Fake political reforms open up loopholes

Koji Morioka, Professor, Kansai University, The Asahi Shimbun, Tokyo

Lawmakers have carried over to the next Diet session a controversial revision in the law regulating political fund raising designed to increase donations not subject to the disclosure requirement. The bill would newly impose a 1.5-million-yen cap on the annual amount a business or other organization can donate to a political party chapter while raising the maximum of donations a party can receive without disclosing them to 240,000 yen per year from the current 50,000 yen.

I am involved in a shareholder lawsuit filed to seek compensation from executives of the construction companies that were found to have made an illegal campaign donation to the Nagasaki prefectural chapter of the Liberal Democratic Party for a gubernatorial election. The scandal strongly underscored the need to tightly restrict political donations from contractors for public works, but the bill doesn't contain a provision for such a restriction.

Few companies are actually willing to make political donations of more than 1.5 million yen per year in the current economic hard times. So the real aim of this legislative initiative is apparently to hide more donations from the public eye. This is a bill that undermines political reforms and should be scrapped.

Disturbingly, the bill is not the only recent attempt to roll back the reforms to root out political corruption. In 1993, Keidanren, the Japan Federation of Economic Organizations, stopped collecting donations from its member companies for parties after doing some soul searching over a series of sordid tales about big businesses' corrupt ties with politicians including the Recruit stock-for-favor scandal and pay-off scandals involving large construction firms.

Ten years since then, Nippon Keidanren, the Japan Business Federation (created by merging the old Keidanren with the Japan Federation of Employers' Associations), is reviving the practice. It has set up a special committee to evaluate the policies and performances of political parties and encourage companies to make donations according to the target figures set by the panel. The business community is setting out to control politics through money.

In an interview with The Asahi Shimbun (the Herald Tribune/ Asahi Aug. 28 issue), Nippon Keidanren Chairman Hiroshi Okuda said the organization will only set "guidelines for voluntary donations by companies," denying any intention to start acting as an conduit of money for parties again.

But what company can refuse to put up money when the powerful business organization presents such guidelines? What Nippon Keidanren is trying to do is little different from the old Keidanren's once-discarded practice of funneling corporate contributions into political parties.

In addition, the body plans to decide which party should receive money through performance evaluation. Such a system is likely to breed collusion between businesses and politicians, making political corruption even worse.

In stark contrast to the business and political circles, the court recently handed down a series of tough rulings on bribery cases involving politicians. Former Construction Minister Kishiro Nakamura lost his Lower House seat and was imprisoned after the Supreme Court in January dismissed his final appeal against a lower court ruling giving him an 18-month prison term for accepting a bribe from a construction company.

In a separate case, the Tokyo District Court in May sentenced former Labor Minister Masakuni Murakami to two years and two months in prison for taking bribes from KSD, an organization providing industrial accident insurance to small businesses.

In another notable court decision, the Fukui District Court, ruling on a suit filed by the Shareholder Ombudsman in February, declared political donations by financially troubled Kumagai Gumi Co. to be illegal.

Corporate political donations, the district court argued, have far greater influence over parties than individuals' contributions because of companies' huge economic power. So, massive donations to political parties by corporations could virtually infringe on people's political rights.

When corporate donations concentrate on specific parties, the court said, they are bound to wield decisive influence over the government's policies, providing a prolific breeding ground for harmful interlocking between the political and business communities, which produced so many corruption scandals in the past.

This warning, while making no attempt to reconsider the 1970 Supreme Court ruling that supported corporate donations, addresses some serious problems with Japanese politics and should be taken seriously. Both politicians and business leaders should ruminate on its implications.

Ideally, political donations by corporations and other organizations should be banned altogether, leaving only individuals to make contributions to parties.

If that is unlikely to become reality anytime soon, there are steps that can be taken in the mean time. Companies and organizations should try to make their donations as transparent as possible.

Many large companies describe in detail their activities for social benefits in their Web sites. Why don't they also disclose information about their political donations, such as the names of the parties they donated money to and the amount given to them?

We have seen too many fake political reforms that leave a lot of loopholes to be exploited.