Tokyo Report

Japan’s Slush Fund Scandal Intensifies in Diet Discussions

Recent Features

Tokyo Report | Politics | East Asia

Japan’s Slush Fund Scandal Intensifies in Diet Discussions

Political parties clashed over political fundraising reform as lawmakers deliberate on proposals for varying levels of transparency and punishment.

Japan’s Slush Fund Scandal Intensifies in Diet Discussions
Credit: Depositphotos

Japan’s efforts to put a stop to controversial political slush funds in the form of an amendment bill has made its way to the Diet for deliberation. But political parties are deeply divided on how much political activity should be regulated under the Political Funds Control Law. 

The amendment to the law was prompted by a scandal late last year involving the misuse of campaign funds by lawmakers of various factions of the ruling Liberal Democratic Party (LDP) and opposition parties. The scandal stoked public outrage over the role of money in Japanese politics and the ethics of lawmakers pocketing money after exceeding fundraising ticket sale quotas set by political faction leaders. 

The House of Representatives Special Committee on Political Reform debated five different amendment proposals submitted by the LDP, Japan Innovation Party (Nippon Ishin no Kai), Constitutional Democratic Party, Democratic Party for the People, and Communist Party of Japan. 

For each party, an amendment bill is a chance to publicize not only their ethical position on political fundraising but also their commitment to “cleaning up” the image and practice of domestic politics.  

Prime Minister Kishida Fumio says his main concern is preventing a recurrence of such scandals. He said the LDP amendment bill is adequate to restore public trust in the government. But the LDP’s junior coalition partner Komeito and the opposition are calling for the amendment to contain stricter rules. 

The ruling LDP and Komeito have butted heads over two points in the draft legislation and were unable to finalize the draft jointly. Komeito disagrees on setting 100,000 yen ($640) as the minimum amount of political funding that will require public disclosure, suggesting 50,000 yen ($320) as a new minimum. They also went one step further by requesting a detailed financial statement of where fundraising money is spent. The LDP disagrees. 

LDP lawmaker Katsume Yasushi explained to the special House of Representatives committee meeting that while transparency was fundamental to the amendment, they also need to consider the freedom of political activity and privacy.

A Komeito official stated it was in the best interests for the LDP to make amendments to the bill in light of its “overly optimistic” content and unrealistic deadline. Komeito chief Yamaguchi Natsuo urged Kishida to take leadership in building consensus within the LDP. 

The main opposition is bringing attention to what they say is the LDP’s lack of commitment to changing Japan’s money-driven political landscape. The populist, right-wing Japan Innovation Party hit back at the LDP’s bill, calling it a “desperately hopeless proposal.” Japan Innovation Party Executive Secretary Aoyagi Hitoshi pointed out the LDP’s failure to address existing problems over donations from corporations and organizations, which is the main trigger for reform.  

But not all main opposition parties are on the same page, since each party has submitted its own amendment bill. The Japan Innovation Party, Communist Party, and Constitutional Democratic Party (CDP) are calling for political donations from companies and organizations to be scrapped entirely. But opposition parties were unable to agree on the minimum amount for individual political funding to be disclosed, which is currently set at 200,000 yen (approximately $1200). 

Another point of contention is the introduction of a joint review system, which aims to make it easier for lawmakers to be punished for questionable financial reports. Currently, expenditure reports are the sole responsibility of the head of accounting. Under the LDP amendment bill, political expense reports should come with a “written confirmation.” If accountants are punished due to an insufficient explanation, so the legislator involved will be as well. Alternatively, the CDP and DPJ argue that the submission of political fundraising earnings ought to be the sole responsibility of the lawmaker themselves.

CDP lawmaker Honjo Satoshi took a dig at the LDP for attempting to maintain secrecy around political funding in spite of the scandal engulfing the party. “Banning corporate donations is the single greatest measure for restoring public address,” he said during Diet question time on May 23. Meanwhile, CDP lawmaker Yunoki Michiyoshi criticized the political deadlock, saying he didn’t see a way for parties to reach agreement by the time the Diet session wraps up on June 23.

The LDP is struggling to secure parliamentary approval for its bill. Since it does not retain a majority of seats in the House of Councillors, it is looking more likely that it will need to cooperate with the Komeito and make concessions in order to pass the bill in the current Diet session.