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The arrest of the chief secretary of the Democratic Party of Japan leader Mr. Ichiro Ozawa on suspicion of violating the Political Funds Control Law has dealt a severe blow to the No. 1 opposition party. The damage to the DPJ is great all the more because the party is regarded as having a chance to win the coming general elections.

Although further investigation is needed to determine whether Mr. Ozawa’s arrested aide deserves indictment, it is regrettable that the arrest has further deepened people’s distrust of politics at a time when the nation is experiencing an economic crisis and people’s support for Prime Minister Taro Aso Cabinet has dropped to an extremely low level. Both ruling and opposition forces should tackle important political issues, including bills related to the fiscal 2009 budget, in earnest.

At a news conference the day after the arrest, Mr. Ozawa declared that he will not step down as DPJ head, saying the suspicions surrounding his secretary are groundless. But he should realize that he needs to give more detailed explanations.

The special investigation squad of the Tokyo District Public Prosecutors Office arrested Mr. Ozawa’s secretary on suspicion of receiving illegal donations from Nishimatsu Construction Co. for Mr. Ozawa’s political funds management organization, Rikuzankai. The secretary serves as Rikuzankai’s chief accountant. The Political Funds Control Law prohibits companies from making donations except for political parties and their political funds management organizations. It also bans political donations in the name of others.

Mr. Ozawa’s aide is suspected of having received ¥1 million in donations for Rikuzankai around October 2006 from a political organization established by former Nishimatsu employees, although the money was from the construction company. He is also suspected of having reported to authorities that Rikuzankai received ¥21 million in donations from 2003 to 2006 from the Nishimatsu-related political organization and another similar Nishimatsu-related political organization when the money was from Nishimatsu itself.

According to sources close to Nishimatsu, the two political organizations, both of which were disbanded in 2006, ostensibly made donations out of membership fees paid by Nishimatsu employees. But they say that in reality the company added the membership fees to the bonuses for employees and that the two bodies served as dummies to provide political donations to politicians. They also say the company decided on the destinations of donations.

The key point in this case is whether Mr. Ozawa’s secretary knew that the donations were from Nishimatsu. Mr. Ozawa said the secretary perceived only that the donations were from the two political organizations, not from Nishimatsu, and that he properly reported the donations as required by the Political Funds Control Law. He also said if the secretary had known that the donations were from Nishimatsu, he would have made a DPJ branch receive them, which is legal.

Mr. Ozawa said that, out of courtesy, his aide did not ask people or organizations making donations where their money came from, adding that no favors were given in exchange for the donations. But the Nishimatsu-related political organizations made the donations over an extended period of time and the amount was large. Generally speaking, it would be difficult for people to believe that Rikuzankai received the money without bothering to find out where the money originated.

Mr. Ozawa criticized the investigation as “unusual” because this kind of arrest and investigation has never been carried out before. He said holding the investigation when a Lower House election is imminent made him feel that it is an “unfair exercise of the public prosecutors’ power, politically and legally.”

Some people may wonder why the arrest of Mr. Ozawa’s aide came the day before the opposition-controlled Upper House voted down a bill to finance the second fiscal 2008 supplementary budget — which includes the controversial ¥2 trillion cash handouts for all households — and the Lower House enacted it with the support of a two-thirds majority held by the ruling forces. It is all the more important for the public prosecutors to carry out the investigation in a fair and strict manner.

It is reported that Nishimatsu created a slush fund of more than ¥2 billion and that the two Nishimatsu-related political organizations spent about ¥480 million to donate to, and buy fundraising-party tickets for, both ruling and opposition politicians. Investigation of slush fund use should not be neglected.

The DPJ, on its part, should realize that if Mr. Ozawa’s secretary is indicted, the party could be devastated. It should employ every possible means, including a strict internal probe of Mr. Ozawa, to clear the suspicions.

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