Reformer Hosokawa falls to doubts over own record

By Sebastian Moffett

TOKYO (Reuter): Morihiro Hosokawa shot to power by campaigning against corruption in Japanese politics, but his downfall was due to an inability to shake off allegations that he too had participated in shady deals.

Hosokawa's resignation as prime minister yesterday followed four weeks of parliamentary paralysis as the opposition Liberal Democrats (LDP) held the national budget hostage to push demands that he come clean over deals he made in the 1980s.

Instead of getting on with the job of pushing through the budget, he has spent much of the past few weeks parrying queries over his personal finances from tenacious opposition lawmakers.

Hosokawa insisted 100 million yen (US$980,000) he took in 1982 from Sagawa Kyubin, a trucking company involved in a 1992-93 money-and-mobsters payoff scandal, was a loan he had repaid by 1991.

Despite his denials, the LDP said it suspected the money was used illicitly to fund his successful 1983 bid for election as governor of Kumamoto, in southern Japan.

It demanded he produce receipts proving he repaid the money and that he allow a former financial aide to testify in parliament on the affair.

Hosokawa also came under attack for a 1986-1987 transaction in shares of Nippon Telegraph and Telephone Corp (NTT) that he claimed was conducted by his late father-in-law.

The problem snowballed to such an extent that when he was reported a few days ago to have said in jest -- and over drinks -- that he wanted to resign, many people thought that despite his denials this was actually what he wanted to do.

By Wednesday, the "joke" was headline news in most of Japan's top dailies and the main item on television talk shows.

The circumstances of Hosokawa's resignation come as a supreme irony for a man who made his name in national politics by pledging to clean it up.

After serving as Kumamoto governor until 1990, making a name for himself as a maverick planner and reformer, he quit the LDP and in 1992 formed the Japan New Party.

He said he wanted to reform a political system that, with the LDP monopolizing national power for four decades, had developed into a hot-bed of money politics.

At first the political establishment gave him a cool reception, but Hosokawa was able to capitalize on his pedigree as scion of a renowned samurai family, his reforming record in local politics and refreshingly clean, youthful image. Born in 1938, he was a generation younger than the LDP leadership.

His message won popular support and contributed to the LDP's losing a no-confidence motion last year after it reneged on promises to pass bills outlawing political corruption.

In subsequent elections, his party came from nowhere to wrest 53 seats in the 511-member Lower House. The LDP lost its majority, and Hosokawa -- with no experience of national government -- was chosen in August to lead an awkward coalition of conservatives, socialists and Buddhists.

The electorate appeared to sympathize with his struggle to pass electoral reforms in the teeth of LDP spoiling and resistance from coalition elements to make any concessions. For a time, he basked in honeymoon poll ratings of around 70 percent, a record for post-war Japan.

Eventually, after being forced to compromise with the LDP, he passed a package of watered-down reforms in January and seemed to be strengthening his grip on power.

Under opposition attack for his Sagawa dealings, however, Hosokawa's ratings began to melt away. Latest polls gave him less than 50 percent support, with four out of five Japanese doubting his account of the financial dealings.

As troubles piled up, Hosokawa had to spend much of his time scrapping in the domestic political arena. But he also drew attention abroad for a style that diverged from Japan's previous foreign policy.

The LDP had established a pattern of backing down in battles with the United States over trade and other thorny bilateral issues.

Hosokawa had established an early friendship with U.S. President Bill Clinton, but relations soured in February when the two men failed to agree on a deal over reducing Japan's enormous trade surplus with the United States.

In Asia he will be remembered as the first Japanese leader to make clear, unambiguous apologies for his nation's expansionist military past.

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