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For two straight years Hiroshi Kamiwaki, a bandanna-wearing law professor and a veteran campaigner, spent his New Year’s Day digging through online filings to find evidence of undocumented money raised on behalf of Japan’s governing Liberal Democratic party.
Those efforts have finally paid off. An investigation by prosecutors, sparked by more than 20 criminal complaints filed by Kamiwaki, has exposed a slush-fund scandal that threatens to topple Prime Minister Fumio Kishida and weaken the powerful political groups that have shaped Japan’s postwar policies.
The Tokyo District Public Prosecutors Office has charged 10 people, including the accounting heads of three LDP political factions who were accused of falsely reporting a total of about ¥970mn ($6.6mn) in funds between 2018 and 2022.
“The process was so painful that I felt like I was going to break down, but the amount of unreported funds I looked into is just the tip of the iceberg,” said Kamiwaki, who teaches at Kobe Gakuin University and leads a citizens’ group that monitors political funding, in an interview. “People may feel differently, but I want to say it’s not over yet and I’m not going to let it end here.”
Kamiwaki said he planned to challenge prosecutors’ decision not to charge any senior party officials belonging to the LDP’s biggest faction, which was formerly led by the late prime minister Shinzo Abe.
This year he has also filed criminal complaints on the use of slush funds by LDP factions, which he hopes will lead prosecutors to reopen their investigation.
The drumbeat of cases has kept the pressure on Kishida, who was forced to sack four cabinet members last year. While his approval rating has bounced back from a record low of 17 per cent in a Jiji Press poll in mid-December, it continues to languish below 30 per cent.
The scandal has also put intense pressure on the powerful political factions within the LDP that have been central to determining who leads the party and have exerted a heavy influence on Japanese policymaking for decades.
The LDP has been in power for most of the country’s postwar history, meaning that jockeying for power takes place within the party. Its 375 parliamentarians had been split into six factions, although four — including the one formerly led by Kishida — have announced their plans to disband.
Analysts said it was unclear whether the Kishida administration could survive deep public scepticism about whether he would keep his promises of bold political change.
During a policy speech on Tuesday, the prime minister apologised for the erosion of public confidence in the ruling party.
“The LDP must change,” Kishida said. “There is no end to our political reform.”
Money scandals are not new to the LDP, and Japanese MPs have often been brought down by misreporting their political funding, even when the sums involved are relatively small.
With the help of a journalist from the Japanese Communist party newspaper, Kamiwaki was able to spot discrepancies between the reporting of money raised by political organisations linked to LDP politicians through fundraising parties and the revenue that the groups declared to authorities.
Combing through the funding reports, which are published online, is complex work because MPs raise cash through numerous political organisations in addition to receiving a range of subsidies and support from the government.
Following widespread political scandals in the late 1980s and early 1990s, corporate donations to individual parliamentarians were banned. To compensate, political factions raise cash through fundraising parties where tickets are usually sold for ¥200,000, mostly to companies.
The latest scandal has exposed a long-running system in which factions set quotas for MPs to sell the fundraiser tickets and then return some of the money raised to those who exceeded their quota. That extra cash is alleged to have been pooled into secret slush funds. Pocketing the difference is not itself illegal, but failing to properly report the payments is punishable by up to five years in prison or a maximum fine of ¥1mn.
While MPs say the fundraising money is needed for election and personnel costs, it remains unclear whether any of the unreported cash was used for their personal benefit — a question outside the scope of the prosecutors’ investigation into misreported funds.
Building a case against MPs can also be challenging. Only three parliamentarians were charged in the recent investigation, with prosecutors saying it was difficult to prove that politicians colluded with the accounting heads of factions in misreporting the funds.
In an effort to revive his popularity, Kishida has pledged a big overhaul of factional politics. The ruling party has announced preliminary plans to ban fundraising parties and to introduce external audits for its financial reports as well as tougher penalties for MPs.
However critics say the reforms do not go far enough, and Kishida’s planned dissolution of the LDP’s powerful factions has already faltered under opposition from other faction leaders, resulting in a compromise solution that will allow members to maintain so-called policy groups.
“The public can see through the political theatre,” said Takao Toshikawa, editor-in-chief of political newsletter Insideline.
The strength of public disapproval has left Kishida with few options. According to Toshikawa, the prime minister can either trudge along until his term as LDP leader expires in September and then resign, or call a snap election in June after the end of the current parliamentary session. If the LDP’s chances of winning the election fall sharply, he may be forced to step down even earlier.
Kamiwaki said Kishida’s planned changes still needed to address underlying issues with the wide use of corporate donations and the selection of LDP leaders from the factions.
“The slush funds will not go away by increasing transparency,” Kamiwaki said. “You need to do political reform from scratch.”
