Japan to Fulfill Old Resolution

Come Jan. 1, Japanese politicians will not be allowed to accept direct donations from the corporations that have bankrolled politics here for decades.

Fearful of voters’ wrath, Japan’s ruling Liberal Democratic Party, or LDP, has thought better about reneging on a 5-year-old promise to enact campaign financing reform. Overruling the wails from party members, Prime Minister Keizo Obuchi last week pledged to push through parliament a law that will prohibit businesses or organizations from contributing directly to politicians beginning the first of the year.

But though the ban--assured of passage with Obuchi’s pledge--appears sweeping and is certainly symbolic, analysts said it represents only a small step toward achieving the accountability that Japanese reformers believe is necessary.

The campaign financing laws are riddled with loopholes, disclosure rules are weak, and enforcement mechanisms are so toothless that politicians in need of money will be able to rake in undeclared yen without undue risk of exposure, analysts said.

“I don’t believe this will reduce the level of corruption,” said Tomoaki Iwai, professor of political science at Tokiwa University in Ibaraki prefecture. “So-called black money or dirty money never comes out in public and never has.”

Independent political critic Taro Yayama agreed: “No one runs for election without a stash of hidden funds.”

For the average Liberal Democrat, corporate donations make up 42% of all political funds, the Japan Times newspaper reported. The forthcoming law is unlikely to diminish the dependence of Japanese politics on businesses’ cash.

Although the new law will ban direct donations to lawmakers, each corporation will be able to give a total of $961,000 a year to political parties. And the law will allow contributions to be accepted at any of the parties’ 8,500 branch offices, which are headed by individual lawmakers.

However, the funds technically will belong to the party, and branches probably will have to hand over a percentage of the largess to the national party headquarters, Yayama said.

Businesses that want to make their opinions count will be able to buy about $1,900 worth of tickets to politicians’ fund-raising events without declaring the money a contribution. Or, if they are intent on skirting the law, they could make the donations in the names of individuals--even using the names of homeless people as cover, Iwai said.

Still, getting this far has taken more than a decade. The drive to reform Japan’s scandal-plagued system began in earnest in 1989, when a financial scandal brought down Prime Minister Noboru Takeshita. It gained momentum in 1993, when powerful lawmaker Shin Kanemaru was caught with $50 million worth of gold bars, cash and securities in his home and office--an incident that helped prompt voters to briefly toss the LDP out of power for the first time in 38 years.

The LDP agreed to the ban on corporate donations in 1994, while it was in political exile, in a deal between then-Prime Minister Morihiro Hosokawa and Yohei Kono, who was then president of the LDP and now is foreign minister. To soften the blow, the two sides agreed to postpone the day of reckoning until 2000.

Now, the LDP is back in power. And thanks to a three-party coalition forged by Obuchi, it is in its strongest position in years. So it was perhaps not surprising that an LDP committee decided last month that it would not proceed with the ban.

Retribution was swift. The Japanese media delivered a fierce tongue-lashing, and the opposition leaped at the chance to denounce the LDP for seeking to perpetuate political corruption. Obuchi’s poll ratings fell, forcing the LDP to conclude that public tolerance for the political money culture is a thing of the past.

“Japanese political and political financing reforms have a long way to go, but the only way is to systematically close each and every loophole,” said Norihiko Narita, a political scientist at Surugadai University in Saitama prefecture. “I can’t say it’s clean now, but we’ve taken a step.”