoting banking reform.

* Kuze’s appointment, like that of other Cabinet members, was made on the basis of the factional balance of power and seniority in the ruling Liberal Democratic Party. This stirred doubts about Mori’s determination to push his “Japan renaissance plan” for economic revival.

* Kuze, a former career bureaucrat at the Home Affairs Ministry, admitted that he used a donation from a private company to pay membership fees of newly recruited LDP members, so that he could meet his recruitment quota for listing on the party’s proportional-representation roster for an Upper House election. This exposed the collusive ties among politicians, bureaucrats and businessmen.

When Mori appointed Kuze as FRC chief, he and LDP Secretary General Hiromu Nonaka were reportedly aware of Kuze’s shady dealings from anonymous letters. They thought Kuze’s appointment would raise no problems. Mori bears a heavy responsibility for the scandal.

Mori was hit by the scandal as he struggled to boost the dismal approval ratings for his government. He had launched his second Cabinet after the general election in June. Kuze’s resignation was reminiscent of the 1997 ouster of scandal-tainted Management and Coordination Director General Koko Sato, a member of Prime Minister Ryutaro Hashimoto’s Cabinet. Hashimoto touched off storms of protests when he appointed Sato, a convicted felon in the Lockheed payoff scandal, to the post. Hashimoto’s political fortunes went downhill following the furor.

The appointment of Kuze, a nonexpert in financial affairs, demonstrated that the LDP practice of making Cabinet appointments on the basis of factional strength and seniority was still alive. Not only Mori but also former LDP Secretary General Koichi Kato, head of the faction that recommended Kuze to the Cabinet post, is responsible for the affair.

The LDP, made up of a number of factions, makes Cabinet appointments from lists of candidates submitted by individual factions. Individual lawmakers’ leadership skills and expertise in specific fields are rarely considered. The crucial factor is how many times a lawmaker has been re-elected.

Kuze was selected on the basis of his seniority. Mori said on forming his second Cabinet that he made the appointments on the principle of “the right man in the right post.” This was far from the truth.

Kuze told reporters after resigning that he received 100 million yen from condominium builder Daikyo Inc. to pay membership fees of newly recruited LDP members to meet his recruitment quota for listing on the LDP’s proportional-representation roster for the 1992 Upper House election.

However, Mori contradicted Kuze when he told the Diet that 100 million yen from Kuze was used as a donation to an LDP-affiliated foundation, a nonpolitical organization. The foundation made no payments to Kuze, Mori said.

According to the LDP, a candidate must recruit at least 20,000 new members in a year and have more than 1 million supporters to have his or her name on the party’s proportional-representation list for an Upper House election. Thus, a candidate who pays membership fees of 4,000 yen each for 20,000 members pays a total of 80 million yen.

Opposition lawmaker Giichi Tsunoda of the Democratic Party of Japan has charged that the Kuze scandal exposes the practice of LDP hopefuls getting lists of potential LDP members from industry groups and receiving donations from companies to pay membership fees for newly recruited members. The practice is intended to obtain a favorable position in the proportional-representation list, Tsunoda said.

Mori said the LDP selects candidates for listing on the proportional-representation roster on the basis of strict standards. He said Kuze’s problem concerning the proportional-representation list was his personal affair, and rejected suggestions that the LDP’s candidate-selection process was flawed.

The LDP’s proportional-representation roster includes many former bureaucrats with voter bases in the industries they supervised. Of the 14 LDP candidates who were elected from the proportional-representation roster in the 1998 Upper House election, seven were former bureaucrats with the Posts and Telecommunications Ministry, the Agriculture, Fisheries and Forestry Ministry, the Construction Ministry and other ministries and agencies.

The collusive ties among politicians, bureaucrats and business executives work this way: Government ministries and agencies have retired bureaucrats run for Diet seats to expand their influence and obtain more budgetary appropriations. To make sure their candidates are elected, the LDP makes industries and organizations under its influence compete to support those candidates. Industries naturally expect elected politicians to act as lobbyists on their behalf.

In this environment, politicians ask for and receive benefits from businesses, and influence peddling is rampant.

The four opposition parties — the Democratic Party of Japan, the Japan Communist Party, the Liberal Party and the Social Democratic Party — have jointly worked out legislation to ban influence peddling by lawmakers. New Komeito, a member of the coalition government, submitted a similar measure to the Diet while it was an opposition party. Now it is considering legislation that is even stricter than the version compiled by the opposition forces. The party reportedly believes that it will suffer a severe setback if it remains complacent in the ruling coalition and fails to develop independent policies.

Ethics is the foundation of politics. The LDP and its boss, Mori, face a critical decision on ethics. In a recent Diet policy speech, Mori said ensuring a “rebirth of government” will be essential in advancing reform toward “a rebirth of Japan.” He also stressed the credo of a “government that steps with the people and is trusted by the people.” If all these statements turn out to mean nothing, Mori will lose the public’s trust.

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