Unfolding fund scandal deals heavy blow to Japan’s Kishida administration

Atsushi Koketsu, emeritus professor at Yamaguchi University of Japan, pointed out that with the ongoing investigations, the development of the scandal into a criminal case may lead to the collapse of the Kishida cabinet.

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Japanese Prime Minister Fumio Kishida holds a press conference in Tokyo, Japan, Dec. 13, 2023. (Frank Robichon/Pool via Xinhua)

In the wake of an unfolding political funds scandal involving major factions of the ruling Liberal Democratic Party (LDP), over 10 senior officials or heavyweight lawmakers have stepped down from their positions in the cabinet of Japanese Prime Minister Fumio Kishida or in the LDP.

The dismissal of the senior officials, all from the largest faction of the LDP, Seiwaken, is regarded as a strategic move by Kishida to distance himself and his party from the escalating scandal, considering the substantial implication of Seiwaken in the controversy.

However, as other factions, including Kishida’s own, may also be involved in the scandal, the prime minister’s gamble to axe the largest LDP faction may not necessarily guarantee its smooth way out of the crisis, analysts said.

SLUSH FUND SCANDAL

The political funds scandal engulfing Japan’s main ruling party emerged in mid-November when prosecutors reportedly launched investigations into a criminal complaint accusing five LDP factions of underreporting their revenue from political fundraising parties. The extra income has allegedly returned to some of the lawmakers as kickbacks.

Japanese political parties routinely organize “fundraising parties” where supporters donate money by purchasing “party tickets,” the proceeds of which are invested in political activities.

It is legal for a Japanese political entity to raise funds through ticket sales at fundraising events and redistribute the proceeds to member lawmakers, as long as they file credible reports on political funding.

LDP factions reportedly established quotas for individual lawmakers on the sale of tickets to fundraising parties. Revenue exceeding the quotas is allegedly funneled to the lawmakers as kickbacks.

Reports suggested that Seiwaken, a faction of 99 members which is also known as the Seiwa policy study group previously led by late former Prime Minister Shinzo Abe, has failed to report hundreds of millions of yen in revenue from fundraising events in their reports, raising concerns about the possibility of pooling secret funds.

Over the past five years, the slush fund of Seiwaken allegedly ballooned to about 500 million yen (3.53 million U.S. dollars), far more than what had been reported, and dozens of its members are suspected of failing to report income and expenditures concerning the accumulated funds, Japanese newspaper Asahi Shimbun reported, citing investigative sources.

Given the severity of the scandal, some Japanese media reports compared it to the infamous Recruit scandal in 1988, Japan’s biggest corruption scandal in postwar history.

Ukeru Magosaki, a former Japanese foreign ministry official, said that the scandal is just the tip of the iceberg, adding that the LDP has long promised political reform, but its practices of power-for-money trade have instead intensified.

REMOVAL OF SEIWAKEN

As Kishida seeks to stem the fallout from the scandal, the prime minister on Thursday accepted the resignations of Chief Cabinet Secretary Hirokazu Matsuno, Minister of Economy, Trade and Industry Yasutoshi Nishimura, Minister of Agriculture, Forestry and Fisheries Ichiro Miyashita and Minister for Internal Affairs and Communications Junji Suzuki, all of whom are members of Seiwaken, while their successors are former cabinet ministers belonging to other LDP factions or are unaffiliated with any specific group.

The political upheaval leaves the LDP in an extremely unusual situation of having no representatives from the party’s largest faction serving in the cabinet, Kyodo News said.

Five senior vice ministers and a parliamentary vice minister belonging to the Abe faction also stepped down from Kishida’s government on the same day.

In the LDP executive lineup, three heavyweight lawmakers — policy chief Koichi Hagiuda, parliamentary affairs chief Tsuyoshi Takagi and Upper House Secretary-General Hiroshige Seko — also submitted their resignations on the day.

Prior to the cabinet reshuffle, Kishida had taken other measures to mitigate the repercussions, including stepping down from his position as chief of his faction Kochikai, the fourth-largest faction within the LDP, and urging LDP factions to suspend the political fundraising parties, but the moves have failed to restore public trust, as evidenced by declining approval ratings.

The approval rate for Kishida’s cabinet has fallen to 23 percent, the lowest since Kishida took office in October 2021, according to a recent NHK opinion poll.

The cabinet’s approval rate dropped 6 points from last month, also a record low since the LDP won back power in December 2012, while the disapproval rate rose 6 points to 58 percent, the NHK said on Monday.

GRIM OUTLOOK

It remains unclear whether Kishida could break the impasse by excluding the Abe faction from the cabinet and party executive positions.

Although the scandal has so far mainly affected the Abe faction, other LDP factions have also had problems. As the investigations and media reports delve deeper, there is possibility that the newly appointed senior officials may also be involved.

Meanwhile, the Kishida faction may also have handed in false reports on its political funds in the past five years. The recorded amount reportedly fell tens of millions of yen short of the actual income of the political fundraising parties.

It is expected that the Kishida faction will also undergo investigations in the future, and Kishida, as a longtime leader of the faction, may not be able to get away with it.

As the cabinet and the LDP’s approval ratings continue to hit new lows, Kishida’s intra-party cohesion is also weakening as the lawmakers are increasingly distancing themselves from Kishida and his administration.

For the replacement of Matsuno, Kishida intended to tap non-faction politician Yasukazu Hamada. However, the former defense minister declined the offer, as did “two or three” more lawmakers, Kyodo News reported.

Some Japanese media reports described the Kishida cabinet as a “mud boat” that many in the LDP are unwilling to board.

Kishida’s term as the LDP president will end next September, and the current term of the lower house of parliament is also halfway through. Now public attention is focused on how Kishida will approach the upcoming presidential election and when he will dissolve the lower house for a general election.

Analysts believe that despite the blow that the Kishida administration suffered from the scandal, Kishida will “endure” in the short term due to the weakness of the opposition parties and the lack of a robust internal demand within the LDP for Kishida to resign.

Atsushi Koketsu, emeritus professor at Yamaguchi University of Japan, pointed out that with the ongoing investigations, the development of the scandal into a criminal case may lead to the collapse of the Kishida cabinet.

Xinhua News Agency

Founded in 1931, Xinhua News Agency is one of the largest news organizations in the world, with over 10,000 employees across the globe. As the main source of news and information for China, Xinhua plays a key role in shaping the country's media landscape and communicating its perspectives to the world. The agency produces a wide range of content, including text news articles, photos, videos, and social media posts, in both Chinese and English, and its reports are widely used by media organizations around the world. Xinhua also operates several international bureaus, including in key capitals like Washington, D.C., Moscow, and London, to provide in-depth coverage of global events.

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