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The investigation of allegations that Rikuzankai, the political funds management body of Democratic Party of Japan Secretary General Ichiro Ozawa, falsified funds reports has entered a new phase with the Jan. 23 questioning of Mr. Ozawa by the special investigation squad of the Tokyo District Public Prosecutors Office.

It is unusual for a politician at the helm of a governing party to be questioned by public prosecutors as if he were an accused party, even when he submits to the questioning voluntarily as Mr. Ozawa did last week.

In a written statement distributed after the questioning, Mr. Ozawa denied involvement in the falsification of reports. Rikuzankai failed to record its purchase of a plot of land for some ¥340 million on Oct. 29, 2004, and money received beforehand, in its 2004 report. Instead, they were recorded in its 2005 report.

In the statement, Mr. Ozawa said that he had over ¥400 million in cash in a safe in his office in October 2004. He loaned ¥400 million of that cash to Rikuzankai, which used it to purchase the land, the statement said. The cash was left over from ¥560 million withdrawn from banks — ¥200 million in November 1989, ¥300 million in December 1997 and ¥60 million in April 2002. One wonders why he needed such a large amount of cash on hand.

Curiously, he took out a ¥400 million loan from a bank several hours after the payment for the land purchase was made. Again, he denied involvement in this matter, saying that a secretary made the arrangements for the bank loan.

Prosecutors apparently suspect that the cash that Mr. Ozawa gave to Rikuzankai included a secret donation of ¥50 million from Mizutani Construction Co., a firm based in Mie Prefecture that wanted to take part in a dam construction project in Oshu, Iwate Prefecture — Mr. Ozawa’s constituency. Mr. Ozawa said in the statement that neither he nor his aides received any illicit funds.

Mr. Ozawa needs to provide further explanation, especially in view of his having offered varying accounts of the details of the land deal. At first, he said that donated funds were used in the purchase. Later, in October, his office said the purchase was funded by a bank loan. He now says the purchase was made using the cash from his office safe.

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