Japan Press Weekly

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2009 March 4 - 10 [POLITICS]

Political Funds Control Law is Full of Loopholes

Under Japan’s political funding control law, political organizations that are eligible to accept donations from corporations, trade unions and other organizations are limited to political parties (headquarters and branches) and political fund-managing organizations appointed by political parties. Fund-managing groups for individual politicians are not allowed to accept corporate donations.

A 1995 law prohibits corporations from donating money to individual politicians. The measure was in response to the increasing criticism of corporate donations as being the hotbed for political corruption. In 2000, corporations were prohibited from giving money to fund-managing organizations as well.

However, every time the law was amended, loopholes were left intact, and a number of scandals that involved politicians and their secretaries have been revealed.

One typical loophole is, like in the recent case, the use of dummy political action groups as a conduit for the transfer of money to politicians.

In the 2004 scandal of the Japan Dental Federation’s illegal donations, it was discovered that the federation’s donations to the National Political Association (the Liberal Democratic Party’s political action committee) included some donations that specified individual recipients.

Another method, which takes advantage of loopholes, allows corporate donations to be made in the guise of personal donations. For example, at electric power companies serving the public interest, most of the executives make donations to the National Political Association but their donations are organized in a manner that they can be regarded as corporate donations. The amounts of their donations are determined according to their rank in the company.

Other loopholes include: a political party branch presided by a politician as branch head accepts donations from corporations and organizations, and piecemeal sales of fundraiser tickets for a politician to people related to business corporations in order to avoid having to include in the annual political fund report the sales of ticket of 200,000 yen and over.

Business corporations persist in making donations by using these illegal methods. A former executive of a general contractor construction company explains why, “Corporations donate money because this directly leads to further profits. Either cash or help in election campaigns is the best way to influence politicians.”

Thus, donations from business corporations and organizations representing them are the source of political corruptions. These donations should be prohibited as the Japanese Communist Party has long been calling for.