Hosokawa faces leadership crisis, possible downfall
Hosokawa faces leadership crisis, possible downfall
TOKYO (Reuter): Japanese Prime Minister Morihiro Hosokawa, hounded by scandal charges and crippled by dissent in the ruling camp, faces a leadership crisis that could force him eventually to resign or call elections, critics said yesterday.
Hosokawa, head of an eight-group governing coalition, was swept to power last August on promises to clean up the corrupt, money-driven political system.
Now, nearly eight months later, the former regional governor finds himself at the center of a row over two controversial loans and his links to the notorious Sagawa Kyubin trucking firm.
Revelations that Sagawa bribed politicians for favors helped bring down the long-ruling Liberal Democratic Party (LDP) last year and enabled Hosokawa to take power.
"The Hosokawa administration is as good as dead," said commentator Masaya Ito.
"The prime minister has failed miserably in trying to free himself of scandal allegations and this will continue to delay government decision-making, a situation that could force him to call elections earlier than expected," he said.
"Also he is seen as an ineffective leader and this could prompt his coalition partners to replace him with a popular politician like Foreign Minister Tsutomu Hata rather than risk early elections."
Japan started a new fiscal year yesterday without a state budget because of a stalemate in parliament over Hosokawa's refusal to provide more information on his controversial personal finances.
The LDP is holding the budget hostage in an attempt to force him to agree to bring before parliament two witnesses who could reveal more information on his past loans.
So far the prime minister has refused to consider summoning his former chief aide, who was in charge of Hosokawa's finances in 1982 when he borrowed 100 million yen (US$980,000) from Sagawa.
The LDP said the money was used as undeclared political donations to fund Hosokawa's successful bid for election as governor of Kumamoto, southern Japan, in February 1983.
Hosokawa has insisted the money was a loan to renovate an ancestral estate and to purchase a Tokyo condominium. He said he repaid the money with interest by 1991 but has been unable to produce receipts to prove his point.
The LDP is also demanding that a financial consultant appear in parliament for questioning about a loan his stock investment firm gave Hosokawa in 1986.
Opposition lawmakers claim Hosokawa used his position as a regional governor to take a loan under favorable conditions. The money was used to buy shares in a giant telephone firm, the sale of which enabled him to reap substantial profits.
Hosokawa has rejected summoning the consultant, arguing that the loan was taken out by his late father-in-law and therefore has nothing to do with him.
The latest disclosures are once again testing the unity of Hosokawa's fractious alliance of conservatives, centrists and Socialists, which has twice come to the brink of a break-up over policy differences.
"The situation is becoming very serious and it's time we began thinking about why this administration was formed in the first place," said Land Minister Kosuke Uehara, a senior figure in the Socialist Party.
"This affair is fueling public distrust of politics and we can't let it continue," he told reporters yesterday.