Ex-Executive Is Sentenced in Japan’s Recruit Scandal

From Reuters

A top Japanese businessman received a suspended jail sentence and heavy fine Tuesday for his role in the 1988 Recruit corruption scandal, which brought down the government and sparked fierce debate about political fund raising.

But political analysts said the verdict will have little impact in reforming the nation’s money-oriented political system.

Hisashi Shinto, former chairman of telecommunications giant Nippon Telegraph & Telephone Corp., was handed a two-year jail term suspended for three years and fined $170,000 by presiding judge Takeshi Toyota for his part in the Recruit shares-for-favors scandal.

Shinto, 80, was found guilty of illegally receiving 10,000 unlisted shares of a subsidiary of communications conglomerate Recruit Co. He made a handsome personal profit when the shares were listed.


In return, Shinto made Nippon Telegraph services available to Recruit.

The 1988 scandal, in which Recruit was found to have distributed more than $11 million to politicians, business leaders and ministry officials--in the form of unlisted shares, cash contributions and purchases of tickets for fund-raising parties--led to the resignation of Prime Minister Noboru Takeshita and several of his cabinet members.

Neither Takeshita nor another former prime minister, Yasuhiro Nakasone, were charged, although Nakasone admitted that his aides received 29,000 shares, and Takeshita too said his secretaries had received large amount of stocks and other favors.

Eleven other people, including two politicians, are still on trial in the affair.


“The verdict (against Shinto) indicates that tough penalties are likely to be brought against other defendants,” said political commentator Makoto Sakata.

But Sakata, who specializes in ties between Japan’s companies and politicians, said the overall political scene and politicians will never change.

The Recruit affair overshadowed the 1976 Lockheed scandal, in which politicians were suspected of taking bribes in return for awarding lucrative contracts to the U.S. aircraft maker.