Prime Minister Ishiba Holds On

The Struggle to Bring Ishiba Down

By Takuya Nishimura, APP 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.
July 28, 2025. Special to Asia Policy Point
 
Despite reaching a deal on tariffs with the United States, Japan’s Prime Minister Shigeru Ishiba faces difficulty in maintaining his government. Anti-Ishiba lawmakers in the Liberal Democratic Party (LDP) are expanding their efforts to remove Ishiba from the leadership. Some newspapers reported that Ishiba has already decided to step down. However, since then, Ishiba has repeated that he would continue to fulfill his responsibilities as prime minister. It is not unusual that the LDP replaces its top leader to represent itself as a “new-born LDP” right after serious defeat in an election.
 
Ishiba announced to the press that he would stay on as prime minister after the polls closed on July 20 for the upper house elections. On July 23 in Japan, two newspapers, the Mainichi Shimbun and Yomiuri Shimbun, however, reported on the front page of their evening editions with huge headlines that Ishiba would step down soon.
 
Yomiuri reported that Ishiba had told one of his aides of his coming resignation on the night of July 22, just before the announcement of an agreement on tariffs between Japan and the United States. “Tariff negotiations are about the national interest. I bet on Akazawa (the top negotiator for Japan). I will explain my responsibility for the defeat in Upper House election soon after the tariff negotiations are settled, but I cannot say I’m resigning so far” Ishiba said, according to Yomiuri. The conversation with the aide seems to be the source of the news of Ishiba’s resignation.
 
The news of a Japan-U.S. tariff deal came in the morning of July 23 Tokyo time. In return for Japan’s pledges to invest $550 billion in the U.S. and to purchase $8 billion of U.S. products, including a 75 percent increase in purchases of U.S. rice, the U.S. reduced the “reciprocal tariff” on Japanese goods from 25 to 15 percent. The Tokyo Stock Market rallied on July 23, welcoming the deal.
 
On the same day, July 23, Ishiba met with three former prime ministers and LDP heavyweights: Taro Aso, Yoshihide Suga, and Fumio Kishida. Observers believe that Ishiba tried to explain his intention to stay on as the prime minister, but those ex-premiers did not support him.
 
According to news reports, Aso concluded that, under Ishiba’s leadership, the LDP cannot win an election, considering the defeats in the Lower House election last October and the Tokyo Metropolitan Assembly election in June 2025. Kishida urged Ishiba to make clear whether he was staying or going. Suga insisted that Ishiba make sure that he does not divide the party. After the meeting, Ishiba said that there was no discussion of his possible resignation.
 
Internal opposition to Ishiba’s prime ministership has spread in the LDP. Some lawmakers formerly affiliated with the Motegi faction, one of the anti-Ishiba powers in the party, started collecting signatures of LDP lawmakers to request a Joint Plenary Meeting of Party Members of Both Houses of the Diet (JPM), an official meeting which can elect new president.
 
The LDP held an unofficial meeting of Diet members on July 28, rather than call a JPM. Ishiba asked for support to continue his presidency to implement the tariff deal with the U.S. While his appeal seemed to fall on deaf ears, many participants wanted the party to identify who was responsible for the disastrous results of the Upper House election. LDP Secretary General, Hiroshi Moriyama, stated that he would do so after the LDP’s review of the election finishes in August. There still is the possibility to hold a JPM, as there have been many requests to do so.
 
Anti-Ishiba groups in the LDP have redoubled their efforts to remove Ishiba. Four leaders of the former (now-disbanded) Abe faction -- Koichi Hagiuda, Yasutoshi Nishimura, Hirokazu Matsuno, and Hiroshige Seko – met at a faction reunion on July 23. One of the finalists in the election for president of the LDP last September, Sanae Takaichi, met with Aso and Nishimura to ask for their support.
 
Some local branches of the party, including the Tochigi Branch led by Toshimitsu Motegi and the Nara Branch, which is the home of Takaichi, submitted requests for the renewal of LDP leadership. After receiving complaints from some local organizations, the LDP Youth Division made the same request.
 
Reshuffling LDP leadership would not, however, address the policy issues behind the party’s recent losses. For example, the kickback scandal was one of the main reasons for those losses. “Who ruined the LDP?” Ishiba asked his colleagues, insisting on his authority to lead the country. Ishiba seems to think that he has at least three responsibilities in the coming weeks: 1) to conclude all the details in the tariff negotiations with the U.S. and related measures for Japanese business sectors; 2) to deliver his own message on August 15 at the 80^th anniversary of the end of World War II; and 3) to lead the Tokyo International Conference on African Development ((TICAD 9) in late August.
 ,jap
There is a speculation that Ishiba will step down after completing this agenda. The usual process of replacing an unpopular LDP prime minister is a growing demand for his resignation, a request for a presidential election, and the emergence of new leaders to replace the prime minister. If Ishiba steps down this fall, he will be added to the list of ordinary leaders who held a short term.
 
Once a new LDP president is elected, leaving the prime minister to declare his cabinet’s resignation en masse and both Houses elect new prime minister. If the Houses elect different people, the winner in the Lower House becomes the prime minister. Now, it is uncertain that a LDP candidate will win, given that there is no majority of the leading coalition in both Houses.
 
However, the opposition to Ishiba has some unusual elements. One is that the driving forces for his replacement are the very ones responsible for losing the election. Most lawmakers in the LDP, and not just the members of the former Abe faction, were reluctant to refuse donations from companies to guarantee the transparency of political fundraising. Another element is the absence of alternative contenders to replace Ishiba. The next leader must have the ability to manage negotiations with opposition parties in the Diet. Ishiba has proven his ability to do so; it is not apparent who else in the LDP could take this on.
 
On July 25, a large demonstration was held near the prime minister’s official residence to support the continuation of the Ishiba government. Participants shouted “Hang in there, Ishiba!” and “Don't resign!” Although there have been frequent protests against incumbent prime ministers, especially during Shinzo Abe’s administration, it is highly unusual that a crowd would gather to chant in favor of a prime minister retaining his position. Encouraged by these supporters, Ishiba must consider how to define his continuing “responsibility” as prime minister.

Japan's Ordinary Diet Session Ends

A bad term for Kishida

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.
June 23, 2024. Special to Asia Policy Point

On June 23, Japan’s ordinary Diet session for this year ended. From the beginning, the session was preoccupied with the Liberal Democratic Party’s (LDP) slush fund scandal.  Prime Minister Fumio Kishida’s administration barely survived persistent inquiries from the opposition parties about the LDP’s secret expenditures of political funds.  By now, Kishida is exhausted after his efforts to protect his party and isolated from nearly everyone in the party. His reelection as LDP president this fall is uncertain at best.

The slush fund scandal came to public attention last November when a professor, Hiroshi Kamiwaki, found that some lawmakers had reported actual expenditures more than their fundraising. This difference lay in the fact that lawmakers, most of whom were affiliated with the Abe faction, had failed to report income from the sales of tickets for fundraising parties. The Special Investigation Division of the Tokyo Public Prosecutors Office began to investigate them and their factions.

Before the Diet’s ordinary session was convened in January, Kishida tried to protect his Cabinet by firing four Ministers of the Abe faction. But it was too little too late to mitigate the impact of the slush fund scandal. It emerged that the secret “kickback” of party ticket sales was a regular method of distributing political funds in the Abe faction. In January, the Public Prosecutor’s Office indicted three lawmakers in that faction and a number of accounting managers in the Abe and Nikai factions.

Considering public resentment of the LDP, Kishida suddenly announced that he would dissolve his own faction, Kochi-kai. He did not consult with his closest allies, LDP Vice-president Taro Aso or Secretary General Toshimitsu Motegi. When the leaders of the Abe faction were reluctant to appear before the Political Ethics Council of both Houses to address the scandal, Kishida abruptly decided to urge the leaders of Abe faction to attend the Council meetings.

Those two unilateral decisions -- dissolving Kochi-kai and appearing before the Councils – put considerable distance between Kishida and other party leaders. The leaders regarded Kishida’s decisions as a form of populism.

The LDP eventually determined that 82 lawmakers had failed to report kickbacks and punished 39. The 39 included Ryu Shionoya, the chair of the Abe faction, and Hiroshige Seko, the top leader of the Upper House lawmakers in the faction. Both left the party. Other leaders, including some from the Nikai faction, were suspended from party membership or party leadership posts. These lawmakers felt they were being made scapegoats for the Kishida administration.

In handling the scandal, Kishida could never explain to the public why the scandal had happened. Some believe that the kickback system in the Abe faction began when former prime minister Yoshiro Mori was the faction leader. But Kishida did not ask Mori for details, thus casting doubt on Kishida’s seriousness about the issue. Kishida’s seeming indifference to public sentiment against politicians’ mismanagement of political funds to avoid taxation caused a steady decline in the approval ratings of his administration.

In the second half of the ordinary session, Kishida focused on a bill to amend the Political Funds Control Act. Although the bill passed the Diet at the end of the session, it included three important loopholes.

First, at the insistence of Komeito, the LDP lowered the threshold for disclosing the identities of party ticket purchasers from 200 thousand yen to 50 thousand yen. But the LDP did not revise the bill to set a limit on the number of fundraising parties each year.

Second, the bill requires certain disclosures about policy activity funds, the money that is distributed from a party to its leaders without mandate of reporting. But there is a time lag: disclosures are required only 10 years after the distribution of funds. Moreover, the crime of failing to properly report political funds will legally become invalid after five years. It is possible that an incorrect report cannot be punished when it is disclosed ten years after, because it already is invalid.

Third, the law requires every lawmaker to certify his or her political funds report. Yet if the certification is wrong, the legislation allows a lawmaker to blame his or her accounting manager.

Caught in the middle between the LDP, which has sought as loose regulation as possible and the opposition parties, sometimes including Komeito, which have called for stricter standards on political funds, Kishida made compromises with both sides. The decision to lower threshold for the disclosure of party ticket purchasers left behind leaders of the LDP including Aso and Motegi.

Kishida’s unilateral handling of politics during the session has taken its toll. In the leaders’ debate in the last week of the session, in which the opposition leaders demanded that Kishida dissolve the House of Representatives and hold a general election, Kishida firmly rejected a snap election at the end of the session.

Although the opposition parties proposed a no-confidence resolution in the prime minister, the ruling party rejected it with majority of votes. Arguments remain, however, that Kishida is not a fit party leader in the coming presidential election. Kuniyoshi Azuma, a member of the Lower House affiliated with the Motegi faction, explicitly questioned Kishida’s campaign. “Kishida should be circumspect in referring to his reelection and have more self-restraint,” said Azuma at a meeting in Asahikawa City, Hokkaido.

Party leaders now hold clandestine meetings to discuss the timing of a snap election. Summer elections would give the LDP a miserable defeat because of the extremely low approval rating for the Kishida Cabinet and the LDP. They have concluded that it would be best for a snap election to be held this fall after September’s selection of a new LDP president.

An Insufficient Political Reform Draft

Protecting Privilege

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.
March 9, 2024. Special to Asia Policy Point

Japan’s ruling Liberal Democratic Party (LDP) on March 7 presented its members with a draft plan for political reform. Revisions are proposed to the party’s rules, disciplinary regulations, and governance code, including a ban on traditional factions. Although LDP lawmakers criticized party leaders for loopholes in the draft, they reluctantly approved it.

The draft imposes tougher penalties on lawmakers whose staff is arrested or indicted for involvement in illegal activities involving political funds. The draft also provides for the expulsion of any lawmaker whose accounting manager is convicted for a violation of the Political Funds Control Act.

The LDP Political Reform Headquarters, headed by Prime Minister Fumio Kishida, has held discussions over party reforms from the beginning of this year. In an interim report from the headquarters late January, the party proposed banning factions from dealing with political funds and from involvement in the selection of ministers or party board members.

The draft of political reform was offered at the March 7 meeting concluding discussions over the past two months. It is expected to be approved in the national convention scheduled for March 17.

There are some rules that apply to LDP itself. The draft revises the Party Constitution, the Party Discipline Rules, and the Governance Codes. For example, Chapter 8 of the LDP Constitution establishes the Party Ethics Committee and the Political Ethics Hearing Committee. The March 7 draft proposes that the Political Ethics Hearing Committee can request the Secretary General to convene the Party Ethics Committee, when a party member or a policy group violates the Ethics Charter in the Party Discipline Rules. The Political Ethics Hearing Committee can also recommend that the Secretary General take necessary measures when an activity of policy group needs to be improved.

The preamble of the Party Discipline Rules establishes political ethics to secure public confidence in politics and requires each party member not to lose the trust of the people. When an accounting manager is arrested or indicted on a charge of violating the Political Funds Control Act, the draft empowers the party to impose on the lawmaker one of five penalties: suspension of appointment to party officials, recommendation to resign from the Diet or government, deregistration as an official candidate of the party in elections, disqualification as a party member, or a recommendation to leave the party.

If an accounting manager for a member is found guilty (after appeals are exhausted) of a violation of the Political Funds Control Act, the party will recommend that the lawmaker leave the party or be expelled. The expulsion clause was highlighted in news reports as the point of revising party rules after the slush fund scandal.

The Governance Code is a relatively new rule, having been introduced in 2022. The Code sets forth the responsibilities of party members and transparency of the party in order to maintain public confidence in the LDP. The March 7 draft adds to the basic principles of the code “strict treatment on the issue of political funds.” Defining “faction” as an organization, which tries to maximize its power and increase its membership, whenever it is backed by the power of money and can influence appointments to posts in the government or party board, the draft prohibits maintenance or establishment of this kind of faction. And it also prohibits policy groups from holding fundraising parties and obliges them to have an external audit.


Changes to the Governance Code do not include the elimination of factions, because it allows factions in the form of policy study groups, to which the definition of “faction” is not applied. There were some complaints in LDP that the definition did not extend to all political organizations.

The LDP has so far failed to disband factions. The party released a Political Reform Guidelines in 1989, when LDP was involved in the Recruit scandal of receiving unlisted stocks. The Guidelines have yet to be implemented. The Guidelines provide for three actions to initiate abolishing a faction: 1) the supreme adviser leaves the faction, 2) the president, vice-president, secretary general, chair of general council, chair of policy research council, chair of Diet members of Upper House, and ministers in cabinet leave the faction, and 3) the officials of the factions do not take action as if they are making party decisions.

In early 2000s, Junichiro Koizumi supported the abolition of factions. He left his faction when he became Prime Minister. However, the result of the “Koizumi reform” was that the Koizumi faction, Seiwa-kai, was subsumed by Yoshiro Mori. Under the Koizumi administration, the Mori faction grew to be the biggest faction in the LDP. It was succeeded by Nobutaka Machimura, Hiroyuki Hosoda, and Shizo Abe. Now, it is cynically expected that the factions will be reborn in the LDP, notwithstanding the latest reforms.

LDP will limit factions in the party organization by ending their role in the selection of personnel for governmental minister and party board posts. Nothing in the draft, however, excludes the influence of factions, or policy study groups, in the appointment process.

The March 7 draft also does not refer to which part of the national laws the LDP plans to amend. Although LDP urges tougher penalties for violations of the Political Funds Control Act, the opposition parties demand the resignation of any lawmaker if his/her accounting manager is conclusively found guilty of violating the statute. Some opposition parties also propose a total prohibition on donations from the business sector or organizations such as trade unions. The LDP has shown no sign of acceding to this demand.

The draft did not touch on penalties by the LDP on the lawmakers who were involved in the slush fund scandal. In the discussion in the Deliberative Council on Political Ethics in the House of Representatives, former Prime Minister Yoshihiko Noda insisted that Kishida punish those lawmakers. Kishida answered that the LDP would decide on sanctions. Young lawmakers in the LDP are frustrated that the leaders of the Abe faction have not taken responsibility for their false control of political funds.

The opposition parties argue that the revisions of the LDP’s internal rules are too weak to guarantee transparency and establish ethics in politics. But the LDP has not put its own ideas for amendments of the Political Funds Control Act on the table in the negotiations with the opposition parties. The LDP remains reluctant to have hearings on all 32 lawmakers who have been requested by the opposition parties to appear before the Deliberative Council on Political Ethics in the Upper House. The failure to make much progress undermines the political basis of Kishida administration, which continues to have low approval ratings.

Unusual Appearance of Prime Minter Kishida before the Ethics Council

An unsatisfying occurrence

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.
March 2, 2024. Special to Asia Policy Point

The first example of an incumbent prime minister’s appearance before the Diet’s Lower House Deliberative Council on Political Ethics (DCPE) occurred last week. The DCPE was established in 1985, two years after former Prime Minister Kakuei Tanaka was found guilty in Tokyo District Court of involvement with the 1976 Lockheed Bribery Scandal that damaged Japanese politics.

On February 29, Prime Minister Fumio Kishida sat before DCPE to take questions about the slush fund scandal. He apologized for losing public confidence in politics as the result of the scandal. Despite his hope to restore that confidence, Kishida was not successful in removing all the doubts about the control of political funds in the LDP.

Kishida’s original plan was to have the DCPE meet on February 28 and 29 and to have the Lower House send the FY 2024 budget bill to the Upper House by March 1. But the meeting on February 28 was cancelled because some lawmakers from the former Abe faction refused to attend and to take questions from the committee if the meeting was open to the public. If it had been held as a closed meeting, it was obvious that the Kishida administration would have been seen as not serious about restoring public confidence in political ethics.

Making the second surprise this year, after the dissolution of his faction in January, Kishida decided on the morning of February 28 to attend the public committee meeting to explain the scandal, hoping to break the deadlock that was delaying the budget. His unusual decision helped the LDP to agree with the opposition parties to hold committee meetings on February 29 and March 1. As part of the deal, the budget bill passed the Lower House in an unusual weekend session on Saturday, March 2.

An isolated prime minister is emerging from the process. Even when Kishida orders LDP lawmakers to fulfill their responsibility to explain the scandal, they are reluctant to follow him. Lawmakers in the Abe faction have been frustrated with Kishida’s leadership since he fired all the Abe faction ministers when the scandal unfolded last December. Kishida’s trilateral cooperation with two other faction leaders, Taro Aso and Toshimitsu Motegi, has weakened after Kishida unilaterally announced the dissolution of his own faction.

As for the Nikai faction, its former secretary general, Ryota Takeda, tried to protect his boss, Toshihiro Nikai: “While Mr. Nikai is apparently the symbol of our faction, he has nothing to do with any office work or accounting,” said Takeda at the PEC meeting. By contrast, Kishida has no follower defend him as Takeda did for Nikai.

Was Kishida successful in the Q&A session of the DCPE on February 29, anyway? The short answer is no. He proposed an amendment to the Political Funds Control Act seeking heavier penalties for lawmakers whose staff engaged in illegal activities. He also said he is considering an official LDP punishment for members who were involved in the slush fund scandal. He promised to have no more private fundraising parties during his term as prime minister. Critically, however, he failed to explain the truth of the scandal.

The committee members from opposition parties asked when, by whom, and for what Abe faction’s “kickback system” had been established. The system returned to a member the proceeds of ticket sales for fundraising parties beyond the member’s quota. Kishida said that the return of excess proceeds had begun at least ten years ago. But everyone already knew that because that was revealed in the LDP’s internal survey. “We could not find exactly when and how it had been established,” said Kishida.

Another point was why the Abe faction resumed the kickbacks, even after Shinzo Abe, as the president of the faction, decided to abolish that practice in the spring of 2022. Kishida explained that LDP, which had no power to enforce its requests for information, could not find everything. Asked whether he made a request to former factional president and former Premier, Yoshiro Mori, Kishida simply answered that there had been no reference to Mori in the LDP survey.

The facts of slush fund scandal were made rather clearer in the Council on March 1 with the attendance of four leaders of the Abe faction: Yasutoshi Nishimura, the former Minister of Economy, Trade and Industry; Hirokazu Matsuno, the former Chief Cabinet Secretary; Ryu Shionoya, the former Minister of Education; and Tsuyoshi Takagi, the former chair of the Diet Affairs Committee of the LDP. Nishimura, Matsuno and Takagi were former secretary generals of the Abe faction, and Shionoya chaired regular meetings of the Abe faction after Abe died.

On when the kickback system started, Matsuno told of his experience. He learned of the kickback system after he became a lawmaker and joined the Abe faction in 2000. The president of the faction at the time was Jun-ichiro Koizumi, and the prime minister was Mori. Shionoya said that the system was established over 20 years ago to help young lawmakers who could not raise political fund by themselves.

How Abe’s decision to abolish the kickback had been reversed was still not clearly explained. Nishimura, who was the secretary general of the Abe faction at the time, recalled that Abe decided in a meeting in April 2022 to end it out of his concern that the obscurity of the fund would invite doubts about the integrity of the LDP. Nishimura then said that some members requested the LDP leaders to resume the kickback system after Abe was shot to death in July.

Although Nishimura said that no conclusion was reached during an August 2022 meeting, Shionoya remembered that they talked about keeping the kickback system at least for 2022. Opposition party members quickly noted the contradiction. However, no Abe faction leaders could name who requested the resumption of kickbacks or who decided to continue it. They also denied that they had recognized the illegality of the kickbacks, even after Abe decided to abolish it.

Another big question was how the kickbacks had been spent. All four leaders said that they had been used for political purposes. If the kickbacks were sent from the faction to the political organization of each lawmaker as a donation and were used for political purpose, then they would not be taxed. But if a kickback was treated as the private income of the lawmaker, it would be taxed. Matsuno explained that some funds were kept in his office in cash and some to support meetings with lawmakers, but he did not reveal who were at the meetings.

According to the discussions in the DCPE the facts in the Abe faction were as follows: someone started the kickback system over 20 years ago and Abe decided to end it in April 2022; Abe was unfortunately assassinated three months later, and someone wanted to be given his surplus funds back; the system was reactivated in 2022 by whom no one knows; no one realized that the kickback was illegal even though it was not recorded on the political funds report; and the funds were used only for political purposes.

The opposition parties were not satisfied with this story and demanded further investigation in the Diet. There are some options going forward: asking other leaders to speak in the PEC, inviting the former president of the Abe faction to the Budget Committee hearing, or establishing new special committee for investigation. Whatever the next step, the scandal is still hanging around.

Will the LDP reform?

Kishida’s Halfway Political Reform

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.
January 27, 2024. Special to Asia Policy Point

On January 22, the Liberal Democratic Party’s (LDP) new Political Reform Headquarters released its “interim report” in response to the slush fund scandals of several LDP factions. Although the report proposes banning factions from hosting fundraising parties and eliminating the role of factions in money-raising and in appointments to cabinet posts and the party board, it does not ban factions. Missing from the report are the details of the scandal – an absence likely to exacerbate rather than quell public frustration with the LDP. Since the LDP has no specific plan to issue a final report, discussion of the scandal and the appropriate response to it has carried over to the Diet.

The Tokyo District Public Prosecutors Office investigated the scandals in which three LDP factions kickbacked to members the proceeds of ticket sales for fundraising parties that exceeded the quotas assigned to the members. The factions did not include the payments on their required political funds reports. The office has now wrapped up its investigation with the indictment of three lawmakers, all of whom are affiliated with the Abe faction, and seven accounting managers.

The prosecutor’s office did not, however, indict seven leaders of the Abe faction who were under investigation. While they were suspected of receiving kickbacks, the leaders explained that they did not know about the money since payments were the responsibility of the faction’s accounting managers. Although criminal prosecutions will not occur, it still is possible that the Committee for the Inquest of Prosecution will discuss the propriety of the non-indictments. Some in the LDP expect further penalties for the leaders, perhaps including expulsion from the party.

The interim report begins with an apology to the public for the kickback scandal. “The people doubt LDP with alleged inappropriate accounting over fundraising parties by specific factions,” says the report, emphasizing that the scandal has been about some specific and not all factions in the LDP.

The interim report calls for enhanced transparency of fundraising so as to prevent future mismanagement. The report also recommends the elimination of fundraising parties by factions and third-party audits for every faction. These recommendations assume that factions will continue to exist; the report does not speak to their possible elimination.

The report has loopholes. Although it would bar faction-led fundraising parties, it does not discuss such parties by lawmakers directly, which could present the same opportunity for kickback scandals. At one time, an LDP faction was group of lawmakers united by an influential leader who was powerful enough to distribute political contributions to faction members. Fundraising parties by individual lawmakers could bring back the old politics of control by bosses.

Also absent from the interim report is any discussion of “political activities spending,” which are distributions by the party to its leaders; how these funds are spent is not disclosed to the public. According to a report of Asahi Shimbun, the LDP distributed fund totaling ¥1.4 billion to fifteen leaders in FY 2022. Secretary General Toshimitsu Motegi received the lion’s share, ¥971 million. As long as factions exist, these distributions will continue, even if the LDP tries to stem the flow.

The report does urge that the factions return to their traditional role as genuine study groups. The report defines factions as “entities for studying policy and complementing party with political education.” But the LDP already has study groups. The LDP Policy Research Council has fourteen divisions, which hold meetings every morning for the study of policies with specialists or scholars. The LDP must explain the difference between these newer divisions and traditional factions as genuine policy groups.

Also requiring explanation is the recommendation to end the factions’ role in appointments to posts in the government and the party board. If this role is to end, the LDP needs to clarify how the party will elect the president. Article 10 of Rules for election of President requires at least 20 party Diet members to nominate a presidential candidate. Until now, nominations have rested on a balance of factions. With the loss of this role for the factions, the twenty members may constitute an informal, quasi-faction.

Disappointed with the report’s confusing approach to factions, some lawmakers have announced that they will leave their factions. The chair of Election Strategy Committee, Yuko Obuchi, will leave Motegi faction. Former Minister of Defense, Takeshi Iwaya, will resign from the Aso faction.

There have been other arguments about political funds, which are not addressed in the interim report. Some have argued that the threshold for reporting the names of buyers and the amount of ticket sales for a fundraising party should be lowered from ¥200 thousand to ¥50 thousand. This approach would be effective in regulating political funds because identification of the ticket buyers may deter local supporters.

Requiring the resignation of any lawmaker whose staff was arrested or indicted mismanagement or failure to report political funds should be another option. The Public Office Election Law already strips a candidate of an election victory if a staff member committed illegal activities such as bribery. This provision could be expanded to cover the mismanagement of political funds.

LDP’s coalition partner, Komeito, and the opposition parties support the recommended reforms on political funds. The reforms are matters for the Diet since amendments to laws will be necessary. The ordinary session of the Diet was convened on January 26. During a discussion in the Diet on January 29, Kishida appeared willing to consider a “guilt-by-association” system that hold lawmakers responsible for political funds control law breaches by their staff. Nevertheless, he was reluctant to disclose political activities spending. Kishida will face hard questions during in the rest of the current Diet session that ends June 23rd.

Kishida's Survival Gamble

Taro Aso Will his administration survival? 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. January 21, 2024. Special to Asia Policy Point The Special Investigation Division of the Tokyo District Public Prosecutors Office has mostly wrapped up its investigation into the Liberal Democratic Party’s (LDP) slush fund scandal. They indicted some Abe faction lawmakers and the accounting managers of the Abe, Nikai, and Kishida factions. To restore public confidence in politics, Prime Minister Fumio Kishida announced the dissolution of his faction. Although the Abe and Nikai faction also agreed to be dissolved, the remaining three LDP factions--Aso, Motegi and Moriyama—have not. Kishida’s abrupt and unilateral decision threatens to bring about a sharp rift in the LDP. The Asahi Shimbun has reported that the public prosecutors indicted two lawmakers in the Abe faction, Yasutada Ono and Yaichi Tanigawa, on charges of violating the Political Funds Control Act. The two are specifically alleged to have failed to report funds from the faction that were derived from the sales of tickets for fundraising parties. On January 7, prosecutors had already arrested a lawmaker, Yoshitaka Ikeda. Ono was indicted in house and has denied any involvement in illegal activities. Tanigawa received a summary indictment and admitted the charge against him. Both men have left the LDP and Tanigawa has submitted his resignation from the Lower House. The accounting managers of three factions allegedly failed to report the funds relating to their faction’s fundraising parties, including the return of some proceeds of the fundraisers to the lawmakers. Amounts not reported include ¥1.3 billion for the Abe faction, ¥380 million for the Nikai faction and ¥30 million for the Kishida faction. Strangely, leading lawmakers in the Abe faction, including the “Five Guys,” were not indicted. Prosecutors interviewed them about the management of their money, but apparently did not find sufficient evidence of their participation in reporting violations. The leaders explained that the head of the faction, either former Prime Minister Shinzo Abe or former Speaker of House of Representatives, Hiroyuki Hosoda controlled the unreported funds. Coincidentally, both men are deceased. Abe ended the “kickback” practice, but his successors in the LDP reversed the decision after he died in July 2022. The leaders of the Abe faction and the accounting manager said in their interviews with the prosecutors that the accounting manager decides whether the funds would be reported or not. Prosecutors failed to ask who was responsible for the decision to resume kickbacks. Another question: What is the difference between the lawmakers who were arrested or indicted and the ones who were not? Asahi and other news media have reported that the charging threshold was ¥30 million. Ono, Tanigawa and Ikeda are suspected or charged with failing to report ¥40 to ¥50 million of funds, while the Abe faction failed to report less than ¥30 million. It is true that the Abe faction’s unreported amount is lower than in the cases of the Japan Dental Federation in 2004, in which the Heisei Study Group, currently the Motegi faction, received ¥100 million, or of the office of Ichiro Ozawa, which failed to report ¥2.1 billion in 2010. However, the Abe faction has run its kickback system for nearly two decades. Ordinary people will have a hard time understanding the decision not to indict Abe faction leaders. Predictably, the approval rating of Kishida’s Cabinet did not show any upsurge (Asahi: from 23% to 23%, Yomiuri: from 25% to 24%) after the indictments were announced. Kishida had at first underplayed the reporting failures, but he changed his tune after Asahi reported the prosecutors’ plan to indict not only people with the Abe and Nikai factions, but also some with Kishida faction. He abruptly announced the dissolution of his faction to show his commitment to party reform and to limit further damage to his administration’s public standing. Kishida did not consult with other factions before announcing the dissolution of his faction. The announcement came as a surprise, if not a shock, to the LDP. Following Kishida’s announcement, the Abe and Nikai factions, both of which handled greater amounts of slush funds than the Kishida faction, called urgent assemblies and declared the dissolution of their factions. Although Kishida did not demand that other factions also dissolve, his decision effectively destroyed the two other major factions. The other three factions are in a difficult position. They are not alleged to have failed to report political funds, but they are the subject of guilt by association. The factions have stressed the positive aspects of factions as policy study groups. The leader of the Aso faction and the vice-president of LDP, Taro Aso, told Kishida that he would not dissolve his faction. This faction, as well as the Motegi and Miroyama factions will decide how to respond formally to Kishida’s action after the Political Reform Headquarters of LDP issues its interim report later this month. The structure of the Kishida administration, supported by Aso and Motegi factions, may well collapse, if Kishida does not establish an appropriate rule for the activities of factions. Some in the LDP have discussed making any faction a genuine study group, and ending their roles in the distribution of political funds, support of member campaigns, and recommendation of members for cabinet or party leadership positions. The LDP may be divided between pro- and anti-faction groups if Aso and Motegi insist on retaining theirs. Kishida’s approval rating has declined for several months. Party leaders could replace Kishida, ensuring his failure in the next general election. Kishida has, however, gambled his administration’s survival on the public’s understanding of his party’s arcane factions without explaining the purpose their fundraising.

Kishida's Difficult New Year

It Can Always Get Worse

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.
January 7, 2023. Special to Asia Policy Point

Prime Minister Fumio Kishida enters the new year with new problems. The slush fund scandal continues to invite distrust with the Liberal Democratic Party’s (LDP) factions. Adding to public skepticism is the Kishida administration’s handling of the great earthquake in Noto Peninsula, an airplane collision at Haneda International Airport. Kishida must master these issues if his administration is to survive.

At the very beginning of the year, Kishida spoke of ending Japan’s decades-long deflation. In the new year’s reflection published January 1, he planned to free 2024 from the country’s deflationary mindset and its cost-cutting tendencies. “We need to have the public and private sectors work together so that everyone in the public feels tangibly what it is like for wages to rise and disposable incomes to increase,” said Kishida, aiming to achieve wage increases that surpass rises in prices.

But even before the end of New Year’s Day, a great earthquake with a magnitude 7.6 hit Noto Peninsula. In a press conference immediately thereafter, Kishida announced the establishment of a headquarters for disaster management and his personal leadership for delivering necessary support for the victims. He canceled his ritual visit to the Ise Jingu and stayed in Tokyo to supervise relief efforts.

Although the Japan Meteorological Agency issued warnings for a tsunami in the coastal areas facing the Sea of Japan, the damage caused by the earthquake was not as great as that resulting from the Great Northeast Japan Earthquake in 2011. The area including the Noto Peninsula, however, is home to many nuclear power plants. While there have not been reports of power plant accidents on the peninsula, a public debate over the safety of nuclear power plants is emerging.

Kishida has held daily press conferences to update the country on the situation on the peninsula and the measures his government has taken. The task is daunting. Aftershocks from the earthquake have damaged roads and other transportation infrastructure, making it difficult to send food, water or fuel to the peninsula. A major fire in Wajima City caused many deaths. The flu and Covid are becoming more prevalent in the shelters.

Considering the lessons of previous great earthquakes, Kishida announced that he would spend the reserve in the FY 2023 budget for reconstruction and increase the reserve in the draft of FY 2024 budget. Kishida has sought the cooperation of the leaders of the five parties, but they will find it difficult to agree even in face of appearing in opposition to disaster aid. Thus far, Kishida seems to be managing the disaster well, but he cannot afford any mistakes.  

The very next day after the earthquake, a Japan Airlines (JAL) passenger jet was landing on a runway at Haneda Airport when it collided with a Japan Coast Guard (JCG) plane. Both planes caught fire, and JCG plane exploded, causing five deaths. In a near miracle, the crew and passengers of the JAL plane evacuated before the plane was incinerated.

According to the record of traffic control, the JCG plane had not been given permission to enter the runway. But the record also indicated that the air traffic controller did not notice that the JCG plane was on the runway when the JAL plane was landing. As if to amplify this disaster, the JCG plane was on its way to Niigata to deliver relief to the Noto Peninsula earthquake victims. The Kishida administration needs to make a better effort to determine the cause of accident, and it must take measures to prevent any similar accidents.

The disasters took Kishida’s attention away from the slush fund scandal, which keeps developing. The Tokyo Public Prosecutors Office has interviewed lawmakers in the Abe faction, including Hakubun Shimomura, the former Minister of Education, Culture, Sports, Science and Technology. The prosecutors have also raided the offices of the Abe faction and two lawmakers, one of whom, Yoshitaka Ikeda was arrested. The leader of the Nikai faction, Toshihiro Nikai, was also interviewed. As investigation continues, public trust in the government erodes.

In the press conference on January 4^th, the fifth of 2024 and ordinarily the first conference in the new year, Kishida emphasized his determination to restore public confidence. “I am leading the effort of reforming LDP,” Kishida said. He announced the creation of a new office in the LDP to enhance the transparency of political funds and to set rules for faction activity.

However, Kishida did not identify any specific political reforms. The leading parties have suggested that the threshold for reporting political funds should be lowered from ¥200 thousand to ¥50 thousand. Asked about it, Kishida was non-committal and said that it would be an issue for the parties to discuss in the Diet.
Kishida has said that he is working on other matters that cannot be postponed, such as wage increases, growth in the national birthrate, and international security.  But given his administration’s low approval rating, political ethics should be the very “issue that cannot be postponed.”

The ordinary session of the Diet convenes later this month. The FY 2024 budget bill will pass the Diet by the end of March. It is likely that the lawmakers will talk about a possible snap election of House of Representatives in April or later. If the idea that Kishida is too weak to survive a snap election grows, there will be a movement in the LDP to replace Kishida as prime minister. Kishida must restore confidence so that he will be reelected in LDP presidential election in the fall.

Change Coming to Japan's Administration

Possible Power Shift in the LDP

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 11, 2023. Special to Asia Policy Point

The expanding money scandals in Liberal Democratic Party’s (LDP) factions promises a significant power shift in the party, and maybe the government. Prime Minister Fumio Kishida must replace those Cabinet and LDP board members who have been identified receiving secret money from their factions. So far, the focus has been on the Seiwa-kai (Abe faction) that has controlled the party and government since most of this century. As a result, it is expected that the Abe faction will lose its grip on Kishida administration.

Most LDP factions, however, including Kishida’s own, are not free of scandal. Although Kishida will reshuffle his Cabinet this week after the Diet session ends on the 13th, the magnitude of the scandal has yet to be determined. It is also unclear how the political damage will affect Abe-era policies.

At the beginning, the scandal looked like some mistakes of each faction in reporting about money of fundraising parties. But it entered another phase when the existence of secret money was revealed. Some factions returned the money received for fundraiser tickets to their members without disclosing them on the political funds report. Abe’s faction imposed a quota on each member for the sales of party tickets, and if a member had sold beyond the quota, the surplus was returned to the member.

The amount of money recorded on political funds report of the Abe faction was the least among five suspected factions in 2022. This faction is the largest in the LDP, and it seems implausible that they could disclose the smallest amount of money received for fundraising parties. Indeed, it strongly indicates that the Abe faction had a great amount of unrecorded secret money.

The first target of the media was Chief Cabinet Secretary (CCS) Hirokazu Matsuno. Matsuno has reportedly received about ¥10 million (approximately USD69,000) from the Abe faction as the surplus for ticket sales beyond his quota between 2018 and 2022. As the secretary general of the Abe faction between 2019 and 2021, Matsuno would certainly have known about the money coming in and going out of the faction. Nevertheless, as CCS, the spokesperson of the Kishida Cabinet, he refused to answer any questions about the secret money in a recent press conference.

Asahi Shimbun reported that other leaders of the Abe faction are suspected of having received surpluses as well. They include all of the “Five Leaders” of the Abe faction: the Minister of Economy, Trade and Industry; Yasutoshi Nishimura; the Chairman of the LDP Policy Research Council, Koichi Hagiuda; the Chairman of the LDP Diet Affairs Committee, Tsuyoshi Takagi; the Secretary General of the LDP Upper House Caucus, Hiroshige Seko; and the head of the Abe faction, Ryu Shionoya.

According to another news report, Prime Minister Kishida has decided to replace all of these Five Leaders. Moreover, it is possible that all the ministers from Abe faction, including State Ministers and Parliamentary Vice-ministers, will be discharged from the administration. However, it is not easy to organize an administration without any member of the biggest faction in the controlling party. Accordingly, some members of the Abe faction without deep involvement in the scandal may be staying.

The Abe faction has been exercising its power in the Kishida administration from the beginning and maintained it even after Abe died. Increases in the defense budget and Kishida’s support for a constitutional amendment would expand the military’s authority beyond self-defense have been necessary to gain the support of the Abe faction. If most or all of the Abe faction is forced out of the administration as a result of the scandal, Kishida may be able to focus on his own issues such as raising birth rate and shifting economic policy from growth to redistribution.

Yet Kishida would not have an entirely free hand and will have to balance different considerations. On the one hand, even if Kishida is successful in establishing a new administration without representatives of the Abe faction, Kishida will still need to appease the faction. Otherwise, the faction may protest against Kishida or leave LDP. On the other hand, in order to raise his already low approval rating, Kishida must make fundamental reforms in the LDP.

To assuage the public, Kishida has stepped down as the head of his own faction and ordering all the factions in the LDP to halt fundraising parties for some time. But the opposition parties have promoted a theory that the scandal is not only a violation of the Political Fund Control Act but also a tax evasion scheme. At a minimum, the LDP must be more transparent in dealing with political contributions and begin to discuss amendments to the laws governing fundraising parties.

Reforms could bring new leadership to the LDP. Former Prime Minister Junichiro Koizumi made LDP reform the ultimate goal of his administration. And he was successful at it.

When Koizumi ran for president in 2001, Prime Minister Yoshiro Mori’s administration was under the control of Heisei-ken of the Motegi faction. To limit the rule of Heisei-ken, Koizumi pursued no-faction politics, excluding any recommendations from the LDP factions when reshuffling his Cabinet and the LDP board.

In 2004, Heisei-ken’s control ended for good with the discovery of a secret donation from the Japan Dental Federation to the Heisei-ken headed by Ryutaro Hashimoto. There are several parallels between those events and the current scandal.

The 2004 scandal and the subsequent reforms enabled Koizumi to take over the political power of the factions and consolidate power to the prime minister’s faction. Only one faction survived -- the Seiwa-kai -- which Koizumi had headed just before he took office as prime minister. Shinzo Abe and Yasuo Fukuda retained the one-faction politics and were regarded as Seiwa-kai premiers. The faction’s control has lasted about two decades except when Democratic Party of Japan led the government.

By contrast with Koizumi and Abe, Kishida has had to oversee multi-faction politics and maintain a delicate balance among the factions. At first under the control of Abe’s faction, Kishida has gradually come to rely upon the factions led by Taro Aso and Toshimitsu Motegi. The current scandal is an opportunity for Kishida rid his administration of the influence of Seiwa-kai. It will be fatal if these money scandals are found to spread beyond the Abe faction.

Internal LDP politics and scandals aside, Kishida is facing his own challenges. He has been unable to explain his meeting with the leaders of organizations closely related to the Family Federation for World Peace and Unification (the Moonies). Asahi Shimbun reported that the leaders of Unification Church’s United States Branch, Michael Jenkins, and of the Japan branch of Universal Peace Federation, Masayoshi Kajikuri, met with Kishida and former Speaker of U.S. House of Representatives Newt Gingrich. The mishandling of an explanation will be fatal to the Kishida administration.

Thus, although Kishida is likely to succeed in eliminating the influence of the biggest faction in the LDP, he must show the public a new version of LDP politics, and himself.