Mr. Katsuichiro Hisanaga, former head of the Japan Skating Federation, and two others have been arrested on suspicion of embezzling 5.8 million yen from the organization in 2002. The arrests are regrettable especially since Japan has produced world-class figure skaters in the past decade. This year Ms. Shizuka Arakawa won a gold medal in the Turin Winter Olympics. The case demands thorough investigation.

Specifically, Mr. Hisanaga and the two others are suspected of having had a travel agency, headed by one of the two, charge the federation about 5.8 million yen more than the actual price of contracts for services related to the World Figure Skating Championships in Nagano Prefecture in March 2002.

Investigative sources say that off-the-book money created over four years until Mr. Hisanaga quit in June 2004 could total up to 40 million yen. It is thought that Mr. Hisanaga pocketed about 10 million yen and distributed the rest to more than 10 federation officials and others.

The case sheds light on the conditions of poor transparency and supervision under which this sports organization operated. Mr. Hisanaga surrounded himself with close aides and controlled the flow of information, allowing only a limited number of executives to receive it. Matters related to international figure skating events were handled at an office other than federation headquarters, thus reducing transparency.

Generally speaking, sports organizations these days are not well-equipped to deal with expanding activities and the ever-larger revenues from sponsors. Manned by a small number of staffers, their secretariats cannot efficiently handle the increasing workload. They often lack expert knowledge and experience to carry out new types of projects.

Boards of directors cannot make decisions speedily because they hold meetings only a few times a year and are not supported by strong secretariats. It often happens that senior officials make decisions without consulting others.

Sports organizations should take concrete measures such as introducing a supervisory committee composed of outside people to check decisions made by executives.

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