During the days of all-inclusive Budget Committee debates in both Houses of the Diet this week, opposition parties focused on the issue of “politics and money,” particularly on the donation scandal involving the Liberal Democratic Party’s largest faction. The debates produced one positive result: The ruling coalition of the LDP and New Komeito agreed to introduce a bill during the current session to put new limits on political donations.

The scandal has raised three specific questions. First, how should the Diet investigate the faction’s alleged coverup of a 100 million yen contribution from the Japan Dentists Federation (Nisshiren)? Second, how should the Political Funds Control Law be tightened to regulate currently unlimited donations between political groups? And third, what should be done to ensure transparency in “detour donations” through the LDP’s fundraising arm, Kokumin Seiji Kyokai (National Political Association)?

The LDP-Komeito proposal would put a 50 million yen-a-year cap on donations from one political group to another. It certainly represents a step forward but does not go far enough. The biggest shortcoming is that political parties (including chapters) and their fundraising groups like Kokumin Seiji Kyokai would be excluded. Thus the impression is that the LDP is not very serious about plugging the loopholes in the funds-control law.

As for the coverup allegation, all opposition parties demanded that the people involved, including former Prime Minister Ryutaro Hashimoto, testify under oath. Mr. Hashimoto, who allegedly received a check for 100 million yen from Nisshiren when he was heading the LDP faction, has told party executives that he will appear as an unsworn witness before the Lower House’s Political Ethics Council. Without sworn testimony, though, his appearance will end up as an occasion to hear only his side of the story.

By contrast, former Chief Cabinet Secretary Kanezo Muraoka, who has been indicted for his alleged role in the scandal, has expressed a willingness to testify under oath, saying he has nothing to hide. It will be inconsistent, however, if the Diet summons him as a sworn witness while not requiring the same of Mr. Hashimoto. Prime Minister Junichiro Koizumi is sitting largely on the sidelines, saying it is up to the Diet to decide whether to call the former prime minister for sworn testimony.

Regarding so-called detour donations, new allegations have emerged that Kokumin Seiji Kyokai issued a fake receipt for 80 million yen in cash that Nisshiren gave directly to six LDP legislators. According to the opposition Democratic Party of Japan, the six include Mr. Hashimoto, former Prime Minister Yoshiro Mori and Mr. Taku Yamasaki, a former LDP secretary general. The DPJ alleges that the document was fabricated to make the donations look legitimate. The Japan Communist Party, which has produced what it claims is a copy of the receipt, says it is “very likely” that the money was a detour donation.

The Diet is duty-bound to conduct its own probe into these allegations even though public prosecutors have completed their formal investigations. The LDP, meanwhile, should carry out its own inquiry. Koizumi has already ordered party secretary general Tsutomu Takebe to initiate action, but apparently with reluctance. The LDP-Komeito agreement does not include a ban on detour donations.

During exchanges on the prosecutorial investigation, Justice Minister Chieko Noono flip-flopped in her replies to opposition questions, and the DPJ criticized her for “lacking the quality of a Cabinet minister,” and went on to demand that Mr. Koizumi dismiss her. If the criticism is justified, the prime minister will be held accountable for his decision to choose her as a member of his new Cabinet.

Elsewhere in the Diet, some Cabinet ministers made inappropriate or apparently incorrect remarks on other issues. Foreign Minister Nobutaka Machimura, commenting on a recent U.S. helicopter crash on a university campus in Okinawa, said nobody on the ground was hurt because the helicopter had a “good pilot.” Predictably, the comment rubbed Okinawans the wrong way.

Chief Cabinet Secretary Hiroyuki Hosoda, speaking of North Korea’s nuclear-weapons program, said the country “has already produced” a plutonium bomb of the same type as the one dropped over Nagasaki. He later corrected the statement, saying North Korea is “on the way to developing one.”

These and other careless comments indicate that Mr. Koizumi’s new team lacks a sense of productive tension. But as far as the issue of money politics is concerned, the Diet is moving more or less in the right direction. To keep up the momentum, Mr. Koizumi needs to demonstrate more leadership.

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