Pesky political fund problems

A spate of political funds problems that hit members of Prime Minister Shinzo Abe’s Cabinet before he dissolved the Lower House appears to have been almost sidelined now that Abe’s ruling bloc was returned to a two-thirds majority of the Lower House in the snap election that mainly focused on his economic policies.

Cabinet members who resigned over scandals survived the election to keep their Diet seats. Ministers who came under fire for questionable handling of funds have been reinstated to their posts, except former Defense Minister Akinori Eto.

But the Liberal Democratic Party-Komeito alliance’s landslide win does not erase the problems. The endorsement by voters in their local constituencies does not relieve lawmakers of their responsibility to account for the political funds irregularities. They still need to set the matters straight.

Yuko Obuchi, who resigned as trade and industry minister in October and was returned to the Lower House by winning by far the largest votes in her home constituency in Gunma Prefecture, has yet to convincingly account for a gap of more than ¥60 million in the income and expenses of her political groups that organized entertainment events for her local supporters. If the gap means that her organizations paid for part of the expenses for the events, it could have constituted an illegal provision of benefits to local voters.

The question of money in politics was not limited to Cabinet ministers or members of the LDP.

Yoshimi Watanabe was forced to resign as chief of Your Party in March after he failed to give convincing accounts of how he used ¥800 million in undisclosed loans that he received from the chairman of a cosmetics company right before previous national elections. The party he founded in 2009 eventually broke up just before the December election, and Watanabe lost his Lower House seat.

Inappropriate use of funds also surfaced among members of local assemblies. The case of a Hyogo Prefectural Assembly member — who resigned after receiving millions of yen in taxpayer-funded allowances by falsely claiming he made dozens of business trips — turned public attention to the widespread misuse of such allowances meant to pay for assembly members’ “policy research” and other “political” activities.

The political funds problems came to the fore this year just as members of the business community were starting again to expand their donations to the LDP after its return to power in 2012. In September, Keidanren (Japan Business Federation) said it would resume the role of urging its member firms to make political donations.

Reports disclosed by the internal affairs ministry showed that business and other organizations increased their donations to political parties and their funds groups by 43 percent in 2013 over the previous year — the bulk of which was donated to the LDP’s funds management body and to the party’s local chapters. These donations reportedly included tens of millions of yen each from manufacturers of nuclear power plant equipment, who sharply increased their offerings to the LDP’s funds body just as the Abe administration actively promoted the exports of Japanese nuclear power plants.

Also on the list of major donors to the LDP were the nation’s major automakers, which earned record profits as the yen fell sharply against the dollar under the Bank of Japan’s massive monetary easing policy — a core part of the “Abenomics.”

Political donations by businesses and other organizations hit a peak of ¥44.7 billion in 1990. The amount went downhill after the dubious flow of money from the business sectors to LDP heavyweights came under severe public criticism and as the Japanese economy entered the post-bubble doldrums. It hit bottom, at ¥1.6 billion, in 2011 while the Democratic Party of Japan led the government. But the amount bounced back to ¥2.4 billion last year after the LDP’s comeback to power.

Keidanren chief Sadayuki Sakakibara denies that businesses use their donations to try to buy policies favorable to their interests. It must be remembered that the Political Funds Control Law was revised in 1994 to tighten control of political donations by corporations. The revision introduced a system to provide public subsidies to political parties to ensure greater transparency in money used in politics.

Today, more than ¥30 billion from state coffers is distributed each year among political parties according to their share of the Diet seats.

Meanwhile, although corporate donations to individual politicians and their funds organizations are banned, corporate donations effectively reach lawmakers via the local chapters of their parties, which are managed by lawmakers elected from the local constituencies.

The DPJ took the helm of government in 2009 after promising to close the loophole by banning corporate donations altogether, but the promise was never implemented while the party was in power. The pledge was dropped in its campaign pledge for the latest Lower House election. Despite the loopholes, efforts have been made over the years to regulate the flow of money to politicians. The problems that surfaced this year with Abe’s Cabinet members highlighted the lax control of lawmakers’ use of funds that they receive.

The funds control law regulates the donations that lawmakers receive and sets rules on disclosure of income and expenses, but it does not provide rules on how the money should be spent out of deference to lawmakers’ freedom to pursue political activities as they choose.

In view of the recent episodes, lawmakers should discuss in earnest whether some restrictions should be imposed to prevent inappropriate use of political funds.

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