In the gubernatorial election of Nagasaki Prefecture on Feb. 21, the candidate backed by the ruling Democratic Party of Japan was roundly defeated by his opponent, who was supported by the No. 1 opposition Liberal Democratic Party. The winner, former Vice Gov. Hodo Nakamura, garnered 44.9 percent of total votes cast against 31.5 percent for the runnerup, Tsuyoshi Hashimoto.

This came at a time when Prime Minister Yukio Hatoyama and all-powerful Democratic Party of Japan Secretary General Ichiro Ozawa were caught up in news reports of their political funds scandals. Ozawa had become an investigation target of public prosecutors in a dubious real estate transaction, while Hatoyama was accused by the opposition of receiving huge sums of money from his mother.

Only a couple of months ago, Ozawa appeared to possess every conceivable political advantage following his role in leading his party to an overwhelming victory in the general election last August. Although he still appears to be the key man in the party, he has lost the spiritual, moral and social authority to demand loyalty from other people. That’s due not only to the fact that three of his closest confidants have been indicted on charges of falsifying political fund reports but also to Ozawa’s own behavior after he avoided indictment.

The day after the three were arrested, Ozawa told a DPJ party convention that the prosecutors’ actions would cast a pall over Japan’s democracy. When it was clear that he would not be indicted, though, he hailed law enforcement authorities for their fairness. This about-face has been interpreted by political observers as revealing the limits of his qualifications as a political leader.

Although Ozawa insists that the acts committed by his confidants constituted only minor offenses such as clerical errors, opinion surveys conducted by major newspapers and other media showed that more than 70 percent believed Ozawa should step down as DPJ secretary general.

Ozawa played the key role in enabling 143 newcomers on the DPJ ticket to win in the general election. Yet, he still lacks solid support within his own party because he is relatively new in the DPJ, which he joined in 2002 after dissolving another party of his own making. That’s why some “indigenous” DPJ members still keep their distance from him. An anti-Ozawa lawmaker has said that of the DPJ Lower House members elected at least four times, only three still back Ozawa.

Ozawa seems to be fully aware that the person he should watch out for is Prime Minister Yukio Hatoyama himself. On the heels of opinion polls showing widespread support for Ozawa to step down, Hatoyama told the Lower House Budget Committee on Feb. 8 that Ozawa should be held accountable for the arrest of his confidants and that he believed Ozawa was fully aware of his responsibility.

This must have come as a shock to Ozawa as evidenced by his rushing to the prime minister’s official residence during a lunch recess for a committee in deliberations. Hatoyama, who is also DPJ president, agreed to retain Ozawa in his current position. But Hatoyama dealt Ozawa a blow when he told Ozawa of his decision to appoint Yukio Edano, known for his staunch opposition to Ozawa, as administrative reform minister. Ozawa had no choice but to accept it.

This decline in Ozawa’s prestige has also caused a change in the U.S. government’s attitude toward him. Washington had counted on Ozawa to play a major role in resolving the controversial issue of relocating the U.S. Marine Corps Air Station at Futenma, Okinawa, remembering that he was instrumental in persuading Tokyo to contribute $13 billion to the multinational forces during the Gulf War.

On Feb. 2, Kurt Campbell, assistant U.S. secretary of state for East Asian and Pacific affairs, called on Ozawa and invited him to Washington. Ozawa said he looked forward to spending some time with President Barack Obama during the visit. Ten days later, however, U.S. Ambassador John V. Roos said in a TV interview that Ozawa’s meeting with Obama would depend on Obama’s schedule, which was interpreted as eliminating any possibility of such a meeting.

With his prestige dwindling, Ozawa now faces a fight on three fronts. One is the possibility that he may yet be indicted. Even though the Tokyo District Public Prosecutor’s Office has decided against his indictment, a citizens’ group has asked the Inquest of Prosecution to review that decision. If the inquest votes twice in a row to denounce the no-indictment decision, Ozawa would automatically be indicted. This would mean his facing a court trial.

The second “enemy” he faces is within his own party. A number of DPJ lawmakers who distance themselves from Ozawa have openly demanded the reinstitution of the Policy Affairs Research Council within the party, which Ozawa abolished with the idea of concentrating decision-making within the Cabinet. As the number of his opponents rise, he has made little progress in implementing his pet goals of granting resident aliens the right to vote in local elections and of putting up two candidates in two-seat constituencies in this summer’s Upper House election.

Ozawa’s biggest problem may be public opinion, which has turned against him. In a bid to reverse the trend, he has been barnstorming throughout Japan to shore up DPJ candidates for the Upper House election. In the eyes of the public, such behavior looks like an attempt to avoid the opposition’s call that he testify before the Diet on his political funds scandal.

It is no exaggeration to say that the relative strength between Hatoyama and Ozawa has reversed, with the prime minister now holding the upper hand. A person close to Hatoyama has said the crucial issue is when he will shift his stand from “distancing himself from Ozawa” to “dismissing Ozawa” from his position.

This is an abridged translation of an article from the March issue of Sentaku, a monthly magazine covering Japanese political, social and economic scenes.

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