Rejection of Purge Basis for Ito’s Decision : Reportedly Asked Japan’s Scandal-Tainted Party Chiefs to Quit

Masayoshi Ito made it clear Friday that his decision to turn down his party’s offer to succeed Japanese Prime Minister Noboru Takeshita stemmed from rejection of his demand for a purge of all leaders of the party.

Asked about reports of his demand that all party leaders tainted by the Recruit influence and bribery scandal resign their seats in Parliament, Ito said: “Today, I won’t say anything about that. I have made my ideas known to (Takeshita and ruling party Secretary General Shintaro Abe) . . . and there was a discrepancy in my opinion from theirs.”

Ito indicated that he was prepared to resign his own seat, but said only, “Right now, here, I cannot comment.”

At a Thursday meeting with Takeshita, Ito was reported to have told the prime minister: “It is a terrible thing to say, but if I succeeded you, my administration would become one sustained by Takeshita, (former Prime Minister Yasuhiro) Nakasone, (former Finance Minister Kiichi) Miyazawa, and Abe, all of whom are linked to (the) Recruit (scandal). People would say Ito is the same (as the others).”

Leaders of Party

Those four leaders head the ruling Liberal Democratic Party’s major factions, which dispense political funds and party, Cabinet and Parliament posts to their followers in exchange for unquestioned loyalty and support. All four received favors from Recruit Co., an information-real estate conglomerate.

Ito demanded that the factions be disbanded and leadership turned over to a younger generation.

He also demanded the resignation from Parliament of Michio Watanabe, who, as chairman of the ruling party’s Policy Board, ranks among the top leadership. He, too, received favors from Recruit Co.

Ito, chairman of the Liberal Democratic Party’s executive board, informed party Secretary General Abe of his decision a day after he presented his purge demand to Takeshita.

Willing to Resign

The prime minister, who received more than $1.5 million in stock profits, political contributions and a loan from Recruit, told Ito that he would be willing to resign his own seat in Parliament. But Takeshita said that asking the others to quit, even if only until the next election for the powerful lower house of Parliament, was impossible.

Ito has said that “it’s not enough to change the cover of the book. The contents must be changed, too. A revolution in consciousness is needed.”

Ryutaro Hashimoto, the Liberal Democrats’ deputy secretary general, told reporters that Ito cited his health and the party’s “inability to reach a conclusion to the Recruit scandal” as reasons for rejecting the offer. He said the party’s top executives, including Ito, would meet again today.

Barring unlikely announcements by Takeshita, Nakasone, Miyazawa, Abe and Watanabe of their intent to give up their seats in Parliament, no change was expected in Ito’s decision.

In Ill Health

Ever since Takeshita announced April 25 that he would resign after the fiscal 1989 budget is enacted to assume responsibility for the scandal, Ito, 75, who suffers from diabetes, has said he did not want to become Japan’s top leader.

But Thursday night he told Takeshita that if he were to accept the post despite his health concerns, he would insist on guarantees that the Recruit scandal be “concluded” by his proposed purge and other reforms.

His rejection of the party’s and the nation’s highest post threw the ruling party into what one political commentator called “anarchy,” facing an election for the upper house of Parliament in July or August with no obvious leader to succeed Takeshita.

Although his reputation as a “Mr. Clean” had won him nearly unanimous backing to succeed Takeshita as premier, Ito, a former foreign minister, is a second-echelon politician with no personal following--or power--of his own.

Third Echelon of Leaders

His departure from the picture left the party the unwelcome prospect of having to dip into a third echelon of leaders.

The party’s choices include turning to aging leaders with little remaining influence or picking a new leader from younger politicians. Two of the younger group, however, also have been tainted by the Recruit scandal and all of them are a generation younger than the party’s strongmen. Like the aging statesmen, they exercise no political power in their own right.

Masaharu Gotoda, 74, chairman of a ruling party reform committee, whose name was mentioned as a dark horse when Takeshita announced his intention to resign, emerged again as a possibility among the older group.

Also named as a man who has no enemies--but also no influence--was Michita Sakata, 72, a former Speaker of the House of Representatives.

If the party loses its majority in the House of Councilors election, it could be forced to form a coalition with one or more of Japan’s four opposition parties. Except for the budget and treaties, bills rejected by the upper house can be enacted only by a two-thirds vote in the lower house, where the Liberal Democrats now hold 58% of the seats.

The scandal broke into the open last July with disclosures that Recruit Co. handed over unlisted stocks in one of its subsidiaries, Recruit Cosmos Co., at cut-rate prices to 168 selected politicians, businessmen, bureaucrats and journalists. When the stocks were put on the market, their price shot up, allowing the privileged owners to reap windfall tax-exempt profits.

Unpopular Tax

Passage of a 3% consumption tax, which went into effect April 1, in the midst of the scandal, exacerbated public disapproval by creating an image of politicians stuffing their own pockets while imposing a new burden on taxpayers. An intensive mass media campaign, moreover, has lumped all links with Recruit Co., including legal political contributions, into the scandal.

Twelve businessmen and two former bureaucrats have been arrested and indicted for bribery and other charges.