June 19, 2024

Japan PM put into corner as secret slush funds scandal falls on him

Japanese Prime Minister Fumio Kishida has been driven into a corner, as prosecutors are now poised to build a case against a former accountant of the ruling party’s faction he used to lead over a political fundraising scandal.

Since the revelations about secret slush funds came to light late last year, Kishida, who heads the Liberal Democratic Party, has tried to place the blame on its largest faction, which was helmed by former Prime Minister Shinzo Abe before he was assassinated in July 2022.

But Kishida’s attempt has so far been unsuccessful. Instead, he has been forced to be accountable for the latest allegations rattling the LDP, which has dominated Japan’s politics and been in power for most of the period since 1955.

Japanese Prime Minister Fumio Kishida speaks at a meeting of the ruling Liberal Democratic Party’s “political reform” panel tasked with reviewing the handling of political funds at the party’s headquarters in Tokyo on Jan. 16, 2024. (Kyodo) ==Kyodo

The funds scandal is “not just a problem for the Abe faction but for the entire LDP,” said Takayuki Ochiai, a vice secretary general of the main opposition Constitutional Democratic Party of Japan, as he urged every ruling lawmaker to take responsibility.

Kenta Izumi, the opposition party’s leader, called on Kishida to step down, saying the prime minister “must put an end to the slush funds scandal.”

Speculation has been rife within the LDP that Kishida, who took office in October 2021, will be compelled to resign as prime minister once an important initial budget for the fiscal year from April 2024 is passed in parliament, possibly in March, some LDP members said.

Prosecutors are investigating several LDP factions amid allegations that they failed to report revenue from fundraising events in violation of the political funds control law, and have been questioning some of its key party members on a voluntary basis.

The Abe faction is suspected of having accumulated hundreds of millions of yen in slush funds, and prosecutors are seeking the arrest of some of its lawmakers to figure out the financial flows within the group, sources close to the matter said.

In a bid to refresh the LDP’s tarnished image, Kishida set up an internal “political reform” panel earlier this month and is seeking to establish rules to enhance the transparency of funds raised by its factions.

Kishida, who headed the fourth-biggest intraparty group until he quit in early December amid the scandal, has asked LDP lawmakers to consider revising the political funds control law, often criticized for containing loopholes that enable politicians to generate slush funds.

At a panel meeting, Keiko Kiyohara, a visiting professor at Kyorin University and a former mayor of Tokyo’s Mitaka, said the slush funds scandal has “desecrated” the public as such funds may have been used for election campaign activities. She said more transparency around how money is used in politics is necessary.

Mitsuo Noguchi, a tax accountant, also proposed that the party’s headquarters audit political fund income and expenditure reports compiled by each faction.

The primary focus, however, is on whether Kishida can disband the LDP’s factions, a move that may encounter stiff opposition from the largest group in particular due to the crucial role it plays in decision-making processes, including in selecting the party’s leader, who typically goes on to become prime minister.

Kishida said Thursday that the faction he used to lead would be dissolved if the move contributes to recovering people’s confidence in politics.

Prime Minister Fumio Kishida speaks to reporters at his office in Tokyo on Jan. 18, 2024. (Kyodo)

Some LDP members, including unaffiliated veteran lawmaker and former Prime Minister Yoshihide Suga, have claimed that its factions should be dissolved to rebuild public trust.

But an Abe group member disagreed with such an opinion, saying that “the abandonment of LDP factions is apparently aimed at weakening the influence of the Abe group and other powerful rivals, probably benefiting Prime Minister Kishida and in turn helping him survive.”

Kishida should “first provide an adequate explanation to the public about the scandal that surrounds the group he used to lead, before making a swift decision to dissolve LDP factions in a bid to restore the popularity of his Cabinet,” he added.

The former accountant of the so-called Kishida faction is alleged to have failed to declare around 30 million yen ($203,000) over three years through 2020, but the money was not returned to its members as happened in some other factions, the sources said.

On Thursday, the faction submitted corrections for three years of political funds reports through 2022 to the Ministry of Internal Affairs and Communications, government officials said.

If Kishida dares to try and disband the factions, the Abe group, composed of about one-fourth of more than 370 LDP lawmakers, may seek to oust the prime minister from power for the upcoming House of Representatives election.

“If the general election is held under Kishida’s leadership, the Abe faction, which has been viewed unfavorably against a backdrop of the secret slush funds scandal, would lose a significant number of seats in the lower house,” the group member said.

“We have to choose a new leader who can garner public support to win the election,” he added.

The present four-year terms for lower house members expire in October 2025 unless Kishida dissolves the chamber. Under Japan’s Constitution, the prime minister has the authority to decide whether to dissolve the lower house.

Related coverage:

Prosecutors to build case on Kishida faction over LDP funds scandal

Japan’s ruling LDP starts discussions to reform political funds rules

FOCUS: LDP lawmaker arrest over funds scandal further blurs Japan PM’s fate

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