Japan’s Kishida Cancels Year-End Parties on Funding Scandal

Emi Urabe and Isabel Reynolds
·3 min read
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(Bloomberg) -- Japanese Prime Minister Fumio Kishida said his party would suspend fundraising events over the year-end period as he scrambles to restore trust amid a financial scandal that could worsen already weak support for his government.

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“We must have a strong sense of crisis,” he told reporters Wednesday after conferring with executives in his ruling Liberal Democratic Party. “It’s an extremely important and heavy problem and we must work together to resolve it.”

Some members of Kishida’s long-ruling LDP have faced scrutiny in domestic media and questions from opposition lawmakers over whether they violated the law by not disclosing all funds raised by selling party tickets.

Failure to deal decisively with allegations that lawmakers may have concealed donations could further damage Kishida’s approval ratings and change the calculus when the party seeks a new leader, possibly as soon as next year.

LDP No. 2 Toshimitsu Motegi told reporters that party factions would refrain from holding parties and other functions over the year-end and New Year period and it was important to improve transparency.

Read: Japan’s Kishida Unveils Stimulus Package as Support Sags

LDP factions expect each of their members to sell a certain number of tickets to the fundraising events. The income from any tickets sold in excess of the target is returned to the individual lawmakers.

If more than ¥200,000 in party tickets is purchased by any one person or group, the amount must by law be registered as a donation. Prosecutors are looking into whether funds returned to parliament members have been recorded properly, according to NHK and other media.

Several members of the party’s biggest faction, previously led by the late former Prime Minister Shinzo Abe, may each have received pay-backs of as much as ¥10 million ($68,000) over five years, NHK reported Monday. Chief Cabinet Secretary Hirokazu Matsuno, previously the secretary general of the group, has repeatedly declined to comment on the matter. The faction headed by Toshihiro Nikai is facing similar allegations, NHK said.

No general election need be held until 2025 and, thanks to a fragmented opposition, the LDP remains unlikely to lose power. It may, however, opt to replace Kishida, whose term as party leader ends in September 2024.

The scandal could lessen the chances of a successor being chosen from among prominent members of the Abe faction and may even prompt the party to pick a lawmaker unaffiliated with any such group.

The latest in a series of scandals comes as voters fret over incomes failing to keep up with prices, and worry about looming tax hikes that would be needed to fund plans for the biggest defense expansion since World War II.

Though the pay-back amounts are relatively modest, suspicions that lawmakers may be pocketing political funds are likely to worsen ill-feeling among the public.

“However you look at it, it’s no good,” Masakazu Tokura, head of Japan’s big business lobby, Keidanren, told reporters Monday, when asked about the scandal. “All political groups should investigate this properly.”

--With assistance from Takashi Hirokawa and Yuki Hagiwara.

(Updates with fresh comments from Kishida from first paragraph.)

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