Sunday, December 10, 2023

Why Kishida is Changing His Cabinet

Faction Scandals Shake Kishida’s Administration

By Takuya Nishimura, Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun
The views expressed by the author are his own and are not associated with
The Hokkaido Shimbun
You can find his blog, J Update here.
December 2, 2023. Special to Asia Policy Point

“When three people get together, they make a faction. A faction is natural community in a society, and not so bad.” This has been the justification for the factions within the Liberal Democratic Party (LDP), particularly when they compete on political or money issues. Acting as an umbrella organization, the LDP can criticize any particular faction that goes rogue. However, the latest scandal, which concerns violations of the Political Funds Control Act, involves all the factions within the LDP and leaves the party with no opportunity to discipline a particular faction.

The Special Investigation Division of Tokyo Public Prosecutors Office has been investigating whether the LDP’s five major factions failed to report their income through fundraising parties between 2018 and 2021. The factions are the Seiwa-kai (Abe faction), Shisui-kai (Nikai faction), Heisei-ken (Motegi Group), Shiko-kai (Aso faction) and Kochi-kai (Kishida faction). As the president of LDP, Kishida urged each faction, including his own, to file corrected reports.

The Japan Communist Party’s Akahata Shimbun first broke this story in November 2022. Akahata reported that the five major LDP factions concealed their income, totaling about ¥25 million. A law professor at Kobe Gakuin University, Hiroshi Kamiwaki, thereafter, submitted allegations to the prosecutor’s office, arguing that the hidden income of would amount about ¥40 million between 2018 and 2021. Unreported income was also accumulated in 2022.

On the basis of the submission, the special investigation office began the investigation of the five factions, interviewing the officers of each faction.

The Political Funds Control Act requires each political organization, including each faction in the LDP, to report the names of buyers of tickets to party functions and the amount, when the sales to a buyer exceed ¥200 thousand. All of the LDP factions allegedly failed to report significant purchases: ¥19 million by the Abe faction, ¥9 million by the Nikai faction, ¥6 million by the Motegi faction, ¥4 million by the Aso faction, and ¥2 million by the Kishida faction.

In the discussion at the Committee on Budget of the House of Representatives, the head of the Constitutional Democratic Party, Kenta Izumi, asked Prime Minister Kishida what he knew about the scandal. “It was reported that there were some mishandlings on the political funding reports and they are in the process of correction,” said Kishida.

Kishida did not seem to have realized that there are serious doubts about his compliance with the law since he remains in charge of his faction. Prime ministers typically leave their factions when they take office in order to show some semblance of impartiality. But Kishida did not take this route and has continued at the head of his faction. He thus cannot escape responsibility for the operations of his faction, as previous prime ministers might have done.

News reports are now focusing on the use of the hidden money. The Abe faction is suspected of distributing the money to its member lawmakers. Distributions allegedly ranged from one hundred to several hundred million between 2018 and 2022.

The distributions would have arisen from ticket sales to the annual fundraising parties of the factions. Historically, these parties are subject to fewer regulations than direct contributions. Ticket sales of less than ¥200 thousand for a person do not have to be reported. The host of a party can receive all the proceeds of ticket sales after catering room fees have been paid.

The Abe faction imposes a quota of ticket sales each member, depending on the selling capacity of each member. The tickets are priced at ¥20 thousand each. The buyers are usually the business owners. Proceeds of the sales go to the faction. If the amount of sales for one buyer exceeds ¥200 thousand it should be recorded in the faction’s political fund report.

So, what happens when a member exceeds his or her quota? The Abe faction is suspected returning the surplus to the member without reporting it. The more tickets a member sells, the more he/she will be rewarded. The member can use the money in his or her own election campaign. It will be secret money free from any regulation. The return of funds to a member has been referred to as a “kickback” scheme

The chairman of the Abe faction, Ryu Shionoya, has admitted that the faction had been sending back the surplus to each member. But he later retreated, saying that he had not confirmed the facts. Two former secretaries general of the Abe faction, who are in the Kishida Cabinet, Chief Cabinet Secretary Hirokazu Matsuno and Minister of Economy, Trade and Industry Yasutoshi Nishimuira, did not directly answer a question about the secret money of a kickback arrangement in their press conferences. The prosecutors are investigating whether the same kickback system exists in other factions.

This latest scandal casts some doubt over the future of factions. While the factions take the form of policy study groups, they in fact work essentially to support the political activities of their members. When one lawmaker holds a fundraising party, colleagues of the same faction will attend and make speeches that praise the host politician and urge the audience to support him/her. The factions promote their candidates for the presidency, and the president usually becomes prime minister. This is a typical and traditional style of politics in LDP.

It is undeniable that this kind of politics is becoming obsolete. Old-time factions have been under the strong leadership of big bosses who could collect a great amount of money, but this system can no longer survive changes in the vehicles for politics and money raising. Lawmakers now have various methods of fundraising or communicating each other through internet.

As seen in the selection of ministers in the cabinet reshuffle in September, the Kishida administration is dependent on the balance of increasingly outmoded factions. That selection caused the consecutive resignations of several State Ministers or Parliamentary Vice-minister, contributing to a decline in the Kishida Administration’s approval rating. Kishida must realize the latest scandals will upset the balance on which his administration relies.

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