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The Tokyo District Public Prosecutors Office has indicted former Chief Cabinet Secretary Kenzo Muraoka over a political-donation scandal involving the Liberal Democratic Party’s largest faction. This seems to confirm the widespread public suspicion that a number of influential members of the faction — not just the treasurer who was recently arrested — might have been involved in the coverup of the 100 million yen donation.

Mr. Muraoka, who was the faction’s acting chairman at the time, is charged with violating the Political Funds Control Law. However, he was not arrested. This, and the way the donation was made, point out the need to toughen the law. The Diet is duty-bound to make necessary changes to establish transparency in political contributions.

According to prosecutors, Mr. Muraoka conspired with the treasurer, Mr. Toshiyuki Takigawa, to conceal the donation in a 2001 campaign-finance report. Investigations reveal that in July of that year, immediately before an Upper House election, the head of the Japan Dentists Federation, Mr. Sadao Usuda, gave a check for 100 million yen to the faction’s chairman at the time, former Prime Minister Ryutaro Hashimoto. Mr. Usuda is also charged with violating the law.

Mr. Muraoka, who was acting chairman in spring 2002 when Mr. Hashimoto was hospitalized for heart disease, was in a position to advise the treasurer on how to handle the donation. Mr. Muraoka has denied his involvement, but prosecutors reportedly believe that he gave orders to hide the donation. The treasurer reportedly has told them that he received “instructions” from Mr. Muraoka.

At this stage, though, it is not clear exactly what happened between the two men. A full picture will not likely emerge until after trial begins. Still, this much can be said for now: Mr. Muraoka and possibly a few other key members of the faction might have been involved one way or another. It is difficult to think that the treasurer, his position as chief accountant notwithstanding, had enough authority to deal with such a huge sum on his own.

The investigation appeared to have all but ended a week ago when Mr. Takigawa, the accountant, was indicted, although details about the scandal remained under wraps. But prosecutors deserve credit for having built a criminal case against an influential politician.

However, Mr. Muraoka’s indictment raises the question: Why was he not arrested? Some may regard the action as lenient. The fact is that the Political Funds Control Law itself is permissive in some respects. The crime of presenting a false funding report is punishable by either confinement or fine, not imprisonment.

In the case of lighter offenses, prosecutors run the risk of overstepping their authority if they arrest suspects. This is not to defend lenient treatment by prosecutors. The point is that under the current law an indictment without arrest may be unavoidable sometimes. But if such action is not sufficient, then the law itself should be revised to give investigating prosecutors more authority.

Prosecutors have decided not to indict former Mr. Hiromu Nonaka, a former LDP secretary general, who has been accused of violating the law. While recognizing his involvement, they said he did not play a “positive” role. Two other men have also escaped indictment: Mr. Hashimoto, who received the 100 million yen check, and Mr. Mikio Aoki, the chairman of the LDP’s caucus in the Upper House. Both men have also been accused of breaking the law, but prosecutors say there is no evidence of their involvement in the coverup.

Many people question the fact that no action has been taken against Mr. Hashimoto and his lieutenants who witnessed the receipt of the questionable check at a private meeting with senior officials of the dentists group. While that is understandable, receipt of the check is in itself not a violation of the law. The crime in this case is that the donation was not duly accounted for.

Beyond that, the funds-control law sets no limits on group-to-group donations. The scandal is a troubling reminder that donations to selected politicians can be made in this form. According to investigators, the dentists group donated the money to the LDP’s fund-managing body, which, along with donations from other groups, distributed it to party members. This is not much different from money laundering in that dubious donations are legitimized by channeling them through registered groups.

Admittedly, these loopholes create obstacles to investigations. If they are to be removed completely, as they should be, the only way of doing so is to rewrite the law and build a new system to govern political donations.

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