Nakasone Admits He Got Windfall Profits From Recruit Co., Denies Wrongdoing

Former Prime Minister Yasuhiro Nakasone admitted under oath Thursday that he and three assistants received almost $800,000 from a business firm involved in an influence-buying scandal that has crippled Japanese politics.

Under questioning in Parliament, Nakasone apologized for the fact that he and seven of his Cabinet ministers received windfall profits from stock offered them preferentially by Recruit Co., an information and real estate conglomerate.

But he denied any wrongdoing and said he has no intention of resigning the seat he has held for 42 years in the lower house of Parliament.

It was the first time in four decades that a former prime minister had been subjected to parliamentary interrogation under the threat of imprisonment for perjury. It was also Nakasone’s first public acknowledgment that he accepted political donations from Recruit, but he said the contributions were reported according to law.

Opposition leaders maintain that Nakasone, who was prime minister from 1982 to 1987, played a central role in the scandal, which has shaken public confidence in the government, and they demand that he resign from Parliament.

Nakasone’s testimony, before the House Budget Committee, lasted for 2 hours and 40 minutes and was marred by shouts of “Lies! Lies!” from opposition members. Two of his six interrogators also accused him of lying.

At one point, an opposition representative shouted, “We’ve had enough excuses!”

Nakasone responded, “I’m not giving excuses.”

Live Broadcast Coverage

The session was carried live by radio stations. Television stations, under a ban on photography, carried the audio portion while showing still photos.

Nakasone said his aides received tax-exempt stock profits of $448,611. And he disclosed, for the first time, that the Recruit Co. had given him $321,391 in political funds from 1982 to 1988 and had bought $21,075 in tickets to a fund-raising party last year.

His aides, he said, used most of their “unexpected profits” for “social entertaining . . . to carry out their jobs more smoothly.”

He insisted that the aides’ transactions were their own “personal economic actions” and were not related to his political financial activity.

Nakasone denied that Hiromasa Ezoe, founder and former president of the Recruit Co., who has been accused of masterminding the influence-buying operation, had served as one of his “brains” while he was in office.

“Among my friends, he was one with whom I was not friendly,” Nakasone said.

Ezoe, along with 11 other businessmen and two former bureaucrats, has been arrested and indicted on bribery and other charges. Two politicians, including Takao Fujinami, who was Nakasone’s chief Cabinet secretary, have also been indicted on charges of accepting Recruit bribes.

Prosecutors have indicated that they will file no additional bribery charges, but investigations into possible violations of a Political Funds Control Law are continuing. Offenders are subject to imprisonment for up to five years.

Nakasone denied repeatedly that he was involved in efforts to protect the interests of a Recruit job-placement magazine or in the purchase of two American supercomputers that were resold to Recruit by Nippon Telegraph and Telephone Co. Ezoe and a former NTT president have been indicted for bribery in the re-sale arrangements.

Interrogators accused Nakasone of informing President Ronald Reagan in 1987 of NTT plans to buy another American supercomputer that it later resold to Recruit. But Nakasone insisted that it was NTT’s purchase of a supercomputer the phone company kept for itself that he had mentioned. The purchase had been announced a month before the two leaders met.

“I wanted to inform Reagan of things favorable to Japan,” Nakasone testified. “(Reagan) knows issues in broad terms, but he does not know small details. . . . His mind was filled with big issues of the world, and he knew absolutely nothing about supercomputers. I knew that because I had met him many times.”

Opposition leaders said Nakasone’s testimony was “filled with perjury,” and they said they will demand that he be called to testify before the upper house as well.

Thursday’s appearance came exactly one month after Prime Minister Noboru Takeshita, accepting responsibility for the scandal, announced his intention of resigning after the fiscal 1989 budget is approved. Takeshita acknowledged that he had received $1.4 million in stock profits, contributions and loans from Recruit.

Although the budget will take effect at midnight Saturday, the ruling Liberal Democratic Party’s search for a successor has failed to produce a candidate. On Thursday, the search was turned over to Takeshita.

Takeshita met with Masayoshi Ito, chairman of the party’s Executive Board, who two weeks ago turned down an offer to become prime minister. Takeshita was reported to have suggested four possible choices: Foreign Minister Sosuke Uno, 66, Finance Minister Tatsuo Murayama, 74, former Prime Minister Takeo Fukuda, 84, and a former Speaker of the lower house, Michita Sakata, 72.

Party leaders said they have decided to extend by 25 days the current session of Parliament, which is scheduled to end Sunday. But opposition parties said they will oppose any such attempt and will submit a motion of no-confidence in the Speaker of the house.