Japan’s Slush Fund Scandal Unlikely To Take LDP Down With PM Kishida – OpEd

By EAF editors

Public discontent with Japanese Prime Minister Fumio Kishida and his ruling Liberal Democratic Party (LDP) is palpable over a slush fund scandal involving at least 970 million yen (US$6.5 million) in unreported income from political fundraising parties held by LDP factions.

The Kishida cabinet’s approval rating was already in the so-called danger zone, below 30 per cent, and the slush fund scandal has pushed it below 20 per cent since the end of last year. What riles public anger about the scandal goes beyond the relatively paltry sum of money involved and encompasses the perceived entitlement of the political class amid society’s expectation that everyone should adhere to rules and laws, regardless of their status or position.

While Kishida’s position is increasingly untenable, the LDP has survived worse. It has held power for nearly 70 years since its formation in 1955, with only two exceptions  — 11 months between 1993 and 1994 and just over three years between 2009 and 2012. Scandals and the uncovering of corruption have taken down prime ministers before, but the party itself has always found a way to bounce back. Japan’s opposition parties, despite their ability to inflict damage on the LDP and perpetuate the politics of crisis, still appear incapable of positioning themselves as a credible alternative government.

Japan, it’s said, is a one-and-a-half party state.

In 1974, Prime Minister Kakuei Tanaka was forced to resign after his pork-barrel corruption through theEtsuzankai (the Niigata Mountain Association) was brought to light. In 1976, Tanaka was arrested after he was found to have also accepted bribes while prime minister (1972-1974) from US aerospace company Lockheed to secure contracts for the sale of its aircraft to All Nippon Airways.

In 1989, Noboru Takeshita was forced to resign as prime minister due to his involvement in the Recruit scandal, in which human resources and classified jobs company Recruit distributed stock market profits to influential politicians and businesspeople.

In 1992, Sagawa Kyubin, a major delivery service company, was found to have made large unreported donations to high-ranking politicians, most notably to LDP power broker Shin Kanemaru, who was forced to resign. Kanemaru was subsequently arrested after police found millions of dollars of bearer bonds, stocks, cash, and gold bars in his home.

The electoral and administrative reforms that were passed in the 1990s when the LDP lost power for the first time, ‘produced a significant reduction in corruption’. While there was an increase in the number of scandals after the reforms due to enhanced transparency, they were nothing like ‘the magnitude of the Lockheed, Recruit, and Sagawa scandals’.

As Ben Ascione explains in this week’s lead article, Prime Minister Kishida is looking increasingly ‘unlikely to survive beyond the end of his term as LDP leader in September 2024’.

None of the responses to the slush funds scandal have been sufficient to restore public trust. Kishida first sought to pin the blame on the Abe faction, which accrued the lion’s share of the unreported income. He reshuffled his cabinet in mid-December 2023 ‘replacing Abe faction members in the cabinet and in state minister and parliamentary vice-minister roles’.

In January, Kishida established a political reform taskforce, but it failed to agree on key measures. Kishida then ‘announced that his own Kochikai faction would be disbanded and left it up to other factions to decide their own fate. The Abe and Nikai factions followed suit and disbanded, while the Aso and Motegi factions continued to resist pressure to disband and declared their intention to continue as “policy groups”’.

‘Kishida’, Ascione explains, ‘appears in an impossible position, trying to avoid alienating the LDP’s old guard who helped install him as prime minister while responding to public demands for substantial political reform’, such as a ‘guilty-by-association’ law for MPs whose secretaries or accountants are found to have violated political funding laws.

The ‘race to replace Kishida is now gathering pace behind closed doors’ in the lead up to the September 2024 LDP leadership election and the next general election due before the end of October 2025.

Former prime minister Yoshihide Suga is thought ‘to be backing reform-minded candidates Digital Economy Minister Taro Kono, former Defence Minister Shigeru Ishiba, and former Environment Minister Shinjiro Koizumi to cast off the LDP’s negative public image’. Former prime minister Taro Aso, who is resistant to change in the party set up, is said to favour ‘Foreign Minister Yoko Kamikawa and [LDP Secretary-General Toshimitsu] Motegi’.

As Ascione concludes, ‘whether factions are resurrected under a new banner or effectively abolished – and the seriousness with which political funding reforms are pursued – will very much depend on who wins the race to lead the post-Kishida administration’.

Whoever succeeds Kishida will have a tough task ahead. Unless they can both unite a fractious LDP and restore public trust, Japanese politics will be looking at a new era of revolving door leadership and uncertainty.

• About the author: The EAF Editorial Board is located in the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University.
• Source: This article was published by East Asia Forum