Political Corruption and Scandals in Japan 9781501715679

Table of contents :
Contents
Figures and Tables
A Note on Proper Names and Transliteration
List of Abbreviations
Introduction. Political Corruption and Scandals in Postwar Japan
1. Understanding Corruption in Japanese Politics
2. Scandals in Early Postwar Japan, 1948–1978
3. Scandals and Reform, 1979–2001
4. Scandals and Reform, 2002–2016
5. Bureaucratic Corruption and Political Scandals
6. Sex and Campaign Finance Scandals
7. Election Law Violations as Political Corruption
Conclusion. The Evolution of Political Corruption and Scandals
Acknowledgments
Appendixes
References
Index

Citation preview

PO­L ITI­C AL CORRUPTION AND SCANDALS IN JAPAN

PO­L ITI­CAL CORRUPTION AND SCANDALS IN JAPAN Matthew M. Carlson and Steven R. Reed

CORNELL UNIVERSITY PRESS  ITHACA AND LONDON

Cornell University Press gratefully acknowledges receipt of a subvention from the Department of Po­liti­cal Science, University of Vermont, which aided in the publication of this book. Copyright © 2018 by Cornell University All rights reserved. Except for brief quotations in a review, this book, or parts thereof, must not be reproduced in any form without permission in writing from the publisher. For information, address Cornell University Press, Sage House, 512 East State Street, Ithaca, New York 14850. First published 2018 by Cornell University Press Printed in the United States of Amer­i­ca Library of Congress Cataloging-­in-­Publication Data Names: Carlson, Matthew M., 1972–­author. | Reed, Steven R., 1947–­author. Title: Po­liti­cal corruption and scandals in Japan / Matthew M. Carlson and  Steven R. Reed. Description: Ithaca : Cornell University Press, 2018. | Includes bibliographical references and index. Identifiers: LCCN 2017025014 (print) | LCCN 2017031399 (ebook) | ISBN 9781501715662 (epub/mobi) | ISBN 9781501715679 (pdf) | ISBN 9781501715655 (cloth : alk. paper) Subjects: LCSH: Po­liti­cal corruption—­Japan—­History. |  Scandals—­Japan—­ History. | Japan—­Politics and government—1945–­ Classification: LCC JQ1629.C6 (ebook) | LCC JQ1629.C6 C37 2018 (print) | DDC  364.1/3230952—­dc23 LC rec­ord available at https://­lccn​.­loc​.­gov​/­2017025014 Cornell University Press strives to use environmentally responsible suppliers and materials to the fullest extent pos­si­ble in the publishing of its books. Such materials include vegetable-­based, low-­VOC inks and acid-­free papers that are recycled, totally chlorine-­free, or partly composed of nonwood fibers. For further information, visit our website at cornellpress​.­cornell​.­edu. Cover: National Diet Building (Kokkaigijidou), Tokyo. Photograph by Tanaka Nobuaki.

Contents

List of Figures and ­Tables List of Abbreviations Introduction. Po­liti­cal Corruption and Scandals in Postwar Japan

vii ix 1

1.

Understanding Corruption in Japa­nese Politics

11

2.

Scandals in Early Postwar Japan, 1948–1978

25

3.

Scandals and Reform, 1979–2001

45

4.

Scandals and Reform, 2002–2016

68

5.

Bureaucratic Corruption and Po­liti­cal Scandals

92

6.

Sex and Campaign Finance Scandals

113

7.

Election Law Violations as Po­liti­cal Corruption

131

Conclusion. The Evolution of Po­liti­cal Corruption and Scandals

151

Acknowl­edgments Appendixes A. Yen Exchange Rate per 1 U.S. Dollar, 1950–2016 B. Prime Ministers of Japan ­after 1945 C. Asahi’s Investigation into Election Violations in the 1960s References Index

165 167 167 169 171 175 185

Figures and ­Tables

Figures 7.1 Number of election law violators in Japan’s lower h ­ ouse, 1946–2014  138 7.2 Number of election law violators in the national and prefectural districts, 1950–1980 145

­Tables 2.1 Bribery prosecutions in Japan’s parliament ­after 1948  33 3.1 Number of politicians linked to major corruption scandals  47 7.1 Japan’s electoral systems from more to less candidate-­centered  137

vii

A Note on Proper Names and Transliteration

We pres­ent the names for all Japa­nese politicians and bureaucrats as ­family name followed by given name. Japa­nese words are spelled with elongated sounds as would be necessary to produce the correct characters on a Japa­nese word pro­ cessor. We made a few exceptions for common En­glish renderings (i.e., Tokyo, Hokkaido, Hyogo, Kobe, and Komeito) and names of some Japa­nese scholars.

List of Abbreviations

ANA CIA CPI DPJ DSP ESB EU JCP JDA JDF JIP JPS JSP LDP MMD MMM NAIIC NFP NHK NISA NLC NPA NTT PR SIA SMD SNTV SOP TEPCO

All Nippon Airways Central Intelligence Agency Corruption Perceptions Index Demo­cratic Party of Japan Demo­cratic Socialist Party Economic Stabilization Board Eu­ro­pean Union Japan Communist Party Japan Dental Association Japan Dentists Federation Japan Innovation Party Japan Pension Ser­v ice Japan Socialist Party Liberal Demo­cratic Party multimember ­district mixed-­member majoritarian Nuclear Accident In­de­pen­dent Investigation Commission New Frontier Party Nippon Housou Kyoukai (Japan Broadcasting Corporation) Nuclear and Industrial Safety Agency New Liberal Club National Police Agency Nippon Telegraph and Telephone proportional repre­sen­ta­tion Social Insurance Agency single-­member district single nontransferable vote standard operating procedure Tokyo Electric Power Com­pany

ix

PO­L ITI­C AL CORRUPTION AND SCANDALS IN JAPAN

Introduction

PO­L ITI­C AL CORRUPTION AND SCANDALS IN POSTWAR JAPAN Though po­liti­cal corruption plagues many nation-­states, most observers believe that an especially virulent form of the disease infects Japan, and that the Yamato [Japanese] strain of the malady is especially resistant to treatment. David T. Johnson, “Why the Wicked Sleep”

Japan has experienced serious prob­lems with po­liti­cal corruption. Major corruption scandals impacted national elections in 1949, 1955, 1967, 1976, 1990, and 1993. To mention only the most serious cases, in 1976 Prime Minister Tanaka Kakuei was implicated in a bribery scandal that involved the purchase of airplanes built by Lockheed, the American aerospace com­pany. Tanaka was paid off for his efforts in making the deal in the form of several cash-­stuffed cardboard boxes delivered to his private residence. He resigned as prime minister and was ­later convicted. In 1989 Recruit, a corporation originally based on a magazine for job advertisements, distributed stock market profits to influential ­people to purchase ­future access to the policymaking pro­cess. A ­ fter it became known that Prime Minister Takeshita Noboru accepted stocks, donations, and huge loans, he also resigned from office. Fi­nally, in 1992 Japan’s largest parcel delivery com­pany, Sagawa Kyuubin, donated large sums to top-­ranking politicians, most notably to power broker Kanemaru Shin. Investigators uncovered a hoard of bank bonds, stock certificates, cash, and 220 pounds of gold bars in Kanemaru’s homes and offices. The po­liti­cal corruption that surfaced during this era was clearly serious, but ­there are reasons to believe that it was much worse than it looked. None of the following institutions—­police, prosecutors, national press, or opposition parties—­were effective in curbing corruption. In the Lockheed case, U.S. reporters provided the only investigative journalism. In the Lockheed, Recruit, and Sagawa cases, ­legal authorities prosecuted t­hese cases aggressively a­ fter the facts had come to light but did not actively investigate po­liti­cal corruption, discovering it only accidentally during other inquiries. The establishment press reported 1

2 Introduction

extensively on cases being investigated or prosecuted but failed to play a proactive role in uncovering corruption. The opposition parties exploited scandals when they occurred but also played a passive role in exposing them. No one was actively investigating po­liti­cal corruption but, whenever the public was provided with a peek ­under the cover of secrecy, they ­were astounded by what they saw. One can only suppose that more proactive or even more systematic efforts by ­legal authorities, the mass media, or the opposition parties to investigate corruption would have generated many more scandals and revealed much more corruption in Japa­nese politics. Fi­nally, elections proved an in­effec­tive tool for controlling corruption. Despite being repeatedly involved in serious corruption scandals, the Liberal Demo­cratic Party (LDP) maintained control of the government between its founding in 1955 and its first loss in 1993. The LDP did lose votes whenever a scandal was reported, but whenever voters ­were angry with the government, they faced an unattractive set of alternatives. The opposition was divided and incapable of presenting voters with a clear alternative to the LDP government. Many voters preferred to choose from among the several LDP or LDP-­leaning in­de­pen­dent candidates that competed against each other in the multimember districts (MMDs) used during that period. If one of the LDP candidates ­were tainted by a scandal, the voter might vote for a “cleaner” LDP candidate to replace the “dirty” one, but that would not result in a defeat for the governing LDP. The best explanation why the LDP survived many major scandals for such a long time is the paucity of alternatives, not the lack of voter concern with corruption. Note that both LDP predominance and the divided opposition ­were caused, in part, by an electoral system based on MMDs that forced larger parties (primarily the LDP) to run more than one candidate per district. When more than one candidate from the same party (copartisans) competes in the same district, voters cannot choose from among them based on party identification or party platform. Such intraparty competition has been linked to corruption in several dif­fer­ent ways, most clearly with the violation of election laws.1 The fundamental prob­lem with intraparty competition is that candidates from the same party cannot compete on their party’s policy or their party leader’s popularity. They must find something ­else to compete on and that “something ­else” tends to be constituency ser­vice. B ­ ecause the party in power has access to the governmental resources necessary to provide such ser­vices, interparty competition advantages the party in power, reducing the probability of alternation in power. If constituency ser­vice extends to funneling government money into the district, it 1. ​See, for instance, Key 1949; Carey and Shugart 1995; Golden and Chang 2001; Nyblade and Reed 2008; and Carlson and Reed 2013.



PO­LITI­CAL CORRUPTION AND SCANDALS IN POSTWAR JAPAN

3

leads to clientelism, campaigns based not on policies for the nation but on providing particularistic benefits to specific groups or areas (Scheiner 2006, 69–73). As this chapter’s epigraph suggests, t­ here was also extreme pessimism about the prospects for bringing po­liti­cal corruption in Japan ­under control. Reforms ­were periodically proposed but seldom enacted. ­Those that ­were enacted w ­ ere watered down and in­effec­tive. Similar prob­lems resurfaced repeatedly, including bribery, embezzlement, bid rigging, fraud, the misuse of public funds, vote buying, and tax evasion. ­There was bid rigging in local government construction proj­ects, slush fund scandals that implicated local governments and police departments, as well as countless politicians who ­were investigated and indicted for election violations such as vote buying. Major scandals ­were followed by new ones in what seemed to be a never-­ending cycle. Though pessimism was clearly justified, the Recruit and Sagawa scandals, along with the founding of three new reform parties, helped push the long-­ruling LDP out of power in the 1993 election. A co­ali­tion government that excluded only the LDP and the Japan Communist Party (JCP) passed a significant po­liti­cal reform package. The 1994 reforms included the introduction of a new electoral system, public funding for po­liti­cal parties, and changes to the campaign finance system. In this book, we argue that the po­liti­cal reforms of 1994 have produced a significant reduction in corruption and have transformed Japa­nese politics in many other significant ways. No one, including ourselves, expected the reforms to work. Early evaluations ­were uniformly negative but, as time passed, evaluations improved.2 We have come to more optimistic conclusions than the studies that preceded ours. We argue first that the reforms have functioned in Japan much as they have in other countries and second that the reforms have reduced the levels of po­liti­ cal corruption in Japan. It is not that corruption scandals have dis­appeared from the headlines since the 1994 reforms. Quite the contrary, corruption receives more and more consistent coverage compared to the episodic coverage that characterized reporting before them. Changes induced by the reforms, especially the enhanced transparency introduced into po­liti­cal finance, provided police and prosecutors with more tools to combat corruption. The mass media has responded enthusiastically, reporting on any scandal or potential scandal. Fi­nally, po­liti­cal parties have energetically used the new transparency to generate scandals. This was especially the case between 2003 and 2012, when the party system centered on competition between two parties, the LDP and the Demo­cratic Party of Japan (DPJ). Although 2. ​For some of the “earlier” studies of po­liti­cal reform, see, for example, Mizuguchi 1993; Mitchell 1996, xvii; Sato 1997; Otake 1998; Sasaki et al. 1999; Schlesinger 1999; and Reed 2002. For some of the “­later” studies, see Carlson 2007; Rosenbluth and Thies 2010; and Krauss and ­Pekkanen 2011.

4 Introduction

the new system is far from perfect, it controls po­liti­cal corruption much better than the prereform system.

Po­l iti­c al Corruption and Scandals The pairing of “scandals” and “corruption” may sound perfectly natu­ral, but scholars studying po­liti­cal corruption have seldom utilized the data generated from scandals in their analy­sis, and for very good reasons. Scandals provide only periodic and unsystematic glimpses into the secret world of corruption and the resulting information is therefore not suitable for statistical analy­sis. Most corruption occurs without ever becoming public knowledge. Even if corruption becomes public knowledge, it may not generate much public reaction. Conversely, scandals do not necessarily involve corruption and “may well center rather on efficiency, incompetence, or mere carelessness” (Moodie 1999, 882). It is impor­tant to recognize that scandals are not a s­ imple ­matter of an information stimulus producing a response of outrage from the public.3 Scandal construction requires an informer, channels available to communicate the message, and an audience that finds the information to be scandalous (Moodie 1999, 879). The prevalence of scandals cannot be used as a mea­sure of the prevalence of corruption. In fact, we find that scandals ­were serious but uncommon when Japa­nese corruption was at its worst and that scandals became much more common, though also much less serious, when the corruption prob­lem was getting better. One must be very careful in interpreting scandals, but we find that paying attention to both how a scandal was generated and what it revealed makes it pos­si­ble to generalize about change in levels and types of corruption. Throughout this book we examine a variety of po­liti­cal scandals to shed light on the nature and types of corruption that affect the functioning of Japan’s demo­cratic pro­cess. We focus upon scandals that became issues in national elections, but our research also inspired us to consider other examples as well. In our analy­sis of scandals, we ask how they ­were constructed and what their consequences ­were for demo­cratic politics. Our main finding is that the po­liti­cal reforms of 1994 have reduced levels of corruption. Since the reforms, we find nothing close to the magnitude of the Lockheed, Recruit, and Sagawa scandals that preceded them—­despite enhanced transparency leading to more scandals. Both scholars and the Japa­nese public are now able 3. ​As Sherman (1999, 887) argues, “Scandals do not just happen; they are socially constructed phenomena involving the cooperation and conflict of many p ­ eople.” For additional research on their complexity, see Thompson 2000; Liebes and Blum-­Kulka 2004; and Kepplinger et al. 2012.



PO­LITI­CAL CORRUPTION AND SCANDALS IN POSTWAR JAPAN

5

to see more of what is taking place u ­ nder the cover of secrecy that hides corrupt activity. We provide sufficient detail so readers may judge for themselves, but we argue that the corruption revealed by the postreform scandals has not been as serious as the corruption revealed by prereform scandals. The most impor­tant change ­after the reforms is the clear evidence of learning. When parties and/or politicians lose votes due to a scandal, other parties and/or politicians take note and adapt to avoid the kind of be­hav­ior that produced that scandal. The simplest example of learning can be found in accounting practices. ­After reform, it was common for politicians to be targeted by carefully examining their official campaign finance reports. It was easy to find inconsistencies. Many members of the Diet ­were found to be paying significant sums to rent offices that ­were rent-­free. One could often find an interest group reporting a po­liti­cal donation that was not reported as income by the politician who received it, or vice versa. In each case, the evidence came from official reports filed by the politician so the politician could not deny the facts themselves, though they often came up with incredible explanations that no one believed. Accounting practices have since become more accurate and reliable. The reports are still useful sources of information from which a scandal could be constructed, but the probability of finding serious “dirt” has dropped drastically. Studies in other countries also show that enhancing transparency makes it easier to construct scandals. G ­ reat Britain provides the most useful comparison on this point. The British Po­liti­cal Parties, Elections, and Referendums Act 2000 worked well, although the new rules on transparency generated a lot of media attention on the topic of party finance and contributed to public unease (Fisher 2009, 298). Japan proves no exception. Scandals tend to become more frequent ­after reforms that enhance transparency. And scandals then reduce corruption over time through a learning pro­cess. In Japan before reform, if a scandal revealed a serious corruption prob­lem, one could expect to see a lull a­ fter the scandal followed sooner or l­ ater by another, similar scandal. A ­ fter reform, if a spate of scandals revealed serious corruption prob­lems, one could expect the flurry of attention to be followed by changes in be­hav­ior designed to avoid any similar scandal in the f­ uture. Fi­nally, since the reforms we find two new types of scandal that do not involve po­liti­cal corruption at all. First, what we call “embarrassment scandals” have become common since 1994. Sex scandals are the most common type of embarrassment scandals, but the category also includes such t­ hings as inappropriate statements or expenditures. Embarrassment scandals report “unethical or immoral be­hav­ior” by politicians and affect electoral outcomes, but such be­hav­ior does no obvious harm to the po­liti­cal pro­cess. Scandals can be constructed from any be­hav­ior that shocks the public, but the public tends to judge politicians much more harshly than do the politicians and po­liti­cal insiders (Allen and Birch 2012).

6 Introduction

It is this perception gap between the public and po­liti­cal insiders that makes “embarrassment scandals” pos­si­ble. Be­hav­ior that is neither illegal nor corrupt but merely embarrassing may be used to construct a scandal that affects electoral outcomes and damages po­liti­cal c­ areers. In the construction of scandals, however, the discovery of unethical or immoral be­hav­ior may also exist in tandem with other be­hav­ior that may pose harm to the po­liti­cal pro­cess. When mainstream newspapers in Japan mention details of a sex scandal, the headline is almost always about some other “more serious” event that is showcased as the main subject of the story. The same pattern is found in the Western hemi­sphere: illicit sexual activity is involved, but many sexual-­ political scandals involve other details that can “overshadow the significance of the sexual transgression” (Thompson 2000, 120). For example, if a politician caught having an affair apologizes or resigns from a leadership role in his party, the newspaper headline is e­ ither about the issuing of the public apology or the resignation. In Japan most scandals involving sexual transgressions are confined to the tabloid newsmagazines, and it is the discovery of other sorts of be­hav­ior, such as the misuse of funds, that typically generates the major po­liti­cal corruption scandals. We also find many scandals constructed from embarrassing details that do not involve po­liti­cal corruption as we define it. Like sex, money is often a ripe source to construct embarrassment scandals. When laws w ­ ere enacted requiring politicians to keep receipts and better document their po­liti­cal expenses, journalists used this material to construct a series of scandals that shocked the Japa­nese public. The expenses ­were perfectly ­legal and did not pervert the course of demo­cratic politics. In 2009, for example, the mainstream press reported that the official disclosure reports of several se­nior DPJ members had counted receipts for nightclubs as part of their official po­liti­cal expenditures (Mainichi, 30 September 2009). One politician reported more than 2 million yen (around $21,000 at the 2009 exchange rate) in expenses spent at a total of eleven dif­fer­ent hostess clubs in a five-­year period.4 One of the venues used by the politicians included a “new half” or transsexual bar (Asahi, 16 October 2009). While the public reaction was one of shock and surprise, the politicians involved w ­ ere quick to explain that ­there was nothing inappropriate about any of the venues used for unofficial meetings. In most cases, the politician had never stepped foot inside the nightclub. A secretary had taken a group of visitors from the politician’s district out for a night on the 4. ​In this book we convert the amounts of Japa­nese yen to U.S. dollars for the time in question, using rates obtained from the Pacific Exchange Rate Ser­v ice, available at http://­fx​.­sauder​.­ubc​.­ca (see appendix A). To gain a better sense of the relative value of Japa­nese yen in one year compared to another, see the discussion and converter available at http://­www​.­measuringworth​.­com​/­japancompare​/­​.­



PO­LITI­CAL CORRUPTION AND SCANDALS IN POSTWAR JAPAN

7

town and simply took them where they wanted to go (Mainichi, 30 September 2009). While no laws ­were broken, the controversy pitted the views of politicians and the DPJ against public perceptions, which assumed that such spending was extravagant and unnecessary. The only t­ hing shocking was the titillating nature of the venue, not the practice itself. Second, we also see an increase in “policy failure scandals.” Policy failures certainly happened before the reforms, but they did not become scandals. Before 1994 the scandals that affected elections results ­were po­liti­cal corruption scandals like Lockheed, Recruit, and Sagawa. The last two scandals ­were instrumental in the LDP’s first defeat and long-­term stint in opposition since it was founded in 1955. ­After reform, however, the scandals that played significant roles in defeating governments w ­ ere policy failure scandals. In 2007 the Japa­nese public was shocked to learn that the Social Insurance Agency (SIA) had “lost” some fifty million pension rec­ords. This “lost pensions” scandal played a significant role in the fall of the LDP-­led co­ali­tion government in 2009, handing the reins of government to the DPJ for three years. The 2011 Fukushima nuclear accident was the direct consequence of de­cades of inefficient management and failure to address obvious prob­lems, but it happened while the DPJ was in power and played a significant role in that government’s defeat in 2012. Both policy failures had significant po­liti­cal consequences, but both ­were caused by bureaucratic, not po­liti­cal, corruption. The po­liti­cal parties and the government of the day certainly deserve criticism for failing to exercise effective oversight over bureaucratic incompetence and corruption, but the corruption that produced policy failure scandals was firmly located in the bureaucratic agencies. We see the rise of embarrassment and policy failure scandals as another, albeit indirect, piece of evidence indicating that levels of po­liti­cal corruption in Japan have declined since the 1994 reforms.

Our Fundamental Narrative and Approach In the second half of the twentieth c­ entury Japan had a serious prob­lem with po­ liti­cal corruption. That corruption periodically erupted into scandals that cost the government votes. In the 1960s the LDP established single-­party dominance, a party system associated with po­liti­cal corruption and, as should be expected, corruption grew more serious. The leadership of Tanaka Kakuei accelerated that trend in the 1970s. In the late 1980s and 1990s a rapid series of scandals stimulated reform movements and, in 1993, the long-­dominant LDP lost power to a short-­lived co­ali­tion government that managed to pass a significant po­liti­cal

8 Introduction

reform package in 1994. As argued above, ­those reforms led to a reduction in po­liti­cal corruption. The reforms changed Japa­nese politics in several fundamental ways, many of which reduced po­liti­cal corruption. Most notably, the reforms enhanced transparency, which in turn empowered and energized both the opposition and the media. Transparency was enhanced primarily through the system of public financing. When candidates and parties receive po­liti­cal funds, they must fill out reports justifying their expenditures. The mass media and opposition parties then use the information to construct scandals that affect electoral outcomes. When a candidate’s po­liti­cal ­career is ended by a scandal, other candidates learn not to repeat that ­mistake, reducing the level of corruption. Both the media and opposition parties responded enthusiastically to the opportunity to construct scandals that sell newspapers and reduce public support for the government, thus becoming more proactive and better fulfilling the watchdog roles assigned to them by demo­cratic theory. The new electoral system based on single-­member districts (SMDs) virtually eliminated intraparty competition, which is associated both with election law violations and many other kinds of po­liti­cal corruption. The electoral system also produced movement ­toward a two-­party system and resulted in two alternations in power, in 2009 and 2012. Even this nascent and short-­lived two-­party system shifted electoral campaigns ­toward competition between parties over policy issues and away from competition between candidates promising benefits to their constituency, which in turn reduced the incentives to commit election law violations or engage in other corrupt activities. In the following chapters, we w ­ ill fill in the details of this narrative, including the false starts along the way. This is our central narrative, but our interests are much wider. Most studies of corruption ask comparative questions such as “How corrupt is Japan compared to other nations?” That is not our primary concern, but we should note that Japan is often considered to be a relatively “clean” country when compared to the other nations of the world. A commonly used source to study perceived levels of corruption is Transparency International’s Corruption Perceptions Index (CPI). It ranks countries by levels of corruption in the public sector based on the perceptions of business p ­ eople and country experts. In 2016, for instance, Japan was given a score of 72 out of 100 (the closer the score to 100, the cleaner the country), which placed it in the twentieth spot out of the 176 surveyed countries and territories (Transparency International 2015).5 In a dif­fer­ent study focused on “citizen” rather than “expert” perceptions, citizens ­were asked w ­ hether they have paid a bribe to “a public body during the previous year” (Transparency 5. ​Japan’s score was slightly lower than the United States’ (74). Italy, by way of contrast, had a score of 47 (Transparency International 2017).



PO­LITI­CAL CORRUPTION AND SCANDALS IN POSTWAR JAPAN

9

International 2015). Only 1 ­percent of Japa­nese respondents reported ­doing so, which along with Australia, Denmark, and Finland represents the smallest percentage of respondents among the 95 countries polled. How can we square ­these findings with the narrative we presented above? First and foremost, Japan is a demo­cratic country in which the rule of law has been firmly established and which has a low overall crime rate (Haley 2015). T ­ hese ­simple facts help generate positive impressions of Japan as a relatively corruption-­ free country in the eyes of expert respondents.6 Second, the CPI is not focused on po­liti­cal corruption and thus includes much that is beyond the scope of this study and misses much of the corruption we described above. Third, very l­ ittle of Japa­nese corruption involves ordinary citizens paying bribes. In Japan it is economic enterprises and interest groups who normally pay bribes, and much po­liti­ cal corruption involves the embezzlement of public funds by politicians and bureaucrats instead of bribery. The location and style of corruption varies across nations. Any single mea­sure of corruption is bound to miss some forms while capturing o ­ thers. Corruption in democracies does not necessarily look like corruption in nondemocracies. Even within the category of demo­cratic countries, corruption in Japan does not look quite like corruption in Italy. We also find that the “modes” of corruption change over time in Japan. The raw purchase of specific public policies with bribes to specific individuals characterized po­liti­cal corruption in the 1950s. In the 1960s corruption shifted t­ oward abuses of power. By the 1980s corruption has shifted yet again, featuring the purchase of diffuse access by spreading money broadly throughout the governmental elite, with l­ ittle or none of the money being directly connected to a specific public policy. When studying corruption one should analyze not only the seriousness of the corruption prob­lem but also its location—­ political, bureaucratic, economic, or other—­and mode: who is paying money to whom for what. We want to know what raises the level of po­liti­cal corruption and what lowers it, or, more simply, what works to reduce levels of corruption. We find significant variation in the levels of corruption over time, so the question “How corrupt is Japan?” cannot be answered without specifying a specific period of time. One needs to ask, “How corrupt was Japan compared to other nations in the period from X to Y?” The 1994 reforms are by far the biggest event in our narrative and caused the greatest changes in levels of corruption—­but they are far from the only event. To 6. ​­There are other plausible reasons that affect “expert” perceptions. When providing a corruption score, some respondents may be thinking about one sector of the government or the economy. ­Because some sectors in the government or economy may have more corruption than ­others, responses captured in the index ­will naturally vary (Lancaster and Montinola 1997, 201).

10 Introduction

strengthen our analy­sis of the c­ auses of changes in levels of po­liti­cal corruption, we analyze all the instances we ­were able to find in postwar Japa­nese history. For example, ­there was a significant drop in po­liti­cal corruption in the late 1950s as war­time economic controls lapsed. Election law violations ­rose sharply in 1952. Violations in the House of Councillors or upper ­house dropped sharply, nearly to zero, in the 1983 election. Po­liti­cal corruption grew more serious around both the 1967 and 1972 elections. We analyze each of t­ hese events, their c­ auses, and their consequences. We recognize the limits of single-­country studies and therefore supplement our findings with studies of other countries. The studies that prove useful are t­ hose that analyze changes in po­liti­cal corruption over time in other democracies. For example, the British study mentioned above that found that enhanced transparency reduces corruption by making it easier to construct scandals but also results in lowered trust in government ­because citizens observe more corruption gives us confidence that our findings in Japan are not limited to one country but can be generalized to other democracies.

1 UNDERSTANDING CORRUPTION IN JAPA­N ESE POLITICS It has been widely deplored that no generally accepted definition of corruption has emerged. However, to expect every­body to agree on its precise nature is as unrealistic as a consensus on the exact attributes of democracy. Oskar Kurer, “Definitions of Corruption”

Corruption signifies a failure to conform to some standard, the “inducement to wrong by improper or unlawful means,” or a “departure from the original or from what is pure or correct.”1 The challenge thus becomes: How do we define what is “pure” or “correct”? Ours is a study of po­liti­cal corruption in Japan so we need a definition of corruption as a deviation from “correct” demo­cratic politics. Below we review the many definitions of corruption and discuss the definitions that prove the most useful in our study. One is a ­simple and commonly used definition: “breaking the law,” specifically violating election laws. The other, however, is more complex and less commonly used: “perverting the proper functioning of the demo­cratic pro­cess.” We also find some other definitions, such as “corrupt exchange,” useful but somewhat narrow for our purposes. Most impor­tant, we find that the most commonly used definition, “the abuse of public office for private gain,” to be of l­ ittle use. Readers should thus be aware that the definition we adopt is dif­fer­ent from the standard definition. We w ­ ill periodically remind the reader of the difference by referring to “po­liti­cal corruption as we define it” instead of simply “po­liti­cal corruption.”

1. ​For discussion on the failure or “deviation” from some standard and other efforts to define this elusive concept, see Kurer 2015 and Rose-­Ackerman 2006. For the quoted definitions and o ­ thers, see “Corruption,” n.d., Merriam-­Webster, accessed 1 February  2017, http://­www​.­merriam​-­webster​ .­com​/­dictionary​/­corruption​.­ 11

12

CHAPTER 1

Defining Po­l iti­c al Corruption The most commonly used definition of corruption is “the abuse of public office for private gain” (Warren 2006). The primary prob­lem with this definition is that it focuses attention on individuals, leading to a “bad apple” theory of corruption. The causal model is that faulty character leads to corrupt be­hav­ior: “the root cause of corruption is found in defective ­human character and predisposition ­toward criminal activity. C ­ auses are rooted in h ­ uman weaknesses such as greed” (De Graaf 2007, 49). Over the course of our study of Japan, we have run across some very dishonest individuals indeed. Newspaper reports contain countless examples of politicians with defective morals and a penchant for criminal activity. Yet we found very few cases in which one could say, “If we could just eliminate ­these par­tic­u­lar individuals, a corruption prob­lem would be solved.” Quite to the contrary, we find the ­causes of the most serious corruption in Japan to be rooted ­either in organ­izations or in the incentives created by po­liti­cal structures. We agree with Warren (2004, 331) that focusing narrowly on individual be­hav­ior detracts attention from the importance of po­liti­cal structures and institution-­defining norms that have corrupt consequences. In fact, the claim that the prob­lem is limited to a few corrupt individuals is often used as an excuse for not passing fundamental reforms. Framing the prob­lem as a m ­ atter of allocating individual “guilt” makes corruption a ­matter for the criminal justice system. It is obviously a good idea to discipline officials who have committed corrupt acts, and punishment should deter bad be­hav­ior to the degree that the corruption is in fact a ­matter of a few corrupt officials. However, outlawing and punishing corrupt be­hav­ior is not a general solution to corruption prob­lems. Punishing corrupt officials may reduce corruption in the short run or keep it ­under control to some degree, but if this ­were the only cause of corruption, the prob­lem would be relatively easy to control. All one would need do is catch and punish the individuals guilty of corruption. One is better off assuming that t­here ­will always be some bad p ­ eople in government, so the system should be designed to minimize the damage done to the po­liti­cal pro­cess by punishing them as quickly as pos­si­ble. Fi­nally, we argue that the standard definition fails to explain much of the po­ liti­cal corruption not only in Japan but also in most democracies. Since the 1980s, major corruption scandals in Western Eu­rope have more often involved illicit party funding than individual gain. The Flick scandal (Irving and Paterson 1987) and Kohl-­gate (Esser and Hartung 2004) in Germany and the Urba scandal in France (Knapp 2002) are all good examples. Similarly, the Watergate scandal in the United States was primarily a m ­ atter of subverting the electoral pro­cess and abuse of po­liti­cal power rather than making money.

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We do not ignore bad apples in our study. We describe and analyze the cases that we find, and we do find one, Tanaka Kakuei, who may well have increased the level of corruption significantly more than would have been the case had he not risen to a position of power in the LDP and the government. Yet, the bottom line is that eliminating dishonest individuals would not solve Japan’s corruption prob­lems.

­Legal Definitions A definition of po­liti­cal corruption as public officials breaking the law has the advantage of being concrete and objective. One certainly does not want the officials in charge of enacting and enforcing laws to be among t­ hose breaking t­ hose laws. The case of lawbreaking that we study, election law violations, is also directly connected to the functioning of democracy and indirectly to many of the other forms of corruption we find in Japan. Studies in other countries have also found the analyses of election law violations to be useful (see Ziblatt 2009 on Germany, and Eggers and Spirling 2014 on Britain). The prob­lem with a legalistic definition, however, is simply that the definition changes e­ very time a new law is enacted or an old law is amended. Indeed, a newly enacted law can seem to produce a quantum leap in the level of corruption. In our analy­sis of election law violations in Japa­nese politics, we find a large spike in 1952. A revision of the elections law that outlawed what had been common practice generated this spike. Politicians v­ iolated the new stricter laws simply by continuing to do what they had always done, not by d ­ oing anything worse than they had in the past. Be­hav­ior was constant but lawbreaking r­ ose dramatically. Similarly, several of the Japa­nese politicians charged with other types of corruption in the early period ­after the 1994 reforms could rightly claim, “I did not step over the line. I stood still and someone moved the line.” This is, of course, no excuse for breaking the law, even a newly enacted law, but it does indicate that changes in the law, not changes in their be­hav­ior, led to their convictions. If one wishes to define corruption as bad be­hav­ior, the ­legal mea­sure ­either underestimates the level of corruption before the reforms or overestimates it a­ fter them. Similar phenomena have been observed in other democracies. The most prominent example comes from Italy. A 1974 reform outlawing campaign contributions from public firms proved a turning point in the evolution of Italian corruption, but the reform seemed to increase corruption rather than control it. By criminalizing what had been normal be­hav­ior, the law provided the ­legal grounds to prosecute many politicians for continuing to behave as they had before the reform (Golden and Chang 2001). We speculate that this phenomenon is common in any country in which the rule of law is effective.

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Corrupt Exchange Donatella della Porta and Alberto Vannucci (1999, 16–17) developed a definition of corruption as “corrupt exchange.” They a­ dopted a principal-­agent framework, assigning the role of principal to “the state, or, better, the citizenry” and the role of agent to public officials.2 Any action by a public official (the agent) that violates “the interests or preferences of the principal” in f­ avor of a third party is corruption. Corrupt exchange occurs whenever the third party gives the agent a reward (bribe) for working in his interests as opposed to the interests of the state or citizenry. This definition has the advantage of focusing on the functioning of democracy instead of the morality of individuals. It also allows the researcher to identify the specific costs of corruption. Too many analyses of corruption deal with events or be­hav­ior that the researcher considers so manifestly “bad” that the label “po­liti­cal corruption” needs no justification. Della Porta and Vannucci’s definition leads the researcher to identify the specific public interests and/or preferences that have been damaged by corruption. We believe that “corrupt exchange” is an excellent definition of corruption, one of the best available. Yet we also we find a prob­lem in applying this definition to the Japa­nese case. First, we find the concept of corrupt exchange to be too narrow to encompass many aspects of the po­liti­cal corruption we find in Japan. The principal-­agent framework focuses attention on bribery, but we find a ­great deal of embezzlement, as we detail below ­under the heading of “SOP Corruption.” Although slush funds created by skimming funds from the governmental bud­get or through demanding kickbacks from public works contracts are often used in corrupt exchanges, the most common use is simply to buy food and drink for t­hose directly involved. The embezzlement that occurs in amassing a slush fund involves no exchange. It is simply looting the public purse. We find many cases of corrupt exchange in Japan and make much use of this definition. Yet, despite the many similarities between Japan and Italy, the “corrupt exchange” definition fits the Italian case better than the Japa­nese case. In Italy della Porta (1996, 353) described a demo­cratic pro­cess that had been converted into an economic enterprise: “business politicians” used po­liti­cally nominated positions in the public sector to “or­ga­nize their c­ areers around the private appropriation of public resources.” We do not find clear examples of business politicians in Japan b ­ ecause most of the lucrative positions are near the top of the po­liti­cal hierarchy, reached only ­after years of po­liti­cal experience. It is the 2. ​See Groenendijk 1997 for a discussion of the principal-­agent framework, as well as earlier studies in this vein by Rose-­Ackerman 1975 and Klitgaard 1988.

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conservative politicians, cabinet members, and faction leaders who are the most likely to be involved in postwar corruption scandals (Nyblade and Reed 2008). In local government, it is prefectural governors who are most often convicted of organ­izing kickback schemes from the allocation of public works. Fi­nally, the most lucrative positions in public enterprises are not local but national, most notably the highly paid amakudari sinecures given to elite bureaucrats when they retire (described in chapter 5). The modes of corruption in Italy differ from the modes of corruption in Japan.

Perverting the Course of Demo­cratic Politics The definition we find most useful in analyzing Japan is not legalistic but has been adapted from a l­egal concept. Robert Goodin (2010) defines po­liti­cal corruption as “perverting the course of politics,” analogous to the l­egal concept of “perverting the course of justice.” This definition focuses attention squarely on the po­liti­ cal pro­cess. Importantly, he defines “perverting the course of politics” in terms of interference with pro­cesses rather than an altered outcome. He gives the example of a leader who has canceled elections as someone who has perverted the course of politics. The impor­tant point is not ­whether the outcome of the election has been changed but that t­ here was interference with the electoral pro­cess. Note also that this definition implies that any be­hav­ior that perverts the course of politics is corrupt even if that be­hav­ior is neither illegal nor unethical. We adapt Goodin’s definition to focus on demo­cratic politics and thus find the best definition for our purposes to be “perverting the functioning of the demo­cratic pro­cess.” Both our and Goodin’s definitions are normative and thus subjective. Using the word “pervert” clearly indicates a normative stance and individuals may well take dif­fer­ent positions on what defines the healthy, unperverted pro­cess of democracy. We find it difficult to imagine a discussion of corruption that does not take a normative stance.3 Corrupt exchange also requires a subjective judgment ­unless one is able to find an objective way of identifying the preferences and/or the interests of the state or the citizenry. We doubt e­ ither is pos­si­ble.4 Our solution to the prob­lem of subjectivity is to specify the aspect of the demo­ cratic pro­cess that has been perverted for each be­hav­ior we label “corrupt.” We 3. ​We find Mark Warren’s (2004, 333) definition, “duplicitous violations of the demo­cratic norm of inclusion,” attractive b ­ ecause it clearly states the demo­cratic ideal from which corruption is a deviation: “­Every individual potentially affected by a decision should have an equal opportunity to influence the decision.” 4. ​The best objective mea­sure we have seen is the one proposed by Golden and Picci 2005, which mea­sures the difference between the amounts of governmental funds dedicated to infrastructure and existing amounts of physical infrastructure for regions of Italy. They note that the mea­sure might be constructed for other countries, but ­doing so ­will be painstaking and likely require an international team with multinational funding.

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­ ill say, for example, “if one considers alternation in power to be an impor­tant w aspect of the demo­cratic pro­cess, then X should be considered a form of po­liti­cal corruption,” or “if one considers election campaigns that focus on the policy alter­ natives that face the nation as ­whole more demo­cratic than campaigns that focus on providing particularistic rewards to specific groups or regions, then Y should be considered a form of po­liti­cal corruption.” Any reader who objects to our labeling can reduce ­these generalizations to “X hinders alternation in power” or “Y inhibits competition between parties over policies.” ­These reduced generalizations can then be tested without reference to po­liti­cal corruption. Attempting to specify how the demo­cratic pro­cess is perverted also allows us to identify scandals about be­hav­ior that do not neatly fit u ­ nder our definition of po­ liti­cal corruption. A sex scandal clearly involves a politician d ­ oing something “bad” and can be defined as the “transgression of prevailing norms or codes governing the conduct of sexual relations” (Thompson 2000, 93–94). Violating norms of sexual relations might be labeled personal corruption and sex scandals often have po­liti­cal consequences and could thus be considered po­liti­cal scandals. However, few sex scandals have any implications for the functioning of the demo­cratic pro­cess, so we would not include them u ­ nder our definition of po­liti­cal corruption. Similarly, the policy failure scandals we find a­ fter the 1994 reforms in Japan had serious po­liti­cal consequences and should thus be considered po­liti­cal scandals. However, the “bad be­hav­ior” that caused t­hose scandals involved bureaucrats, not politicians, so we consider them examples of bureaucratic corruption. Policy failure scandals are, however, a more complex case. The policy failure scandals we examine have impor­tant ramifications for the functioning of the demo­cratic pro­ cess and one could fault politicians for failing to monitor bureaucrats effectively. We therefore devote one chapter to the bureaucratic involvement in po­liti­cal scandals. Our definition and focus on po­liti­cal corruption is both narrower and broader than the standard definition. It does not apply to corruption of the judicial system, for example, which would be Goodin’s perversion of the course of justice. Similarly, bureaucratic corruption might be defined as perverting the policymaking pro­cess and business corruption might be defined as perverting the pro­cess of economic competition. Our definition is also broader, however, in that it applies to corruption prob­lems caused by orga­nizational norms and po­liti­cal structures, some of which have nothing to do with the be­hav­ior of politicians.

Types of Corruption Trying to define po­liti­cal corruption is similar to trying to define a weed. Homeowners know a weed when they see one, but botanists need more information to

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develop an effective weed killer that does not harm other plants. Similarly, journalists, po­liti­cal commentators, and voters may well feel certain that they know corruption when they see it, but a social-­scientific definition of corruption should produce categories that specify precisely what about the be­hav­ior or institution is harmful and point ­toward policies that might bring that par­tic­u­lar type of corruption u ­ nder control. Dif­fer­ent types of corruption have dif­fer­ent ­causes (Nyblade and Reed 2008). It follows that a policy that controls one type of corruption may be useless against another type. Designing effective policies to reduce and control corruption requires identifying the type of corruption that is causing the prob­lem. We identify three types of corruption: bad apple corruption, in which the root ­causes are located in individual be­hav­ior; standard operating procedure (SOP) corruption, in which the root c­ auses are located in organ­izations; and systemic corruption, in which the root ­causes are located in po­liti­cal structures. We then propose hypotheses about what type of policies prove most effective in controlling each type.

Bad Apple Corruption We noted above that we found bad apple corruption to be a relatively minor prob­lem in Japan but also promised to analyze the cases we find. If it is true that corruption is caused by ­human weaknesses (De Graaf 2007, 49), then the most effective policy would be to root out the troublemakers e­ ither by hiring only good p ­ eople or punishing bad ones. In practice, efforts to control corrupt individuals generally involve identifying and punishing the individuals responsible for bad be­hav­ior. We find several cases in which increasing penalties or tightening loopholes has been effective. This control strategy is appropriate for dealing with bad apples, but it is not effective in controlling ­either SOP or systemic corruption ­because the ­causes of the other two types are not rooted in individual be­hav­ior.

SOP Corruption One of the most common forms of SOP corruption in Japan is skimming from the bud­get to create slush funds (uragane, prob­ably best translated as “hidden money” and equivalent to a second set of accounts or to the phrase “off the books”). Since the mid-1990s, scandals involving slush funds have plagued many local governments. In 1997 the Japan Citizens’ Ombudsman Association estimated that a combined total of 43.6 billion yen (around $360 million) in slush funds existed in Tokyo, Hokkaido, and twenty-­three other prefectural governments (Yomiuri, 3 September 2006). Many prefectures launched investigations and found many slush funds.

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In Gifu prefecture, for example, government workers reported fictitious business expenses to generate a slush fund and used it to cover entertainment expenses or to provide monetary gifts for the weddings and funerals of prefectural government workers. In 1994 alone, the slush fund was estimated to be worth as much as 466 million yen ($4.6 million) (Yomiuri, 1 September 2006). The practice seems to have begun in the mid-1960s, peaking during t­ hose three years between 1992 and 1994, declining thereafter to less than 2 million yen ($21,000) in 1995, and dropping below the million mark in 1996 and 1997 (Gifu Shinbun, 29 September 2005). In 2006 another slush fund involving the ­union of local officials and the prefectural board of education was uncovered that was valued at 1.9 million yen (around $18,000) (Gifu Shinbun, 7 January 2014). In Hokkaido, the government amassed a slush fund worth some 7.6 billion yen ($65.3 million) (Yomiuri, 3 September 2006). A Hokkaido government official noted that the use of slush funds was not an issue of illegal be­hav­ior by a few ­people, but a prob­lem within the organ­ization; that is, not bad apple but SOP corruption. The police force was one of the organ­izations with a well-­organized uragane SOP. A former National Police Agency (NPA) executive officer “published a 400-­page mea culpa which meticulously described how police agencies throughout Japan embezzle money from their bud­gets” (D. T. Johnson 2003, 28). Again, in the early 2000s prefectural police departments across Japan w ­ ere embroiled in slush fund scandals (Hokkaido Shinbun Shuzaihan 2005). Police departments had developed creative techniques of skimming funds from their bud­gets and put the money into a general slush fund for departmental use. One in­ter­est­ing technique was paying off non­ex­is­tent in­for­mants. ­Because police in­for­mants are guaranteed partial anonymity, payments are hard to trace. Only the recipients’ names are given on the receipts used to account for the expenditures. Journalists disclosed the practice by calling every­one in the phone book with that name looking for the person who had received the payment. They discovered that every­one who received a payment for information given to the police had an extremely common name. In fact, the names ­were chosen from the phone book to maximize the number of ­people with the same name as a way of preventing anyone from spotting the scam. By 2005 or so skimming for the slush fund had become so highly institutionalized that techniques ­were discussed and new ideas exchanged at national meetings of prefectural police chiefs, and the job of skimming had become part of the standard ­career path, that is, SOP. Any police officer who refused to break the law for the “good of the department” would not be promoted above a certain level. Most recognized the illegality of the scheme, but considered skimming to be part of their job and not bad be­hav­ior. It was not ­until retirement that several former police officers ­were fi­nally able to shed light on the successful scheme that they had helped perpetuate. One of t­hose policemen was Harada Kouji, a former

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Hokkaido chief superintendent, who spoke out ­after an audit committee refused to conclude that the police force was guilty of creating a slush fund. In a news conference, he explained how the money was systematically diverted, expressed shame for being aware of the prob­lem but not ­doing anything about it, and called on the police force to reform itself (Mainichi, 10 February 2004). Another was Saitou Kunio, a former deputy chief in eastern Hokkaido, who showed reporters a secret ledger that he kept of a slush fund and explained how he issued fake receipts to keep the scheme ­running (Herald-Asahi, 3 March 2004). Embezzlement and slush funds are endemic in Japan (D. T. Johnson 2003, 29). Significant corruption was also revealed in the inside the Ministry of Foreign Affairs during a public ­battle between Suzuki Muneo and Tanaka Makiko detailed ­later in chapter 5. In 2001 a slush fund created from the secret diplomatic funds maintained by the Cabinet Secretariat was discovered in the same ministry. One official, Matsuo Katsutoshi, was charged with embezzling more than 500 million yen ($4.1 million) of the secret funds, some of which he used to purchase, among other ­things, a string of race­horses named ­after his former lovers. Secret funds are easy targets for embezzlement. In Japan the chief cabinet secretary has access to a fund (formally called naikaku kanbou houshouhi or “Cabinet Secretariat rewards,” informally called kimitsuhi or “secret fund”) that has been allocated in the Japa­nese bud­get since 1947. The chief cabinet secretary can use it freely without any requirements to disclose to the public how the fund was spent.5 While supporters argue that the secrecy is necessary to keep the government operating smoothly, critics have pushed for some disclosure on how taxpayer funds are spent. The use of slush funds from secret accounts appears to be common in many democracies. For example, the Elf scandal in France involved secret funds normally used to bribe foreign politicians being siphoned off for personal use (Heilbrunn 2005). ­There has also been discussion and controversy over the use of uragane by some po­liti­cal parties surrounding one item of expenditure: soshiki taisakuhi, which roughly means “orga­nizational mea­sures” expenses. The LDP and DPJ distributed funds in varying amounts (beyond the distribution of the po­liti­cal party subsidy and other party funds) to individual politicians in what­ever amount they deci­ded. Recipients of t­ hese funds w ­ ere not required to reveal how they spent the money. Using the official campaign reports for 2009, the JCP drew attention to the fact that both the LDP and DPJ reported a total of 1.7 billion yen ($18.2 million) 5. ​Several former LDP chief cabinet secretaries have spoken on rec­ord about the use of t­hese funds. On a tele­v i­sion program in 2001, Shiokawa Masajurou stated that he used some of the funds to deal with opposition parties. In 2010, Nonaka Hiromu revealed that he spent as much as 70 million yen ($797,000) a month in 1998 and 1999. Hirano Hirofumi, DPJ prime minister Hatoyama’s chief cabinet secretary, admitted that he withdrew 360 million yen ($4.1 million) from the fund in response to a question from a JCP member in parliament. See Economist, 20 May 2010.

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of funds that w ­ ere distributed to twenty-­one individual politicians in this way. The JCP criticized the practice, as it had with the chief cabinet secretary fund, as being opaque and corrupt ­because ­there is no public accountability in justifying the final destination of ­these funds (Akahata, 13 December 2011). Like the use of the chief cabinet secretary fund, reform has proven difficult b ­ ecause parties have been reluctant to abandon this practice. A better-­documented case of embezzlement by politicians comes from local assemblies. Assembly members get a taxpayer-­funded allowance (seimu katsudouhi, “po­liti­cal activity expenses”) and the embezzlement of ­these funds has become SOP corruption in many local governments. Nonomura Ryuutarou ran several times for the Hyogo prefectural assembly and once elected began to loot the public purse. Nonomura became internationally famous for his “crying press conference” video, which was uploaded to YouTube in 2014. Nonomura spent millions of yen on a variety of “business” expenses, including hundreds of one-­ day excursions. He refused to produce receipts, claiming that t­ here was no such rule that required him to do so. He was found guilty of illegally receiving public funds by the Kobe District Court in 2016, but at least managed a suspended sentence, keeping him out of jail. The “crying press conference” stimulated the media to investigate similar cases and they had no trou­ble finding many more incidents nationwide (Asahi, 21 July 2016). Reforms and lawsuits attempting to rectify the situation seem to have had ­little effect so far. In 2016 the case of the Toyama City Assembly again drew national attention (Kita Nihon Shinbun, 13 July 2016). Twelve assembly members out of forty resigned and the city held a record-­setting by-­election to fill all of the vacant seats (Asahi, 7 November 2016). The case of SOP corruption most relevant to the functioning of the demo­cratic pro­cess was the practice of committing election law violations between 1947 and 1993 in the lower ­house and between 1947 and 1980 in the upper ­house. The NPA systematically collects data on election law violations and publishes the aggregate number of electoral violations and violators ­after each election. The data include all officially reported cases of election violations—­not just the cases that draw interest from the mass media. We collected as much of the police rec­ord as pos­ si­ble for both ­houses of the Japa­nese Diet, which we analyze in chapter 7. It is impor­tant to note that the common refrain “every­one is ­doing it” is overwhelmingly accurate for par­tic­u­lar organ­izations at par­tic­u­lar times, but t­ here are a few exceptions. One always finds a few individuals who refuse to participate, even at the cost of being overlooked for promotions. Some even turn into “whistle­-­blowers,” revealing the SOPs of their organ­izations to the public. If the root cause of corruption is to be found at the orga­nizational level, the SOPs of some organ­izations should be more corrupt than ­those of ­others, and

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the amounts involved w ­ ill rise and fall over time. This is certainly the case with Japa­nese slush funds. Punishing individuals is not very effective in controlling SOP corruption. The best medicine for SOP corruption seems to be transparency. Once SOP corruption becomes public knowledge, action is normally taken and reforms enacted. Often publication alone is effective in reducing SOP corruption, at least in the short and medium term. We find strong evidence that transparency works. Transparency reduces corruption by exposing it. By making more of the activities of parties and politicians available for public scrutiny, it increases the probability of identifying prob­lems. The fundamental mechanism through which transparency reduces corruption is politicians learning from the experience of scandals. When a politician is caught ­doing something corrupt and it damages her po­liti­cal ­career, other politicians take note and revise their SOPs to avoid meeting the same fate. Similarly, opposition parties learn that exposing governmental corruption makes it easier to unseat the governing parties and take control of government. Parties thus learn to construct scandals about their rivals and adjust their SOPs to avoid being caught in such scandals themselves.

Systemic Corruption We wish to call corruption that is built into the system by po­liti­cal structures, and thus does not depend upon the be­hav­ior of individuals or on the SOPs of organ­ izations, “systemic corruption.” The clearest cases are formal structures such as the electoral system or the rules governing the conduct of campaigns, but we also want to include such informal structures as the party system. Structures can pervert the demo­cratic pro­cess ­either indirectly by producing incentives for corrupt be­hav­ior or directly without affecting be­hav­ior at all. We ­will illustrate both phenomena below. Any structure that generates incentives for corrupt be­hav­ior perverts the proper functioning of the demo­cratic system, if only indirectly through increasing the prevalence of both individual and SOP corruption. The incentives, however, are systemic ­because they are constant as long as the structure remains in place. The be­hav­ior may vary among individuals and organ­izations, but the incentives do not. ­Because the incentives are built into the system, punishing individual offenders or increasing transparency ­will only result in temporary reductions in corruption. Only structural reform to change the incentives can reduce corruption permanently. One of the clearest examples of systemic corruption in Japan is bid rigging in the construction industry. In postwar Japan, bid rigging had become the SOP for allocating contracts for public works. Virtually all procurement decisions w ­ ere

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made through consultations called dangou kyoutei (“agreement by consultation”), which essentially involved a gentlemen’s agreement among contractors of “neatly dividing up and parceling out their construction market” (Woodall 1993, 298–99). The formal rules limited designated bidders to around ten firms, making collusion easier to effect, and thus produced power­ful incentives to practice dangou. Politicians, especially prefectural governors, w ­ ere called upon to mediate (or sometimes merely to ratify or legitimate) the collusion and w ­ ere well paid for their ser­v ices. We can be sure that the corruption was systemic, not simply SOP, ­because governors convicted of bid rigging w ­ ere regularly replaced with governors who promised reform but w ­ ere soon engaged in bid rigging themselves. If a governor refused to perform the necessary role, the construction industry found someone e­ lse. The construction industry demanded a “voice of heaven” (ten no koe) to construct or ratify the dangou agreement and could not function without one. It was built into the system. The resulting collusion contributed to the corruption of politics, administration, and policymaking in many ways. For example, dangou affected elections indirectly. One reason for the extremely high reelection rates for governors was that construction companies supported the incumbent or his designated successor to guarantee inclusion in the dangou agreements. The power­ful incentives for bid rigging thus not only perverted the policymaking pro­cess, but also perverted the demo­cratic pro­cess by giving incumbents an unfair advantage over challengers. We find similar cases in other countries. For example, the nineteenth-­ century patronage system in the United States has been shown to have suppressed alternation in power in state governments (Folke, Hirano, and Snyder 2011). U ­ nder the patronage system, po­liti­cal parties had a significant supply of patronage jobs to distribute to their supporters. Since patronage was only available to the governing party, the patronage system gave the governing party an advantage over the opposition. If one considers alternation in power to be an impor­tant aspect of the demo­cratic pro­cess, then both bid rigging in Japa­nese prefectural governments and the patronage system in the United States perverted the course of democracy and should be considered a form of systemic corruption. Note also that patronage was perfectly l­egal in the United States at the time and that it did not involve corrupt exchange or any other corrupt be­hav­ior. Returning to the Japa­nese case, the electoral reforms of 1994 also changed the structure of competition and thus indirectly affected the incentives to participate in many other forms of corruption. For example, the SMDs introduced in 1994 virtually eliminated intraparty competition between two conservatives r­ unning in the same electoral district, which in turn increased incentives to campaign on the policy differences among parties, which in turn produced a drop in the number of election law violations. If a candidate’s election depended on his party’s policies

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and leader, breaking election laws was not an effective way of winning a seat in the Diet. We find strong evidence that structural reform works in Japan. Structural reform can produce dramatic and long-­lasting reductions in many dif­fer­ent types of corruption. We also find similar cases in other countries. In Victorian Britain, for example, the losing candidate could file a petition to void the result ­because the winner had cheated by violating election laws. A tribunal of sitting members of parliament adjudicated the petition but tended to vote not on the merits of the case but along party lines. Whichever party had a majority in the tribunal tended to win the seat. The candidate who cheated was not punished consistently and corruption flourished. A structural reform—­putting judges instead of members of parliament in charge of adjudicating charges of electoral fraud—­resulted in a dramatic decline in election law violations (Eggers and Spirling 2014).

The Construction of Scandals One excellent attempt to define “scandal” is “intense po­liti­cal communication about a real or ­imagined defect that is by consensus condemned and meets universal indignation or outrage” (Esser and Hartung 2004, 1041). We adjust this definition in two ways. First, instead of “intense po­liti­cal communication,” we consider any issue that receives significant media coverage over several weeks to be a scandal. Second, instead of focusing on condemnation and consensus, we consider any issue that has potential to alter the course of po­liti­cal events by damaging the standing of a po­liti­cal figure or po­liti­cal party. It is useful to think of scandals as generated in a series of stages and roles, though the stages do not necessarily occur in strict order and actors may play more than one role. The first stage is revelation, bringing the potential scandalous be­ hav­ior to light (Sherman 1999). The most common sources that reveal secret information mentioned in the lit­er­at­ ure are victims, whistle­-­blowers, research by po­liti­cal rivals, and investigative reporting. However, we also find many scandals that w ­ ere constructed from information that was discovered serendipitously while police ­were investigating unrelated cases. Similar phenomena occur in other democracies. In her study of corruption in the Eu­ro­pean Union (EU), Carolyn Warner (2007, 51) found that many of the major cases came to light not b ­ ecause of increased economic competition brought about by the EU: “More often it was routine tax inspections, personal vendettas, a jilted lover, or suspicious deaths.” In France, for example, a regional tax inspector uncovered a corruption case involving President Chirac, and the Flick Affair in Germany was revealed when the chief accountant was audited.

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No ­matter how scandalous the information might be, it does not produce a scandal ­unless it becomes widely known, and so the second stage is publication. The mass media is the key institution at this stage. The greater the media exposure, the more pronounced the reaction to similar levels of corruption. For example, the mani pulite (“clean hands”) judicial investigations that led to the earthquake election of 1994 in Italy w ­ ere effective b ­ ecause, for the first time, the press actively publicized them (Chang, Golden, and Hill 2010). The media follow their own decision rules about which potentially scandalous be­hav­ior is newsworthy and we find that t­ hose decision rules have changed over time. The media, particularly the Asahi Shinbun, played a proactive role in the 1960s but, starting in the 1970 ­after the LDP established its dominance, the media was reduced to a passive and reactive role, often only publicizing a scandal ­after the foreign press became involved (Farley 1996). The increased transparency produced by the 1994 reforms once again stimulated the media to play a more proactive role. The third stage is dramatization, constructing a story line that leads to the conclusion that “something must be done!” At this stage, the roles played by victims and/or po­liti­cal rivals increase, though the importance of the media remains. ­There also tend to be competing story lines as ­those accused of corruption often deny or minimize the prob­lem. One common ploy is to claim that the corruption is merely a m ­ atter of a few corrupt individuals and no reform is needed. Japan’s po­liti­cal reforms of 1994, for example, had long been on the agenda but ­were enacted only a­ fter several scandals struck in relatively quick succession, and the Recruit scandal helped refute the bad apple thesis a­ fter many politicians ­were implicated. The final stage of a scandal is, or at least should often be, po­liti­cal reform. The major reforms enacted in Italy and Japan in the 1990s both involved responses to serious and per­sis­tent corruption prob­lems (Sakamoto 1999; Shugart 2001). U ­ ntil ­those reforms, however, investigative committees produced reports only ­after the scandal had faded from media attention. ­These reports resulted in ­little or no reform, watered-­down reforms, or reforms that served the interests of established parties instead of improving the demo­cratic pro­cess. We w ­ ill attempt to identify any reforms that ­were enacted ­after each of the scandals we analyze.

2 SCANDALS IN EARLY POSTWAR JAPAN, 1948–1978 For much of the postwar period . . . ​the role and per­for­mance of Diet members in pork barrel politics made or broke their po­liti­cal ­careers. Such politics also often degenerated into ‘money politics’ and outright po­liti­cal corruption. Haruhiro Fukui and Shigeko N. Fukai, “Pork Barrel Politics”

We begin with the period in which the image of Japa­nese postwar politics as hopelessly corrupt was formed. That image was based on solid observation and evidence. Major corruption scandals impacted four national elections between 1948 and 1976. Reform efforts w ­ ere anemic and had l­ ittle or no effect on corruption. Yet a closer examination of the scandals during this period reveals significant changes in the nature and modes of corruption over time. We find significant variation in the levels of corruption and analyze the ­factors that caused ­those changes. In the scandals we examine between 1948 and 1960, corruption took the form of raw purchase of public policy by interest groups. T ­ hose scandals that occurred between 1960 and 1972, however, revealed corruption that was less about the purchase of public policy than the abuse of po­liti­cal power. The two scandals centered on Tanaka Kakuei in 1974 and 1976 revealed corruption that involved politicians at the very center of po­liti­cal power. If reforms did not cause t­hese changes in the shape and size of corruption, what did? We point to the changing roles of the primary actors who are tasked with controlling corruption: the ­legal authorities, the media, and the opposition parties. How did we choose which scandals to analyze? First and foremost, we chose scandals that shed light on the nature and types of corruption that can pervert the demo­cratic pro­cess. Scandals that became issues in a national election w ­ ere included, but our research led us to examine other scandals as well. Unfortunately, the lit­er­a­ture on Japa­nese scandals often fails to address some of the questions we ask. We ­were thus forced to “reconstruct” many of the scandals primarily 25

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using newspaper sources.1 For recent scandals, newspapers ­were the best, if not only, public source of information to follow the c­auses and consequences of scandals for Japa­nese politics. However, journalists seldom identify their sources, which made it difficult for us to determine the precise origins of each scandal. We thus caution that many of the events we pres­ent are based on newspaper reports and subject to our efforts to make sense of socially constructed events, which can be interpreted in multiple ways.

Buying Public Policy, 1948–1960 We begin our narrative three years a­ fter the surrender of Imperial Japan in World War II. The immediate postwar conditions ­were dire and chaotic and most Japa­ nese strug­gled to obtain the essentials just to stay alive (Dower 1999). The Allied occupation, led by the United States, commenced shortly a­ fter Japan’s surrender and focused initially on efforts to de­moc­ra­tize and demilitarize Japa­nese government and society. The centerpiece of its po­liti­cal reform efforts was the creation of postwar constitution that located government legitimacy in the Japa­nese ­people.2 ­Women ­were given the right to vote and the first postwar election was held in 1947. Much more can be said about the immediate years ­after Japan’s surrender, but for pres­ent purposes our analy­sis begins with the scandals that affected the next election in 1948, although we note that the ­causes stem from this earlier time.3 The scandals we detail in the early postwar period revealed raw corrupt exchange: economic interest groups simply paid politicians and bureaucrats to influence specific public policies. The Allied occupation gave the Japa­nese government wide powers to intervene in the economy. The Priority Production System allocated resources to the coal and steel sectors and the Economic Stabilization Board (ESB) became the “General Headquarters” for economic planning (C. Johnson 1982, 181–85). What emerged was essentially a “new postwar system ­under direct government control, with the ESB at its head” (K. Ishikawa 1995). With the government’s central role in the economy, bureaucrats and poli1. ​We use Asahi more than other Japa­nese newspapers for practical reasons. The Asahi was the first to develop a way to search newspaper headlines, and ­later a searchable newspaper database (Kikuzou II), which made it pos­si­ble to analyze many scandals in detail. The digitization and online availability of other newspapers also proved useful in our study. 2. ​The constitution retained the parliamentary system but tried to make it more accountable and demo­cratic. More controversial for Japa­nese politics ­today, the constitution includes a clause (Article 9) that requires the Japa­nese ­people to “forever renounce war as a sovereign right of the nation.” 3. ​We did uncover earlier scandals in 1947 surrounding the discovery of and investigations into surplus military supplies, which was dramatized by the statements and activities of Liberal Party Diet member Sekou Kouichi. For some of the relevant details, see Aldous 1997, Dower 1999, and Kuroda and Ootani 2000.



Scandals in Early Postwar Japan, 1948–1978

27

ticians could “sell” relevant public policy to interested economic interest groups. Two of the first three scandals we analyze directly involved the ESB. ­Under the occupation, American officials intervened into Japa­nese politics regularly and conflicts within the occupation government (SCAP) often influenced domestic Japa­nese politics.4 The Shouwa Denkou scandal and other scandals around this time involved American officials in ways that are not fully understood (C. Johnson 1995b; Dower 1999). Although some information has recently surfaced through the disclosure of previously declassified Central Intelligence Agency (CIA) files, much remains to be sorted out.5 We leave this task to ­future scholars and hope that American interventions in Japa­nese domestic politics can be better understood as more information is declassified and brought to light. We now turn to an analy­sis of each scandal in chronological order. We focus on major scandals that received considerable press attention and, except for Tanaka’s money-­politics scandal, implicated many politicians.6 We describe each scandal and address a common set of questions for each scandal: How did the scandalous information become public? What was the be­hav­ior from which the scandal was constructed? How did the scandalous be­hav­ior affect the demo­ cratic pro­cess? What ­were the ­legal consequences of the scandal, if any? Fi­nally, did the scandal result in any po­liti­cal reform? Our interpretations are based on newspaper reports and a rich set of scholarly accounts.7

Shouwa Denkou (April 1948) The Reconstruction Bank was created in 1946 and began operations in 1947. The bank issued bonds and used the profits to subsidize key industries such as iron and steel, coal, and chemical fertilizers. It granted loans to public corporations,

4. ​SCAP stands for the Supreme Commander for the Allied Powers, the title held by General MacArthur, but also refers to more generally the entire occupation structure. 5. ​See, for example, the article “CIA Rec­ords Seen by AP Show U.S.-­Linked Militarists Plotted Coup in Japan in the 1950s” (Associated Press, 1 March 2007). 6. ​In studying scandals, we built upon data initially collected by Nyblade and Reed (2008) who coded cases of “looting” and “cheating” by politicians using newspaper headlines but did not examine scandal construction or other statistical indicators of corruption. In the realm of scandals, we uncovered an extensive variety both before and a­ fter the 1994 reforms, which we have or­ga­nized into the main chapters of this book. Our effort is not to document and explain e­ very scandal but rather to focus on the broader link between scandals and the functioning of the demo­cratic pro­cess. We reconstruct many of the “standard” scandal examples but the questions we ask require us to include other sorts of scandals that do not fit our definition of po­liti­cal corruption. 7. ​Japa­nese scholars have produced many excellent studies of the corruption scandals covered in this chapter and chapter 3, the classic being Ishikawa Masumi 2004. Soma Masao edited several volumes on Japa­nese elections in the 1970s and 1980s and several of the chapters cover corruption and related issues. Aritake 1970 and Yamamoto Kenji 1992 also offer two notable general treatments of po­liti­cal corruption. In En­glish, ­there are several impor­tant studies of specific scandals or figures, including Baerwald 1967, Chal­mers Johnson 1986, MacDougall 1988, and Yayama 1990.

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loans that have been described as l­ittle more than outright cash transfers (Flath 2005, 194). A ­ fter the war’s end, the government heavi­ly subsidized the chemical fertilizer industry b ­ ecause it played a vital role in food production and in the planting of rice.8 Shouwa Denkou, a large chemical fertilizer com­pany, had received close to 2.36 billion yen ($11.7 million) in assistance.9 The com­pany president returned the f­ avor by kicking back at least 100 million yen (around $500,000) to government officials, a clear case of corrupt exchange. In a parliamentary investigative committee on 27 April 1948 a Diet member charged the prime minister and his deputy with taking kickbacks and soon ­after called for an investigation (Kuroda and Ootani 2000, 43). The NPA had launched an investigation into Shouwa Denkou before charges w ­ ere made in the Diet. One month ­after the public exposure, Tokyo prosecutors searched the home of the Shouwa Denkou president and carted away two truckloads of documents.10 Among the politicians ensnarled in the scandal ­were Prime Minister Ashida Hitoshi and Deputy Prime Minister Nishio Suehiro.11 Although many individuals ­were charged, most ­were acquitted. Prominent exceptions ­were the president of Shouwa Denkou and Kurusu Takeo, Ashida’s minister of finance, who was found guilty of corruption-­related offenses in 1962. Kurusu was the only member of the upper ­house implicated in the scandal. The Shouwa Denkou scandal contributed to a major reform. The Po­liti­cal Funds Control Law was enacted on 29 July 1948 in a cooperative effort between U.S. occupation authorities and the Ashida cabinet to enact stricter anticorruption laws and to better regulate the financing of po­liti­cal activities. Like its American counterpart, the Federal Corrupt Practices Act that was enacted in 1910 and ­later amended, the legislation limited campaign contributions and campaign spending.

Coal Mine Nationalization Scandal (September 1948) In 1948 coal mine ­owners paid members of the Diet to oppose the co­ali­tion government’s efforts to nationalize the coal industry. The Japa­nese government and SCAP put a high priority on increasing coal output and therefore promoted min-

  8. ​During the war, much of this industry had been diverted to the production of war chemicals. Recovery was expected to be more rapid b ­ ecause Japan possessed necessary raw materials and production facilities. See Cohen 1949, 476–77.   9. ​The 1948 exchange rate was around 202 yen per 1 U.S. dollar. 10. ​Prosecutors in Japan have two ways to investigate corruption: in­de­pen­dently or with help from police officials. The few cases that are investigated in­de­pen­dently have been limited to the major corruption cases and complicated economic crimes (Iwashita 2014). 11. ​Ashida was prosecuted for taking money from construction companies in another incident (Mitchell 1996, 100).



Scandals in Early Postwar Japan, 1948–1978

29

ing to stimulate Japan’s industrial recovery. The slow output of domestic coal production and shortage of coal for other critical industries such as iron and steel translated into enormous sums in subsidies and “loans” being made to the coal industry by the government, many through the Reconstruction Bank. The coal mine scandal followed a contentious debate w ­ hether Japan should nationalize the coal industry, embrace ­free market princi­ples, or focus on giving the state stronger controls that culminated in the passage of the Emergency Coal Industry Control Law. The legislation that was passed in 1947 to take effect the following year was a watered-­down version of a bill promoted by the Socialist Party that would have ­ abour govnationalized the coal industry,12 following the example of the British L ernment at the time. Prior to the formation of the Katayama cabinet, the Socialist Party, its two co­ali­tion partners (the Japan Demo­cratic Party and National Cooperative Party), and the Liberal Party agreed to replace the nationalization plan with emphasis on acquiring greater state control (Miwa 2004, 195). The law that passed granted the government powers in the supervision, finance and control of the industry through the creation of an All Japan Coal Mine Control Committee, regional coal bureaus, local control committees, and a controller and production council in each of the mines designated by the minister of commerce and industry for special government supervision (Cohen 1949, 473).13 At a meeting of an investigative committee of the Diet on 1 September 1948, members reported rumors that mine ­owners ­were paying members of the Diet to oppose the bill. The bribes went mainly to Demo­crats who, as members of the co­ali­tion government, ­were formally committed to support the bill, and most of ­those who received the money defected to the Liberals before the 1949 election. The Tokyo District Public Prosecutor’s Office launched an investigation that led to bribery charges against eight politicians, all from the lower ­house.14 One of ­these was a young Tanaka Kakuei who w ­ ill figure prominently in l­ ater scandals. Tanaka accepted a 1-­million-­yen bribe (about $5,000 using the 1948 exchange rate) from mine interests to vote against the legislation and had to run much of his first 12. ​The Japan Socialist Party (JSP) was the main opposition to the conservative parties that dominated Japa­nese politics between the end of World War II and 1996. A more moderate Demo­ cratic Socialist Party (DSP) split from the JSP in 1960. In 1996 the JSP dissolved, with many of their members joining the Demo­cratic Party of Japan (DPJ) and o ­ thers remaining in a small Social Demo­ cratic Party (SDP). 13. ​ Zaibatsu (“financial cliques”) such as Mitsubishi and Mitsui ­were the large industrial conglomerates that dominated the economy at the end of the war, owning the largest mines in Japan. Many coal mine o ­ wners opposed the idea of nationalizing the industry while the coal miners’ ­unions had endorsed the Socialists’ plan since 1945. 14. ​The Tokyo District Public Prosecutor’s Office (Tokyo Chihou Kensatsuchou) is an autonomous institution located within the Ministry of Justice. Along with the cities of Osaka and Nagoya, it contains a Special Investigation Department (Tokusoubu), which could investigate major corruption cases and complicated economic crimes without police referral. See David T. Johnson 2002, Iwashita 2014, and Haley 2015 for more information about Japa­nese prosecutors in general.

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reelection campaign from his jail cell (C. Johnson 1986). Most of the eight individuals avoided significant jail time or fines mainly due to the difficulty that prosecutors faced in establishing that the money received by politicians was anything more than a po­liti­cal contribution. Shouwa Denkou and the coal mine scandals forced the immediate resignation of the Ashida cabinet. A Liberal Party caretaker cabinet led by Yoshida Shigeru took over and called an election in 1949. As seen above, many Demo­crats defected to the Liberals before the election and the new party was renamed the Demo­cratic Liberal Party for that election, reverting to the Liberal Party label thereafter. The newly empowered Diet played a major role in publicizing corruption, calling for an investigation into both scandals. L ­ egal authorities pursued corruption-­related charges aggressively. Fi­nally, the scandals ­were key ­factors in the defeat of the co­ali­tion government by the Demo­cratic Liberal Party in the 1949 election. The parties that had participated in the co­ali­tion ­were devastated both by defections and by loss of votes, and the Demo­cratic Liberals won the first single-­party majority in Japa­nese history. The scandals revealed serious corruption, but the ­legal system, the Diet, opposition parties, and Japa­nese voters all performed their functions reasonably well and democracy seemed to be working to reduce it.

The Shipbuilding Scandal (1954) The Demo­cratic Liberal government that had won the 1949 election soon found itself embroiled in a major scandal of its own. In 1954 representatives from the shipbuilding industry donated large sums of money to bureaucrats and politicians in exchange for the passage of legislation that subsidized interest on government loans. The Japa­nese government had long considered the shipbuilding industry to be one of the most strategically impor­tant industries, which also meant channeling considerable government largesse in the form of financial assistance (Hoshi and Kashyap 2001, 159). The shipbuilding industry experienced a boom from the Korean War as well as from government programs created in the 1950s that provided loans and matched shipping industries with shipbuilders. As the war wound down, so did the boom, and industry representatives requested government assistance. The Yoshida government passed legislation in 1953 that subsidized the interest on government loans. However, obtaining favorable legislation came at a price, as a court trial and the Diet debates reveal. Like the Shouwa Denkou and coal mine scandals that preceded it, paying bribes to politicians and government officials for preferential treatment was part of the costs of business, particularly for companies in strategically impor­tant sectors.



Scandals in Early Postwar Japan, 1948–1978

31

During a lawsuit among several businessmen conducted at the Tokyo District Court in 1953, investigators discovered receipts from the Yamashita Steamship Com­pany issued to one of the businessmen being sued (Kuroda and Ootani 2000, 214). A search of Yamashita Steamship’s business rec­ords, however, found no acknowl­edgment of any of ­those large payments or the loan. Investigators fortuitously stumbled upon the notes of the Yamashita Steamship president, who listed the names of politicians and bureaucrats that had taken funds from the com­pany in its effort to secure the passage of the 1953 legislation. The scandal led to the arrest of seventy-­one politicians, business executives, and bureaucrats from the Ministry of Transport. Some of the most prominent politicians implicated included the Policy Affairs Research Council president for the Liberal Party, Ikeda Hayato, Liberal Party secretary-­general Satou Eisaku, Deputy Prime Minister Arita Jirou, and Minister of Transport Gengou Tsuboi. The prosecution intended to charge Satou and Ikeda with accepting bribes, but the minister of justice at the time, Inukai Takeru, ­under pressure from Prime Minister Yoshida, invoked Article 14 of the Public Prosecutors Law that allowed him to “control and supervise public prosecutors” and requested that the prosecutor postpone Satou’s arrest. Inukai resigned the next day. Of the 71 arrested in the scandal, 32 ­were indicted and 23 ­were convicted, but only one received a prison sentence. The 1955 election, like the 1949 election, was influenced both by many defections, this time from the Liberals to the Demo­crats, the latter now led by Hatoyama Ichirou, and a strong swing away from the Liberals to the benefit of the Demo­ crats (Reed 1988). The Yoshida cabinet fell on 10 December 1954. A caretaker government ­under Hatoyama called an election for February 1955. Scandals w ­ ere thus instrumental in producing two alternations of power: from the Democrat-­ Socialist co­ali­tion to the Liberals in 1949 and from the Liberals to the Hatoyama Demo­crats in 1955. It would, however, be a long time ­until the next alternation in 1993 ­because, despite a clear rejection of the Yoshida government by voters and massive defections, the Demo­cratic Party failed to secure a majority. A ­ fter long negotiations, the Liberal and Demo­cratic Parties merged to form Liberal Demo­ cratic Party (LDP). The LDP would go on to establish one-­party predominance, changing the nature of po­liti­cal corruption in Japan. Satou was indicted for violation of the Po­liti­cal Funds Control Law, but his case was discontinued due to a general amnesty declared in 1956, when Japan was admitted to the United Nations. The scandal and Yoshida’s po­liti­cal meddling to prevent Satou’s prosecution resulted in a precipitous drop in Yoshida’s popularity and provided his many enemies with sufficient weapons to bring down the final Yoshida cabinet. It did not, however, prevent e­ ither Satou or Ikeda from l­ ater becoming prime ministers (see appendix B).

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The scandal was soon brought up in Diet debates, but the Diet played a more passive role in this case than in t­ hose detailed above. It played no role in uncovering the corruption but did dramatize the prob­lem that had been discovered elsewhere. Similarly, the ­legal authorities pursued the case aggressively once it was revealed, but the revelation was serendipitous, not the result of investigations into po­liti­cal corruption. Serendipitous discovery followed by dramatization by the opposition parties and prosecution by the l­egal authorities became the most common pattern thereafter. We find ­little evidence of proactive investigation of corruption by the opposition parties or by the ­legal system from this time ­until ­after the reforms of 1994. No governmental reforms resulted from this scandal, but the Federation of Economic Organ­izations (Keidanren) created a po­liti­cal group tasked with amassing untainted po­liti­cal funds to support conservative rule and to prevent socialists from returning to power (Mitchell 1996, 113–14). The federation encouraged businesses to funnel their po­liti­cal contributions through this group instead of making direct contributions to individual politicians. It was not, however, able to enforce this policy and scandals involving corrupt exchange continued. In the shipbuilding scandal, Yoshida, using the power granted to him by the revised Public Prosecution Law, prevented the arrest of Liberal Party secretary-­ general Satou. Making prosecutors more accountable had also made them more susceptible to po­liti­cal interference. David T. Johnson (2000, 64) argues, “For the next two de­cades, the dark shadow of Article 14 made it impossible for prosecutors to pursue major cases of po­liti­cal corruption.” Johnson backed up his argument by counting the number of prosecutions and convictions over the postwar period; updated versions of ­these figures are presented in ­table 2.1.15 From 1948 ­until the bribery case of Suzuki Muneo, Japa­nese prosecutors indicted forty-­five members for bribery with more than half of ­these cases taking place during the 1948–54 period. Among the forty-­five indicted politicians, thirty-­one ­were convicted. Johnson and other scholars argue that prosecutors w ­ ere more active in charging politicians in the earlier period compared to the period that followed. Bribery cases are difficult for prosecutors to substantiate not only b ­ ecause the law requires a heavy burden of proof, but also ­because it restricts the “prosecution’s in­de­pen­dence by making Japan’s top prosecutor—­the Prosecutor General— an agent of the top politician, the Prime Minister” (D. T. Johnson 2000, 62).16 15. ​We updated his t­ able with other bribery cases that we read about in our search of the Asahi database. Instead of listing the figures by individual scandal, we aggregated them by year, generally using the time of indictment as the year of conviction comes much l­ater. Next to the year, we have also indicated the names of key scandals we discuss in this book. 16. ​Johnson is cautious in stating that t­ here is a lack of hard evidence b ­ ecause we cannot know all the information available to prosecutors. Another reason was suggested earlier in this chapter: we also do not know the full picture of American interventions in Japa­nese politics.



Scandals in Early Postwar Japan, 1948–1978

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­TABLE 2.1  Bribery prosecutions in Japan’s parliament ­after 1948 YEAR

1948 Shouwa Denkou/coal mine scandal 1954 shipbuilding scandal/other

POLITICIANS INDICTED

POLITICIANS L­ ATER CONVICTED

15

5

7

5

1957 prostitution bill/other

4

3

1961

1

1

1967

1

1

1968

2

2

1976 Lockheed scandal/Tanaka Kakuei

3

3

1986

2

1

1988

1

1

1989 Recruit scandal

2

2

1990

1

1

1992

1

1

1994 Nakamura Kishirou/zenekon

1

1

2000 KSD scandal/Nakao Eiichi

3

3

2002 Suzuki Muneo

1

1

Source: D. T. Johnson 2000, updated by authors.

If the prosecutors ­were in­effec­tive, so was the po­liti­cal system ­after 1955. The LDP evolved into a franchise party. It provided a brand name and financial support to its candidates, but t­ hose candidates operated as in­de­pen­dent po­liti­cal entrepreneurs backed by their own support organ­izations (Curtis 1999, 143). The main ­thing it offered prospective candidates was control of government. Control of the government, however, proved more than sufficient to hold the party together for thirty-­eight years (with a minor defection in 1976). Control of government provided candidates with resources useful in building their own personal support organ­izations known as kouenkai. Kouenkai are permanent formal-­membership organ­izations that provide support to an individual politician and are extensively involved in electoral mobilization (Krauss and Pekkanen 2011, 30). ­Because candidates’ primary campaign organ­izations ­were kouenkai and not the party organ­ization, the LDP proved incapable of disciplining candidates. Candidates could violate party rules, vote against government bills, or even defect to another party, but, if they won and wanted to return, the LDP accepted them back into the party. The effective LDP decision rule for nominating candidates was simply, “if you win, you are LDP” (kateba Jimintou). Though many efforts w ­ ere made to tighten the party organ­ ization the LDP would not demonstrate the capacity to enforce party discipline ­until ­after the 1994 po­liti­cal reforms.

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Most relevant to our topic, the party proved incapable of expelling scandal-­ tainted candidates. In the LDP’s first election in 1958, seven conservative candidates who ­were ­under criminal investigation w ­ ere initially refused the nomination but ­were nominated before the election in direct violation of party rules (Reed 2009). The scandal-­tainted candidates ­were ­going to win a seat and the LDP wanted that seat. It soon became standard practice for scandal-­tainted candidates to formally leave the party (while maintaining their influence inside the party) and run as an unaffiliated in­de­pen­dent. If the candidate won, he was considered “cleansed” (misogi) and allowed to reenter the LDP. It should not come as a surprise that the first LDP government was plagued by another major scandal involving raw corrupt exchange.

The Prostitution Bill Scandal (1957) Prostitution was ­legal in postwar Japan but t­here was a growing movement for stricter government regulation (Garon 1997). The government submitted a bill to control prostitution in 1948, backed by American occupation authorities. Although it failed to become law, it formed some of the basis for the regulations contained in the Prostitution Prevention Law that passed in 1956 with the strong support of ­women’s groups, Christian churches, social welfare groups, and the left wing of the Socialist Party (Fujime 2006). The law called for the “prohibition of the exploitation of the prostitution of ­others” and was directed against such actions as solicitation in public, advertising or calling attention to the ser­v ice, as well as recruiting ­women into prostitution by force, intimidation, or other influences (E. H. Johnson 1993). The prostitutes’ u ­ nion paid politicians with the goal of persuading them to vote against the bill or to alter its implementation. In addition, “racketeers” “disrupted the election campaigns of female Diet members who w ­ ere leaders in the movement for Anti-­Prostitution Law” (Yokoyama 1993, 215). Most of the politicians who received the money ­were affiliated with conservative parties and represented constituencies with large “red light” districts. The Tokyo District Public Prosecutor’s Office uncovered the corruption when examining a separate embezzlement case. In subsequent searches investigators turned up the name of a po­liti­cal group involved in trying to defeat the antiprostitution legislation and a list of politicians who had received funds. Prosecutors indicted three politicians, all from the lower h ­ ouse, for receiving bribes and five industry representatives for giving bribes. Two of the politicians ­were found guilty. The scandal had ­little po­liti­cal or legislative fallout.



Scandals in Early Postwar Japan, 1948–1978

35

Corruption ­u nder LDP Predominance: The “Black Mist” Scandals LDP predominance was established in the 1960 election, aided by a split in the socialist camp. As noted above, single-­party predominance changed the nature of corruption. The scandals of this period w ­ ere as much a m ­ atter of the abuse of power as of corrupt exchange. The mass media spotlighted a wide variety of incidents u ­ nder the heading of “Black Mist,” building up an image of “sleaze,” to use the term applied to the image of the Conservative government leading up to the 1997 British election (Mortimore 1995). The Black Mist scandals w ­ ere thus a media creation (Stockwin 2003, 16). Of course, the press did not create the scandal out of ­whole cloth. ­There ­were enough incidents from which to construct a scandal, but ­there was no incident at the center of the scandal, nothing like Shouwa Denkou or shipbuilding. The evidence we have, therefore, indicates that stable LDP predominance reduced the level of corrupt exchange but increased the abuse of power. Perhaps the most serious incident of corrupt exchange involved the Kyouwa Sugar Refining Com­pany. In 1966 officials of this com­pany gave large sums of money to LDP politicians in exchange for assistance in obtaining a loan from the Central Cooperative Bank for Agriculture and Forestry (Mitchell 1996, 117). The incident became public knowledge when the socialists brought up the corrupt exchange during a bud­get committee meeting in the upper ­house (Asahi eve­ning, 28 September 1966). The politicians accused of taking illicit funds w ­ ere, not surprisingly, all from the LDP. Ironically for the socialists, one of their own upper h ­ ouse members, Aizawa Shigeaki, was convicted on extortion charges but died while the case was on appeal. Another clear case of corrupt exchange involved LDP member Tanaka Shouji, who used his former position as the chair of the power­ful lower ­house audit committee to blackmail businessmen and politicians. His failed attempt to blackmail Tanaka Kakuei and real estate mogul Osano Kenji (who ­later featured in the Lockheed scandal described below) over a shady real estate transaction proved to be his downfall. He threatened to expose the details of the transaction ­unless he was paid to be quiet. When he collected the payoff from Osano, however, he was arrested and eventually sentenced to prison for blackmail, fraud, and breach of trust. Many of the incidents included ­under the heading of Black Mist ­were publicized ­because of their media appeal, not for the seriousness of the corruption involved. For instance, the minister of transport, Arafune Seijurou, ordered express trains to stop at a small town in his district and was forced to resign his post. Another LDP member, Matsuno Raizou, managed to have the government pay for his

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­ aughter’s honeymoon trip. Another, Kanbayashiyama Eikichi, was accused of d the misuse of government aircraft when he and other officials flew home to his district for a parade celebrating his new position as director of the Defense Agency. Scandals concerning the abuses of power seem appropriate for the beginning of LDP predominance. Yet the fact that all this media attention failed to uncover any incidents as serious as Shouwa Denkou or the shipbuilding scandal is evidence that Japan’s prob­lem with corruption had become somewhat less serious. It also suggests that the incentives for corruption had shifted from demands from economic interests for influence over policy to demands from LDP politicians for money. The Black Mist scandals triggered the dissolution of the lower ­house. Faced with factional opponents within his own party calling for his resignation and with opposition parties boycotting all Diet proceedings, Prime Minister Satou called an election for the end of January 1967. The LDP vote dropped significantly but the party lost only a few seats, maintaining a solid majority in the Diet. Recall that the 1949 “Shouwa Denkou” election saw the Democratic-­Socialist co­ali­tion defeated by a rejuvenated Liberal Party u ­ nder Yoshida Shigeru and the 1955 “shipbuilding scandal” election had seen that Liberal Party defeated by a resurgent Demo­cratic Party led by Hatoyama Ichirou. Why did the 1967 “Black Mist” election not produce an alternation in power? In 1949 and 1955 voters abandoned the government of the day and flocked to a single alternative. In 1967, voters abandoned the governing party, just as in the first two scandal elections, but in 1967 the anti-­LDP vote was spread across a growing number of opposition parties. Japan had become a single-­party dominant party system not ­because voters ­were satisfied with LDP rule, but ­because they ­were not offered a credible alternative to the LDP. Voters would l­ater demonstrate their willingness to flock to an alternative again in the “Lockheed” election in 1976 and in the “Recruit” elections of 1990, but neither the New Liberal Club in 1976 nor the Socialist Party ­under Doi Takako in 1990 proved capable of providing an alternative capable of unseating the LDP. Elections no longer played a significant role in controlling corruption. The next election to produce an alternation in power would be in 1993. Fi­nally, the Black Mist scandals seem to have deactivated the mainstream media. The mainstream media, especially the Asahi Shinbun, played a prominent role in investigating and dramatizing the corruption of the 1960s. Asahi was active in publicizing and analyzing election law violations in both the 1960 and 1967 elections. The media spotlighted a wide variety of incidents involving the abuse of power by the newly dominant LDP. What followed, however, was a period of quiescence. Corruption scandals virtually dis­appeared from the newspapers between 1968 and 1974. The mainstream Japa­nese media only publicized ­those incidents that became public through the l­ egal system. Investigative journalism depended upon the foreign media ­until po­liti­cal reform. Yet we argue that corruption grew much



Scandals in Early Postwar Japan, 1948–1978

37

worse during this era of quiescence when no one was investigating corruption or constructing scandals.

The Tanaka Kakuei Era ­ fter the Black Mist scandals, the LDP adapted to its role as the party in power A and scandals grew scarce. The police and prosecutors w ­ ere passive, uncovering corruption only serendipitously during the investigation of other, nonpo­liti­cal cases. The opposition parties w ­ ere divided and in­effec­tive. Fi­nally, the media had retreated to passivity ­after the Black Mist. Media passivity is usually blamed on “information cartels” formed by the “press clubs.” The gestation and birth of press clubs in public offices, the Diet, and party headquarters began in the period from 1890 to 1910 (Yamamoto T. 1989). In 1949 occupation authorities mulled banning them over the fear they would obstruct the freedom of the press, but press clubs managed to survive and ­today continue to function as both social organ­izations and news-­gathering agencies.17 Press clubs form a “closed shop” consisting of journalists that have propriety access to official sources (Freeman 2000). The clubs have their own sets of rules and practices, and can use the threat of expulsion against individual journalists who try to buck the system. Most relevant ­here is the fact that the exposure of corruption is often dependent upon outsider information from media sources that do not participate in the cartel (Farley 1996, 159). The press clubs helped the LDP pressure the Japa­nese media into quiescence but did not tame the foreign media. And so it was a freelance Japa­nese journalist and the foreign media that broke the two scandals described below. Once reported by ­these “outsider” journalists, however, pack journalism took over and the mainstream media provided extensive, even excessive, coverage. The resulting scandals revealed serious corruption involving large numbers of politicians. It became clear that, during the period of quiescence between 1967 and 1974, corruption had become extremely widespread. B ­ ecause our analy­sis is based on analyzing scandals, an absence of scandals means an absence of data. Without data we cannot pinpoint when the corruption increased, but one plausible explanation centers on Tanaka Kakuei.18 As noted above, Tanaka had been 17. ​The Japan Newspaper Publishers and Editors Association rebuffed the efforts of the occupation authorities by claiming that the press clubs ­were or­ga­nized to facilitate the meeting and socializing of interested reporters and had nothing to do with the gathering of the news. See Yamamoto Taketoshi 1989, 388. 18. ​Jacob Schlesinger, correspondent for the Wall Street Journal, wrote the most useful account in En­glish of the Tanaka machine in 1999. One of the best studies of Tanaka Kakuei in Japa­nese is by Fukuoka Masayuki (1985).

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tried for bribery in the coal mine scandal but thereafter r­ ose rapidly to become the youngest-­ever secretary-­general of the LDP in 1965. In 1972 he was elected party president and prime minister. He utilized ­these posts to systematize many practices linked to corruption, most notably the use of government-­funded construction proj­ects, and to bolster LDP (and especially Tanaka faction) support at the polls. Many of the names l­ ater associated with corruption, most notably Kanemaru Shin and Ozawa Ichirou, w ­ ere Tanaka associates. One can make a good case that corruption would not have gotten so bad if only someone other than Tanaka had been elected prime minister in 1972. A narrow focus on individuals reinforces the idea that one could solve the corruption prob­lem by simply getting rid of a few corrupt officials, but that is clearly not the case. That said, however, Tanaka seems to have made the corruption prob­lem worse than it other­wise would have been.

Tanaka’s Money-­Power Politics Scandal (1974–1975) Like the Black Mist scandals, the controversy surrounding Tanaka Kakuei’s “money-­power politics” was driven not by any major incident but by media spotlighting. This time, however, the mainstream media was passive u ­ ntil forced into action by a freelance journalist and the foreign media. To understand why Tanaka was forced to resign as prime minister in 1974, one must start with the 1974 upper h ­ ouse election. The Tanaka cabinet had already lost public support largely due to the inflation caused by Tanaka’s pork barrel politics (Kume 1998, 108). The 1974 election was a chance to turn ­things around. Tanaka devised the practice called “company-­organized campaigning” (kigyou-­gurumi senkyo) in the “upper” tier of the upper ­house called the “national district” (zenkokuku) system that was used from 1947 ­until the 1980 election. The LDP assigned candidates to specific industrial groups and made it the com­pany’s responsibility to elect their assigned candidate. If the com­pany’s candidate lost, it would not only be an embarrassment, but also the com­pany would not have a direct representative in the Diet while their rivals would. Big business did not want to see a Diet with significant socialist influence so Tanaka could convince even the traditionally apo­liti­cal Mitsubishi Group to sponsor a candidate. Note that the initiative for corrupt exchange was coming from politicians and parties, not from economic interests. Instead of interest groups buying public policy from politicians, corrupt exchange now resembled politicians demanding money and votes from interest groups. Corrupt exchange thus looked more like extortion by politicians than bribery by interest groups. New rec­ords ­were set for money spent on the campaign (if illicit funds are included) and ­there was a jump in election law violations (Carlson and Reed 2013).



Scandals in Early Postwar Japan, 1948–1978

39

Worse yet for Tanaka and the LDP, all that money and effort produced only two more seats for the party. Tanaka was pilloried in the press for his campaign tactics and within the LDP for having “lost” the 1974 upper h ­ ouse election. In November of 1974 freelance journalist Tachibana Takashi published an article exposing Tanaka’s money-­power politics in the monthly magazine Bungeishunjuu. His investigative reporting revealed that Tanaka owned many chemical and transportation companies, expensive real estate in downtown Tokyo, and villas allegedly purchased with money left over from his 1972 campaign to become prime minister. Tachibana’s article further suggested that Tanaka had purchased the seat of prime minister. The revelations w ­ ere not new, though unknown to most of the voting public, and did not involve any clear criminal be­hav­ior. It was “sleaze” much like that exposed in the Black Mist scandals. The mainstream press, however, ignored the story ­until 22 October when Tanaka made an appearance at the Foreign Correspondents’ Club. Out of nine questions asked to him by foreign reporters, five dealt with the magazine exposé. The next day the Japa­nese newspapers jumped on the story (LA Times, 1 December 1974). Using the scandal as ammunition, Tanaka’s enemies could force his resignation. As impor­tant as Tanaka’s resignation was, the choice of his successor proved even more so. Miki Takeo led the smallest faction in the party and was seldom mentioned as a potential prime minister, but he was also known as a dedicated reformer and personally as “Mr. Clean.” The LDP could not afford to have another scandal at that juncture and Miki seemed a safe bet. He soon lived up to his reputation as a reformer, exploiting the win­dow of opportunity to enact the first major revisions of the Po­liti­cal Funds Control Law since its original enactment in 1948. The revisions included the strengthening of disclosure rules, the introduction of narrower definitions for classifying po­liti­cal organ­izations, the placement of quantitative restrictions on donations, and allowing contributions to be tax deductible up to a set amount. Miki’s original proposal was to ban corporate contributions, but he had been forced to alter his position to gain the support of his own party. The reforms ­were designed to direct the flow of money ­toward parties instead of factions and to encourage more donations from individual donors (Curtis 1988, 180). Tanaka’s money-power ­politics scandal thus resulted in significant po­liti­cal repercussions and reforms.

The Lockheed Scandal (1976) The Lockheed scandal came to light during an investigation conducted in the U.S. Senate by Senator Frank Church’s Subcommittee on Multinational Corporations into bribes paid by American companies to foreign government officials. The

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investigations ­were aimed at malfeasance by American companies but in testimony in the U.S. Senate, Lockheed was “accused of paying bribes in at least fifteen countries, and in at least six of them, it has caused serious governmental crises” (Sampson 1976, 53). Japan, Italy, Germany, and the Netherlands w ­ ere among the six. The Italian general election of 1976 was also a “Lockheed” election but Lockheed was only one of several scandals uncovered just before voters went to the polls (Clark and Irving 1977, 9). In Germany, Minister of Defense Franz Josef Strauss received at least $10 million from Lockheed, but the incident was not dramatized into a major scandal and did not greatly affect the electoral outcome. In Japan, however, the allegations about Lockheed’s payments to se­nior government officials brought the Diet to a standstill (Baerwald and Tomita 1977, 223). If Tanaka had been prime minister at the time of ­these allegations, it is plausible that he might have prevented the incident from being dramatized into a scandal. The prime minister at the time was, however, Mr. Clean, Miki Takeo, and he was determined to pursue the issue. In February, Miki promised full disclosure and the two ­houses of the Diet passed a joint resolution demanding that the United States reveal the names of ­those who took the bribes. President Gerald Ford provided the relevant information on 10 April (Soma 1977, 32). The LDP suddenly regretted its decision to select Miki as their leader and moved to dump him. However, Miki held his ground and continued to press forward. He could do so ­because, unlike Satou in 1966 or Tanaka in 1974, he had the support of the public, the opposition parties, and the media. In addition, the ­legal system, most notably the Special Investigation Department within the Tokyo District Public Prosecutor’s Office, pursued the Lockheed case with vigor. It is difficult to know how active or passive prosecutors are at any time, ­because prosecutors ­will not talk, and the journalists that do talk do not know the real state of the evidence (D. T. Johnson 2000). Yet it is clear that prosecutors, who had seemed to be passive since the shipbuilding scandal, became more aggressive in the Lockheed case.19 They managed to maintain their in­de­ pen­dence and continue the ­trials u ­ ntil their conclusion years ­later. In July and August of 1976, the scandal culminated in the arrests of former prime minister Tanaka, former parliamentary vice minister of transport Satou Takayuki, and former minister of transport Hashimoto Tomisaburou (Baerwald and Tomita 1977). Investigations into the scandal revealed that the American 19. ​The name of the lead prosecutor in charge of the Special Investigation Department in the Lockheed scandal was Yoshinaga Yuusuke. His individual role in spurring a more aggressive style is often mentioned in many of the scholarly accounts and in the Western media. See, for example, Kubo 1989, Sakagami 2007, as well as the New York Times (1 May 1989) for his ­later involvement in the Recruit scandal.



Scandals in Early Postwar Japan, 1948–1978

41

Lockheed aerospace com­pany had spent substantial sums, as much as $12 million, in Japan to influence the sale of its airplanes to All Nippon Airways (ANA). Unreported and illegal funds w ­ ere paid to the Marubeni Trading Com­pany, Lockheed’s agent in Japan, as well as to ANA to encourage the purchase of Lockheed’s TriStar jets. At the time, ANA had been negotiating with the Mitsui Corporation, who was the agent for Douglas Aircraft, to purchase the DC-10. In 1972 Lockheed’s vice president visited Japan and met with the president of Marubeni to request that he seek Prime Minister Tanaka’s help in selling the TriStar. The vice president also used the confidential ser­vices of Kodama Yoshio, an ultranationalist who had been imprisoned in the 1930s for trying to assassinate the Japa­nese cabinet. Marubeni officials met with Tanaka and requested his intervention on behalf of Lockheed. Secret deals w ­ ere struck between Tanaka, Marubeni, ANA, and Kodama and his vari­ous contacts. A ­ fter winning the contract from ANA, Lockheed paid every­one for their ser­v ices, including Tanaka, Kodama, ANA, and Osano Kenji, a business mogul and major holder of ANA stock who helped persuade ANA’s vice president on behalf of Tanaka. The Lockheed scandal was thus reminiscent of the Shouwa Denkou and shipbuilding scandals in that money was exchanged for a governmental decision. The difference was the fact that the com­pany purchasing public policy was a foreign entity. The fallout of the Lockheed testimony led to a flurry of arrests and charges in Japan and involved a total of four dif­fer­ent ­trials in the Tokyo District Court based on the differentiation of the main money routes. The ANA route involved the ANA board chairman as well as the former minister of transport and parliamentary vice minister of transport. All of them w ­ ere found guilty, with the chairman receiving three years in jail with a five-­year stay of execution. The former ministers received fines and suspended sentences.20 The Kodama Yoshio route focused on bribery but never went to trial b ­ ecause Kodama died. The Osano Kenji route found Osano guilty of perjury, but Osano died while appealing his conviction. The Marubeni route and trial focused on Tanaka, his secretary, and Marubeni officials who ­were indicted on charges including bribery, perjury, and foreign exchange law violations. Tanaka was found guilty in 1983 for violations of foreign control laws and received a four-­year prison sentence, but remained ­free on appeal. His

20. ​In the Japa­nese l­egal system, suspended sentences can be given in cases where the prison sentence is up to three years. Essentially, the convicted person is on probation and w ­ ill not see the inside of a jail cell u ­ nless he or she commits additional crimes and the court cancels the suspension. “When a person is indicted in Japan, it is ­because the prosecutor feels that the defendant deserves, and society is best served by, some form of punishment of that person. Conversely, when prosecution is suspended, it is ­because the prosecutor feels that punishment is not warranted” (Castberg 1997).

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secretary and several former Marubeni executives also received prison sentences, which most of them appealed. The 1976 “Lockheed” election had several significant consequences. First, the LDP failed to capture enough seats to win a majority for the first time since it was founded. It could cobble together a majority only by bringing conservative in­de­pen­dents into the party. The LDP did not lose power and no other party came close to winning more seats than the LDP, but the 1976 election did usher in the hakuchuu (“evenly matched”) era of extremely narrow majorities. The prospect of co­ali­tion government was now real and produced a change in the culture of the Diet, from a culture of conflict between the LDP and the opposition to a culture of cooperation and compromise (Krauss 1984). The LDP won only 30 ­percent of eligible voters in 1976 and 1979, which appears to have been the rock bottom of LDP support at that time. The party won the 1980 election but returned to 30 ­percent in 1983 a­ fter Tanaka was convicted of crimes associated with Lockheed. The Lockheed scandal was thus responsible for LDP losses in two elections, 1976 and 1983. The second event in the 1976 election that would reverberate throughout Japa­ nese politics thereafter was the first defection from the LDP. Kouno Youhei led a small group of defectors out of the party and formed the New Liberal Club (NLC). Voters flocked to the NLC, clearly demonstrating the potential for a new conservative party. However, the party ran in only twenty-­five districts, the minimum required at the time to conduct po­liti­cal activities during the official campaign period. If the NLC had followed a more aggressive nomination strategy, nominating even ten or twenty more candidates, the LDP would prob­ably have lost its majority in 1976, though it is far from clear what kind of government would have been formed ­under ­those circumstances. The most bizarre aspect of the Lockheed scandal was Tanaka’s continuing influence. Tanaka continued to run and win as an in­de­pen­dent through 1986. As noted above, scandal-­tainted incumbents in Japan often continued to run without the party nomination and, if elected, rejoined the LDP, but Tanaka also continued to lead the largest LDP faction despite not being formally a member of the LDP. This position allowed him to play the role of kingmaker. The Tanaka faction was the key to the se­lection of Prime Ministers Oohira and Nakasone. Tanaka’s influence faded only ­after he suffered a stroke. Thus, the Tanaka era—­ where Tanaka ­either dominated the po­liti­cal system or was the opponent of the leader in power—­can be said to have persisted for some thirteen years, from 1972 to 1985 (C. Johnson 1986, 22).



Scandals in Early Postwar Japan, 1948–1978

43

The Evolution of Major Postwar Corruption Scandals, 1948–1978 ­ here is no conservation law for corruption.21 Corruption may never go to zero, T but it does get worse or better depending upon the circumstances. Po­liti­cal corruption in Japan clearly became less serious with the establishment of stable LDP predominance. Yet, it is also hard to avoid concluding that po­liti­cal corruption grew progressively worse during the period of quiescence between 1967 and 1974, and especially a­ fter the advent of Tanaka Kakuei. U ­ nder the conditions of extremely low transparency established by LDP dominance, serendipitous revelations periodically revealed serious corruption implicating large numbers of politicians, most but not all of them members of the LDP. If an accidental peek u ­ nder the veil revealed so much corruption, it makes sense to assume that systematic revelations would have revealed much more. For Japa­nese voters, the Lockheed scandal was particularly convincing in this re­spect. A remarkable number of unlikely events had to coincide to reveal the facts of the case. If it w ­ ere not for an ambitious American senator probing into American companies, the foreign media asking questions that led the Japa­nese media to probe into the case and, most impor­tant, the election of Miki Takeo who refused to cover it up, the Japa­nese public would have never known. Low-­probability events, however, can have significant consequences. The Lockheed scandal dominated the headlines for months and Tanaka’s trial kept the story alive for years. The ­causes of rising corruption also seem clear. The checks on corruption did not function well during the era of LDP predominance. First, the Japa­nese media failed to engage in aggressive investigative reporting. The Japa­nese mass media covered corruption cases thoroughly in the Black Mist scandals beginning in 1966 but retreated thereafter into quiescence. The weekly magazines covered corruption, but the mainstream media only picked up such stories ­after the foreign press began to discuss them. Second, the criminal justice system was in­effec­tive in investigating and convicting corrupt politicians. Most notably, bribery was extremely difficult to prove. Prosecutors appear to have been quite active u ­ ntil 1954 but, in the shipbuilding case, ­were stymied by po­liti­cal interference. While prosecutors pursued the Lockheed case quite aggressively, they faced a very restrictive environment. Prosecutors in Japan face severe limitations in how they can investigate—­w iretapping, 21. ​In physics, a conservation law for energy is expressed as the statement that the total quantity of energy in an isolated physical system does not change: the amount of conserved energy only changes by the amount of energy that enters or exits the given volume. Studying corruption is difficult ­because it is not an isolated physical system and ­because ­there is no volume that can be mea­ sured with any degree of certainty.

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­ ndercover operations, plea bargaining, immunity, and electronic surveillance u are all prohibited (Nester 1990, 99; Iwashita 2014). Third, ­there ­were serious issues with electoral accountability. The LDP proved incapable of disciplining corrupt party members. The party could not deselect scandal-­tainted politicians ­because it was a franchise party that depended on the personal qualities and rec­ord of their candidates more than the popularity of the party’s policies or its leadership. Involvement in serious corruption cases did not prevent politicians from rising to the leadership of the party and the government. Ikeda Hayato and Satou Eisaku ­were involved in the shipbuilding scandal but went on to become prime ministers (see appendix B). Tanaka Kakuei was convicted (­later reversed) in the coal mine scandal but he not only went on to become prime minister, he also continued to act as kingmaker inside the LDP ­after being convicted in the Lockheed scandal (C. Johnson 1986). Nor could voters enforce accountability. Voters punished the LDP but could only dent its predominance b ­ ecause ­there ­were no attractive alternatives. The LDP lost votes and seats ­after each of the major corruption scandals, but ­those votes and seats w ­ ere spread among a divided opposition. Voters also punished scandal-­ tainted politicians but w ­ ere seldom able to defeat politicians with a solid “personal vote” or­ga­nized into power­ful kouenkai. In the old MMD election system, conservative voters could punish a scandal-­tainted LDP politician and still vote for the LDP by supporting a dif­fer­ent LDP member in the same district. The only hopeful sign during this period was the voter response to the NLC in 1976. The NLC did not run enough candidates to dislodge the LDP from power, but it did demonstrate to all concerned that new reformist parties could expect a similar response. Three other new parties learned from the NLC experience and, together, ­were able to defeat the LDP at the polls in 1993. Fi­nally, scandals resulted in no significant reforms. Vari­ous government ministries established deliberative councils (shingikai), but any recommendation that might threaten LDP predominance could not be passed. The most effective reform was that enacted during the Miki administration in 1975. A major revision of the Po­liti­cal Funds Control Law attempted to shift the flow of money t­ oward parties and away from factions and to encourage more donations from individuals instead of large companies (Curtis 1988, 180–82). Neither purpose was realized. The image of Japa­nese politics as “so corrupt that it seem[s] beyond reform” (C. Johnson 1995a, 211) was clearly justified. The Lockheed scandal was followed by a crescendo of scandals in rapid succession. The number of politicians implicated also ballooned to new rec­ord levels. The frequency of ­these scandals and the rising numbers of politicians implicated fi­nally led to an alternation in power in 1993 and the po­liti­cal reforms of 1994. We now turn to that story.

3 SCANDALS AND REFORM, 1979–2001 The momentous push for po­liti­cal reform that swept Japan in the early 1990s had its genesis in a series of scandals. . . . ​Public outrage at the corruption forced lawmakers to take action, leading to the passage by the Diet of a package of po­liti­cal reform bills in early 1994. Hideo Otake, How Electoral Reform Boomeranged

The Lockheed scandal ended quiescence but the scandals that followed revealed a dif­fer­ent form of corruption. First, the initiative shifted back to interest groups, with the corrupt exchange involving interest groups buying influence more than politicians extorting money from interest groups. Second, many of the interest groups involved w ­ ere “po­liti­cal outsiders” trying to become “insiders.” T ­ hese groups did not pay bribes for specific policy outcomes. Rather they spread cash around widely among the po­liti­cal elite to guarantee diffuse access to the policymaking pro­cess. Fi­nally, the number of politicians implicated in the scandals of this period ballooned to numbers never seen before. The scandals made it clear to the public that corruption was endemic to the system and involved almost all influential politicians, including some from the opposition parties. Why did corruption take the form of buying diffuse access? ­There ­were no significant reforms that might explain the new form of corruption. None of the groups tasked with controlling corruption became significantly more aggressive or effective. Scandals ­were still generated through serendipitous discovery and the criminal justice system was seldom successful in obtaining bribery convictions ­because politicians ­were merely accepting money from sources passing it out. The Lockheed scandal described in chapter 2 seems to have taught politicians and interest groups lessons that changed their be­hav­ior. Established insider interest groups seem to have learned to avoid too much involvement in politics, and outsider groups seem to have learned that po­liti­cal access could have significant payoffs. Outsider groups also had plenty of cash due to the economic boom of 45

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the 1980s.1 Throwing cash at many politicians prob­ably made serendipitous discovery more likely even if investigators had not gotten any more efficient. The practice guaranteed that, whenever a scandal erupted, it would implicate a high proportion of the most power­ful politicians. Many LDP politicians learned that the Tanaka way of winning elections was no longer working and that reform was necessary. Some even proved willing to defect from the LDP and form new parties, knowing from the experience of the NLC in 1976 that voters welcomed such an alternative. Reformers within the LDP met a positive response from similar groups inside the opposition parties who also wished to form a ­v iable alternative to the LDP. ­These groups came together in the 1993 election, denied the LDP a majority, and formed a broad co­ali­tion government that excluded the ruling party for the first time. This diverse co­ali­ tion then passed the reforms of 1994. The reforms of 1994 caused major changes in the prevalence of corruption, the pro­cess of scandal construction, and the content of the scandals that emerged. ­Those changes did not, however, happen immediately. In the period between 1993 and 2001, most scandals involved be­hav­ior that had happened before reform, leaving the impression that nothing much had changed. Even so, the transparency generated by the reforms made it easier to construct scandals, and other parts of the reforms made it easier to convict the politicians implicated. More impor­tant, the reforms tended to reinvigorate the l­ egal system, the media, and the opposition parties.

Buying Diffuse Access, 1979–1993 Movement t­ oward reform began in the late 1980s. Scandals that followed Lockheed saw a steep rise in the number of politicians implicated. In ­table 3.1 we pres­ent our rough estimates of the number of politicians implicated in each of the major scandals we have covered between 1947 and 1993.2 In the first six postwar scandals, for example, we find an average of ten lower ­house politicians and almost no upper h ­ ouse members associated with each scandal. From 1979 to 1992, however, the average is more than three times higher for the lower ­house and eight times higher for the upper ­house. Scandals tended to

1. ​See Katz 1998 for one analy­sis of the detailed ­factors that ­shaped the rapid and mostly unexpected fall of Japan’s po­liti­cal economy. See also Grimes 2001 and Vogel 2006 for a general discussion. 2. ​The list is limited to the major scandals we pres­ent in chapters 2 and 3. Although t­ here ­were many other po­liti­cal scandals during this time, we uncovered the longest list of politicians in the Recruit and pachinko scandals, which generated additional inquiries.



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­TABLE 3.1  Number of politicians linked to major ­corruption scandals SCANDAL

Shouwa Denkou (1947)

LOWER ­HOUSE

UPPER ­HOUSE

7

1

Coal mine (1948)

10

0

Shipbuilding (1948)

14

1

6

0

17

1

8

0

KDD (1979)

12

6

Recruit (1988)

52

8

Pachinko (1989)

67

17

Sagawa Kyuubin (1992)

12

3

Prostitution bill (1957) Black Mist (1966) Lockheed (1976)

Source: Authors’ search of the Asahi database.

implicate many more politicians ­after the Tanaka era and up to the structural reforms of 1994. In addition to our standard questions, we must also ask how the lists ­were generated. Similarly, in previous scandals it was reasonably clear what interest groups ­were buying with their money, but in this period the recipients of interest group largess typically had no formal authority over any specific policies of interest to the donors. This not only made it extremely difficult to prove a l­ egal case of bribery but also forces us to ask, “What ­were politicians selling and donors buying when all of this money changed hands?”

The KDD Scandal (1979) In 1979 KDD, the government-­owned International Telephone and Telegraph Com­pany, enjoyed a mono­poly on international telephone ser­v ice. The KDD scandal came to light when immigration authorities accidently caught KDD officials smuggling jewelry and other luxury goods into the country (Soma 1982, 190–91). The com­pany initially claimed that its employees had simply failed to fill out the appropriate customs forms, but investigators soon discovered that the luxury goods ­were part of a well-­organized scheme by top KDD executives to generate slush funds (Asahi, 15 October 1979). The investigation revealed that com­pany officials had spent billions of yen since 1975 on gifts and other financial support to politicians in the LDP and, to a lesser extent, the Japan Socialist Party (JSP) (Asahi, 20 May 1980). Investigators also discovered that KDD executives ­were stealing and squandering com­pany funds. The president spent millions of yen on every­thing from expensive artwork to golf

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clubs for his own personal use. The Tokyo High Court ultimately found him guilty of embezzlement. No politicians ­were indicted in this scandal, however. During the trial, it was revealed that around 190 politicians had received money from KDD, but prosecutors never released the full list of ­those involved. As no politicians w ­ ere indicted in the court proceedings, airing the list would have drawn attention away from the KDD officials who w ­ ere on trial. The court evidence was never leaked so the Japa­nese public was never told who accepted money from KDD. The press, however, did reveal a small list of politicians known to have accepted gifts. At least six members who accepted gifts w ­ ere from the upper h ­ ouse, the greatest number of names linked to this chamber in any of the scandals discussed thus far. Smuggling had become SOP corruption for KDD officials. The smugglers w ­ ere just ­doing their job, believing that their actions w ­ ere perfectly ­legal. Smuggling was not a practice built into the system in any way; it was just com­pany policy. KDD had clear interests in maintaining its mono­poly over international telephone ser­v ice and restricting competition from other companies, domestic or foreign (Quo 1980; Farnsworth 1980; West 2006). However, most of the politicians who received funds from KDD had no official capacity to influence legislation on behalf of the com­pany. KDD was rather purchasing broad po­liti­cal access and influence. Prosecutors ­were thus unable to convict politicians who accepted “contributions” from KDD on bribery charges. The KDD scandal had l­ittle effect on the 1980 elections and generated no specific reforms. However, the less prominent Grumman-­McDonnell scandal did generate changes in campaign finance laws, which ­were enacted in 1980. In this scandal, LDP politician Matsuno Raizou took illicit funds from the Nisshou-­Iwai Corporation in an incident like the Lockheed case.3 Matsuno accepted the payments between 1967 and 1976 although this fact did not become public ­until the trial of the vice president of Nisshou-­Iwai in 1979. The 1980 reforms added reporting requirements for po­liti­cal groups used by individual politicians to receive po­liti­cal donations. Po­liti­cal groups needed to officially register if they raised or spent money on behalf of any politician. The new laws also required politicians to disclose more of the specific details related to the income and expenses made by their registered groups. Discrepancies between com­pany rec­ords and the financial reports of politicians proved useful to the construction of scandals. In the Recruit and pachinko scandals detailed 3. ​To promote aircraft sales in Japan and in other countries such as Iran, Grumman along with the McDonnell Douglas Corporation bribed politicians such as Matsuno and likely other officials. In Japan Nisshou-­Iwai, a major trading firm, was the sales agent for Grumman. During the investigation by prosecutors, the executive director of Nisshou-­Iwai committed suicide by jumping out of his office win­dow.



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below, journalists and investigators used multiple sources of information to uncover and reveal a long list of individuals who took money or other benefits, even when no clear laws ­were broken. Even this seemingly minor, little-­noted reform increased transparency and made scandal construction easier.

The Recruit Scandal (1988) Ezoe Hiromasa founded Recruit in 1960 as a classified advertisement, publication, and ­human resources com­pany. One of its core business activities was providing information about job openings for job seekers and information to companies about potential recruits. The com­pany quickly expanded and in 1964 established a real estate subsidiary com­pany called Recruit Cosmos. Between 1984 and 1986 Recruit sold preflotation shares in Recruit Cosmos to bureaucrats, media leaders, business executives, academics, and members of the LDP and opposition parties. When the stock was publicly listed, most of t­hose who received shares sold them, making windfall profits. Recruit had a clear preference to sell shares and make contributions to LDP members in the more power­ful lower ­house. The Recruit scandal did not involve any explicit quid pro quo and thus did not fit the ­legal definition of bribery. Public criticism focused on the preflotation of stock, but the practice was not illegal at the time. In addition to donating to politicians through the officially registered po­liti­cal groups, Recruit made bulk purchases of tickets to fund-­raising parties, which became commonplace in Japan ­after revisions to the funding law pushed in 1975 (Curtis 1988, 185). Tickets typically cost 20,000 or 30,000 yen ($160 or $240) and ­were sold by po­liti­cal secretaries. The number of tickets sold normally exceeded the number of attendees by a large margin. The cost of the tickets could be written off as business expenses, rather than as po­liti­cal contributions. The Recruit scandal thus focused light on two unfamiliar ways of giving money to politicians: insider trading and fund-­raising parties. More information about the “stocks-­for-­favors” scheme came to light through two major events. The first was a journalistic investigation by the Yokohama branch of the Asahi Shinbun involving a local story (Farley 1996, 148). The Recruit connection emerged when a deputy mayor testified in the Kawasaki municipal assembly in response to questions ­whether his purchase of Recruit shares was a return f­avor for the rights given to Recruit to build a large office building. The local story did not make the front page of the national newspaper, but it did attract tips from other sources leading to a front-­page story that implicated the aides to Prime Minister Takeshita, LDP secretary-­general Abe, and Minister of Finance Miyazawa. The government refused to respond to opposition party demands for a parliamentary inquiry. Narazaki Yanosuke, a member of the Diet from the small

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Social Demo­cratic League, repeatedly visited Recruit asking for a list of t­ hose who received stocks from Recruit Cosmos. His dogged per­sis­tence worried a se­nior Recruit executive, Matsubara Hiroshi, who deci­ded to silence Narazaki by offering him a “small souvenir.” Instead of accepting the “souvenir,” Narazaki contacted Nippon Tele­vi­sion. Together they secretly taped Matsubara offering Narazaki an envelope stuffed with 5 million yen ($39,000) in cash. When the sting was then played on national TV it provided a smoking gun that convinced the public, if not the prosecutors, that Recruit was guilty of trying to pervert the demo­cratic pro­cess. The made-­for-­television plot engineered by Narazaki and Nippon Tele­v i­sion was a spectacular and proactive move against corruption, but Narazaki was not done. He filed a complaint with the Tokyo District Public Prosecutor’s office, which promptly charged Matsubara with bribery and began digging up information on ­those that Recruit was supposedly trying to bribe.4 Identifying ­those who received the stocks proved difficult ­because privacy laws protected stock dealings and ­because the transactions ­were not managed by Recruit itself but by affiliated entities. Fi­nally, some of the recipients listed their stocks ­under an assistant’s name. The Special Investigation Unit led by Yoshinaga Yuusuke within the Tokyo Public Prosecutor’s Office was tasked with sorting out the details.5 Investigators made no effort to suppress the names of politicians who received prelisted stocks or funds from Recruit ­because insider trading was not the main point of ­legal contention and ­there ­were few laws to restrict this practice. Some individuals, prob­ably investigators or t­ hose involved in underwriting some of the stock transactions, leaked information to the media and opposition parties, which explains how the “lists” kept getting longer and more detailed as investigations progressed (Nester 1990, 99).6 Once investigators began pursuing criminal charges the scandal generated an impressive amount of detail, including the longest list of politicians involved in a major postwar scandal up u ­ ntil this time. Recruit wanted influence over the many seemingly minor administrative changes that could affect an information com­pany’s ability to obtain and publish information. The vice minister of education, for example, helped Ezoe join education committees that w ­ ere relevant to the com­pany’s efforts to identify job seekers and companies interested in hiring. Contacts cultivated with officials 4. ​Matsubara pleaded guilty to attempted bribery. He received an eighteen-­month sentence, which was suspended for four years. 5. ​In the earlier Lockheed scandal, Yoshinaga’s team helped uncover evidence that led to the conviction of Tanaka Kakuei. 6. ​Ezoe (2010, 325–26) speculates that one of the first leaks originated from within the local branch of Daiwa Securities, the managing underwriter for some of the stock deals. He also suspects that Asahi’s Yokohama bureau did not release the list all at once, so that the national bureau would not take over the story.



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linked to the Ministry of L ­ abor and Ministry of Education, as well as with officials from Japan’s largest com­pany, Nippon Telegraph and Telephone (NTT), made it pos­si­ble for Recruit to purchase two super computers from NTT. Yet, as with KDD, Recruit was spreading money around widely, establishing connections without demanding any specific quid pro quo, thereby making it difficult to establish a case of bribery. The first fallout from the scandal led to three cabinet resignations: Minister of Finance Miyazawa Kiichi, Minister of Justice Hasegawa Takashi, and Economic Planning Agency chief Harada Ken. In 1989 additional arrests netted the former president of Recruit and former officers and the chairman of NTT. The former vice ministers of l­abor and education w ­ ere also arrested on the charge of accepting bribes in return for f­avors. In April 1989 the scandal toppled Prime Minister Takeshita ­after he admitted in Diet testimony that he had received 151 million yen ($1.2 million) in donations from Recruit. Investigations into the Recruit scandal resulted in criminal charges being filed against many bureaucrats and businessmen, but the top po­liti­cal leaders escaped indictment. In 1990 prosecutors secured their first major guilty verdict in the trial against the former chairman of NTT. He was sentenced to two years in jail, but the sentence was suspended ­because of his age and contributions to the business world. Prosecutors also charged two prominent members of the Diet with bribery: Ikeda Katsuya, former deputy secretary-­general of Komeito, Japan’s religious party, and Fujinami Takao, former chief cabinet secretary in the Nakasone cabinet and member of the LDP. Prosecutors argued that both used their influence to maintain an informal agreement between private companies and government agencies on a uniform date for hiring college gradu­ates, which was impor­tant to the sale of Recruit publications. Ikeda was given a suspended three-­year prison term. The Tokyo District Court acquitted Fujinami in 1994 but the Tokyo High Court reversed the decision in 1997, giving him a suspended three-­year sentence. The last defendant to face trial was Recruit founder Ezoe, who was given a suspended three-­year sentence in 2003. Partly in response to the Recruit scandal, the Takeshita administration passed amendments to Japan’s Securities and Exchange Law in 1988 that prohibited insider trading, prescribed sanctions for violators, and increased reporting requirements and the investigative authority of the Ministry of Finance. The Recruit scandal, however, was only one impetus for reform. Japan had experienced major insider trading scandals in the business world since 1987 and was facing external pressure from other countries to reform its securities laws to insure fairness for foreign investors (Swan 1991). As in 1974, when the LDP selected Miki to replace the disgraced Tanaka, the party selected another “Mr. Clean” from a small faction to replace Takeshita, Uno

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Sousuke. Uno had been minister of foreign affairs u ­ nder Takeshita. More impor­ tant, he was one of the few se­nior LDP leaders who had not received stocks or money from Recruit. The most likely explanation for this fact is, however, that Recruit did not consider him impor­tant enough to bribe (Mitchell 1996, 125). As it turned out, Uno would further damage the LDP’s reputation when he became embroiled in Japan’s first modern “sex scandal” (detailed in chapter 6).

The Pachinko Scandal (1989) In 1989 the weekly magazine Shuukan Bunshun published an exposé claiming that the National Federation of Entertainment Associations, the main po­liti­cal organ­ization for the pachinko industry, had made considerable donations to politicians in the JSP, including Doi Takako, the popu­lar chairwoman of the party and avid pachinko player. The exposé was an effort to discredit Doi and the Socialists but soon backfired as the media quickly determined that politicians from all parties except for the JCP had received donations. The scandal is unique b ­ ecause, though no one faced any serious ­legal charges, the Socialists deci­ded to conduct their own investigation into the affair and make the results public. Pachinko is a ­legal form of gambling in Japan in which players purchase small steel balls and feed them into a vertical pinball-­like machine. A ball that hits a target triggers a payout of additional balls, which can ­later be exchanged for cash or prizes. The Japa­nese spend some 30 trillion yen a year (about $275.8 billion in 2016) playing pachinko, equal to half of the spending on health care, and money borrowed to play is believed to account for almost half of consumer debt (Economist, 27 July 2006). One reason why the discovery of donations from the pachinko industry to politicians became a major scandal is b ­ ecause Korean residents run a considerable portion of the industry. Some of t­ hese Koreans are from North K ­ orea raising funds to send to the North Korean government. The original exposé alleged that at least two Socialist members received donations from North Korean residents, a violation of the Po­liti­cal Funds Control Law. It is illegal for politicians to receive po­liti­cal donations from non-­Japanese citizens. Additionally, the donations and purchases of party fund-­raising tickets w ­ ere linked to efforts by the pachinko industry to defeat proposed legislation that would make its financial activities more transparent by requiring pachinko players to purchase prepaid cards (Asahi, 7 November 1989). The revelations tarnished the Socialist image as a clean party that pursued LDP corruption. The party thus deci­ded to investigate the rumors and make the results known. It uncovered disturbing details that implicated itself but also,



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more impor­tant, cast other ruling parties in a negative light. From 1984 to 1987 seven Socialist Party members received around 8 million yen ($55,000 at the 1987 exchange rate) from the industry, with fifteen members from other parties accepting close to 15 million. During the same period, however, 81 LDP politicians accepted a much larger 124.8 million yen (more than $860,000) (Asahi, 14 October 1989). The JCP was the only clean party. The Socialists denied that any of the funds accepted by its members ­were used in exchange to influence legislation. The Socialists’ report caught the other parties off guard. As the LDP gathered information, additional reports linked contributions from a Korean pachinko owner to former LDP prime minister Suzuki Zenkou (Asahi, 17 October 1989). Komeito and the Demo­cratic Socialist Party (DSP), which had been implicated in the Socialists’ report, admitted that five members of each party accepted donations from the industry (Asahi, 21 November 1989). The LDP found itself in its normal position of denying that any irregularities had been involved and resisting opposition demands to initiate an investigation and expose itself to the public. The LDP partially caved in to pressure by releasing information showing that seven members of its cabinet, including Prime Minister Toshiki Kaifu, received funds or the purchase of party fund-­raising tickets from the pachinko industry (Asahi, 20 October 1989). The minister of health and welfare, Toida Saburou, revealed that he too had received donations, making him the eighth cabinet member linked to the scandal. Three days l­ater, in a press conference, Ozawa Ichirou, then secretary-­general of the LDP, informed the public that his party had not deci­ded w ­ hether to release a complete list ­because he still needed to consult vari­ous opinions within the party (Asahi, 23 October 1989). A ­ fter heated debate in the lower ­house Bud­get Committee, the LDP fi­nally deci­ded to publicize the results of its own internal investigation with a complete list of the politicians who accepted money from the industry. Including the cabinet estimates that the LDP released earlier, the ­grand total was slightly over 123 million yen ($892,000)—­just below the Socialists’ estimate, the difference prob­ably being explained by the dif­fer­ent time periods used by each party (Asahi, 2 November 1989). Both the Recruit and pachinko scandals implicated all parties, though to differing degrees. Most notably, the Socialists’ response to the pachinko scandal prevented vote losses in the next election. The same issues dominated the 1990 election as the 1989 upper h ­ ouse election: the tax increase and the Recruit scandal. When looked at in terms of vote swings, the Socialists did almost as well and the LDP almost as badly as they had done in the 1989 upper ­house election, but the LDP retained its majority in the lower h ­ ouse due to differences in the electoral system.

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The Sagawa Kyuubin Scandal (1992) Sagawa Kyuubin is the second-­largest parcel delivery com­pany in Japan. In March of 1991 an arrest made in a separate extortion case led to revelations linking the com­pany to or­ga­nized crime (Kuroda and Ootani 2000, 258). In July a weekly magazine reported on a power strug­gle between the founder and board chairman of the com­pany, Sagawa Kiyoshi, and its ambitious Tokyo president Watanabe Hiroyasu (Farley 1996, 151). The Tokyo District Public Prosecutor’s Office and the Tokyo Metropolitan Police Department investigated and then arrested Watanabe and three other executives for allegedly making illegal loans that burdened the com­pany with massive debt. Media reports at the time suggested that some of the loans w ­ ere granted to companies with connections to or­ga­nized crime and that the Sagawa executives used kickbacks from the loans to buy f­ avors from politicians. Sagawa Kyuubin wanted to expand ser­vices beyond the Tokyo area, but no new permits ­were to be issued ­until the passage of new legislation in 1989. According to statements made by Watanabe to Tokyo prosecutors, approximately 2.2 billion yen ($15.9 million) was distributed to twelve top-­ranking politicians. The money seems to have been part of an effort to influence the licensing pro­cess and to include provisions into the new legislation that would be favorable for the com­ pany. ­Those implicated included the vice president of the LDP, three former prime ministers, several former and current cabinet members, a former faction leader, and the former head of an opposition party (Yomiuri, 28 August 1992). The vice president of the LDP and leader of the Takeshita faction, Kanemaru Shin, received 500 million yen ($3.6 million), which he distributed to some sixty members of the Takeshita faction just prior to the 1990 lower ­house election (Asahi, 9 March 1993). Sagawa made direct cash payments to politicians or their secretaries to avoid creating a paper trail. The vari­ous investigations helped reveal the many connections between the illicit cash, the criminal underworld, and Japa­nese politicians. The revelation that Kanemaru and six other LDP politicians had asked the head of Sagawa Kyuubin to use his influence with a rightist group to stop it smearing Takeshita Noboru during the 1987 LDP party presidential election also made excellent media fodder. The rightist group had employed a strategy called “killing with praise” (homegoroshi) that involved such activities as dispatching ­drivers of armored trucks to circle a ­hotel where Takeshita was holding a reception and blaring his praises through the truck’s loud speakers. Sagawa’s president Watanabe had connections with one of Japan’s largest crime syndicates, the Inagawa-­kai, and requested their help in persuading the rightist group to terminate their campaign. Almost a year a­ fter the scandal emerged, Kanemaru Shin resigned his party posts with the LDP and expressed his intention to resign as the chair of the



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Takeshita faction. Prosecutors could not charge him with accepting bribes b ­ ecause he had not held a position with direct authority over policies of interest to Sagawa. His positions as LDP vice president and leader of the Takeshita faction w ­ ere not government positions and therefore irrelevant for proving bribery, even though Kanemaru was the most impor­tant dispenser of cash and patronage in the Diet. Faced with an angry Japa­nese public and the need to do something, prosecutors charged Kanemaru with failing to declare his 500-­million-­yen ($4 million) donation from Sagawa. This same charge had been used against the governor of Niigata, who had been forced to resign and was ­later found guilty of accepting an illegal donation from Sagawa. Kanemaru deci­ded to write out his confession in the comfort of his own home to avoid questioning and a trial. His only punishment was to pay a fine of 200,000 yen (around $1,500) for failure to report the donation. Public anger over the lenient treatment forced prosecutors to grant a rare interview to a foreign reporter. “We used all the ­legal authority we have,” claimed Deputy Prosecutor Takahashi Takeo. “We gave him the maximum fine authorized by law for failing to report a contribution” (Washington Post, 29 September 1992). Prosecutors deci­ded that they would not indict the sixty members of the Takeshita faction who had been given shares of the 500 million yen due to lack of evidence. Prosecutors had been unable to find receipts that would have proved exactly how Kanemaru distributed the money (Asahi, 23 December 1992). Although reporters had circulated a list of the politicians who had received Sagawa funds, no one could verify the accuracy of the list (Kikuchi 1992). Newspapers ­were ­under a gag order not to identify specific names u ­ ntil February of 1992 when the Tokyo District Prosecutor’s Office issued arrest warrants (Farley 1996, 139). Several politicians, including Nakasone Yasuhiro, sued tele­v i­sion stations, publishers, and individual journalists for mentioning their names in relation to leaked testimony. Investigators also encountered numerous obstacles in building their cases b ­ ecause several of the key p ­ eople had died, including Takeshita’s secretary Aoki Ihei, Sagawa secretary and former Diet member Nakao Hiroshi, upper ­house member and former minister of justice Hasegawa Shin, and former Inagawa-­kai leader Ishii Susumu. Unable to obtain any sort of confession, prosecutors opted to try Kanemaru for tax evasion in 1993. Tax authorities estimated that Kanemaru owed the government over a billion yen ($9 million at 1993 exchange rate) for income he had concealed in the late 1980s. This would soon prove to be a conservative estimate. When investigators searched his homes and offices, they recovered cash, ­bearer bonds, and 220 pounds of gold bars. He claimed his massive hoard was not for personal use but to fund a po­liti­cal realignment. Soon it became clear that much of his hoard had not been collected from Sagawa but from many dif­fer­ent

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companies, particularly in the construction industry. Kanemaru’s trial was suspended soon ­after his arrest due to his declining health. Nearly blind from diabetes, he died three years ­after his arrest in 1996. Kanemaru and the former governor of Niigata ­were the only politicians to face even minor charges in the scandal.7 On the Sagawa side, Tokyo president Watanabe was tried and convicted of aggravated breach of trust for causing massive financial damage to his com­pany for issuing excessive loans and loan guarantees. He was given a seven-­year sentence from the Tokyo District Court, which the Tokyo High Court upheld in 2001 and 2003. Watanabe died in 2004 before starting his jail term. Several other executives from Sagawa w ­ ere also indicted over similar charges and found guilty. However, the founder and former chairman of Sagawa was not prosecuted for any crimes. He declined to give testimony to the Diet due to poor health and died in 2002. Prosecutors used what they learned investigating Sagawa and Kanemaru to build additional scandal cases in 1991, which are both worth a brief mention. Investigators uncovered a paper trail that showed that a steel-frame maker called Kyouwa had made large payments to Abe Fumio, man­ag­er of the Miyazawa faction of the LDP. Abe had formerly been a cabinet member in charge of the Hokkaido-­Okinawa Development Agency, which had brought him into close contact with Kyouwa. The steel-­making firm sought Abe’s help in ­matters that included the construction of a planned resort and golf course near the constituency he represented in Hokkaido. Abe was arrested and charged with bribery and the incident further tarnished the Miyazawa government and the LDP. As soon as the Kyouwa scandal faded, investigators used materials seized in Kanemaru’s homes and offices to uncover systematic kickbacks on public construction proj­ects involving essentially the ­whole industry. In the zenekon (“general contractors”) scandal, top executives of top construction firms w ­ ere arrested and charged with bribery. The scandal forced the resignations of several governors and mayors and led to the arrest of then-­LDP minister of construction Nakamura Kishirou. In the aftermath of the Sagawa Kyuubin scandal, the Miyazawa government made minor revisions to the Po­liti­cal Funds Control Law in 1992. The revisions tightened penalties for illegal contributions, which had been a centerpiece of nearly all of Japan’s postwar corruption scandals. The practice most specifically targeted in 1992 was the po­liti­cal fund-­raising party. Miyazawa, however, proved uninterested

7. ​The evidence known to prosecutors at the time has never been made public and t­ here is speculation ­whether a more aggressive approach against Kanemaru or other LDP members might have exposed a g­ reat deal more of the corruption than was vis­i­ble at the time. “Perhaps prosecutors knew of Kanemaru’s terminal illness and felt that a long trial would accomplish l­ ittle, but to date no explanation for his seemingly lenient treatment has been offered, despite substantial criticism from the media” (Castberg 1997).



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in passing electoral reform. When it became clear that electoral reform would not be enacted, thirty-­nine members of the LDP voted in ­favor of a Socialist motion of no confidence on July 18, 1993. Eigh­teen more abstained by being absent from the vote. The loss of the no-­confidence vote by the Miyazawa cabinet forced dissolution of the government and a new lower h ­ ouse election was called. The inability of the Miyazawa government to make po­liti­cal reforms frustrated the public and helped split the LDP. In the 1993 election a total of forty-­six defectors formed two new parties: the New Party Sakigake (Shintou Sakigake) by Takemura Masayoshi and the Renewal Party (Shinseitou) by Hata Tsutomu and Ozawa Ichirou. The Japan New Party (Nihon Shintou), created before the 1992 upper h ­ ouse election by Hosokawa Morihiro, the former governor of Kumamoto Prefecture, made three. T ­ hese three new parties denied the LDP any chance of forming a majority government, but anti-­LDP votes ­were again spread widely among the vari­ous opposition parties. ­After considerable maneuvering, a co­ali­ tion government that excluded only the LDP and the JCP was formed ­under Hosokawa. The co­ali­tion agreed on ­little other than the need for reform, but it managed to pass major structural reforms, the centerpiece being the replacement of the old election system with a mixed system combining SMDs and proportional repre­sen­ta­tion (PR). The 1994 reforms introduced a mixed-­member majoritarian (MMM) electoral system. “Mixed-­member” means t­ here are two tiers, one based on SMDs and the other on PR. In the Japa­nese version, voters cast one vote in each tier. The SMD tier elects 300 candidates from 300 districts (reduced to 289 in 2017) while the PR tier elects 200 (reduced to 176 in 2017) seats from 11 blocs.8 ­Because ­there is no link between the two tiers in terms of the allocations of seats, the key to winning a majority is winning in the SMD tier. The system was designed to shift elections from candidate-­centered to party-­centered campaigning. The new SMDs virtually eliminated intraparty competition, which has been associated with corruption, and promoted interparty competition, which has been shown to reduce corruption (Nyblade and Reed 2008). Reformers also hoped that harsher penalties would reduce the number of election law violations. The key provision was strengthening of guilt-­by-­association rules (renzasei), making candidates responsible for electoral law violations committed by their immediate relatives or campaign man­ag­ers. A candidate now risks having their election voided and facing a five-­year ban from r­ unning in the same district if one of their relatives or secretaries is caught breaking the rules. Since the passage of electoral reform, the courts have voided the election victories and 8. ​The PR tier is “closed-­list,” meaning that voters cannot change the order in which candidates receive one of the PR seats allocated to their party.

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implemented the five-­year ban on more than ten sitting members of parliament.9 ­These penalties provide clear evidence that corruption continues, but also show that it has become easier to gain convictions on electoral law violations since the reform.

Scandals during the Transition Period, 1993–2001 Scandals during the transition period w ­ ere of two types: ­those that differed ­little from that of the prereform period; and a new type, policy failure scandals. Instead of following chronological order, we pres­ent three examples of the first type before presenting two of the second. The first three cases involve the serendipitous discovery of corrupt exchange that had occurred before reform. The primary impact of the 1994 reforms was an increased transparency that made it easier to construct a scandal. The last two scandals are of a type seldom seen before reform but which became common thereafter. Bipolar competition between the government and the opposition parties, rather than among candidates, focuses on policy differences, and one of the best tactics for the opposition is to criticize the government’s policy rec­ord. The rise in policy failure scandals thus enhances the functioning of the demo­cratic pro­cess.

Nakamura Kishirou’s Bribery Scandal (1994) In 1994 Nakamura Kishirou was indicted on charges of accepting bribes from Kajima Corporation, a major construction contractor, when he was minister of construction in 1992. Nakamura started his ­career as a secretary to Tanaka Kakuei and ­later was a favorite disciple of Kanemaru Shin, connections that facilitated both his rise and fall. His arrest was part of the broader zenekon (“general contractors”) scandal, which involved bid rigging among local government officials and construction companies. Documents seized from former LDP secretary-­ general Kanemaru ­were instrumental in uncovering the scandal—­a serendipitous discovery, as was common before reform. In 1993 police arrested a wide swath of governors, mayors, and construction com­pany officials for bribery and bid rigging crimes. Nakamura’s arrest in 1994 was the first against a sitting member of parliament. The Diet approved the prosecution’s request to strip Nakamura of his parliamen9. ​From 1947 through 1993, the courts had voided only one winning candidate’s election (Yomiuri, 30 October 1998).



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tary immunity and he was arrested only seven days a­ fter the reforms w ­ ere passed (Asahi, 12 March 1994). Against the backdrop of the widening scandals and the calls for po­liti­cal reform, Nakamura’s arrest was a proactive move by prosecutors. They charged him with accepting money from the Kajima Corporation in exchange for efforts to influence the Japan Fair Trade Commission. Kajima did not want criminal charges filed against a construction business group comprised of sixty-­six contractors called the Saitama Doyou-­kai (Saitama Saturday Club) (Asahi, 6 March 1994). The evidence was based on testimony given to prosecutors by Kajima’s vice president ­after his arrest in 1993; he claimed that he personally had given Nakamura 10 million yen (around $79,000) in exchange for his mediation. The quid pro quo involved made it easier for prosecutors to arrest and prosecute Nakamura even though the bribery provisions for mediated bribery ­were not amended u ­ ntil ­after this scandal. Nakamura tried but failed to make the case that his mediation efforts ­were within the bounds of the law at the time. He denied that the Kajima Corporation had asked him to intervene with the Japan Fair Trade Commission, and both Nakamura and Kajima’s vice president insisted that the money was a ­legal po­liti­cal donation (Asahi, 5 July 1994). Although the ­legal system made it easier to investigate Nakamura’s corrupt dealings, the new electoral system failed to eliminate him from the Diet. In 1996 Nakamura was not nominated as the official LDP candidate in his bailiwick of Ibaraki 7th district but, following standard prereform LDP practice for scandal-­ tainted incumbents, ran as an in­de­pen­dent. It was clear, however, that he was in fact the LDP candidate and would win his seat. In 1997 the Tokyo District Court sentenced Nakamura to eigh­teen months in prison (Asahi, 1 October 1997). He appealed the ruling and was elected once again as an in­de­pen­dent in the 2000 general election. The opposition parties tabled a resolution to force Nakamura to resign, but the LDP refused to go along. His appeal was rejected by the Tokyo High Court in 2001 and by the Supreme Court of Japan in 2003 (Asahi, 25 April 2001 and 17 January 2003). The latter decision fi­nally forced Nakamura to exchange his Diet seat for a jail cell. Even this, however, proved but a temporary setback. Paroled in 2004, he won his seat again in 2005, defeating the LDP incumbent. He won again in 2009, 2012, and 2014, ­running against an LDP nominee but with public support from several prominent LDP politicians. Nakamura’s election victories are testimony to the strength of his kouenkai, but he is one of the few remaining candidates who have won an SMD r­ unning against both LDP and DPJ nominees based on his personal vote. Nakamura is a type of candidate that po­ liti­cal reform was designed to eliminate, a scandal-­tainted in­de­pen­dent. His survival is, however, an extreme outlier—­the clearest single exception to the rule.

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The most similar case is Fujinami Takao in Mie 5th district. Fujinami had been convicted in the Recruit scandal but had been acquitted on appeal before the 1996 election and ran with the LDP nomination, winning easily. Prosecutors persisted, however, and managed to get his conviction reinstated before the 2000 election. In that election, he won again as an in­de­pen­dent but retired from politics before the next election. Candidates capable of winning a seat without a party nomination have all but been eliminated by reform. Nakamura’s base vote accounted for 25 ­percent of the electorate in his district and Fujinami’s accounted for 22.5 ­percent in his. Only 14 ­percent of the three hundred SMDs had candidates as strong as t­ hese two in 1996 and the number of similarly dominant candidates has declined e­ very election since.10

Nakao Eiichi’s Bribery Scandal (2000) Nakao Eiichi was first elected in 1967 from Yamanashi Prefecture, home to another famously corrupt minister of construction, the aforementioned Kanemaru Shin. Nakao was not a strong candidate, often committing election law violations to survive. Soon ­after he lost the 1996 election, he was arrested for accepting bribes from a construction com­pany during his tenure as minister of construction. Investigators learned about the bribes from their interrogations of po­liti­cal fixer Heo Young-­joong a South Korean national with extensive underworld and business connections. Heo was linked to the Itoman Corporation scandal of the early 1990s, one of the largest business fraud scandals in the postwar period. Itoman, an Osaka-­based trading h ­ ouse, was charged with trying to defraud Ishibashi Sangyou, the parent com­pany of Wakachiku Construction, out of billions of yen. That scandal led to the collapse of Itoman and incidentally produced information damaging to Nakao. Heo had brokered meetings between Nakao and Wakachiku executives. Heo told investigators that Nakao had accepted 30 million yen ($276,000) in 1996 to help Wakachiku gain a designation that would allow it to bid on public works contracts from the Ministry of Construction. Police arrested Nakao in 2000 over the charge that he had accepted bribes from the construction industry (Asahi, 1 July 2000). Com­pany rec­ords and testimony clearly indicated that contributions had been made but most of the money had not been declared on any of Nakao’s campaign finance reports. Nakao was ar10. ​­These calculations are based on the average vote ­under MMD for 1986, 1990, and 1993, aggregated to the 1996 SMDs.



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rested five days ­after he lost his seat in the 2000 election. Prosecutors may have waited u ­ ntil ­after the election on purpose. Nakao lost by a narrow margin to a DPJ candidate. He had used the funds to finance his failed reelection bid and donated money to help finance the election campaign of Mizuno Kenichi, his son who had been a­ dopted by another politician (Asahi, 11 August 2000). Mizuno did not properly disclose ­these funds for obvious reasons but the statute of limitations ran out so prosecutors could not charge him with any crime. Nakao retired from politics a­ fter his arrest, but the l­ egal fallout from the scandal continued to make news. Prosecutors arrested Nakao again a­ fter discovering that he had accepted additional bribes from the same construction com­pany during the month of the 1996 general election (Asahi eve­ning, 21 July 2000). Nakao pleaded guilty to the charges and asked for leniency, arguing that Heo had used him. In 2002 the Tokyo District Court handed Nakao a twenty-­four-­month unsuspended prison sentence plus a 60-­million-­yen ($479,000) fine. Nakao appealed to the Tokyo High Court as well as the Tokyo Supreme Court in 2003 and 2004 but to ­little avail, although he managed to have his sentence reduced by two months. He could avoid serving prison, however, b ­ ecause the Tokyo District Prosecutor’s Office suspended his sentence fearing that the seventy-­four-­year-­ old would not be able to withstand imprisonment due to an undisclosed illness. This scandal, along with the Nakamura scandal described above, played a role in the revision of bribery laws in 2000 and 2002. The major postwar bribery laws trace back to 1958, where accepting a bribe as well as giving a bribe for the exertion of influence for public officials (assen shuuwai zai) was criminalized (Nakagawa 2006). Enacted in 2000, the new law on “mediation bribery” (assen ritoku shobatsu hou) punishes public officials who profit from using the powers of their office to influence the per­for­mance of another public official. The law specifically applies to members of the Diet, local assemblies, state-­paid secretaries, and to situations where ­there is an existing contract in force by the national or local government, or an administrative sanction in place against an individual or com­pany. In 2002 it was revised again to include private secretaries.

The KSD Scandal (2001) KSD was an obscure Tokyo-­based semipublic foundation affiliated with the Ministry of L ­ abor (currently the Ministry of Health, ­Labor and Welfare).11 Such

11. ​Its full name at the time was KSD Chuushou Kigyou Keieisha Fukushi Jigyoudan (KSD Foundation for Promoting Welfare of In­de­pen­dent Entrepreneurs). It changed its name ­after the scandal to Anshin Zaidan (Peace of Mind Foundation).

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organ­izations are known as gaikaku dantai (“satellite organ­izations”) due their close links to a ministry. As a public interest foundation, KSD was granted tax exceptions and was eligible for government subsidies while being placed u ­ nder the “relaxed” supervision of the Ministry of ­Labor. Koseki Tadao, a former official in the Tokyo ­Labor Standards Office, created the forerunner of KSD in 1964. The explicit purpose of the foundation was to offer accident insurance to o ­ wners of small-­and medium-­sized companies. ­Under Koseki’s leadership, KSD developed into a well-­connected and financially successful foundation, boasting more than one million members and an annual income worth close to 24 billion yen ($223 million) in 2000 (Yomiuri eve­ning, 17 May 2001). He also seems to have embezzled billions of yen from the foundation over a period of twenty years. He used the money to line the pockets of LDP members in return for ­favors. The embezzlement was discovered during the course of an investigation of bribery. The origins of the bribery scandal began when prosecutors focused attention on a variety of breach of trust issues perpetuated by Koseki and other KSD officials. Beginning in October 2000, many of t­hese charges appeared in the media. Koseki was accused of making illegal loans, using the KSD Hall as his official residence, paying himself an excessive salary, misappropriating funds to support a close female acquaintance, and channeling KSD funds to LDP-­ affiliated organ­izations (see, e.g., Yomiuri eve­ning, 6 October and 9 November 2000). Investigators raided KSD and its affiliates and arrested Koseki and two other executives. Next, two LDP politicians from the upper h ­ ouse became the focus of the prosecutor’s bribery case: Murakami Masakuni and Koyama Takao. Murakami was a former minister of ­labor and the influential head of the LDP’s upper ­house caucus. Koyama Takao was Murakami’s protégé and former secretary for fifteen years before being elected to the upper ­house in 1995. Murakami was perhaps the most power­ful politician to be criminally charged for corruption since former prime minister Tanaka in the Lockheed scandal (Kyodo, 1 March 2001). Both Murakami and Koyama ­were alleged to have accepted millions of yen for helping KSD with its pet proj­ects. The most prominent example was legislation that would make it easier for small companies to hire foreign workers by extending the technical training period from two to three years. Another was an effort to create a four-­year college to train engineers. Murakami chaired a group of around a hundred LDP members that pushed the college proj­ect and lobbied for government subsidies. The Institute of Technologists (Monotsukuri Daigaku) was established in 2001 in Saitama Prefecture ­after receiving billions of yen in government subsidies. In return and unbeknownst to its members, KSD had used funds to help Murakami and Koyama get elected to the upper h ­ ouse in the first place.



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From 1983 ­until 1998, the upper tier of the upper ­house was elected through closed list PR. In a closed list system, voters choose parties but the candidates are elected in an order determined by the party. Closed list systems thus tend to foster greater levels of party unity. The LDP, however, chose an informal and “objective” (meaning that no one need take responsibility for the decision) rule: the candidate who recruits the most party members receives the highest rank on the list. KSD supplied Murakami and Koyama with enough party members to guarantee each of them places high enough on the party list to win their elections. The organ­ization filled out the party membership applications and paid the party dues for KSD members and employees without necessarily informing them that they had joined the LDP (Yomiuri, 3 March 2001). KSD elected two upper ­house PR candidates and indirectly donated substantial sums to the LDP by paying party dues of the members provided by the organ­ization. In 1990 Koseki had created a po­liti­cal arm of KSD by establishing the po­liti­cal organ­ ization Houmeikai, which could then distribute funds to Diet members, including Murakami and Koyama, during election campaigns (Yomiuri, 26 February 2001). KSD also paid the salaries of Murakami’s private secretaries (Yomiuri, 7 February 2001). The KSD scandal led to several arrests and convictions. The most impor­tant former KSD member to be charged was Koseki Tadao, who received a suspended three-­year sentence in 2002, which he appealed and ultimately did not serve ­because he died of natu­ral ­causes in 2005. Murakami and Koyama ­were the only politicians to be punished. Murakami received a twenty-­six-­month sentence and fine in 2003, finalized by the Supreme Court in 2008 ­after unsuccessful appeals (Yomiuri eve­ning, 28 March 2008). Koyama received a twenty-­two-­month sentence in 2004 and did not appeal. The scandal also affected the c­ areer of Nukaga Fukushirou, a LDP member of the upper ­house. He resigned as state minister for economic and fiscal policy ­after it was revealed that his secretary had accepted funds from KSD, allegedly in return for inserting a reference to the college to train engineers into a policy speech given by Prime Minister Obuchi to the Diet in 2000 (Yomiuri, 27 January 2001). His resignation came less than three weeks ­after he had been appointed. The Ministry of ­Labor also announced disciplinary mea­ sures, though no suspensions or salary cuts, against eight se­nior officials for their ties to KSD (Yomiuri, 14 March 2001). The KSD scandal contributed to the decision to move to an open list system starting with the 2001 upper ­house election. It also generated criticism of satellite organ­izations in general and spurred the creation of a new l­egal framework for designating organ­izations as a public interest corporation (koueki houjin) (Deguchi 2010). Fi­nally, four opposition parties (the DPJ, the JCP, the Liberal

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Party, and the Social Demo­cratic Party) launched a joint inquiry into the bribery allegations and set up a committee to monitor corruption in the LDP in the next upper ­house election (Yomiuri, 20 January 2001).

The HIV-­Tainted Blood (Yakugai Eizu) Scandal (1996) The three scandals described above ­were all cases of corrupt exchange revealed serendipitously. ­After the reforms ­were enacted the co­ali­tion government disintegrated, allowing the LDP to return to power, but this time in a co­ali­tion with the Socialists and the New Party Sakigake. Co­ali­tion government soon proved to be the key to a major policy failure scandal. Beginning in the late 1980s, lawsuits w ­ ere filed against the Ministry of Health and Welfare, a drug com­pany, and a leading doctor, charging them with knowingly providing HIV-­tainted blood products to hemophilia patients (Feldman 1999; Japan Center for International Exchange 2004). Several hundred patients died. The families of ­those infected not only sued the com­pany, but also drew wide public support for their cause (Asahi eve­ning, 14 July 1995). The drug com­pany involved was the Green Cross Corporation (Midori Juuji), which had hired many retired Ministry of Health and Welfare officials on its staff (Asahi eve­ning, 5 January 1996). In the criminal ­trials that ensued, hemophiliacs suggested that this ministry purposely postponed the approval of heat-­treated blood products, which would have eliminated the risk of HIV transmissions, to protect the com­pany against foreign competitors. In 1996 Kan Naoto, a member of New Party Sakigake who had or­ga­nized a group to study the tainted-­blood issue within the party, was appointed minister of health and welfare (Asahi, 12 January 1996). As minister, Kan or­ga­nized a proj­ ect team to investigate the ministry’s role in the prob­lem. The ministry bureaucrats protested that all the minister need do was ask a question and they would provide him with the answer. The answer they provided was that the necessary information did not exist. However, Kan’s proj­ect team soon found the “non­ex­is­ tent” information (Asahi, 11 February 1996). It seems clear that the information was known within the ministry but was being kept secret from both the public and the minister. The discovery led directly to an agreement between the ministry and the families that settled the dispute. Kan met with the families and publicly apologized for the incident, an unpre­ce­dented act at the time. Overnight, Kan became a national hero ­because his “efforts to confront ministry mandarins are rare in a country where politicians and bureaucrats are widely viewed as being in bed together” (Nikkei Weekly, 8 April 1996).



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If the government of the day had been a single-­party LDP administration or if the minister of health and welfare had been a member of the LDP, it seems highly likely that the public would have never known of this policy failure. A minor party in a co­ali­tion government thus provided the transparency needed to construct a policy failure scandal.

The Housing Loan (Juusen) Scandal (1996) When the economic b ­ ubble burst, financial institutions w ­ ere faced with the prob­ lem of how to deal with all the loans that could never be repaid. One set of institutions that posed a particularly difficult po­liti­cal prob­lem was juusen, roughly analogous to the U.S. savings and loans, which produced a similar scandal in the United States (DeLeon 1993). Many of the bad juusen loans w ­ ere owed to institutions linked to Noukyou, the agricultural cooperatives that served as a major source of votes for the LDP. The LDP-­led co­ali­tion thus proposed a bailout using public funds (Asahi, 21 December 1995). The move was deeply unpop­u­lar, with 87 ­percent of the public expressing disapproval (Asahi, 28 February 1996) and juusen thus seemed a perfect issue for the New Frontier Party (NFP, then the primary alternative to the LDP) to focus on. This was a case of a policy failure scandal produced by two-­party competition. NFP leader Ozawa Ichirou deci­ded on a strategy of boycotting the proceedings and picketing the committee rooms, bringing deliberations to a halt. However, that strategy also proved unpop­u­lar with the public. In the March by-­election in Gifu, the NFP played the juusen card but lost badly. Most Gifu voters (81 ­percent) opposed the bailout, but of ­those only 27 ­percent voted for the NFP candidate, while 21 ­percent voted for the LDP-­affiliated in­de­pen­dent and ­w idow of the incumbent whose death had precipitated the by-­election (Asahi, 25 March 1996). The first attempt at using a policy failure scandal to unseat the LDP thus ended in failure. The tainted-­blood and juusen scandals overlapped and w ­ ere often linked in the media, along with kan-­kan settai, or the practice of local government officials wining and dining central government bureaucrats at upscale restaurants with local governments footing the bill.12 All three stories severely damaged the reputation of the bureaucracy. Asahi ran a five-­party series on the myths about the Japa­nese bureaucracy between 27 and 31 March 1994. The five myths ­were po­liti­cal neutrality, serving the national interest, infallibility, spotless integrity, and selfless ser­ 12. ​The character “kan” means “government official.” The first “kan” refers to local government officials and the second to central government officials. “Settai” refers to entertainment.

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vice. The article debunking spotless integrity focused on kan-­kan settai. One surprising indication of this was that bureaucrats who retired to run for the Diet in the 1996 election often played down their bureaucratic backgrounds (Asahi, 5 April 1996). Traditionally, a bureaucratic background had been a guarantee of competence, but not so in 1996.

What the Scandals Revealed The scandals between the Tanaka administration in 1972 and the defeat of the LDP in 1993 revealed extremely serious corruption prob­lems. The amounts of money involved and the number of politicians implicated are truly impressive. That said, ­there is good reason to believe that corruption was even more serious than it looked. In a low transparency environment, corruption came to light only through serendipitous discovery. None of the major scandals resulted from investigations of po­liti­cal corruption. Rather each revelation depended upon an unlikely sequence of events. Greater transparency and proactive investigations would surely have revealed more corruption compared to the scandals that did emerge. The media was passive. It publicized corruption once revealed but did not investigate corruption proactively. The ­legal system pursued corruption cases aggressively once they became public knowledge but played l­ittle role in bringing them to light in the first place. The opposition parties publicized and criticized the corruption revealed by scandals but ­were seldom involved in uncovering corruption. The Tanaka money-­power politics scandal became public knowledge only when a freelance reporter wrote a story and the foreign media picked it up. The Lockheed scandal was revealed first in a U.S. Senate subcommittee and only became public knowledge due to the efforts of a prime minister from a small faction who was selected for his clean image. The KDD scandal came to light when immigration officials broke pre­ce­dent and examined the luggage of KDD officials and found smuggled goods. The Recruit scandal surfaced only when Asahi’s local Yokohama bureau stumbled onto a national story a­ fter digging into a local story about a deputy mayor and Recruit. The Sagawa Kyuubin scandal likewise attracted mainstream attention when Kanemaru was let off with a token fine, which the mainstream media publicized and dramatized. Once corruption came to light, the mainstream media and the opposition parties aggressively publicized and criticized corruption and the l­egal system aggressively investigated and prosecuted ­those implicated. However, the media and opposition parties proved inept at dramatization, constructing a narrative that led to the conclusion that “something must be done!” The one exception is the



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sting operation conducted by Narazaki and Nippon Tele­v i­sion in the Recruit scandal. More problematic was the fact that prosecutors had difficulty convicting power­ful politicians. Com­pany executives, bureaucrats, and businessmen faced criminal charges but po­liti­cal leaders and politicians ­were largely untouched. The politicians who took the money in the Recruit and Sagawa Kyuubin scandals had not necessarily broken any laws, however. They had simply accepted “contributions” from sources that w ­ ere passing it out. Kanemaru was clearly a very bad apple and was certainly involved in more corruption than just failing to disclose a po­liti­cal donation or paying all his taxes, but we do not know much about Kanemaru’s activities b ­ ecause he managed to avoid prosecution for bribery as he had no governmental position. Prosecutors’ extraordinary efforts to prosecute Kanemaru and their difficulties in ­doing so speak volumes. The ­legal system was unlikely to get any more effective at controlling corruption without greater transparency and wider powers. The 1994 reforms provided some of both, but it would take time before the effects ­were felt. In the first three scandals of the transition period, the only contribution of the reforms was the relative ease with which prosecutors could convict politicians who had committed crimes before the enactment of the reforms due to enhanced transparency and new authority. The nature of corruption had not changed. However, the two policy failure scandals of this period proved harbingers of ­things to come. In the HIV-­tainted blood scandal, Minister of Health and Welfare Kan Naoto proved ­adept at dramatization. His popularity soared, allowing him to cofound a new party, the Demo­cratic Party of Japan (DPJ), and go on to become prime minister (see appendix B for dates). However, opposition efforts to dramatize the juusen scandal ­were much less successful. Creating a two-­party system required leadership as well as an effective and credible opposition party. Structural reform was significant, but it was not enough. Both the LDP and the opposition had much to learn about the new po­liti­cal environment.

4 SCANDALS AND REFORM, 2002–2016 Although an image of Japa­nese politics as hopelessly corrupt is widespread, ­there is far less corruption now than ­there was in the past. Gerald L. Curtis, Election Campaigning Japa­nese Style

By the second election u ­ nder the new electoral system in 2000, Japa­nese politics had largely adjusted to the new po­liti­cal environment. The party system was still in flux but moving steadily ­toward bipolar competition. In 1999 the LDP formed a co­ali­tion with Komeito to maintain its hold on power.1 By the third election in 2003, the DPJ had become the only feasible alternative to the LDP. Intraparty competition had been virtually eliminated in the new SMDs and an increasing number of t­ hose districts featured competition between one representative from the government and one from the opposition. This movement culminated in an alternation in power in 2009. The DPJ not only defeated the LDP but also managed to govern for over three years. However, the DPJ’s first stint in power proved disastrous, and the LDP returned to power in 2012. The opposition fragmented and the LDP won four consecutive landslide victories (2012 and 2014 in the lower h ­ ouse and 2013 and 2016 in the upper ­house), but that does not represent a return to the status quo ante. The dominance of the LDP-­Komeito co­ali­tion depends upon low turnout and a divided opposition. The LDP won the 2012 election with fewer votes than when it lost in 2009 due to low turnout and remains vulnerable to any unified alternative able to generate an increase in turnout. One predictable consequence of the 1994 election system reform is based on Duverger’s law, which states that the introduction of SMDs ­will encourage bipo-

1. ​For a description of the pro­cess of co­ali­tion formation, see Klein and Reed 2014. 68



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lar competition.2 In Japan competition between government and opposition with the possibility of an alternation in power moved the focus ­toward policy differences and contributed to the rise of policy failure scandals. It also provided an incentive to construct a scandal from anything e­ lse that might embarrass the government. Fi­nally, bipolar competition promoted more strategic be­hav­ior. Instead of waiting for a revelation to be discovered serendipitously, we see more targeted scandal construction aimed at prominent members of the rival party. How did we choose which scandals to analyze? This chapter continues the story lines developed in the previous chapters and focus on major scandals that reveal the nature and types of corruption that pervert the functioning of the demo­cratic pro­cess. In addition, since we came across many scandals centered on cabinet ministers, we include scandals that culminated in a cabinet resignation. Many of ­these did not fit our definition of po­liti­cal corruption so we extended our scope to include “embarrassment scandals.” Fi­nally, following our standard decision rule, we investigated any scandal that became a major issue in a national election, some of which turned out to be policy failure scandals. We describe t­hese scandals only briefly ­here and provide a more thorough analy­sis in chapter 5, on bureaucratic corruption. The scandals that we examine in this chapter focus on the 2002–16 period. They often concerned be­hav­ior that had been “secrets of success” in the prereform era but had been rendered out of date by the reforms. The new ele­ment added by the reforms was that of learning. Instead of corrupt be­hav­ior continuing unabated, candidates and parties started learning to avoid the kind of corrupt be­ hav­ior that produced scandals, but that learning only became evident several years ­after the reforms ­were passed. We divide our pre­sen­ta­tion of scandals in this chapter into four periods. The first period relates to the Koizumi administration (2001–6), which was followed by three disappointing, one-­year LDP administrations that form the second period (see appendix B) and led to the LDP losing the 2009 election. The third period thus begins with the DPJ victory of 2009 and ends with its defeat ­after three equally disappointing one-­year administrations in 2012. Fi­nally, we briefly cover the period since the LDP’s return to power. ­Under the second Abe administration, which was in power at the time of writing, several of our story lines reach resolution, at least temporarily. This administration learned from the m ­ istakes of previous LDP and DPJ governments and proved much better at dealing with the media, including how to limit scandal coverage. 2. ​In Duverger’s classic study, he demonstrated how election systems based on single-­member plurality encourage two-­party systems and how systems based on PR contribute to multiparty systems. His ideas have informed de­cades of research on elections and party systems and have also generated considerable controversy (see Duverger 1959 and Benoit 2006 for more discussion).

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Scandals u ­ nder the Koizumi Administration, 2002–2006 In 2001 the maverick Koizumi Junichirou was elected president of the LDP and became prime minister (Lin 2009). He promised to “change Japan by changing the LDP” and, if the LDP would not change, he would “bust it up” (bukkowasu). In the 2001 upper ­house election, Koizumi and Tanaka Makiko, out­spoken ­daughter of Tanaka Kakuei, ran against their own party’s tradition in a fashion reminiscent of Tony Blair’s “New L ­ abour” in Britain in 1997 and achieved similar results in the form of a landslide victory. The Koizumi administration accomplished significant reforms (Kushida, Shimizu, and Oi 2013), but the media story line was dominated by the b ­ attle between the prime minister and “the forces of re­sis­tance” (teikou seiryoku). What voters saw between the 2001 and 2005 elections was an embattled prime minister being prevented from passing reforms by his own party. The LDP thus lost ground to the DPJ in the 2003 general election and the 2004 upper ­house election. In 2005, however, Koizumi pulled another rabbit out of his hat by forcing the passage of his pet postal privatization bill through the Diet over the objections of the forces of re­sis­tance. Fighting with his own party proved popu­lar once again and the LDP won another landslide victory in the 2005 election. The LDP selected Koizumi ­because the standard campaign strategies of the past had stopped producing victories. Two-­party competition was also beginning to play a role in the generation of scandals. Koizumi’s victories ­were media events, making the media a more impor­tant arena in Japa­nese politics. Fi­nally, increased transparency gave the media and opposition parties more access to information from which to construct scandals.

Suzuki Muneo’s Scandals (2002) Suzuki Muneo was one of the most successful fund-­raisers in the LDP. He used his powers of office and connections to collect ­those funds, primarily from business ­owners in his native Hokkaido, and distributed them to his allies in the Diet. He had also developed connections with bureaucrats in the Ministry of Foreign Affairs, becoming the leading zoku giin (“policy tribesman”) for that ministry. We describe the role of zoku giin in more detail in chapter 5. The Suzuki scandals began as a public feud involving both politicians and bureaucrats. Two nongovernmental organ­izations had been banned from attending an Afghan aid conference in Tokyo in 2002, presumably ­because they had made public statements critical of the Japa­nese government (Asahi, 21 January 2002). The minister of foreign affairs at the time, Tanaka Makiko, accused



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Suzuki of blocking the aid groups and interfering in internal ministry affairs (Asahi, 25 January 2002). Both Tanaka and Suzuki are colorful characters and the usually dull Diet debates shown on Nippon Housou Kyoukai (NHK, Japan Broadcasting Corporation) suddenly became popu­lar viewing. ­These disputes between Tanaka, Suzuki, and the ministry, and especially their use of media leaks, proved to be too much of a distraction for Prime Minister Koizumi. He fired his popu­lar and out­spoken minister of foreign affairs even though it resulted in a drop of close to thirty percentage points in his support rate (Asahi, 2 February 2002). Shortly thereafter, Suzuki offered Koizumi his resignation as chairman of the LDP’s Special Committee on External Cooperation, which h ­ andles issues concerning Japan’s official development assistance, to help quell accusations that he exerted undue pressure on the ministry (Asahi eve­ning, 4 February 2002). The JCP had been publicizing LDP corruption for years, but the transparency provided by the new reporting requirements gave them a new weapon in that old ­battle. In a meeting of the lower h ­ ouse Bud­get Committee in February 2002, JCP member Sasaki Kenshou claimed that Suzuki was misusing government funds allocated for the “Northern Territories,” the four islands off the coast of Hokkaido that are the focus of Japan’s territorial dispute with Rus­sia (Asahi, 14 February 2002). He noted that locals in Hokkaido called the government-­funded “House of Friendship” on Kunashiri Island the “Muneo House.” He further charged that many Japa­nese companies that received contracts for construction proj­ects in the Northern Territories, financed by official development assistance, belong to po­liti­cal organ­izations that support Suzuki. Sasaki even voiced suspicions that Suzuki had interfered in an overseas aid proj­ect to construct a hydroelectric power station in ­Kenya (Yomiuri, 14 February 2002). The most impor­tant charge, however, concerned events that had occurred three years earlier in 1999. Suzuki had been questioned about money he received from a lumber com­pany, Yamarin (Asahi, 18 June 2002). In a Diet committee meeting broadcast live on national tele­v i­sion, Sasaki presented copies of Suzuki’s campaign finance reports in which Yamarin’s donations to Suzuki ­were clearly shown. As required by the reforms, many of Suzuki’s donors w ­ ere now being disclosed on his campaign finance reports. Unfortunately for him, however, prosecutors used the list to begin building a ­legal case for bribery. Sasaki called on Suzuki to testify about ­these and other ­matters in the Diet and asked Koizumi to investigate. The prime minister consented (Asahi, 28 February 2002). Suzuki denied the allegations in sworn testimony at a Diet committee hearing in March and several days ­later resigned from the LDP without giving up his seat in the Diet (Asahi, 12 March 2002). An aide was arrested the following month and charged with hiding po­liti­cal donations by falsifying Suzuki’s po­liti­cal report in 1998. In 2003 he received a suspended sixteen-­month prison term. In 2004 a

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second aide was found guilty of taking bribes and hiding donations and given a suspended two-­year prison sentence. Both aides appealed the rulings. As for Suzuki, the Diet approved a request in 2002 by Tokyo prosecutors allowing them to arrest him while the Diet was in session. The prosecutors charged Suzuki with taking 5 million yen ($38,000) from Yamarin in 1998 in exchange for using his influence as deputy cabinet secretary to help the firm avoid the punishment it faced for illegal logging in national forests (Asahi, 15 June 2002). T ­ here ­were also some reports that forestry officials overlooked the illegal logging in exchange for Yamarin hiring retiring forestry officials (Yomiuri, 24 June 2002). Suzuki admitted accepting the money, but as a po­liti­cal contribution and not as bribes, and explained that he had returned the money to the com­pany in 1998 once his office had become aware of Yamarin’s ­legal prob­lems (Asahi, 15 June 2002). Immediately ­after his arrest, prosecutors searched the Yamarin head office and the home of the chairman and removed 250 boxes of documents to be used in their case against Suzuki (Yomiuri eve­ning, 20 June 2002). In a separate bribery case, prosecutors charged Suzuki with accepting 6 million yen ($50,000) from Shimada Construction between 1997 and 1998 when Suzuki headed the former Hokkaido Development Agency (Asahi eve­ning, 1 August 2002). Prosecutors argued that the funds ­were a bribe given by the com­pany to Suzuki in exchange for his help in gaining public construction contracts. Adding to his mounting ­legal trou­bles, the lower h ­ ouse Bud­get Committee filed a charge of perjury against Suzuki over testimony he gave to the committee in March, making him only the second lower ­house member ever to face a perjury complaint (Asahi eve­ning, 5 September 2002). In the past, when power­ful zoku giin such as Suzuki accepted po­liti­cal donations in return for directing government contracts their way, it was difficult for prosecutors to establish a bribery case. The arrest of Suzuki delivered a power­ful message that times had changed. This time prosecutors ­were able to connect his legally reported donations to a specific government contract. The proactive action of prosecutors in pursuing Suzuki was made pos­si­ble by the greater transparency in disclosing the sources of po­liti­cal funds introduced in 1994 and by the revisions to bribery laws beginning in 2001. In 2004 the Tokyo District Court sentenced Suzuki to two years in prison along with a fine for a total of four charges: two counts of accepting bribes (including one for being a mediator u ­ nder the revised law), one count of violating the Po­liti­ cal Funds Control Law by concealing donations, and one count of perjury during his testimony before the Bud­get Committee. He lost an appeal to the Tokyo High Court in 2008 and the Supreme Court finalized his conviction in 2010. He was



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paroled early a­ fter serving seventeen months of the sentence. The conviction did not, however, end Suzuki’s po­liti­cal c­ areer. Despite his ­great fund-­raising prowess, Suzuki has never been particularly successful electorally. He had begun his ­career as a po­liti­cal secretary to Nakagawa Ichirou and won a seat for the first time in 1983 when Nakagawa committed suicide. However, Suzuki remained in the shadow of Nakagawa’s son, Shouichi. In 1996 Suzuki was not nominated in the new 11th district, where most of his support was concentrated, b ­ ecause Nakagawa Shouichi had more support t­ here. He was also not nominated in the 12th district, his second choice, ­because Takebe Tsutomu had more votes ­there. He was allocated the 13th district in which a rival from the NFP had the most support. He lost the SMD but won a PR seat. When the NFP incumbent returned to the LDP in 2000, Suzuki was forced to accept a PR nomination instead of his preference for ­running in the SMD.3 The scandals prevented him from getting a nomination in 2003 so he opted not to compete in the 2003 general election for “health reasons.” He lost the 2004 upper ­house election in Hokkaido ­running as an in­de­pen­dent but formed his own po­liti­cal party, New Party Daichi (Shintou Daichi), winning a seat in the Hokkaido bloc of the PR tier in 2005 and 2009. Following his parole in 2011, Suzuki lost his eligibility to hold po­liti­cal office ­until 2017. Yet Suzuki retained the leadership of his party, which fielded seven candidates in the 2012 election, albeit winning only a single seat. The sole winner was Ishikawa Tomohiro, one of Ozawa Ichirou’s former scandal-­tainted secretaries. ­After a court found Ishikawa guilty in the Ozawa case discussed below, his PR seat went to the runner-up on the party list, which happened to be Suzuki’s ­daughter. Two of Suzuki’s enemies soon also found themselves in trou­ble with the law. In June of 2002 weekly magazines including Shuukan Shinchou published allegations that Tanaka Makiko had misused state-­paid salaries for two of her secretaries in 1998. The scandal forced her to leave the LDP and run as an in­de­pen­dent ­until joining the DPJ in 2009. She was not indicted. Additional leaks emerged in the tabloids accusing Tsujimoto Kiyomi of the Social Demo­cratic Party, another of Suzuki’s enemies, of misusing her former secretary’s state-­paid salary to help cover office expenses. Tsujimoto resigned her seat in the Diet but made a come3. ​The LDP often faced the prob­lem of two incumbents seeking the same SMD nomination and had devised a novel way of resolving it: a “Costa Rica” agreement. ­Under this arrangement, the LDP would nominate both candidates but one would run in the PR tier instead of the SMD. In the subsequent election, they would switch, ideally forming a “tag team” capable of winning the SMD for the LDP. This term was prob­ably coined by former prime minister and chairman of the Japan-­Costa Rica Friendship Association Mori Yoshirou, based on his limited reading of Costa Rica’s PR system. See Carlson 2007 and Reed and Shimizu 2009.

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back in the 2005 general election. She was given a suspended two-­year sentence for falsely registering two w ­ omen as secretaries who never worked for her. Tsujimoto claimed, prob­ably correctly, that this was a SOP in the Social Demo­cratic Party, but the judge rejected this as a reason to reduce the charges. Suzuki is ­rumored to have been the source of the information that led to the charges against his enemies. The Suzuki Muneo scandals signaled that the Special Investigation Department of the Tokyo District Public Prosecutor’s Office, the office that investigates corruption cases involving Diet members, would prosecute politicians such as Suzuki for “mediation bribery” (assen shuuwaizai). Thus, even if politicians properly and legally report funds as being po­liti­cal donations, they could still be charged with corruption if the money can be linked to a specific request. The scandals also generated a debate on the rules governing relations between politicians and bureaucrats and the LDP-­Komeito co­ali­tion agreed on new rules to make contacts more transparent. When lawmakers make requests to a government ministry, the bureaucrats involved are now expected to inform the cabinet minister in charge (Asahi, 18 July 2002). The Ministry of Foreign Affairs went even so far as issuing a formal manual for dealing with Suzuki a­ fter he was reelected in 2005. The rules mostly involved not dining with him and submitting a report if their paths crossed (Mainichi, 4 October 2005). The Suzuki scandals sold newspapers and magazines and boosted the ratings of news programs and the televised parliamentary debates. It was reported, for example, that Suzuki’s two-­hour testimony to the Diet Bud­get Committee that began on a Monday at 9 A.M. had exceptionally high ratings (20.8 ­percent) (Kyodo, 18 March 2002). One commentator noted that Japa­nese politics was now tele­vi­sion entertainment: “Within a week the Junichiro and Makiko Show had acquired the heavy villain e­ very sitcom needs. Short, balding, and fifty-­four, Suzuki was perfect for the part” (Sayle 2002). By our definition, Suzuki was a corrupt politician and had been so from the beginning of his ­career. Yet his corrupt practices ­were SOP when he entered politics. From his point of view, prosecutors had targeted him, looking for any law they could find to secure his conviction. He had not stepped over the line between ­legal and illegal activities. He had stood still, but the reforms had moved the line.

The Pension Premiums Scandal (March 2004) In the early years of the twenty-­first ­century the SIA was facing an increasing number of ­people who ­were not paying their pension premiums. Premiums are usually deducted automatically from the salaries of Japa­nese employees, but ­those not employed in a salaried job need to make the payments themselves. In response,



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the SIA started a publicity campaign calling on the public to avoid being delinquent on their payments. They hired actress Esumi Makiko to be the spokesperson. This soon proved to be an embarrassing choice ­because it turned out that Esumi was herself delinquent. The revelation prompted the media to ask w ­ hether the politicians responsible for promoting the legislation ­were paying their own premiums (Asahi, 23 March 2004). Many ­were not. The discovery that politicians ­were not paying their premiums while campaigning to get citizens to pay theirs generated moral outrage. The DPJ took the leading role in pursuing the scandal. The party asked that all members of the Koizumi cabinet publicly reveal their payment status (Asahi eve­ ning, 7 May 2004). The first fruits of the DPJ campaign came on April 23 when three cabinet ministers publicly admitted to lapses in their payments (Asahi, 24 April 2004). On April 28, four additional cabinet members admitted that their payment status was not current (Asahi, 29 April 2004). The confession by Chief Cabinet Secretary Fukuda Yasuo was particularly damaging to the government, as he had been the government’s main spokesperson for raising pension premiums. Although Fukuda explained that his delinquency was an error and not done to avoid payment, he was forced to resign in early May. Much like the pachinko scandal described in chapter 3, however, the pension scandal gradually expanded to the opposition. Admissions made by Koizumi cabinet members lost some shock value when it was reported that DPJ leader Kan Naoto had also lapsed on his payments (Asahi, 29 April 2004). In the end, JCP and Komeito members joined a group of more than a hundred Diet members spanning six dif­fer­ent po­liti­cal parties that had failed to pay part of their pensions a­ fter April 1986, the date when payments became mandatory (Yomiuri, 14 May 2004). One consequence of the scandal was that the LDP launched an internal investigation into the SIA ­after the discovery in February 2005 that around three hundred workers had inappropriately accessed the personal pension rec­ords of Prime Minister Koizumi and actress Esumi Makiko (Asahi eve­ning, 25 February 2005). The results of the investigation confirmed that around 1,535 employees—­about 5 ­percent of the agency’s workforce—­had viewed private information on p ­ eople’s pension rec­ords (Asahi eve­ning, 28 April 2005). The rec­ords of celebrities and politicians naturally garnered the most curiosity. While the government chastised the SIA and the employees who accessed files w ­ ere punished, the decision to publicize the investigation suggests that the role of leaked government information in this scandal cannot be overlooked. The pension premium scandal does not constitute corruption by our definition. It would be certainly nice if politicians w ­ ere not hypocritical, but hy­poc­risy does not pervert the course of democracy. It is merely embarrassing. The pension

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premium scandal could thus be called the first major embarrassment scandal since the reforms. As we ­shall see below, however, it was not to be the last.

The Japan Dentists Federation Scandal (July 2004) The Japan Dentists Federation (JDF) is the po­liti­cal arm of the Japan Dental Association (JDA). The dentists have traditionally supported LDP candidates. In 2004 investigators discovered that a former LDP politician, Yoshida Yukihiro, had received money from the JDF that he used to bribe prefectural and city assembly members during his failed reelection attempt in the 2003 general election. Yoshida returned some of the money to the former JDA leader, Usuda Sadao, who then spent the money illegally on his own campaign to win reelection to the leader­ ship of the JDA. The scandal soon engulfed the entire LDP as investigators uncovered illicit donations between the JDF and the Hashimoto faction, the largest in the LDP at the time. The Hashimoto faction had received a 100-­million-­yen ($823,000) check prior to the 2001 upper h ­ ouse election, which it failed to report (Asahi, 30 August 2004). Former prime minister Hashimoto denied involvement in the decision to hide the donation and resigned as faction leader. The trea­surer of the faction pleaded guilty to violating campaign finance laws and received a suspended ten-­month prison term from the Tokyo District Court. Several se­ nior politicians in the LDP w ­ ere also investigated for having received diverted JDF funds through their party’s fund-­raising organ­ization in violation of campaign finance laws, although none of the cases went to trial (Asahi, 10 December 2005). The JDF scandal helped end the po­liti­cal ­career of Hashimoto, prime minister between 1995 and 1998, and scion of a po­liti­cal lineage ­going back to 1949 and a bureaucratic lineage ­going back even further. He did not stand in the 2005 general election. He passed the seat on to his son, who failed to win the f­ amily seat outright but was elected in the PR tier. The influence of the LDP’s largest faction was significantly weakened, first by the revelations and then by Hashimoto’s sudden death from a heart attack in 2006. The lesson was clear: no one is invulnerable. Yet neither politicians nor dentists seem to have learned much. We w ­ ill meet the dentists again in chapter 5, where they are caught breaking campaign finance regulations to help elect their candidates in the 2015 upper ­house election. The JDF scandal did not become public knowledge u ­ ntil ­after the July 2004 upper ­house election, but it did contribute to a relatively minor reform of the Po­liti­cal Funds Control Law. The large transfer of funds between the JDF and the Hashimoto faction had not gone unnoticed and thus a restriction was put in place



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to limit transfers between some po­liti­cal groups to a maximum of 50 million yen ($462,000) a year.

The Fall of the LDP The LDP did not learn from Koizumi’s success. His successor, Abe Shinzou, allowed the rebels that Koizumi had refused to nominate back into the party, sending the message that the LDP had not changed at all. He also proved to be an in­effec­tive prime minister, rapidly losing the support that Koizumi had bequeathed him. The DPJ won control of the upper ­house in 2007 and used that position to extract more information from the bureaucracy. The result was the “lost pensions” scandal, detailed in chapter 5, a major policy failure scandal that severely damaged the LDP’s reputation for competent government. The DPJ also found that attacking individual ministers could be an effective weapon against the governing party. The transparency introduced by the reforms and the nascent two-­party system produced by the new electoral system had led to classic two-­party politics.

Targeting LDP Cabinet Ministers The DPJ learned that a careful search of any politician’s financial reports could potentially reveal something embarrassing that might generate a scandal.4 In some cases the information obtained from ­these reports was used to cast the taint of corruption on the target. Other times it helped establish that laws had been broken. However, most searches uncovered no corruption as we define it, only embarrassing details that sold newspapers—­primarily tabloids but sometimes mainstream newspapers—­and damaged reputations. Searching financial rec­ords, however, requires time and energy, and so targets had to be chosen. Cabinet ministers turned out to make the best targets. By finding and exposing embarrassing details contained within their financial reports, the opposition was able in some cases to embarrass the minister and the ruling party. Cabinet ministers ­were also a newsworthy target—­coverage of their activities, including embarrassing details, was given priority coverage by the vari­ous print media. While practically ­every cabinet minister was subject to targeting efforts by the DPJ and the mass media, we have opted to focus below on the LDP cabinet members who resigned, one who refused to resign, and another who avoided resignation by committing suicide. 4. ​Note that it often proved to be extremely difficult to identify the party responsible for bringing the scandal to light. Increased po­liti­cal transparency has made it pos­si­ble for almost anyone to study the reports and potentially uncover information that could be used to construct a scandal.

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The first minister in the Abe cabinet to be caught in this web was Sata Genichirou, the minister of administrative reform. The campaign finance reports of a support group created in 1990 by one of his f­ather’s construction companies claimed to have rented office space from 1990 to 2000, but no rec­ord of a signed rental contract could be found (Yomiuri, 26 December 2006). Whoever blew the whistle on Sata had carefully investigated the financial statements of this group and ­whether a rental contract had been signed for the addresses provided on the report. Once the story leaked, Sata hastily called a press conference and pledged to investigate. The next day he resigned as minister, admitting that his investigation had found illegal accounting committed by one of his “inexperienced” accountants (Yomiuri, 28 December 2006). In this case, the exposure of details from his campaign finance report combined with the discovery of law-­v iolating accountant was enough to force Sata to step down and save himself and the governing party from further embarrassment. The two cases that did not culminate in a direct resignation are worth a brief mention. ­After the Sata scandal above, the next minister caught was Ibuki Bunmei, the minister of education, culture, sports, science and technology. Akahata, the communist newspaper, claimed credit for exposing the scandal, but the mainstream press quickly confirmed the facts (Akahata, 3 January 2007). Ibuki’s main fund agent organ­ization (seiji shikin kanri dantai) had claimed office expenses but also claimed the space was rent-­free.5 Apparently, Ibuki’s accountant included rent for other offices in the figure as well as such office maintenance expenses as the costs for parking seven cars. Despite their best efforts, however, the opposition camp was unable to oust Ibuki ­because he denied ­doing anything improper or illegal. Moreover, the rules governing the use of expenditures and campaign finance in general ­were often sufficiently vague, allowing many ministers like Ibuki to fight back successfully in silencing the scandal. ­After Ibuki, the DPJ hit the jackpot with their next target, Minister of Agriculture Matsuoka Toshikatsu, a politician with a long history of l­egal prob­lems (George Mulgan 2006). At the time, he was implicated in a bid rigging scandal surrounding construction companies that built forestry roads, a program administered by Matsuoka’s ministry. His campaign finance reports included suspiciously large utility expenses. He explained that he had spent the money on expensive purified ­water. This explanation was literally incredible. Two DPJ upper ­house members visited Matsuoka’s office and found no evidence to support his explanation (Asahi, 10 March 2007). Learning from the pachinko and pension premium payments scandals, the party also took pains to clean up 5. ​Most politicians establish a single fund agent organ­ization, which, along with local party branches, is one of the main “wallets” and ­legal entities used to accept and spend po­liti­cal funds subject to the Po­liti­cal Funds Control Law.



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their own ­house before attacking the LDP (Asahi, 17 March 2007). Prime Minister Abe deci­ded to stem the flow of resignations and continued defending Matsuoka even though he had become a laughingstock. Hours before Matsuoka was ­going to be questioned in the Diet, he committed suicide—­the first sitting cabinet member to do so since the war. Matsuoka’s suicide stunned the po­liti­cal world but also effectively ended the scandal. It also prompted significant revisions to campaign finance laws in 2007. Before the reforms, po­liti­cal groups linked to politicians disclosed the total amounts of expenditures using specific spending categories and did not need to attach receipts. Several scandals emerged when politicians ­were “caught” spending large sums on office expenses when the office in question was rent-­free. The new law requires all groups closely associated with Diet members to submit receipts for all ordinary and po­liti­cal expenses, excluding personnel fees, above 10,000 yen ($85). Receipts for expenditures below this amount are to be kept and disclosed upon request. The Asahi was among the first to break the next scandal. Akagi Norihiko, the new minister of agriculture, claimed large expenses on his official report for an office that was not in use. Both the press and members of the opposition camp demanded that Akagi make his receipts public. Akagi explained that the expenditures for several offices had been grouped together and declined to release his receipts. He was ­under no ­legal obligation to do so, but the questions would not stop and his answers ­were unconvincing; he resigned shortly thereafter. Despite commanding a power­ful kouenkai inherited from his grand­father, he lost the 2009 election and did not run again in 2012 or 2014. In this case, embarrassing details, along with the appearance that Akagi was trying to cover up something, hastened his fall. Abe checked his next ministerial appointee to make sure he would not have to watch another minister resign in disgrace (Asahi, 2 September 2007). He chose Endou Takehiko, but it was soon found that Endou chaired a farmers’ mutual aid association that had illegally received government subsidies by exaggerating reports of weather damage to the grape harvest in 1999. Most damaging was the fact that the Board of Audit had reported the prob­lem but the government had done nothing about it for three years (Asahi, 4 September 2007). As the public uproar grew, and amid the criticisms of Endou by members of the opposition and by the leader of the LDP’s co­ali­tion partner Komeito, Endou saw the writing on the wall and resigned only a week ­after taking office; he did not run in the 2009 election (Kyodo, 3 September 2007). Laws ­were broken, but the illegal subsidies ­were returned and with his resignation the investigation into Endou was over. The next minister of agriculture, Oota Seiichi, was appointed by Abe’s successor Fukuda Yasuo. It was soon discovered that Oota had reported paying

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rent on his office even though the office he listed was rent-­free (Asahi eve­ning, 26 August 2008). Unlike his pre­de­ces­sors, however, Oota provided a reasonable ­explanation and made details of the expenditures public (Asahi, 30 August 2008). While Oota managed to survive the expenditure scandal, he soon resigned for other reasons. He presided over a case of foreign rice purchased by the government to meet the requirements of “minimum access” for rice imports. The government had bought the cheapest rice pos­si­ble, designating it for use in nonfood products only, but a com­pany had mixed the moldy, pesticide-­tainted rice into rice sold for consumption. When ­these facts ­were made public, Oota’s comment was that the public was making “too much fuss” over the incident (Yomiuri, 19 September 2008). Oota resigned seven weeks a­ fter being appointed minister and lost in the 2009 election. He retired from politics claiming that both he and the LDP lost b ­ ecause of biased reporting by the left-­w ing media (Asahi, 3 August 2009). ­Under the Asou administration, two ministers resigned a­ fter the negative exposure of two scandals. Minister of Infrastructure Nakayama Nariaki resigned in 2008 ­after a series of verbal gaffes. In interviews with media organ­izations, he was quoted on rec­ord claiming that Japa­nese do not like foreigners and that Japan is ethnically homogenous. Prime Minister Asou expressed disappointment, offered a public apology for Nakayama’s statements, and replaced him just four days ­after his official appointment. Another embarrassing incident for the Asou government involved Minister of Finance Nakagawa Shouichi, who appeared to be drunk during a televised international press conference in 2009. The DPJ and other opposition party members filed a censure motion against Nakagawa and used the incident to embarrass him and the Asou government. Disgraced, Nakagawa resigned three days l­ater. He lost his seat in the August 2009 election and died unexpectedly two months l­ater. ­After 2007 the DPJ and opposition parties used embarrassing details to damage the reputation of LDP members and the LDP, targeting their efforts on as many cabinet ministers as pos­si­ble. In fact, the practice of targeting caused much of the rise in embarrassment scandals that occurred during this period. The DPJ targeted dozens of other cabinet ministers and published the embarrassing details they found, and therefore the universe of embarrassment scandals is much larger than we have shown h ­ ere. What is impor­tant for current purposes is that embarrassment scandals and high-­profile resignations contributed to the fall of the LDP in the 2009 election and would contribute to the fall of the DPJ in 2012.



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The Fall of the DPJ Government (2009–2012) Scandals concerning the DPJ began before it came to power in the 2009 election and continued for most of its time in office.6 Two scandals involved the campaign finance irregularities of two of its major leaders, Ozawa Ichirou and Hatoyama Yukio. Both Ozawa and Hatoyama became the focus of reports before the 2009 election. Many of the reported campaign finance irregularities occurred years if not de­cades earlier, with their origins in the prereform campaign finance system. Efforts to target the DPJ leadership by journalists as well as public prosecutors and the LDP ­were aided by a stricter reporting regime that helped expose some of the accounting practices at the heart of the scandals. The DPJ u ­ nder Kan Naoto also experienced a major policy failure scandal concerning its h ­ andling of the Fukushima nuclear disaster of 2011, which we detail in chapter 5.

Ozawa Ichirou’s Scandals (2009–2010) Ozawa Ichirou inherited a Diet seat from his f­ ather in 1969 and built his kouenkai into one of the strongest in Japan. He learned his politics from Tanaka Kakuei and Kanemaru Shin, two politicians who featured prominently in the corruption scandals of the prereform era. Ozawa was also one of the major architects of the 1994 reforms. He played a key role in splitting the LDP in 1993 and in the formation of the Hosokawa cabinet. He was instrumental in creating the NFP, the major opposition party in 1996, but also instrumental in its failure. He joined the DPJ before the 2003 election and was pivotal in engineering its victory in 2009 as well as its defeat in 2012. Ozawa was a true master of the politics of prereform Japan. As such, t­here ­were constant rumors of corruption, but he had learned to play the po­liti­cal game without breaking the letter of the law. Like Suzuki Muneo, however, he had not yet mastered the new system. Ozawa was implicated in the Nishimatsu Construction scandal of 2009 (Sankei News, 4 March 2009). Nishimatsu first came u ­ nder investigation when its president was arrested and charged with illegally bringing slush funds into Japan from his overseas operations. ­Because campaign finance laws ban direct corporate contributions to politicians, Nishimatsu circumvented the law by using two dummy po­liti­cal groups that had been created by former com­pany officials in 1999 (Akahata, 26 January 2009).

6. ​An earlier rendition of some of the scandals in this chapter was published in Carlson 2013.

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On 3 March 2009 prosecutors arrested and indicted Ozawa’s aide, Ookubo Takanori, on charges of falsifying campaign finance reports to make it appear that donations from Nishimatsu came from dif­fer­ent organ­izations. Ozawa defended Ookubo and claimed that the prosecution’s case against him was po­liti­ cally motivated (Asahi, 4 March 2009), though most of the politicians caught in the Nishimatsu net belonged to the LDP. ­Under pressure from the public, the media, and members of his own party, Ozawa resigned as party president on 11 March 2009 and was replaced by Hatoyama Yukio. Hatoyama kept Ozawa close to power, appointing him secretary-­general of the party, but prosecutors continued to search through the files of his official fund management body, the Rikuzankai. Three Ozawa aides ­were arrested in 2010 for misreporting funds used to purchase a plot of land next to Rikuzankai headquarters. As in the Nishimatsu case, prosecutors lacked sufficient evidence to indict Ozawa himself. However, Ozawa was caught in the web of another reform. In 2009 a reform of the judicial system gave citizens’ panels the authority, u ­ nder specified conditions, to reverse a prosecutorial decision not to charge an individual, and the panel did so in Ozawa’s case.7 He was indicted in April and September 2010. Presumably, the citizens’ panel believed that Ozawa was directly involved in the misreporting of 400 million yen ($4.3 million) in po­liti­cal funds. In September 2012 his aides ­were tried, convicted, and given suspended jail terms ranging from one to three years. In April 2012, however, Ozawa was acquitted. Unlike Suzuki, Ozawa had managed to stay within the letter of the law. Ozawa’s organ­ization in Iwate was strong enough to defeat the LDP in three out of four districts. His kouenkai won his own election in Iwate 4th district no m ­ atter what party he represented, winning in 1996 for the NFP, in 2000 for the Liberals, and between 2003 and 2009 for the DPJ. He also won r­ unning for the Tomorrow Party of Japan (Nippon Mirai no Tou) in 2012 and as a member of the ­People’s Life First Party (Kokumin no Seikatsu ga Daiichi) in 2014, the latter with a greatly reduced share of the vote. Ozawa may have mastered the politics of prereform Japan, but he did not do as well once the system changed. Corrupt practices ­were SOP before, but ­under the new system it was much more difficult for someone like Ozawa to operate as a “shadow shogun” without becoming caught up in the web of scandals (Schlesinger 1999). Ozawa managed to avoid ­legal prosecution, but it came at a heavy price.

7. ​See Johnson and Shinomiya 2015 for a broader discussion on how the new system works and how it may affect aspects of the criminal pro­cess moving forward.



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Hatoyama Yukio’s Campaign Finance Scandal (2009) Hatoyama Yukio’s f­ amily has been involved in politics for four generations. His grand­father was one of the found­ers of the LDP and served three terms as prime minister beginning in 1954 (see appendix B). Hatoyama also comes from a wealthy ­family. His ­mother is the ­daughter of Ishibashi Shoujirou, the founder of the world’s largest tire maker, Bridgestone Corporation. A ­ fter earning a Ph.D. in engineering from Stanford University, Hatoyama worked as a college professor and in 1986 ran successfully as an LDP candidate in Hokkaido’s 9th district. In 1993 he left the LDP and helped found the New Party Sakigake. In 1996 he helped create the DPJ with his younger ­brother, who had entered politics earlier, and Kan Naoto. The Hatoyama f­amily channeled such massive amounts of funds to build the DPJ that the press initially called it the “Hatoyama New Party” (Itoh 1999). ­After scandal-­tainted Ozawa resigned as party president, Hatoyama was elected to the post in May of 2009 and went on to become the first DPJ prime minister ­after the 2009 general election. Exactly one month a­ fter Hatoyama became the party president of the DPJ, news reports emerged about the existence of deceased donors on Hatoyama’s campaign finance reports. Asahi was the first to break the story. Reporters determined that ­there ­were at least five deceased individuals listed on his reports between 2002 and 2007 (Asahi, 16 June 2009). The paper gave several examples, including donations from a former president of a Tokyo-­based travel agency from 1998 to 2007, even though he had died in 2005. In July Tokyo prosecutors deci­ded to investigate, but in November prosecutors announced that they would not indict Hatoyama due to lack of evidence. A panel of citizens reviewed the charges but deci­ded that the prosecutors’ decision was proper, effectively closing the investigation into Hatoyama. However, his secretary, Katsuba Keiji, was less fortunate, as the Tokyo District Court sentenced him to two years in jail for falsifying reports to hide over-­the-­limit donations from Hatoyama’s ­mother and ­sister. He did not appeal (Asahi, 7 May 2010). The fuss over his campaign finance reports was an embarrassment not only for the DPJ but also for the LDP and Hatoyama’s younger b ­ rother, who had joined the latter party and also concealed over-­the-­limit donations from his ­mother and ­sister. Hatoyama’s being the leader of the DPJ, however, generated intense scrutiny.

Targeting of DPJ Cabinet Ministers (2010–2012) Kan Naoto defeated Ozawa in the race to succeed Hatoyama as DPJ leader and prime minister. Kan was the first prime minister since Koizumi to gain support

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during his tenure (Pekkanen and Reed 2013, 12). The primary reason for the rise in Kan’s support was his policy of excluding Ozawa and his followers from positions of power. That popularity ended, however, with the Fukushima nuclear disaster described in chapter 5. During the Hatoyama administration the media had focused on the Ozawa scandals. With the Kan and Noda administrations t­ hose efforts shifted to targeting DPJ cabinet members. Many DPJ ministers proved easy targets b ­ ecause they lacked governing experience and had never received intense public scrutiny. The DPJ also had much to learn about managing and deflecting scandals, and the damaging effects of the earlier scandals surrounding Ozawa and Hatoyama strained the leadership choices moving forward. During the Hatoyama administration and in Kan’s initial cabinet, ­there ­were three major resignations that w ­ ere due to personal reasons or policy differences among co­ali­tion partners. ­There ­were also several DPJ cabinet members whose resignations w ­ ere influenced by a scandal. We focus on the three ministers who sparked controversies with their public comments. We then turn to the two ministers (and prime minister) who ­were linked to illegal foreign donations. Embarrassing misstatements, rather than corruption, provided the materials for the construction of the three scandals. The first centered on Yanagida Minoru, who was first elected to the Diet in 1990 as a member of the DSP and l­ ater joined the NFP in 1996 before fi­nally joining the DPJ. At a party in his district to celebrate his appointment as minister of justice, Yanagida joked that the job required that one memorize only two phrases: “I ­don’t comment on specific cases” and “I’m acting in accordance of the law and evidence” (Asahi, 18 November 2010). It appears that ­these are the standard phrases used by Japa­nese ministers of justice to avoid answering specific questions. When some members of the DPJ called for his resignation, the LDP deci­ded to attack him as the weakest link in the cabinet, charging Yanagida with making light of the Diet (Asahi, 19 November 2010). The DPJ was in a weak position ­because the LDP had by then regained control of the upper ­house, so Kan deci­ded to sacrifice his minister to get the supplementary bud­get passed (Asahi eve­ning, 22 November 2010). Matsumoto Ryuu was first elected in 1990 from the JSP; he joined the DPJ in 1996. Prime Minister Kan appointed Matsumoto minister of reconstruction ­after the devastating 2011 Touhoku earthquake, tsunami, and nuclear disaster. In Miyagi Prefecture, during his first tour of the tsunami-­devastated areas, Matsumoto got angry at the prefectural governor for arriving a few minutes late, refusing to shake his hand. L ­ ater, in a meeting with the Iwate prefectural governor, he warned that the government would help areas that offer ideas, acting as if he alone deci­ded ­whether a governor deserved support. His comments and be­hav­ior ­were aired on tele­vi­sion and received thousands of hits on YouTube. He resigned soon a­ fter the controversy erupted (Asahi, 5 July 2011).



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Hachiro Yoshio also had his roots in the JSP and was elected in 1990. He was appointed minister of the economy, trade and industry in the Noda cabinet. Returning from a trip to inspect the evacuated areas around the Fukushima nuclear plant, he described the scene as a “dead town” and joked with reporters about having radiation on his clothing. He resigned a­ fter only nine days in office. His offense was an “inappropriate choice of words.” At a time when the media was avoiding words like “disaster” and “meltdown,” Hachiro had dared to describe what he saw. Two additional scandals and resignations also had ­little to do with corruption but rather ­were constructed from embarrassing details of financial reports or from ­things that happened de­cades earlier. In March 2011 LDP upper h ­ ouse member Nishida Shouji questioned Minister of Foreign Affairs Maehara Seiji about donations from a foreign resident of Japan. Nishida knew that many in his own party could easily be exposed for similar violations, but ­after consulting with an LDP colleague, he brought the subject to public attention (Mainichi, 8 March 2011). Newspapers soon revealed that the donor was a restaurant owner from Maehara’s hometown who had contributed a small amount to Maehara’s po­liti­cal group ­every year over a five-­year period (Sankei News, 4 March 2011). No one, not even Maehara, had apparently known that the longtime resident happened to be a Korean citizen. Maehara resigned to prevent further embarrassment to himself and to the Kan administration, which wanted no distractions as it was facing a difficult ­battle in passing bills related to the next bud­get. The fuss over donations from foreign nationals did not end with Maehara’s resignation. In the Diet, Nishida and the LDP went a­ fter additional DPJ members for questionable donations, including Prime Minister Kan Naoto. Reporters poring over Kan’s campaign finance reports confirmed that a South Korean resident of Japan, who was using a common Japa­nese name, had made donations to Kan from 2006 to 2009 (Asahi, 11 March 2011). Accepting donations without much thought to the residency status of specific donors had been SOP for de­cades ­under LDP rule. Kan refused to resign as prime minister and claimed that he had no knowledge that the donor had been a foreign resident. This line of targeting immediately ended the moment the country experienced the Touhoku earthquake, tsunami, and nuclear disaster. We discuss the details of this event in chapter 5, and note h ­ ere that the targeting of DPJ cabinet members resumed ­later in 2012. The second and final ministerial scandal and resignation occurred in 2012, prior to the general election, and this story had a familiar plot line. It was revealed that Noda’s newly appointed minister of justice, Tanaka Keishuu, had past ties to a yakuza member and that his po­liti­cal group had accepted funds from a com­ pany run by a Chinese national. The smoking gun was a picture taken nearly

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three de­cades earlier that showed Tanaka with the yakuza member at a wedding cele­bration. As far as the donation, it is unlikely that ­either Tanaka or his aides had any knowledge of the Chinese connection since he has been raising funds from an extensive variety of businesses in his district for de­cades. Why had no one bothered to question the nationality of his donors ­until now? Most likely ­because few cared ­until Tanaka became minister of justice in a cabinet reshuffle designed to help Noda in the upcoming DPJ leadership race prior to the 2012 election. The information about the donation and the former yakuza connections was released at the opportune time to embarrass Tanaka as well as Noda. The LDP used the scandal against the DPJ and some groups within the DPJ used the scandal to attack Noda and his failure to carefully vet his cabinet appointments. Citing health reasons including an irregular heartbeat, Tanaka resigned from his post. Two months ­after Tanaka’s resignation, Noda called a snap election, which led to a devastating defeat for the DPJ. The party lost nearly half of its 2009 vote due to the defection of Ozawa Ichirou and his followers, the rise of new parties, and the public perception that the DPJ government had been incompetent (Kushida and Lipscy 2013; Reed et al. 2013). The scandals detailed above, the targeting of DPJ cabinet ministers over mostly embarrassing statements, and the charges of “mismanagement” of the Fukushima nuclear accident in 2011 w ­ ere the keys to the LDP’s defeat of the DPJ in the 2012 election.

The LDP Returns to Power (2012–2016) The DPJ was soundly defeated in the 2012 election and again in 2014. In addition to its pitiful rec­ord in government, it suffered defections and challenges from new parties, most notably the Japan Restoration Party (Nippon Ishin no Kai; renamed the Japan Innovation Party [JIP] before the 2014 election) led by Osaka mayor Hashimoto Tooru (Reed 2013). Low turnout and the fragmentation of its rivals allowed the LDP to return to power with more seats that they had won in the Koizumi landslide of 2005. As it turned out, the LDP (or, at least, the Abe administration) had learned a lot during its three years and three months in opposition. For pres­ent purposes, the most impor­tant lesson learned by the Abe administration was how to deal with the media, and specifically how to deal with scandals.8

8. ​In this book we covered as many scandals as pos­si­ble up ­until 2016. At the time of writing, the LDP-­Komeito co­ali­tion is still in power.



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Targeting LDP Cabinet Ministers The opposition parties w ­ ere preoccupied with rebuilding and reor­ga­niz­ing ­until September 2014. Only then did the DPJ and JIP begin to move against the LDP. They returned to the technique that had worked so well in the past: attacking individual ministers. They led off with the minister of justice, Matsushima Midori, and the minister of economy trade and industry, Obuchi Yuuko, both high-­profile female members of the cabinet at a time when the Abe administration was promising to advance ­women’s position in government and society. Matsushima distributed inexpensive fans to voters in her district. T ­ hese fans are often passed out as advertisements for events or sales campaigns. Matsushima’s opponents complained that her fans ­v iolated election rules ­because politicians are not allowed to give gifts to voters (Yomiuri, 17 October 2014). It was hard to rouse any public indignation over such an issue, but prosecutors had to admit that distributing them did indeed break the letter of the law (Yomiuri, 21 October 2014), and Matsushima was forced to resign. Obuchi Yuuko is the ­daughter of former LDP prime minister Obuchi. When she was twenty-­nine years old, her ­father died suddenly and she ran in the by-­election to fill his seat in Gunma prefecture. She had no significant po­liti­cal experience but easily won with her name recognition and b ­ ecause she inherited her f­ ather’s strong campaign organ­ization. When she was elevated to a cabinet position in 2014, her rivals found discrepancies in her disclosure reports and po­liti­cal activities. The financial management of Obuchi’s kouenkai by her secretaries was found to include serious violations of campaign finance laws, including the use of off-­the-­ book and fictitious expenses that ­were likely used to reconcile the large sums spent on supporters’ meals and outings to theaters and baseball games (Asahi, 17 October 2014). ­There was l­ittle public indignation over the fact that funds w ­ ere spent on such outings, but Obuchi was implicated in the technical violations linked to the management of her po­liti­cal groups. ­These violations went back many years and may have been the way the books w ­ ere balanced when her f­ ather was still alive. Prosecutors indicted two of her former secretaries but dropped charges against Obuchi for lack of evidence. A citizens’ group filed a request with an in­de­pen­dent judicial panel with the hope that prosecutors w ­ ill reinvestigate the case but failed to succeed. For pres­ent purposes, the impor­tant point is that Abe quickly engineered a double resignation, thereby preventing the scandals from becoming long-­running media events (Asahi, 21 and 28 November 2014). He was learning how to prevent scandals from lasting long enough to damage cabinet or LDP support.9 9. ​While the Obuchi and Matsushima scandals ­were erupting, the DPJ was also targeting Eto Akinori, Abe’s minister of both defense and security legislation, over the sources of a 3.5-­million-­yen ($33,000) “donation” that had been corrected on his campaign finance report. This case, however,

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Abe then called a snap election in 2014 and won another landslide (Scheiner, Smith, and Thies 2015). The scandals surrounding Abe’s cabinet ministers played a role in the decision to call a snap election before the opposition could or­ga­nize a credible alternative, but Abe also faced growing opposition to his policy agenda and leadership style from with his own party (Pekkanen and Reed 2015). The December 2014 election resulted in the LDP-­Komeito co­ali­tion winning nearly the same supermajority as it had in 2012. The victory was not based on an increase in votes but on lower turnout and a divided opposition, but Abe claimed a mandate for his policy agenda and reasserted his leadership of the LDP. The opposition began attacking ministers again in February of 2015 and soon forced the minister of agriculture, Nishikawa Kouya, to resign. Nishikawa’s prob­ lem was that he had received po­liti­cal contributions from corporations that had received subsidies from his ministry. He resigned within the month, realizing that no ­matter how much he explained he would have to resign in the end (Yomiuri, 24 February 2015). His rapid resignation not only prevented a scandal but also prompted the realization that the prob­lem resided more with the law than with Diet members. The DPJ found similar prob­lems with the minister of education, the minister of the environment, and the new minister of justice, none of whom resigned (Yomiuri, 28 February 2015). A thorough search of the rec­ords of Diet members revealed that both parties ­were implicated. Six from the LDP, including Prime Minister Abe, and five from the DPJ, including party leader Okada Katsuya, took money from corporations that had received public subsidies (Yomiuri, 3 March 2015). The real­ity of the situation was that it was virtually impossible to verify that all of one’s contributions ­were from legally permissible sources, but the point was to embarrass and tarnish the ruling party, even though this cycle of scandals quickly ran out of steam when it became clear that the ­causes traced back to strict campaign finance regulations and the difficulties in enforcing them. The next targeted minister, and the closing example for this section, was the minister for economic revitalization, Amari Akira. Amari had led Japan’s negotiations over the Trans-­Pacific Partnership and was a central player in promoting the government’s economic policies. The scandal exploded on 28 January 2016 when a tabloid magazine, Shuukan Bunshun, revealed that Amari and his secretaries had accepted cash and gifts from a construction firm that ­were not legally disclosed (Asahi, 20 January 2016). Amari did not resign immediately, instead hiring an in­de­pen­dent ­lawyer to investigate the charges (Yomiuri, 21 January 2016). did not culminate in a major scandal or resignation ­because Abe called a snap election. Abe was reelected as prime minister and reappointed every­one except for scandal-­tainted Eto. The LDP made plans during this time to or­ga­nize a workshop to improve accounting practices for secretaries and staff to prevent similar “accounting” errors ­going forward (Yomiuri, 31 October 2014).



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He thus avoided making statements that could be immediately disproven. However, when the ­lawyer discovered that many of the details would be difficult to refute and as the magazine continued to reveal more embarrassing details, Amari resigned his cabinet post, just a week or so a­ fter the scandal first broke. A considerable portion of Amari’s po­liti­cal funds came from com­pany donations. In his 2014 campaign finance reports for his party branch and fund agent, for instance, he raised a total of 182 million yen ($1.7 million), with more than half derived from ticket sales to fund-­raising parties and a sizable amount from businesses and individuals, many who listed themselves as com­pany employees. Only a small portion was derived from the taxpayer-­funded party subsidy. Amari denied pocketing any of the cash, claiming he instructed his aide to properly rec­ ord it as a po­liti­cal donation. Some of the scandal-­tainted funds ­were disclosed in his reports, but the source of the revelations claimed much more had been handed out (Asahi, 1 February 2016). Like Obuchi, Amari inherited his campaign organ­ization from his f­ ather and left his secretaries in charge. Amari himself was seldom pres­ent in his district (Kanagawa Shinbun, 23 January 2016). What was dif­fer­ent about this scandal was not that Amari was targeted but that he was targeted by someone other than the opposition or the weekly magazines. The source was instead a “donor” who was alleged to have kept meticulous rec­ords, including photocopies of the serial numbers of the funds he distributed, and even tape-­recorded meetings. This has led Amari to publicly question w ­ hether he had been “framed” from the outset (Asahi, 25 January 2016). Most importantly for our purposes, the scandal had l­ittle effect on the support rates of the Abe administration (Yomiuri, 2 February 2016). The strategy of using the transparency introduced by the reforms had run its course. Parties and politicians had learned their lessons. Laws ­were still being broken, but the source of shocking revelations out of which a scandal might be constructed had dried up. When something shocking was found, the government had learned how to minimize the damage.

What the Scandals ­a fter the Reforms Revealed First and foremost, it is hard to avoid the conclusion that levels of corruption have declined since the 1994 reforms. Many dif­fer­ent strands of evidence lead to the same conclusion. In the prereform era, scandals ­were discovered through serendipity. Transparency was so low that investigation by the police, the media, or po­liti­cal rivals was in­effec­tive. However, when a light was accidentally shown

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on the dark corners of Japa­nese politics, serious corruption involving politicians near the center of power became vis­i­ble. The reforms increased transparency making it pos­si­ble to uncover corruption more systematically. Yet nothing like the Lockheed, KSD, or Recruit scandals has occurred since the reforms. Instead of scandals named a­fter companies or institutions that implicated large numbers of politicians, we find scandals named ­after single politicians. In sum, we see more but find less. It is hard to avoid the conclusion that ­there is less to be found. Second, a large number of postreform scandals have not involved po­liti­cal corruption as we define it. Laws w ­ ere sometimes broken, but often the scandalous be­hav­ior involved embarrassing details or questionable accounting practices. The pensions premiums scandal, for example, was constructed using embarrassing facts and hardly represented a perversion of the demo­cratic pro­cess. Several ministers ­were forced to resign for telling the truth using a poor choice of words. One might wish that voters would pay more attention to policy issues but leaving the decision to voters is democracy. For our purposes, however, the impor­tant point is that fewer corruption scandals and more embarrassment scandals indicates that ­there is much less po­liti­cal corruption ­today compared to the past. Third, parties and politicians, most notably the Abe administration, have learned from their ­mistakes and taken steps to reduce the number of scandals that occur or to limit the po­liti­cal fallout. Similarly, candidates are slowly learning that corrupt activity by their accountant or secretary can damage their po­liti­cal ­careers. In the Obuchi and Amari cases described above, the candidate may or may not have been directly involved in corrupt activities, but they w ­ ere lax in monitoring their own campaigns and financial information. In the postreform environment of greater transparency, candidates are being forced to take responsibility for tasks that had traditionally been delegated to their handlers and personal support groups. Fourth, ­legal authorities have a few new tools to target bad apples, including a better paper trail as one consequence of changes to the system of campaign finance, the adoption of the party subsidy system, revisions to provisions related to bribery in the criminal code, and stricter guilt-­by-­association rules applicable to election campaigns. ­These changes helped to make arrests and secure criminal charges. The convictions of Suzuki Muneo, Nakamura Kishirou, and Nakao Eiichi represented impor­tant ­legal efforts to target po­liti­cal bribery, but also highlighted the irony that a successful conviction need not end one’s po­liti­cal ­career. Changes to campaign finance laws helped build some of the bribery cases, although most of the time the official reports generated lots of scandals involving large numbers of politicians in both the ruling and opposition parties. Prosecutors and citizens often saw or suspected corruption, but finding the evidence and criminal intent still proves difficult.



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Fi­nally, the demo­cratic pro­cess seems to be working better since the 1994 reforms: elections are more about parties and less about candidates. Most notable is the rise of policy failure scandals. Though policy failure scandals often involve corruption, it is bureaucratic not po­liti­cal corruption, and exposure of the policy failures of the current government clearly enhances the demo­cratic pro­cess. Most notably, policy failure scandals focused public attention on policy and governmental competence and ­were crucial in producing Japan’s first lasting alternation in power since 1955.

5 BUREAUCRATIC CORRUPTION AND PO­L ITI­C AL SCANDALS If judged on discovered cases of po­liti­cal bribery among higher civil servants, the postwar bureaucracy is remarkably ­free of corruption. Richard H. Mitchell, Po­liti­cal Bribery in Japan

The once “infallible” and “incorruptible” Japa­nese bureaucracy was revealed to be thoroughly fallible and structurally corrupt. Richard J. Samuels, Machiavelli’s ­Children

If po­liti­cal corruption can be defined as perverting the course of the demo­cratic pro­cess, bureaucratic corruption can be defined as perverting the course of the administrative pro­cess. Perversions of the administrative pro­cess, however, seldom produce ideal ingredients for constructing a scandal. Bureaucratic waste and inefficiency are constant themes in any country with a f­ ree press but administrative details seldom sell newspapers. Politicians caught in a scandal must face reelection and are therefore necessarily in the public eye before, during, and a­ fter the scandal. Bureaucrats caught in a scandal, however, have seldom appeared in the news before the scandal and soon dis­appear into anonymity ­after it. Tanaka Kakuei, Kanemaru Shin, and Suzuki Muneo go down in the annals of Japa­nese corruption but the names of bureaucrats whose stories sold newspapers for a time are soon forgotten. Few remember, for example, the name of Matsuo Katsutoshi, the bureaucrat who embezzled at least 410 million yen ($3.4 million) from the Ministry of Foreign Affairs. He used the funds to purchase luxury goods such as a yacht and a string of race­horses, which he named a­ fter his girlfriends. The Ministry of Foreign Affairs conducted its own internal investigation, firing Matsuo and filing a criminal complaint with the police. The minister explained to the public that the corruption was due to the crimes of a single individual but it ­later became clear that the slush fund and embezzlement went back de­cades and involved the entire organ­ization. A second reason for the lesser coverage of bureaucratic corruption is that much of it involves retired bureaucrats. Active bureaucrats in the central ministries have been implicated in their share of corruption, but the most egregious examples 92



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involve public or semipublic corporations staffed by retired bureaucrats. In such cases, the connection between the corruption and the bureaucracy seems indirect. Only when reporters dig a l­ittle deeper does the bureaucratic connection become manifest. Although this study focuses primarily on politicians, politicians must influence bureaucrats to accomplish many of their corrupt ends. In some of the bid rigging scandals in the construction industry, for example, politicians directed public works contracts to construction companies that supported them, but the choice of companies is technically an administrative decision made by bureaucrats. In addition, the policy failures that ­were significant ­factors in the two alternations in power since the reforms ­were caused, in large part, by bureaucratic corruption. Politicians can no longer leave the bureaucracy alone to take care of policy and administration ­because politicians can lose elections due to bureaucratic failures. Our picture of po­liti­cal corruption would thus be incomplete without some analy­sis of the bureaucratic context.

Bureaucratic Involvement in Po­l iti­c al Scandals, 1947–1993 We begin by reviewing the involvement of bureaucrats in the major po­liti­cal scandals before 1993. Among the eleven scandals analyzed in chapters 3 and 4 that happened prior to the 1994 reforms, six involved both politicians and bureaucrats, one was primarily a bureaucratic scandal that also involved politicians, and four ­were po­liti­cal scandals with l­ittle or no bureaucratic involvement. The one bureaucratic case involved a public corporation, not a central ministry. It concerned officials from KDD, the government-­owned International Telephone and Telegraph Com­pany, raising a slush fund by smuggling expensive goods into the country. The role of politicians was to receive large sums from that fund, a fact that made it a po­liti­cal scandal in the media. In ­those scandals that involved both politicians and bureaucrats, the basic pattern was interest groups bribing politicians to influence bureaucratic decisions. Even though bureaucrats ­were involved, the focus of the scandals and ­legal cases centered on politicians. Few bureaucrats ­were made targets of the scandals and fewer yet put on trial. In the Shouwa Denkou scandal of 1948, for example, the chemical fertilizer com­pany paid prominent members of the po­liti­cal, bureaucratic, and economic worlds to help it receive public subsidies and loans. The scandal involved the Reconstruction Bank, the banking industry, and the Ministry of Commerce and Industry (Asahi, 17 December 1948). The director of the Reconstruction Bank, Ninomiya Yoshitomo, was identified as having received

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one of the largest payoffs, but was not charged with any crime. The bad apples that bore the brunt of the public shaming ­were politicians with ties to the ministries. L ­ ittle is known about the roles played bureaucrats in securing government financing and loans for Shouwa Denkou. The coal nationalization scandal of the same year and the shipbuilding scandal of 1954 likewise involved extensive bureaucratic participation with few individuals accepting any responsibility. The Lockheed scandal of 1976 also fits the pattern of bureaucratic involvement with the exposure of politicians with bureaucratic connections. In the ­trials that involved the purchase of Lockheed planes by ANA, the former minister of transport and parliamentary vice minister of transport received fines and suspended sentences. Fi­nally, the Recruit scandal of 1988 involved politicians with bureaucratic connections. The president of Recruit sought to obtain po­ liti­cal influence from bureaucrats and politicians alike. The scandal and l­egal trial generated a long list of individuals who ­were arrested or who resigned from their official positions. T ­ hose arrested with prominent bureaucratic connections included the vice ministers of education and l­abor and a host of other officials associated from both ministries. Media coverage was focused primarily on politicians. The ministries involved ­were noted but individual bureaucrats ­were not. We draw two major conclusions from looking at the involvement of bureaucrats in the major scandals from 1947 to 1993. First, newspaper reports focused primarily on the politicians and virtually ignored ministry officials. In none of the scandals was a specific national ministry blamed or punished for corrupt be­hav­ior. Second, the newspaper reports focus heavi­ly on the t­ rials, in effect, delegating the decision of what to cover to the prosecutors and the courts. ­Because the ­legal system is specifically designed to punish bad apples, the media did ­little to discuss the more fundamental ­causes of corruption.

LDP Policy Tribesmen (Zoku Giin) In Japan “policy tribesmen” (zoku giin) play the role of mediating between politicians and bureaucrats (Inoguchi and Iwai 1987). The bureaucracy took charge of Japan’s economic development from the time the LDP was formed in 1955 u ­ ntil 1 the 1973 oil shock (Nikkei Weekly, 10 January 1994). In the next two de­cades, LDP zoku giin emerged and expanded their influence as the government’s bud­get grew smaller and conflicts between ministries surfaced. The bureaucracy became dependent on t­ hese politicians, which led to corruption, poor policy decisions, and inappropriate bud­get allocations. 1. ​Inoguchi Takeshi offers this explanation in his interview with Nikkei Weekly, which we explain ­here.



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Zoku giin serve in many official party and governmental positions related to a ministry, but their influence was based on their long association and personal networks, not their formal authority. The informal influence of zoku giin often trumps the formal authority of cabinet ministers. We owe a debt to the maverick Tanaka Makiko for providing us with our clearest evidence concerning the relationship between ministers, bureaucrats, and zoku giin. In her two stints in ministerial roles, she tried to exercise the ­legal powers of ministers and failed. ­These failures revealed the practical limitations on ministerial power. We begin with her second stint in the cabinet as minister of education in the Noda administration. Tanaka was presented with a document that would approve the establishment of several new universities. It seemed perfectly clear to her that Japan needed to reduce the number of universities, not establish new ones, so she refused her approval. Uproar ensued. The prob­lem was that the universities had already been built, faculty hired, curriculums set, and advertisements for students published. Though the minister had clear l­egal authority to make the decision, Tanaka’s choice set was not the “­either approve or disapprove,” as indicated by the law, but ­either acquiesce in what has been deci­ded or cause trou­ble and delay the implementation of what had been deci­ded. Tanaka soon relented, making her point (and several more enemies) but only slightly delaying the start of the new universities. Most ministers simply acquiesce in any decision that reaches their desk. When a maverick like Tanaka bucks the system, it becomes pos­si­ble to glimpse how the system works. To have effective influence over the decisions made by the ministry, politicians need to be involved much earlier in the pro­cess. Ministers can and do have pet proj­ects and do have g­ reat influence over that proj­ect when they become ministers. But the politicians with the most general influence over policy decisions and most power over bureaucrats are not ministers but zoku giin. Theirs, however, is power without responsibility, while the minister bears the responsibility without power. Zoku giin have policy “expertise,” but the policy decisions that concern them tend to focus on such ­matters as the allocation of construction proj­ects to companies. Fi­nally, zoku giin share a broad range of interests with the bureaucrats in their networks. They are usually aware of per­sis­tent policy failures in their respective fields, for example, but have no more interest in making them public than do the bureaucrats themselves.

Amakudari as Systemic Bureaucratic Corruption Amakudari literally means “descent from heaven.” In this case, heaven is the bureaucracy and lucrative postretirement jobs are the reward for descending into private life. Most studies of amakudari have been performed by po­liti­cal

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economists interested in understanding the relationship between government and business in Japan (C. Johnson 1974; Calder 1989; Schaede 1995). A study on the effects of amakudari by two economists, for example, concluded that the collusion between the regular and regulated comes at the expense of taxpayers and that amakudari rewards private companies that take risky investments (Mizoguchi and Quyen 2012). This phenomenon is not limited to Japan. Another study noted that firms with personal and financial connections to politicians have benefited from higher stock valuations in Indonesia, the United States, Malaysia, and Nazi Germany (Eggers and Hainmueller 2009).2 Amakudari has played a role in many of the po­liti­cal corruption scandals described above. In Nakao Eiichi’s bribery scandal, which was described in chapter 3, one of the ser­v ices provided to construction companies was to introduce amakudari bureaucrats who might join the com­pany. KSD employed fourteen former bureaucrats (Yomiuri, 9 December 2000). Fi­nally, the logging com­pany involved in one of Suzuki Muneo’s scandals may have overlooked illegal logging in exchange for hiring amakudari bureaucrats (Yomiuri, 24 June 2002). Amakudari also played significant roles in each of the major policy failures of the 1990s, but the system has proven impervious to reform efforts. The Ministry of Finance’s bailout of seven failing private lending institutions (juusen, the savings and loan bailout) as well as the HIV-­contaminated blood scandal are two prime examples (Nakano 1998). One theme that comes up repeatedly in the analy­ sis of policy failures is lax oversight. One imagines that it is difficult for serving bureaucrats to oversee retired bureaucrats working in a public corporation b ­ ecause the latter ­were recently the former’s se­nior colleagues in the ministry. Industries that depend upon public contracts, such as the construction and defense industries, are linked to po­liti­cal corruption in many countries. In Japan such companies often hire amakudari bureaucrats to bolster their po­liti­cal influence. For example, in 2007–8 the administrative vice minister of defense was found to have arranged a dangou agreement among companies used to supply military goods. The chosen com­pany had an unwritten agreement with the Ministry of Defense where it would hire one of its retired officials or a retired military officer ­every time 1 billion yen in sales (around $9 million) w ­ ere generated (Mizoguchi and Quyen 2012). The scandal provides another example how amakudari can represent a form of bureaucratic looting (Nakano 1998). Though amakudari to private industry has been associated with corruption, serious policy failures are more often associated with amakudari in “quangos,” 2. ​See also the influential study by sociologists Colignon and Usui 2003. In the po­liti­cal science lit­er­a­ture, see Nakano 1998 for an impor­tant study on the Ministry of Post and Telecommunications, where he concludes that amakudari is itself a kind of bureaucratic looting whereby firms pay a sort of dues or “spoils” to the ministry given their jurisdictional power.



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quasi-­ public agencies or quasi-­ autonomous nongovernmental organ­ izations. Quangos have caused prob­lems in public administration and have been linked to corruption internationally (Warner 2007, 98–100). In Japan many quangos seem to have ­little function beyond providing postretirement jobs for bureaucrats. The most popu­lar ­thing that the DPJ did in its first year in power in 2009 was to uncover and publicize cases of bureaucratic waste and inefficiency through a bud­get screening pro­cess known as jigyou shiwake. The ­whole pro­cess was performed before an audience and cameras and was entertaining tele­v i­sion. Some of the most egregious examples of waste and inefficiency came from quangos staffed by amakudari ex-­bureaucrats. For example, ­there ­were nine dif­fer­ent subsidized organ­izations to promote healthy eating habits, employing fifty-­three amakudari bureaucrats. Two organ­izations seemed to have the same mission, the Healthy Eating Association (Sukoyaka Shokuseikatsu Kyoukai) and the Eating Habits Association (Nihon Shokuseikatsu Kyoukai). The difference turned out to be that the former provided postretirement jobs for Ministry of Agriculture bureaucrats while the latter provided jobs for Ministry of Health bureaucrats (Asahi, 22 November 2009). Another, the Japan Food Specialist Association (Nihon Fu-do Supesiarisuto Kyoukai), had one employee and twenty-­two officers, four of latter being amakudari bureaucrats. When the Ministry of Agriculture explained that this was not a case of inflated staff and that the retired bureaucrats ­were earning their lucrative salaries, it drew a laugh from the audience (Asahi, 22 November 2009). Many of the bureaucrats ­were surprised and angry to find their explanations laughed at by ordinary citizens and ridiculed by the mass media. A focus on corruption thus leads one to look at amakudari in places not covered by the business-­government relationship research. That focus also leads us to look at the Japa­nese bureaucracy from a dif­fer­ent a­ ngle. Though the reputation for honesty and efficiency has clearly been overstated, the main prob­lems are found not in the central ministries but in amakudari destinations, especially in quangos. We are fortunate to have a study of one Japa­nese public corporation that demonstrates why they function so badly (Skinner 1980). It describes a dysfunctional organ­ization headed by recently retired ministry bureaucrats who enter laterally and do not stay long. Employees who have spent their lives in the organ­ization are lorded over by short-­stay outsiders. To our knowledge, no one since has studied what we consider to be at the center of bureaucratic waste and inefficiency. ­Great Britain has a similar prob­lem. Both the bureaucracy and Parliament enjoy a clean reputation, but that reputation is based in part on British versions of amakudari. British bureaucrats are unlikely to be offered or accept bribes from government contractors while in office, but a­ fter resigning or retiring many w ­ ill be offered lucrative corporate directorships (Doig 2003, 178). A study of the estates of British politicians who had recently died found that Conservatives who

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served in Parliament died almost twice as wealthy as similar Conservatives who barely missed winning a seat in Parliament. The difference is that winners are appointed to nonexecutive corporate directorships three times more often than losers (Eggers and Hainmueller 2009).

Bureaucratic Corruption Scandals Bureaucrats ­were deeply involved in much of the po­liti­cal corruption covered in this book. If amakudari represents a case of structural bureaucratic corruption, we would expect to see bureaucratic corruption that does not directly involve politicians. That is indeed what we find. All we had to do was look. Much bureaucratic corruption involves uragane, the slush funds described in chapter 1. In 1998 executives from brokerage firm Nomura Securities got in trou­ble for their excessive “wining and dining” and the hosting of golf tournaments for officials at the semigovernment body the Japan Highway Public Corporation (Asahi, 7 February 1998). The money was allegedly spent to help the com­pany win contracts to underwrite bonds used to finance road construction. The scandal involved former and current officials from the Ministry of Finance, including former ministry officials who owed their position at the corporation to the practice of amakudari. It also involved the Industrial Bank of Japan (Yomiuri, 30 December 1997). Beginning in 2001, a series of scandals at the Ministry of Foreign Affairs revealed more information about bureaucratic corruption. As with our analy­sis of zoku giin above, we have Tanaka Makiko to thank for the best data on bureaucratic corruption available.

Scandals at the Ministry of Foreign Affairs (2001–2002) Serious corruption at the Ministry of Foreign Affairs became public in 2001 ­under the Mori administration. In its New Year’s Day edition, Yomiuri detailed alleged skimming from the secret government funds (kimitsuhi) by ministry officials. Rumors about Matsuo Katsutoshi had circulated for years. At the time, he was director of the Overseas Visit Support Division that manages the secret funds. Shuukan Posuto, for example, published a story on the lax use of secret funds at the Ministry of Foreign Affairs in March of 1997. It also appears that Matsuo’s superiors and colleagues ­were aware of his activities, but ­those activities did not attract public attention ­until the Yomiuri article. The ministry responded to the media reports and po­liti­cal pressure from the Mori administration by conducting its own internal investigation. As noted above,



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based on that report Matsuo was fired from his post and the ministry filed a criminal complaint with the police (Asahi, 26 January 2001). The minister of foreign affairs at the time, Kouno Youhei, referred to the corruption as being the “crime of one individual” and downplayed claims that other officials benefited from the stolen funds (Asahi, 25 January 2001). Kouno along with fifteen other officials ­were given reprimands or temporary pay cuts as a way of taking public responsibility for the scandal. The ministry investigation team confirmed the basic details of the scandal, also with a focus on the individual culpability of Matsuo. Between 1993 and 1999, Matsuo oversaw arrangements for the prime minister and other officials on overseas trips. He padded expenses for more than a dozen trips by submitting false receipts and getting reimbursed for expenses that ­were never incurred. For example, when a former prime minister and other VIPs visited Saudi Arabia in 1997, they stayed at the Saudi government’s guest­house at the expense of the Saudi government, but Matsuo submitted bogus receipts and received millions of yen in reimbursement from the Japa­nese government (Asahi, 11 March 2001). Matsuo used his own personal bank account to s­ ettle bills, as well as other secret accounts to hide and conceal ministry funds. Apparently, the internal controls over the submission and pro­cessing of the funds w ­ ere so lax or non­ex­is­tent that no one openly questioned Matsuo’s math. He used 410 million yen ($3.4 million) to purchase a yacht, condominium, golf club memberships, a string of racing h ­ orses, and to pay his mistresses and former wife (Asahi eve­ning, 26 January 2001; Asahi, 11 March 2001). This scandal was only one of Prime Minister Mori’s prob­lems and he soon resigned and was replaced by the reformer Koizumi Junichirou. In one of several bold moves, Koizumi appointed Tanaka Makiko, d ­ aughter of Tanaka Kakuei, as minister of foreign affairs. Almost as soon as Tanaka was appointed, the controversy and friction between her and the ministry became a constant feature of Japa­nese politics ­until her departure nine months ­later. Suzuki Muneo, the zoku giin we met in chapter 4, backed the ministry in this ­battle. One of the first conflicts between ministry bureaucrats and Tanaka surfaced in May 2001 ­after se­nior bureaucrats reshuffled international appointments. Upset that she had not been consulted, Tanaka responded by freezing all personnel transfers. The media delighted in covering the reaction of the ministry officials, many of whom complained about Tanaka’s “high-­handed decision” and expressed sympathy for some of their affected colleagues incon­ve­nienced by the freeze (Yomiuri, 10 May 2001). Se­nior bureaucrats had always overseen decisions regarding personnel appointments, but Tanaka was not following the playbook. Tanaka soon gave ministry officials ammunition with which to retaliate, however. She canceled a meeting with U.S. deputy secretary of state Richard Armitage and forced his superior, Secretary of State Colin Powell, to wait several

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days by postponing a scheduled phone conference. She also cited a scheduling prob­lem in attending a dinner party with the Argentine foreign minister and canceled a telephone conference with the Rus­sian foreign minister. In his first tele­v i­sion program appearance since stepping down as prime minister, Mori criticized Tanaka for canceling her engagements with foreign leaders, for acting emotionally (kanseiteki ni hashiteru), and for her decision to suspend personnel transfers (Yomiuri, 14 May 2001). For her part, Tanaka announced a plan to reform the ministry in a joint meeting between her ministry and an LDP panel (Yomiuri eve­ning, 6 June 2001). Among other ­things, the plan called for a stricter supervising system, the appointment of an in­de­pen­dent person to an inspector post, participation by outside certified public accountants in ministry work, and the ability to conduct spot inspections without prior notification. A series of bureaucratic scandals ensued. One of the many tips received about corrupt practices in the ministry developed into a major police investigation and led to criminal charges being filed against Kobayashi Hiromu, assistant section chief at the ministry’s Economic Affairs Bureau, and his subordinate. They ­were charged with defrauding the state of 22 million yen (around $200,000) in conjunction with the Group of Eight summit held in Okinawa in 2000 (Asahi, 17 July 2001). The scheme involved the submission of padded taxi bills to the ministry whereby Kobayashi and his subordinate skimmed 12 million yen off the top of the car hire bill in the form of taxi vouchers, which they redeemed for cash or used for private purposes. Kobayashi used some of the diverted funds to pay for living expenses and massages. Next, an insider accused Mizutani Makoto, the consul general to the Japa­nese embassy in Denver, Colorado, of diverting government funds for personal reasons when the Mori administration had been in power (Asahi, 17 July 2001). Following the newspaper report, the ministry launched an in-­house investigation. The investigation determined that Mizutani had improperly diverted public funds on purchases such as paintings, furniture, groceries, and an exercise treadmill (Nikkei Weekly, 30 June 2001). The official was fired from his position but was not criminally charged. Three officials linked to the Japa­nese embassy in K ­ enya improperly received funds for housing and utility costs. One official, for instance, submitted a fake contract stating that he had rented an unfurnished apartment for much more than his ­actual expense and pocketed the difference (Yomiuri, 25 August 2001). He had to pay back the funds and return to Tokyo from his post in New York. Meanwhile, an internal ministry investigation uncovered a slush fund that had been created in conjunction with the 1995 Asia-­Pacific Economic Cooperation meeting. Asakawa Akio, the assistant chief at the ministry’s Eu­ro­pean Affairs Bureau, was accused of padding ­hotel bills. He and other officials instructed ­hotels



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to overcharge for the use of their facilities and to hold the extra in slush funds that could be ­later tapped for wining and dining. News about the slush funds temporarily took a back seat to coverage of the September 11 terrorist attacks on the United States. While 9/11 dominated the news, the results of an internal investigation into Matsuo’s embezzlement scandal w ­ ere fi­nally published. The original response that blamed a single bad apple was decisively refuted. In fact, slush funds ­were found in 71 of the 119 divisions (Yomiuri, 1 December 2001). Public funds had been pooled by officials throughout the ministry and ­were used for such purposes as wining and dining. Slush funds w ­ ere, in fact, systematic SOP corruption. Matsuo had ­v iolated SOP only by using the slush fund for private purposes. Tanaka punished a total of 328 officials with fines and warnings, dismissing two. Officials holding positions of assistant section chief or higher w ­ ere required to pay back some of the funds that had been spent. The most se­nior officials w ­ ere asked to return some of their salary and Tanaka herself returned approximately one month of her pay. In March of 2002 the trial of Matsuo fi­nally concluded: he was given a seven-­and-­a-­half-­year jail sentence for his role in squandering secret government funds on luxury items. The trial failed to go beyond Matsuo to reveal more systematic abuses, however. Matsuo refused to speak of wider ministry involvement and the ministry shredded many of the documents that could have shed more light on the issue. Tanaka’s nine-­month stint as minister of foreign affairs proved more colorful than successful. If she had been more competent in dealing with her official duties or more skilled in internal LDP politics, she might have accomplished significant reforms in her ministry and set a pre­ce­dent for further reform. Though she failed to accomplish this much, the media attention her efforts drew revealed much about the Japa­nese bureaucracy. First, the evidence indicates that embezzlement for funding slush funds seems to be standard practice throughout the bureaucracy. When individuals decide to use the uragane for personal purposes, the ministry response is to prevent it from becoming public knowledge but, if it becomes known, they portray it as bad apple corruption. Second, the ­battle between Tanaka and Suzuki produced the clearest evidence to date concerning the power of zoku giin.

Scandals at the Ministry of Defense (1994–2008) In 1998 a scandal erupted involving the defense procurement system, a common place to find corruption in any country ­because the secrecy involved in defense procurements makes it easier to keep the corruption u ­ nder wraps. It appears that having defense-­equipment manufacturers submit inflated invoices to the Ministry

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of Defense’s procurement section had become SOP corruption. The ministry knew of the practice and even used it as leverage to persuade the companies to hire its retiring amakudari bureaucrats. The procurement section had conducted its own investigation four years earlier in 1994 and discovered that Nico Electronics had been padding its invoices. The ministry asked this com­pany for a refund to cover the inflated amount and, allegedly, conspired with the com­pany to reduce the payment if the com­pany would employ the ministry’s retiring officials (Asahi, 25 September 1998). The corrupt exchange of allowed padded invoices for amakudari posts came to light when the Tokyo District Public Prosecutor’s Office raided the Ministry of Defense headquarters and the offices of Nico Electronics and Toyo Communications Equipment, two subsidiary companies linked to the NEC Corporation, one of the world’s largest computer chip makers. One might have expected Japan’s oversight agency, the Board of Audit, to play a more active role, but it had known about the Nico Electronics overcharges as early as 1994 and had not filed an official report detailing ­because it can only do so if a ministry acknowledges the irregularity (Yomiuri, 15 December 1998). The scandal forced the resignation of LDP minister of defense Nukaga Fukushirou, the chair of the NEC Corporation, and more than a dozen individuals from the corporate world w ­ ere convicted for their role in causing state losses and given short suspended sentences. While the former chief of the Ministry of Defense’s procurement section pleaded guilty and received a suspended sentence, the former deputy chief ’s l­egal team argued against his guilt in a separate trial that continued years beyond the scandal. They argued that overcharges and the practice of amakudari w ­ ere SOP in the nation’s defense procurement system, and that his confession to accepting bribes was made u ­ nder duress (Asahi, 12 October 1999). The courts, however, w ­ ere not persuaded and upheld his suspended sentence. The scandal failed to generate any significant reforms within the ministry, but further scandals spurred the LDP-­led government to set up an expert panel to suggest ways of, among other goals, making procurement procedures more transparent (Kyodo, 16 November 2007). A second scandal in the Ministry of Defense involved Moriya Takemasa, a high-­ flying bureaucrat. In 2003 he was appointed administrative vice minister, the pinnacle of the bureaucratic hierarchy. Minister of Defense Kyuuma Fumio evaluated Moriya so highly that he attempted, albeit unsuccessfully, to extend his tenure beyond the standard four years (Asahi, 20 March 2007 and 1 August 2007). Soon ­after Moriya’s retirement, the DPJ called for him to testify concerning the provision of fuel to U.S. naval vessels that occurred on his watch. In the first report to the Diet in February 2003, the amount of fuel was listed as 200,000 tons, but in September the amount was revised to 800,000 tons. The government



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claimed that it was a clerical error but the opposition suspected that the “error” covered up a potentially unconstitutional transfer of fuel for use in the Iraq War (Asahi, 15 November 2007). It was ­later discovered that the ministry was indeed aware of the true figure but reported the lower figure to the defense minister, who then duly reported the lower figure to the Diet (Asahi, 22 September 2007). Once this controversy focused media attention on Moriya, his cozy relationship with defense supplier Yamada Youkou Corporation came to light. Com­pany officials regularly treated Moriya and his wife to golf. Moriya knew that accepting such f­avors from a defense contractor was illegal and used a false name to avoid discovery (Asahi eve­ning, 19 September 2007). In return, Moriya used his influence to direct defense contracts to the com­pany. In the most notorious case, he intervened to prevent a contract from being put up for bid, insisting that Yamada should be entrusted with the contract without needing to compete for it (Asahi, 20–21 September 2007). Details of the quid pro quo between Moriya and the com­pany continued to come to light and the monetary value of the goods received by Moriya continued to grow. In the end, he was convicted of accepting bribes and lying to the Diet. The public was treated to stories of corruption at the highest level of the bureaucracy for several months. This case demonstrates that some bureaucrats cannot wait ­until retirement to cash in on their influence. It also throws further doubt on the accuracy of the expert advice that bureaucrats provide to their putative superiors.

The Role of Maladministration in Policy Failure Scandals Prob­lems of bureaucratic waste, inefficiency, and corruption may receive continuing coverage, but the bureaucrats responsible tend to remain faceless and nameless. Only when maladministration results in a major policy failure does it produce a scandal that changes the course of politics. ­There ­were many policy failures ­under the LDP predominant party system, but few generated scandals.3 The Japa­nese civil ser­v ice had long been a symbol of efficiency and honesty and enjoyed extremely high levels of public trust (Samuels 2003, 286). We now know, however, that that reputation was based on secrecy as well as on efficiency. During the long reign of the LDP the party in power and the bureaucracy shared an interest in keeping policy failures hidden from the public eye. The opposition parties, of course, had a clear interest in publicizing policy failures but seldom 3. ​An earlier rendition of some of the policy failure scandals was published in Carlson 2017.

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had access to the information necessary to do so. Thus, when policy failures fi­nally did come to light, it was usually discovered that the prob­lem had been known to po­liti­cal and bureaucratic insiders but ignored for thirty or forty years. The increased transparency produced by the 1994 reforms was impor­tant, but the key to exposing policy failure proved to be the ability of opposition parties to obtain embarrassing information from the bureaucracy. Policy failure scandals became common only ­after the LDP lost power in 1993 and increased as the two-­ party system evolved. Once opposition parties and politicians gained access to the necessary information, they used it to attack the government’s rec­ord. Once the LDP’s policy failures became public knowledge, voters proved ready to “kick the rascals out” and give the other rascals a chance. In chapter 4 we noted two policy failure scandals that emerged in 1996 that failed to generate alternation in government. Both cases also confirm the role of bureaucratic maladministration. In the HIV-­tainted blood scandal, the necessary transparency was created not by two-­party competition but by co­ali­tion government. In the LDP-­JSP-­Sakigake co­ali­tion that governed between June 1994 and November 1996, the minister of health and welfare was Kan Naoto, a reformer who did not share the LDP po­liti­cal culture and did not trust bureaucrats. Facing lawsuits charging that the ministry had permitted the distribution of HIV-­tainted blood to protect domestic drug companies, bureaucrats claimed that the information needed to prove culpability did not exist. Kan, however, persisted and “discovered” the necessary information. Consequently, three drug com­pany executives, each former heads of Green Cross, ­were convicted and sentenced to prison for “putting profits before safety” (Kingston 2004, 170).4 The NFP constructed the second policy failure scandal, the housing loan scandal of 1996, as part of its strategy for defeating the LDP. The NFP was unable to prevent the passage of the bud­get, which included the bailout funds, but it brought Japa­nese politics to a standstill for a brief period in 1996. Debates in the Diet also revealed that all but one of the presidents of the housing loan companies w ­ ere retired bureaucrats from the Ministry of Finance, confirming the importance of amakudari in bureaucratic corruption (Mizoguchi and Quyen 2012, 818). Policy failure scandals became more common thereafter, and two of them, which we analyze below, ­were keys to defeating the government of the day and causing an alternation in power.

4. ​At least one, Matsushita Renzou, was an amakudari ex-­bureaucrat who had served as head of the Phar­ma­ceu­ti­cal Affairs Bureau before becoming head of Green Cross. One serving bureaucrat, Matsumura Akihito, was also convicted. Dr. Abe Takeshi was portrayed as the arch-­v illain by the media but was acquitted of the death of one of his patients.



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The “Lost Pensions” Scandal (2007) Nagatsuma Akira, a young DPJ Diet member, applied the skills he had developed in his previous c­ areer as a newspaper reporter to construct scandals. He first gained a reputation by exposing the fact that bureaucrats regularly took long, expensive taxi rides home a­ fter work at the tax payer’s expense. While this was more a m ­ atter of waste than corruption, some bureaucrats also took kickbacks from the ­drivers (New York Times, 19 July 2008). Nagatsuma’s next mission was to expose incompetence at the SIA. ­After repeatedly pressing the SIA to release more information about pension rec­ords, the government fi­nally acknowledged in May 2007 that some fifty million pension rec­ords remained unidentified. Other established democracies including the United States, the United Kingdom, and Australia (Takayama and Kitamura 2009) have failed to keep proper pension rec­ords but, as the most rapidly aging society in the world, the scandal hit especially hard in Japan. It soon became clear that the government had known of the prob­lem since the 1960s but had neither informed the public nor made a serious effort to remedy the situation (Yomiuri, 7 and 21 July 2007). If the opposition DPJ had not won control of the upper ­house in the 2007 election, the prob­lem may never have become public knowledge. Given the necessary information, however, the DPJ and the mass media constructed a massive policy failure scandal. They also uncovered other serious bureaucratic corruption in the pro­cess. More than twenty members of the SIA embezzled pension premiums or ­were involved in their fraudulent use. The total amount of embezzlement was estimated at 300 million yen (around $2.5 million), but the a­ ctual figure is prob­ably much higher (Asahi, 4 September 2007). In addition, the SIA e­ ither failed to punish its employees when they had been caught in illegal be­hav­ior or merely gave them a slap on the wrist (Asahi, 22 September 2007). Further investigation revealed that SIA officials had engaged in repeated and systematic falsifications of pension rec­ords to improve the appearance of their rec­ord books (Asahi, 21 December 2008). The broader structural ­causes for the “missing” pension rec­ords can largely be attributed to clerical errors made over a long period. Pension rec­ords w ­ ere kept in handwritten form. When ­these rec­ords ­were digitalized in the 1960s, the SIA could not deal properly with Japa­nese names b ­ ecause they are written in Chinese characters. B ­ ecause the characters in names can be pronounced in many ways, an accurate transcription required verification from each individual but the pronunciation was often assigned without verification or was based on inaccurate com­pany rec­ords (Takayama and Kitamura 2009). Pension rec­ords ­were “lost” this way and again when the system transitioned to a unified pension identification

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number ­after January 1997. Japa­nese citizens often had two or more identification numbers, particularly if they had changed jobs. The SIA faced the challenge of dealing with 300 million pension numbers when the number of eligible pensioners was around 100 million. Their working solution was to send out postcards to ask ­people to specify their multiple identification numbers, but the response rate was less than 10 ­percent (Schoppa 2011, 208). The SIA did not release sufficient information to estimate how much pro­gress had been made.5 The deceit and mismanagement continued for de­cades ­until the DPJ and the mass media exposed it. Once the prob­lem became public knowledge, the Abe administration vowed to check 50 million rec­ords within a year, a promise that proved impossible to keep. The Japan Pension Ser­v ice Law was passed in June 2007, abolishing the SIA and replacing it with the Japan Pension Ser­vice (JPS), a public corporation, which took effect in 2010 (Asahi, 5 June 2007). Having lost the 2007 upper ­house election to the DPJ, in part due to the scandal, Abe announced his resignation in September for health reasons. Abe’s successor, Fukuda Yasuo, established a social security system council to discuss reforms to the basic pension plan and pos­si­ble changes to its financing (Yomiuri, 5 March 2008). Fukuda, however, faced a DPJ buoyed by their 2007 upper h ­ ouse victory and anxious for the next general election. The DPJ could not force an election with a motion of no confidence b ­ ecause the LDP-­Komeito co­ali­tion controlled the lower ­house, but they could and did pass a nonbinding censure motion against Prime Minister Fukuda on 11 June 2008, the first prime minister to ever suffer that humiliation. Facing falling support rates and repeated failures to get bills through the Diet, Fukuda resigned in September that year to be replaced by Asou Tarou. Revelation ­after revelation kept the pension fiasco in the news and severely damaged the LDP’s reputation for competent government, making it much easier for voters to make a leap into the dark and vote for the inexperienced DPJ in the 2009 general election. As late as 2013, 21.3 million pensions ­were still missing (Asahi, 17 September 2013). The SIA had been reor­ga­nized into the JPS in 2010 to restore citizen trust in the government management of pension rec­ords. However, the JPS was involved in another scandal in 2015 when personal data on more than a million Japa­nese citizens ­were stolen from the JPS’s presumably “secure” network. Although internal regulations require employees to assign passwords to files containing personal information, many of the stolen files had no 5. ​One explanation given about the SIA is that it “tends to think that if negative information becomes public, public criticisms would destroy the reputation and credibility of the pension administration, and that this would further increase the number dropouts from the Public Pension System” (Takayama and Kitamura 2009, 107).



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such protection. Many of the same p ­ eople who worked for the SIA w ­ ere simply transferred to the JPS and similar orga­nizational practices seem to have prevailed.

The Fukushima Nuclear Accident (2011) The roots of the 2011 nuclear accident at the Fukushima plant w ­ ere sown years before the DPJ was founded. T ­ here is no reason to think an LDP government could have managed any better. Indeed, one scholar suggests that “Prime Minister Kan’s leadership was, on balance, beneficial in that he took control of a situation in which the locus of responsibility became ambiguous during the crisis, and he solved several serious information and coordination prob­lems” (Kushida 2014, 33). Yet, the media accounts during the crisis portrayed the Kan administration as inexperienced, inept, and error-­prone, turning the accident into a policy failure scandal. Part of the reason for this disjuncture between the image and real­ity is simply the understandable tendency of p ­ eople to blame the government of the day for any prob­lem that happens on its watch. Another prob­lem was that the government was unable to provide relevant information or assure the public that the authorities ­were in control of the situation. Due to poor planning, bad organ­ization, and several unfortunate accidents, no one could have possibly known what was happening and no one could have possibly taken charge. The initial impression of the Kan administration’s h ­ andling of the t­ riple disaster (earthquake, tsunami, nuclear accident) was chaotic. “Information given to the public was fragmented, and coordination between the prime minister’s cabinet, the relevant government organ­izations, and the Tokyo Electric Power Com­pany (TEPCO) operating the Fukushima Dai-­Ichi plan seemed highly problematic” (Kushida 2013b, 405–6). ­Later the reason for the chaotic response became clear: “The DPJ leadership was operating ­under conditions of extreme information uncertainty and communication difficulties, exacerbated by preexisting governmental and contingency-­planning shortcomings” (Kushida 2013b, 412). No contingency plan considered the fact that a tsunami and earthquake could deprive the plant of electricity. When that happened, all plans w ­ ere rendered irrelevant. The public, of course, was not aware of t­ hese (and many other) prob­lems at the time. The nuclear accident at Fukushima was a direct consequence of de­cades of inefficient management and failure to address obvious prob­lems. Policy failures started at least as early as 1978 but w ­ ere minimized or covered up.6 TEPCO, the operator of the Fukushima reactors, concealed nuclear mis­haps by submitting false reports to the government (Nakamura and Kikuchi 2011). When a scandal 6. ​For some of the previous prob­lems with TEPCO’s reactors as well as TEPCO’s efforts to cover up prob­lems, see Nakamura and Kikuchi 2011 as well as Kushida 2013a.

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in the early 2000s surfaced ­after the efforts of a whistle-­blower, the Japan Nuclear and Industrial Safety Agency (NISA) investigated and reported that TEPCO had covered up a total of twenty-­nine incidents with its reactors over the last several de­cades (Kushida 2013a).7 Electric power companies faced weak state oversight and a weak civil society. A government panel was created in 2006 to draft guidelines that could be used by companies to check their adherence to standards, but it was stacked with experts that had ties with the electric companies (Kawato, Pekkanen, and Tsujinaka 2012, 80–82). Although an agency for nuclear safety existed, it played a minimal role, as revealed in the aftermath of the Fukushima nuclear accident. Local protest groups have filed fourteen major lawsuits against the state or power companies since the late 1970s but to no avail ­because “it seems the judges perceived that the state and nuclear operators ­were more reliable sources of information” (Kawato, Pekkanen, and Tsujinaka 2012, 82). Established by the Japa­nese parliament and granted the power of subpoena, the National Diet of Japan Fukushima Nuclear Accident In­de­pen­dent Investigation Commission (NAIIC, chaired by Kurokawa Kiyoshi, former president of Science Council of Japan) conducted more than 1,000 interviews and released a final report spanning more than 600 pages in 2012. The report concludes that the earthquake and tsunami that followed w ­ ere the direct ­causes of the accident but that the root ­causes ­were connected to orga­nizational and regulatory systems instead of issues concerning the competency of any par­tic­u­lar individual (NAIIC 2012, 16). It explains the root ­causes again in the following manner: The under­lying issue is the social structure that results in ‘regulatory capture,’ and the orga­nizational, institutional, and ­legal framework that allows individuals to justify their own actions, hide them when incon­ ve­nient, and leave no rec­ords in order to avoid responsibility. Across the board, the Commission found ignorance and arrogance unforgivable for anyone or any organ­ization that deals with nuclear power. We found a disregard for global trends and a disregard for public safety. We found a habit of adherence to conditions based on conventional procedures and prior practices, with a priority on avoiding risk to the organ­ization. We found an organization-­driven mindset that prioritized benefits to the organ­ization at the expense of the public. (NAIIC 2012, 21) 7. ​The whistle­-blower was Kei Sugaoka, a Japa­nese American nuclear inspector who worked for General Electric (supplier of Reactors 1, 2, and 6 of the Fukushima Daiichi Nuclear Plant, which ­were built in the late 1960s and early 1970s). Sugaoka noticed a cracked steam dryer at Reactor 1 and reported it to NISA. Although a law had been passed to protect the identity of whistle­-blowers, NISA divulged his name to TEPCO, effectively ostracizing him from the entire industry (for more about this story, see New York Times, 26 April 2011).



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The report faults TEPCO, the nuclear power regulatory authorities, and the Ministry of Economy, Trade, and Industry for failing to implement basic safety requirements, countermea­sures in case of a severe accident, and safety mea­sures for the public in the event of a large radiation release (NAIIC 2012, 10). It faults the regulators for not supervising nuclear safety, TEPCO for failing its responsibilities as a private com­pany and for manipulating its cozy relationship with regulators, and the extensive collusion and lack of transparency that had led to the corruption and capturing of the regulatory system by nuclear power interests and the expense of public safety.8 The report also lays blame on the Prime Minister’s Office for disrupting the planned chain of command by creating a response team within the TEPCO headquarters. Prime Minister Kan’s decision to visit the Fukushima plant was criticized ­because it “diverted the attention and time of the on-­site operational staff and confused the line of command” (NAIIC 2012, 18).9 Along with the Diet report, the cabinet established another commission that published its findings in 2012 (Investigation Committee on the Accident at the Fukushima Nuclear Power Stations [ICANPS] 2012). The commission argued that the accident happened ­because planners assumed that some foreseeable phenomena would never occur—it was, for example, assumed that an extended station power blackout could not happen. It also echoed criticisms of Kan’s initial response: “Intervening in the site of the disaster as a commander may create confusion on-­site, and lead to a loss in the opportunity of making impor­tant decisions or lead to making wrong judgment” (ICANPS, 2012, 32). Kan, however, staunchly defended his visit to the plant b ­ ecause officials in Tokyo failed to provide information about what was ­going on. He told the Diet commission, “You ­can’t expect a nuclear expert to be prime minister or a cabinet minister, so we need top regulatory officials to provide expertise and help us. We d ­ idn’t have ­those ­people” (Guardian, 29 May 2012). Although much remains to be sorted out, what we can say with confidence is that the Japa­nese public was not presented with a balanced account. On the one hand, NHK provides some of the best disaster coverage in the world. It utilizes hundreds of remote cameras placed across the country, has an integrated warning system that warns of tremors, and requires a certain number of its reporters 8. ​In 2012 TEPCO released its own report of the accident, a summary of which was published in En­glish on its website; see TEPCO 2012. It acknowledged some deficiencies in such areas as accident preparedness and communicating information but blamed ­Mother Nature for causing an unavoidable accident and the government for its inadequate response. 9. ​The advice to leave the on-­site operational staff in command of operations on the ground makes sense but in this case the on-­site staff w ­ ere from TEPCO, which “consistently failed to inform government officials, especially the prime minister and cabinet, of what was happening at the plant, downplayed dangers, did not adequately inform or misinformed the government and public about developments, and then tried to shift all the blame onto the prime minister rather than admit its epic mismanagement of the crisis” (Krauss 2013, 191; see also Nakamura and Kikuchi 2011).

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to live within ­running distance to its Tokyo station in case a major quake strikes (Washington Post, 27 March 2011). Yet what tran­spired during the crisis was that the government authorities and the mainstream media focused primarily on reassuring ­people instead of warning them of potential dangers (McNeill 2013, 138). The mainstream media did not use words such as “massive” or “severe” and did not mention the possibility of a “meltdown.” Panic was avoided. Instead, the Japa­nese p ­ eople responded to the crisis with calm, reflecting the way in which it was reported. The cost was public ignorance of the dangers they faced. Harsh criticism of TEPCO could be found in the weekly magazines and foreign media but is less evident in the mainstream media, presumably ­because of TEPCO’s large advertising and economic clout, not to mention the press club system. The power-­supply industry is Japan’s biggest advertiser with spending equal to roughly 88 billion yen a year (roughly $1 billion), 24.4 billion yen of which comes from TEPCO alone (McNeill 2013). It has been suggested that t­ hese ­factors discouraged investigative reporting as well as media attention on prob­ lems associated with the nuclear power industry (McNeill 2013, 131–32). When the mainstream media made efforts to criticize TEPCO or the nuclear industry they usually criticized Japan’s “nuclear village” comprised of bureaucrats, politicians, power companies, manufacturers, academics, and the mass media (see Samuels 2013, 118–23). One newspaper report criticized the nuclear industry as being difficult to penetrate ­because it fits the definition of what is known in science and engineering as a “black box”—­inputs and outputs can be seen, but the inside workings are invisible (Mainichi, 25 May 2012). Having largely ignored ­these black boxes for so long, the mainstream press was not blameless in their creation. In 2012 before the DPJ lost power, the government poured 1 trillion yen (about $12.5 billion) into TEPCO in what has been described as one of the largest state interventions into a private nonbank asset since the 2009 bailout of General Motors in the United States (Economist, 11 May 2012). The agreement officially allowed the government to control the com­pany in terms of strategy and in selecting board members. In 2013, ­after TEPCO repeatedly failed to control the radioactive ­water that was building up around the Fukushima plant, the LDP reached the conclusion that Prime Minister Kan had begun with: TEPCO could not be trusted to manage a nuclear power plant on its own; central government must intervene directly (Yomiuri, 3 September 2013). The nuclear accident revealed de­cades of failures to address obvious prob­lems and a rare glimpse into Japan’s nuclear village. ­Legal ­trials to determine criminal responsibility or negligence for the nuclear accident are ­under way. It ­will take a long time to set the historical rec­ord straight.



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The policy failure scandal surrounding the DPJ’s h ­ andling of the Fukushima disasters played a major role in the party’s fall in 2012, an election in which it lost nearly half of the support it had won in 2009. The Kan administration suffered from a policy failure scandal that was not of its own making and was magnified by less than balanced reporting. Abe and the LDP profited greatly from the scandal and from its successful attempt in pushing a story of DPJ incompetence and mismanagement before the public.

Clean and Efficient? The Japa­nese bureaucracy has been heralded as clean and efficient. The evidence presented in this chapter indicates that this evaluation needs revision. We did not conduct an exhaustive study of bureaucratic corruption given our focus on politicians and po­liti­cal structures, but we uncovered more than enough information to guarantee that anyone who undertook such a task would not lack for data. The argument that the Japa­nese bureaucracy is relatively corruption-­free is belied first by the fact that bureaucrats ­were involved in most of the major corruption scandals in the prereform era. The idea that politicians w ­ ere corrupt but bureaucrats clean seems to be based primarily on differential media coverage. Second, corruption involving zoku giin has been common both before and a­ fter the reforms and that corruption required politicians to influence administrative decisions. Bureaucrats are thus necessarily involved ­because they are formally in charge of ­those administrative decisions. The bureaucratic role, however, receives ­little media, ­legal, or academic attention. Fi­nally, we find cases of strictly bureaucratic corruption and suspect that it would not be hard to find more. When we chose the practice of uragane to illustrate the concept of SOP corruption in chapter 1, we ­were more on target than we i­magined at the time. Any attempt to write this off as cases of individual bad apples simply does not stand scrutiny. We have come to agree that embezzlement and slush funds are endemic in Japan (D. T. Johnson 2003, 29). The creation and use of slush funds are not limited to bureaucracies, but they are a pervasive form of bureaucratic SOP corruption. Most disturbing from the standpoint of demo­cratic theory are the clear cases of bureaucrats keeping secrets from and lying to both the public and their putative po­liti­cal superiors. The clearest cases are the HIV-­tainted blood scandal and the conviction of Administrative Vice Minister of Defense Moriya for lying to the Diet concerning the provision of fuel to U.S. naval vessels. TEPCO’s rec­ord for deception is also impressive. T ­ hese are cases in which serious corruption was

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revealed in serendipitous circumstances and are thus like the cases of po­liti­cal corruption in the 1980s and 1990s right before the reforms. If greater levels of transparency w ­ ere introduced into the Japa­nese bureaucracy, we would expect to see much more corruption than is currently vis­i­ble. The argument that the Japa­nese bureaucracy is efficient is belied most clearly by the amount of waste uncovered by the DPJ’s bud­get screening hearings in 2009. No one watching could continue to think of the Japa­nese bureaucracy as a paragon of efficiency. Even more to the point, however, is the role of bureaucratic inefficiency in the major policy failure scandals. Anyone who has read reports and analyses of the HIV-­tainted blood scandal, the “lost pensions” scandal, or the Fukushima nuclear accident w ­ ill find it difficult to conclude that Japan should leave impor­tant decisions to bureaucrats. ­These cases of inefficiency cannot be written off as exceptions b ­ ecause much of the inefficiency can be linked to the systematic practice of amakudari. Amakudari has been found to bias administrative decisions in ­those companies that ­employ retired bureaucrats over ­those that do not. Lax bureaucratic oversight has been cited as a reason for many of the major policy failures and amakudari is one reason for lax oversight. Fi­nally, quangos that employ amakudari bureaucrats have been involved in both corruption and policy failures, and in many cases are bureaucratic waste themselves, created primarily to provide lucrative posts to retiring bureaucrats. Our review of bureaucratic corruption and po­liti­cal scandals convinces us that the Japa­nese bureaucracy’s reputation for being clean and efficient has been overstated. Yet it is worth reiterating that we lack a systematic study of bureaucratic corruption in Japan and in many other countries. We have cast some doubt on the standard wisdom concerning the Japa­nese bureaucracy, but much more of the story remains to be told.

6 SEX AND CAMPAIGN FINANCE SCANDALS Some scandals may invoke the public disclosure of concealed transgressions, while ­others may be sparked off by public allegations about transgressions which may or may not have occurred. John B. Thompson, Po­liti­cal Scandal

As we scanned the newspapers, we uncovered many embarrassment scandals, often involving sexual transgressions or questionable campaign finance practices. Some politicians ­were caught having an extramarital affair and, although no laws ­were broken, they resigned from an impor­tant position within their party. Likewise, the new accounting rules made po­liti­cal funds more transparent and parties began looking for something that might embarrass their rivals. In both types, the scandalous be­hav­ior included information that laws may have been broken and a handful of cases involved seriously bad be­hav­ior. Most, however, ­were just embarrassing. In the first section of this chapter we analyze sex scandals, with a focus on some of their c­ auses and consequences for Japa­nese politics. We examine Japan’s “first” modern sex scandal in the ­later 1980s and roughly three dozen more. We then turn to a discussion of the high costs of elections in Japan, the regulations governing campaign finance, and the increase in the number of scandals constructed from the transparency introduced by the 1994 reforms. The construction of embarrassment scandals is more complex than that of the corruption scandals we analyzed in previous chapters. The mainstream press does not investigate them and does not even necessarily report on them. Tabloid magazines (“scandal sheets”) break and sensationalize most of the stories. We thus expand our search par­ameters to include Asahi’s subsidiary magazine, Shuukan Asahi, along with the Asahi newspaper, to analyze the role of the media in the construction of embarrassment scandals.

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The Advent of Sex Scandals A sex scandal can be defined as “the public disclosure of activities of po­liti­cal figures which constitute, or which can be portrayed as constituting, a transgression of prevailing norms or codes governing the conduct of sexual relations” (Thompson 2000, 93–94). Violating the norms of sexual relations is not po­liti­cal corruption u ­ nder our definition but can be used to construct scandals that tarnish the reputation of individual politicians and po­liti­cal parties and thus have po­liti­cal repercussions. Sex scandals have not been common in Japa­nese politics, but society has changed and the advent of competitive bipolar politics gave both sides the incentive to search for new ways to construct scandals. ­Under the LDP predominant party system, Japan was one of the countries with few sex scandals. Sex scandals ­were reported exclusively, if at all, by the weekly magazines. Po­liti­cal journalists from the national newspapers ­were reluctant to peddle “soft news” ­because they risked damaging their relationships with politicians (Freeman 2000, 119). The first clear exception to this rule was Prime Minister Uno Sousuke’s “­woman prob­lem” in 1989, which can be considered Japan’s first modern sex scandal (West 2006). Since po­liti­cal reform, however, scandals involving sexual transgressions by politicians have become more common. Weekly magazines (shuukanshi) are displayed prominently at train stations, bookstores, and con­ve­nience stores. Advertisements displaying the most sensational headlines hang from the ceilings of trains throughout the country. Many major newspapers publish their own weekly magazine. Asahi, for example, has published Shuukan Asahi (“Weekly Asahi”) since 1922 and Mainichi Shinbun has published Sunday Mainichi since roughly the same time. Major publishing companies also publish weekly magazines. Bungeishunjuu publishes Shuukan Bunshun, Koudansha has Shuukan Gendai, and Shinchousha oversees Shuukan Shinchou. The last began in 1956 and immediately became popu­lar for its sensational and controversial reporting. The magazine introduced a new style of narrative journalism, adopting a storytelling method and using informal Japa­nese language that seemed to be perfectly suited for covering scandals (­Gamble and Watanabe 2004, 78). Weekly magazines break and sensationalize the story using such tactics as publishing excerpts from personal correspondence, and, if pos­si­ble, publishing sensational photographic evidence. The mainstream media selects t­ hose weekly magazine stories that reach mainstream standards of newsworthiness. If a scandal develops over an extramarital affair and the politician resigns from a leadership position, for example, the mainstream press ­w ill focus on the resignation and po­liti­cal fallout. Likewise, if the infidelity involves other criminal be­hav­ior, the mainstream press ­will likely report on the latter and leave the details about the sexual transgression to the tabloids. For the mainstream media, “second-­order



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transgressions” that involve some other offending be­hav­ior “overshadow the significance of the sexual transgression” (Thompson 2000, 120). In chapter 5 we found that prominent members of the government w ­ ere more likely to be targeted for scandal construction than members of the opposition or less prominent members of the governing party. The author and Japa­nese journalist Nishioka Kensuke explains, “If you are a big fish, someone with power, like a government or corporate leader or in charge of some outfit that is in the news constantly, you are a target. . . . ​Our targets are the big fish. Of course, sometimes it’s smart to remember what a small fish is ­doing, ­because eventually small fish become big fish” (quoted in ­Gamble and Watanabe 2004, 111). This generalization applies with force to scandals that build upon some form of sexual transgression.

Japan’s “First” Modern Sex Scandal In former Prime Minister Uno’s obituary reported in a British newspaper, he was named as the first prime minister to be forced out of office ­because of a sex scandal (In­de­pen­dent, 20 May 1998). Uno was obviously not the first Japa­nese politician to have an extramarital affair but, up to that point, the media did not consider extramarital affairs to be appropriate material for the news.1 What changed? First, the foreign media picked up the story, a pattern seen in the Lockheed scandal described in chapter 2. Second, the issue of ­women’s role in society began to receive more attention by the media and was given a further boost when Doi Takako was chosen to lead the LDP’s main rival, the Social Demo­cratic Party, making her the first female to head a major po­liti­cal party in Japan. Third, a member of Uno’s cabinet made comments that added fuel to the fire. The details of Uno’s affair became public when Nakanishi Mitsuko, a former geisha, revealed in the weekly magazine Sunday Mainichi that he had not treated her properly when she was being paid to be his lover in 1985. Among other ­things, she accused Uno as being rude, self-­centered, and stingy. The mainstream media ignored the story ­until the Washington Post reported on the details for an international audience. The editor of Sunday Mainichi was cited as saying that the story was published ­because the social position of ­women in Japan was changing and it was no longer pos­si­ble for the country to cling to traditional customs (Washington Post, 7 June 1989). In Japan Uno’s “­woman prob­lem” (josei mondai) became impor­tant code words that related not only to the scandal itself, but also to the broader treatment of ­women in society. 1. ​Tanaka Kakuei, for example, kept mistresses, including one with whom he fathered two sons and a ­daughter. At one point, the name of one of his mistresses even surfaced in the Diet in connection to paperwork listing her name in some of Tanaka’s questionable real estate dealings.

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Facing the first female leader of a major po­liti­cal party in Japan, Uno’s party shot itself in the foot when the minister of agriculture, Horinouchi Hisao, rhetorically questioned ­whether ­women have any use in politics and expressed his view that a w ­ oman’s job was to stay home and take care of her f­amily (Asahi, 8 July 1989). He also said Doi Takako was unfit to become prime minister ­because, unlike Margaret Thatcher, who had a husband and ­children, Doi was single and the job would be beyond her abilities. Although Horinouchi’s comments had been intended for an audience of local party supporters in Mie Prefecture, the mainstream press deemed them worthy of instant coverage, as did the foreign media (see, e.g., LA Times, 11 July 1989). Asked for her reaction, Doi said that Horinouchi’s remarks reflected the true voice of the Uno administration and the public response to the minister’s remarks would become clear in the upcoming election (Asahi, 9 July 1989). The following day, Horinouchi claimed his comments ­were misunderstood, retracted them, and offered a public apology, but did not resign his post as the minister of agriculture. The LDP was defeated in the 1989 upper ­house election badly, losing its majority in that h ­ ouse. The defeat was, however, best explained by the introduction of the consumption tax and the Recruit scandal (see chapter 3), not by Uno’s ­woman prob­lem. Shortly thereafter, Chief Cabinet Secretary Yamashita Tokuo, married and sixty-­nine years old at the time, admitted to having a three-­year relationship with a twenty-­six-­year-­old bar hostess (Asahi, 24 August 1989). When he was nominated for the cabinet post, he tried to pay her 3 million yen ($22,000) to keep the story quiet. Offended at the bribe, she took her story to a weekly magazine and the mainstream media picked it up. The public exposure, especially the second-­ order transgression of attempted bribery, forced Yamashita to resign from his post. Following the Uno and Yamashita affairs, sex scandals continued to be reported in the tabloid magazines, but the mainstream press largely ignored them ­until ­after the 1994 po­liti­cal reforms.

The Evolution of Sex Scandals We searched Asahi’s electronic database for sex scandals involving members of the Diet since 1994. Shuukan Asahi provided us with general interest stories that listed and discussed the major sex scandals and infidelities involving politicians and other famous p ­ eople that had been reported in weekly magazines.2 We sup-

2. ​The lists ­were published in Shuukan Asahi (14 September 2007 and 8 August 2008), which we updated and expanded. ­These lists also included the name of the tabloid credited for breaking the story. Two magazines stood out: Shuukan Bunshun and Shuukan Shinchou.



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plemented t­ hese lists with a few other sex scandals discovered in other sources.3 We also included cases in which a politician made inappropriate or demeaning comments about ­women, as well as t­hose featuring real or alleged criminal offenses and rumors of sexual transgressions. Our searches returned roughly three dozen examples. This figure underestimates the prevalence of sexual transgressions since most cases are never reported or do not become public and undercounts the number of scandals since we did not perform a systematic search of all tabloids. With t­ hese two caveats, we nevertheless find clear evidence that the media targets members of the government in the construction of sex scandals. Between 1996 and 2007 u ­ nder unified LDP control of the Diet, nine of thirteen sex scandals involved members of the LDP. We find nine sex scandals during the period of divided government, with the LDP in control of the lower ­house and the DPJ in control of the upper ­house.4 Of ­these, three involved the LDP, five involved members of the DPJ, and one involved a member of another party. Between 2010 and 2012 ­under DPJ rule, eight of nine scandals involved members of the DPJ. Fi­nally, a­ fter the LDP returned to power between 2012 and 2016, all six of the sex scandals involved members of the LDP. Our preliminary analy­sis suggests that sex scandals tend to involve members of the government and that two-­party competition stimulates their construction.

The Ingredients of Sex Scandals Sex scandals can be constructed from a wide variety of ingredients. The most common ingredient is an extramarital affair, accounting for over half of the cases we uncovered. For an extramarital affair to become a scandal, however, a more po­ liti­cally relevant ingredient seems to be necessary. Infidelity by itself seldom c­ auses serious damage to a po­liti­cal c­ areer. For example, an act that draws police attention usually ends po­liti­cal ­careers soon ­after becoming public knowledge. Another impor­tant ingredient involves published campaign finance reports, which sometimes reveal embarrassing details about how funds are spent or received. The first case of infidelity ­after the reforms surfaced before the 1996 election. Funada Hajime had an affair with upper h ­ ouse member Hata Megumi. The affair did not generate much news coverage in the national press. In 1999, 3. ​Along with our additions, we note that around three out of four of the examples ­were reported first in the tabloids, and some of the details w ­ ere ­later mentioned in the Asahi national edition, which proved useful in thinking about which details warranted national coverage. 4. ​Members of the upper ­house ­were rarely involved in sex scandals except during the era of divided government. ­Because the opposition controlled the upper chamber for the first time since the founding of the LDP, the upper h ­ ouse suddenly became more newsworthy and some of that news involved sex scandals.

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however, Funada divorced his wife and married Hata, which produced greater news coverage and more serious po­liti­cal repercussions. Despite being a member of one of the premier po­liti­cal families in his prefecture, he lost the 2000 election to a novice female candidate from the DPJ. His divorce clearly played a role in that defeat (Chuunichi Shinbun, 19 June 2000). Infidelity proved insufficient to generate a scandal, but divorce and remarriage damaged Funada’s c­ areer. In 1996 the opposition used details of an affair that took place in the 1980s to accuse Prime Minister Hashimoto Ryuutarou not only of having an affair, but also of compromising national security ­because his partner was allegedly a Chinese “spy” posing as an interpreter.5 Hashimoto’s alleged affair was reported in Shuukan Bunshun and the opposition brought the issue to the floor of the Diet, generating mainstream news coverage as well as reports in the foreign media (Asahi, 10 June 1998; Gibney 1998). Hashimoto claimed he remembered meeting the ­woman, taking a meal together, and exchanging letters but denied anything beyond that (Asahi, 13 June 1998). The media acquired letters between the ­woman and Hashimoto leaked by the ­woman’s former husband, but the letters failed to produce clear evidence of infidelity or espionage. The ingredients evaporated and the scandal failed to produce any clear repercussions. In 2007 DPJ member Himei Yumiko had an affair with a former high school teacher.6 The parents of the teacher sued Himei over the use of their names on financial paperwork that she filed to establish a business in her district. The DPJ prefectural party branch refused to nominate her for the next upper ­house election so she switched to Ozawa Ichirou’s NFP, r­ unning and losing in Chiba 8th district in 2012. She failed to run in ­either of the national elections held in 2013 or 2014. In May of 2009 a magazine reported that LDP upper h ­ ouse member Kounoike Yoshitada traveled with a female acquaintance other than his wife to the seaside resort town of Atami where they stayed at a h ­ otel together. When the incident was scooped by the national press, the major transgression was not the affair but the fact that the politician used a ­free government-­provided rail pass for something that would be hard to construe as official business (Asahi, 15 May 2009). Kounoike admitted he had been careless in using the pass, reimbursed the rail com­pany, and resigned as deputy chief cabinet secretary. The reaction in the press and in po­liti­cal circles was so vitriolic that the politician developed m ­ ental prob­ 5. ​The w ­ oman served as the Chinese Health Department interpreter for Hashimoto when he visited China in the late 1970s. In 1985 she l­ ater came to Tokyo with her husband, who was a Chinese diplomat stationed at the embassy in Tokyo. 6. ​The first female politician in our list of scandals prior to Himei Yumiko is Satou Yukari. Her infidelity stories surfaced in 2005 but did not become mainstream news most likely ­because they took place years earlier when she had not even entered national politics and had been living in the United States.



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lems that required hospitalization. He recovered enough to win a seat in the 2013 upper h ­ ouse election. The first sex scandal to hit the DPJ ­after gaining power in 2009 involved an unmarried member of the Diet.7 The trou­ble started for Nakai Hiroshi when the magazine Shuukan Shinchou (25 March 2010) reported that he had given his lover a card key that allowed her to access his lodging in Tokyo’s Akasaka district, housing reserved for lawmakers and their families. Nakai explained that he had dated the ­woman for about six years and she came to the apartment once a week to clean (Asahi eve­ning, 25 March 2010). The DPJ investigated and found no evidence that he had broken any rules or regulations, but Nakai retired from politics prior to the 2012 election. The scandal may have played some role in his decision, but he had other prob­lems that prob­ably played bigger ones. The fuss devoted to the so-­called Ozawa girls who won with Ozawa’s support in the 2009 election consisted of ­little more than rumors and gossip but was made newsworthy by the connection to Ozawa. Aoki Ai and Tanaka Mieko w ­ ere not married but ­were suspected of having inappropriate relationships with married men. Ai’s private meetings with Ozawa and a pos­si­ble affair between her and Ozawa’s secretary w ­ ere featured prominently in the tabloids without solid evidence. Tanaka was also reported as having inappropriate relations with a bureaucrat. The prefectural DPJ refused to nominate her for the 2012 election, citing the negative publicity generated by the sex scandal, and chose a local city assembly member instead (Yomiuri Ishikawa edition, 25 September 2012). A final example of infidelity involved LDP member Miyazaki Kensuke. Reporters from Shuukan Bunshun caught him traveling to his condominium in Kyoto and spending the night with a bikini model. Miyazaki was married to LDP lawmaker Kaneko Megumi, who at the time of the affair was pregnant and about to give birth to their son. Miyazaki had achieved notoriety two months earlier by expressing his desire to become the first male lawmaker in Japa­nese history to take a month of paternity leave. On his blog, he expressed his desire to help change attitudes in Japa­nese society where ­women have been burdened with most of the responsibilities for raising ­children, which was in tune with government efforts to advance the position of ­women in society. Being caught with the model and his subsequent admission that he had been unfaithful more than once exposed him as a hypocrite, incurred the wrath of the opposition and the ruling government, and put his marriage at risk (Asahi, 10 February 2016). He resigned from parliament two days a­ fter the scandal broke, leaving the title of the first male lawmaker to take paternity leave still up for grabs (Yomiuri, 12 February 2016).

7. ​Some of the scandals detailed in this chapter w ­ ere published earlier in Carlson 2013.

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Sex sells. Weekly magazines seek evidence of infidelity by any newsworthy politician and often sensationalize the story. The mainstream press picks up the stories only if ­there is a po­liti­cally relevant ele­ment that it can share with a national audience. A story of infidelity that remains in the weekly magazines ­will have ­little or no effect on a politician’s ­career. Repercussions depend upon the second-­order transgressions more than on the infidelity itself. Making a comment that offends w ­ omen may sound like a less serious transgression than infidelity, but infidelity is essentially a private m ­ atter while public comments are taken to reflect a politician’s values and therefore his or her fitness for public office. Offensive comments thus tend to have more serious po­liti­cal consequences than does infidelity. We have several politicians to thank for making public comments that attracted considerable attention. A major news story in 2003 was the arrests of several students from Waseda and other universities who created a group called Super F ­ ree. This group or­ga­ nized parties at which one activity was gang-­raping ­women. The leader of the group was sentenced to fourteen years in prison. In a seminar addressing Japan’s declining birth rate, participants w ­ ere discussing the arrests when LDP member and former cabinet minister Oota Seiichi remarked that “at least gang rapists are vigorous (genki)” (Asahi, 27 June 2003). A ­ fter members of the media made his comments known, the criticism from female legislators and the top LDP leadership was swift. He apologized but lost the election. Even though 2003 was a bad year for the LDP, Oota’s defeat was surprising and his comments w ­ ere the most likely explanation. LDP members also w ­ ere involved in scandals in 2007 and 2009 for making comments deemed to be insensitive and sexist against w ­ omen. At a speech in front of local supporters in 2007, the LDP minister of health, Yanagisawa Hakuo, called ­women “birth-­giving machines” (Asahi, 31 January 2007). He apologized and did not run in 2012, though his age prob­ably played more of a role in the decision to retire than the scandal. In 2008 Sasagawa Takashi, the secretary-­general of the LDP, concluded a speech congratulating a newly elected female mayor in western Japan by noting that w ­ omen in politics w ­ ere generally lacking in elegance and refinement (Asahi, 7 March 2009). He also apologized but lost the 2009 election. Though hard to gauge with any precision, offensive comments prob­ably played some role in the losses. We did uncover a few cases of potentially criminal acts, although this ingredient was quite uncommon. One such case happened in 2005 when Nakanishi Kazuyoshi, a newly elected LDP upper ­house member, celebrated with other lawmakers ­until midnight then deci­ded to continue drinking alone. L ­ ater that eve­ning, he walked up to a twenty-­two-­year-­old ­woman whom he mistook for a prostitute, pressed against her, and reached into her dress to feel her breast (Asahi,



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10 March 2005). The w ­ oman called out to her boyfriend for help, who was chatting on his cell phone nearby. Nakanishi fled to a nearby club as the ­woman reported the incident to a police officer. Nakanishi was found, arrested, and kept in detention overnight. He had his ­lawyer submit his letter of resignation to the Speaker of the House. He reached a l­egal settlement with the w ­ oman, who no longer wished to press charges. Although Nakanishi escaped a court trial and criminal sentence, the scandal had cost Nakanishi his Diet seat. He ran again without a party nomination but finished with less than a quarter of his 2003 vote. His po­liti­cal ­career was over. Another potentially criminal act was linked to LDP member Sata Genichirou. ­After the LDP won the 2012 election, Sata was appointed to the power­ful Committee on Rules and Administration. Just prior to the publication of reports and incriminating photo­graphs in several tabloid magazines, Sata resigned from his post. The resignation was reported in most of the major national newspapers. Kyodo News Ser­v ice, for example, explained that the resignation came on the heels of a pending report about his “­woman prob­lem” to be published in Shuukan Shinchou (27 June 2013). The same story was repeated in Asahi and Yomiuri newspapers the next day. The tabloids claimed that Sata had taken part in “compensated dating” (enjo kousai), paying a young college student that he had met at a kyabakura (“cabaret club,” a staple feature of Japan’s entertainment industry) for sexual ­favors. Since the 1990s, the issue of compensated dating has generated intense media interest in tandem with government efforts to crack down on child prostitution and child pornography (Leheny 2006, 16–17). Sata’s rapid response in resigning from his post prior to the publication of the tabloid reports represents a calculated effort on his part to minimize damage and prob­ably helped him retain his seat in the next election. A third and final example of a potentially criminal act happened just two months ­after the LDP returned to power in 2012. Tokuda Takeshi, a second-­ generation politician with a power­ful kouenkai and impressive financial resources, resigned as a parliamentary secretary just before a magazine published the full details about a forced sexual relationship with an underage ­woman ­after a night of heavy drinking. The ­woman had already petitioned the Tokyo District Court for compensation in 2007. He resigned from his position without an explanation, citing confidentiality reasons, following the same strategy as Sata. Unfortunately for Tokuda, he was also caught in the worst case of election law violations since the reforms and has resigned his seat for that reason. Overall, scandals surrounding potentially criminal acts are rare ­because discovery is often avoided. In Tokuda’s case, for example, the w ­ oman had filed and won a claim against the politician, but the public knew none of the details. It thus seems likely that t­here are more politicians who have been accused of

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vari­ous sexual crimes, but details are shrouded in privacy and never become a public scandal. The last ingredient we cover falls ­under the category of embarrassing official expenditures. Japa­nese politicians have long entertained themselves and their supporters at bars and nightclubs. The expenditures that occurred on ­these occasions ­were not documented or reported in a way that attracted media attention ­until reforms in 2007 and 2009 required politicians to keep and disclose receipts. A ­little investigative reporting often turned up a few “surprising” revelations about where the receipts had been issued. The first wave of questionable expenditures connected to adult venues surfaced in 2009 a­ fter the DPJ had won power. In an investigation conducted by the Mainichi newspaper, it was revealed that five se­nior members of the DPJ spent taxpayer funds in hostess bars, an embarrassment for a party that had come to power with the promise of stopping the wasteful use of such funds. The biggest fish implicated was the new minister of education, Kawabata Tatsuo, who spent funds in six bars, including a transsexual bar, over a five-­year period. Kawabata explained that subsidized funds ­were not used (Kyodo, 30 September 2009). The outings had been or­ga­nized by his staff to entertain supporters, and Kawabata had not personally visited the transsexual bar. The expenses w ­ ere correctly reported and no laws w ­ ere broken. The incident had no major po­liti­cal consequences. ­After 2009, many politicians learned to avoid listing potentially embarrassing expenditures on their official reports. It was wise to pay for such activities out of their own pocket. In addition, the DPJ sent directives to all its members clarifying the norm that public funds should be used for more legitimate expenses like office space or rent. DPJ members appear to have heeded this advice as we w ­ ere unable to find any major embarrassing expenditure scandals a­ fter this point. In 2015, three years a­ fter the LDP returned to power, an embarrassing official expenditure scandal involving a visit to an adult-­entertainment bar featuring a live S&M show surfaced. The target was the newly appointed minister of trade in the Abe cabinet, Miyazawa Youichi, who had been in the job for only three days. Apparently, a staff member had visited a bar and included the receipt in Miyazawa’s 2010 report. The bar advertised itself online with photos of its live show, and reporters could generate an attention-­grabbing headline that the new trade chief had paid money to a sex show bar (Mainichi, 23 October 2014). Major newspapers had no trou­ble reporting the story b ­ ecause the expenditures ­were officially documented. Miyazawa himself did not learn about the expense issue u ­ ntil he read about it in a report by Kyodo. He explained that the expenses ­were inappropriate, his office was recovering the money from the staffer, and the expenses would be stricken from his official report. The scandal



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had run its full course and, except for the embarrassment, Miyazawa suffered no damage to his po­liti­cal c­ areer.

Responses and Consequences of Sex Scandals We next looked at how politicians responded, wondering if some responses proved more effective than ­others in quieting the scandals. A common response was to deny the allegations or apologize for inappropriate comments or be­hav­ior. The three politicians mentioned above who uttered offensive comments, Yanagisawa, Oota, and Sasagawa, issued public apologies but did not resign their posts. The public nature of their comments made it difficult to do anything other than issue an apology. On the other hand, in many of the infidelity scandals politicians simply denied the affair without apologizing. Without a clear smoking gun, rumors w ­ ere hard to substantiate. When faced with clear evidence of sexual misconduct, the most common response was to resign from a party post or official position. Nakagawa Hidenao, for example, resigned as chief cabinet secretary a­ fter denying the allegations of an extramarital affair as well as rumors of involvement with a rightist po­liti­cal group (Asahi eve­ning, 25 September 2000). What changed for Nakagawa, however, was when telephone conversations ­were broadcast on tele­v i­sion between him and his mistress (Asahi, 27 October 2000). The scandals surrounding Nakagawa proved to be too big of a distraction for him to fulfill his official duties, and resigning his post served to minimize po­liti­cal damage. In another case, DPJ member Hosono Goushi resigned as Policy Research Council chairman ­after photo­graphs ­were published of him kissing a w ­ oman on the street a­ fter coming out of a ­hotel. The photo­graphs appeared in a popu­lar tabloid magazine that every­one could see and purchase at the local con­ve­nience store. The incident was embarrassing for the politician but did not have any significant impact on his po­liti­cal ­career. ­There was also the rare case of a politician fessing up to infidelity. Miyazaki, the “paternity leave” lawmaker who cheated on his wife, is one of the few politicians to publicly apologize for his be­hav­ior and subsequently resign as a lawmaker. Fi­nally, we also uncovered a few cases of politicians suing the tabloids making the allegations. LDP member Yamasaki Taku, for example, sued Shuukan Bunshun for monetary damages a­ fter it published stories detailing an alleged affair. The magazine countersued and Yamasaki ended up losing his cases in the Tokyo District Court, where the details of the stories w ­ ere found to be credible (West 2006, 101).

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Money, Campaign Finance Reports, and Scandals Election campaigns in Japan are extremely expensive and the need to raise large sums of money is one cause of corruption. In the election system used for the lower ­house prior to the 1994 reforms, one study estimated that Japan spent nearly four times more money per capita on politics as did Germany, the United States, or the United Kingdom (C. Johnson 1995a, 215). The electoral system has been blamed for the high cost of campaigning, but the system of campaign finance interacts with the electoral system to shape both the amount and types of spending. A common thread through all the major postwar po­liti­cal scandals discussed in this book is the ­legal and illegal use of po­liti­cal funds. When major corruption scandals came to light, one of the first ­things to be changed was the regulation of campaign finance. Often the changes ­were cosmetic and failed to address issues of ­either systemic or SOP corruption. The 1994 reforms, however, increased transparency in the disclosure of po­liti­cal funds and impacted the volume and ways that po­liti­cal funds flow through the system.8 Japan ranked in the top group of countries in one study that calculated an index of party spending in eigh­teen countries (Nassmacher 2009, 119). The “big spenders,” which have index scores exceeding 1.6, consist of Israel, Mexico, Austria, Italy, and Japan. The “moderate spenders,” with an index score ranging from 0.2 to 0.4, include the Netherlands, Britain, Australia, and Denmark. T ­ hese estimates, however, w ­ ere calculated using information from the 1990s, and Japan’s po­liti­cal system ­today no longer appears to be as expensive as it was at that time. One way to analyze the costs and fund-­raising patterns in Japa­nese politics is to examine the official annual and campaign-­period reports filed by lower ­house members over time. Carlson (2007, 25) calculated the officially reported amounts of annual income by LDP members for 1986 through 1993. We have updated this study using reports from 1996 ­until 2012, which allows us to compare three election years u ­ nder the old system with six u ­ nder the new. For the prereform years, LDP members on average reported earning roughly 213 million yen ($1.9 million in 1993) in yearly income across all of their po­liti­cal groups. Compared to the postreform average of 117 million yen ($1.5 million in 2012), the average amounts of income have clearly declined. Likewise, the averages for campaign-­period expenses have been reduced: the mean u ­ nder the last three 8. ​For additional discussion of Japan’s campaign finance regulations with some focus on campaign finance scandals and the high costs of elections, see Carlson 2016.



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prereform elections was close to 16 million yen ($144,000 in 1993), which has dropped several million yen over six postreform election cycles. ­Factors other than the 1994 reforms, notably Japan’s prolonged economic downturn, explain some of the downturn in fund-­raising and expenses, but it seems clear that the official amounts linked to LDP members have, on average, declined, particularly compared to the late 1980s and 1990s.9 The 1994 reforms—­ and particularly the role of the new subsidy system for po­liti­cal parties—­helped alleviate some of the fund-­raising pressure for LDP members in the lower h ­ ouse, but many scandals suggest that the need for funds is still a critical ingredient in Japa­nese politics.

The Evolving Campaign Finance System The Po­liti­cal Funds Control Law is the main set of regulations that deals with the financing of po­liti­cal activities in Japan. Enacted in 1948 during the American occupation, its aim is to discourage corruption and level the playing field for po­ liti­cal parties. It provides a l­egal framework that requires all parties, po­liti­cal organ­izations, and candidates to keep account books that rec­ord the names, addresses, and occupations of persons from whom or to whom payments above a specified amount are received or made. It bans contributions from foreign nationals and organ­izations u ­ nder government contract and spells out financial penalties for groups that violate provisions of the law. Although this law was an impor­tant first step, it did not prevent the series of major po­liti­cal scandals described in chapter 3. One prob­lem was lax enforcement. The typical penalty for any campaign finance violation involves a jail sentence and/or monetary fine depending on the violation in question. One of the most serious violations was the charge of misrepre­sen­ta­tion or falsification of official income and expense reports (shuushi houkokushou no kyogikisai), which carried a jail sentence not to exceed five years or a monetary fine. More impor­tant than the rules, however, was the fact that it was extremely rare for violations of the Po­ liti­cal Funds Control Law to go to trial. The authorities in charge of overseeing campaign finance reports ­were not given powers to investigate or mete out punishments for violations, which instead remained the exclusive domain of the ­legal system. ­Unless other serious transgressions ­were involved, ­legal authorities seldom pursued criminal charges in the realm of campaign finance. Major revisions of the Po­liti­cal Funds Control Law occurred in 1975, 1980, and 1992 and focused on strengthening disclosure rules and tightening restrictions for 9. ​To say more we would need to have similar figures for other parties and for other election systems that ­were not reformed, and better time series data for individual politicians.

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contributors. In 1994 structural reforms ­were implemented that changed the electoral system, introduced a new government subsidy system for po­liti­cal parties, and altered parts of the campaign finance system. Unlike the electoral system, the Po­liti­cal Funds Control Law was not overhauled in 1994. The penalties for violating campaign finance laws w ­ ere often so low that criminal prosecution was seldom worth the effort. Many of the loopholes in the campaign finance system remained and politicians exploited new loopholes in response to the reforms. However, increases in transparency, the evolving party system, and media attention in the financial details released by individual politicians had significant effects on campaign finance. The most impor­tant change in the Po­liti­cal Funds Control Law since 1994 is the system for of disclosing and providing receipts for some kinds of expenditures. This ­legal change was enacted ­after a series of scandals focused attention on false reporting and questionable or illegal accounting practices. In 2007 new regulations required that politicians’ fund agent organ­izations attach receipts for expenditures of 50,000 yen (around $425) or more, except for personnel fees (Asahi, 24 February 2007). The regulations ­were subsequently revised and strengthened in 2009. The 2009 revision requires po­liti­cal groups linked to Diet members to submit receipts above 10,000 yen (around $107) for all ordinary and po­liti­cal expenses, excluding personnel fees.10 The receipts also required certification by a registered auditor.11 The new ­legal requirements and disclosure rules provided journalists and other concerned parties with a wealth of newly available information that could be used to construct a scandal. Transparency provided the information needed to construct ­these scandals, but increased po­liti­cal competition and media interest provided incentives to use the information. T ­ hese materials revealed patterns of corruption that had existed prior to the 1994 reforms and new forms of corruption that had emerged in response to the new rules.12

10. ​The amount might have been lower, but some politicians with lots of small receipts complained of all the paperwork this would entail. The compromise was to retain receipts less than 10,000 yen and show them upon request. 11. ​Unlike most tax or corporate audits, however, Diet-­linked po­liti­cal groups are handled with velvet gloves. ­There are no checks on questionable spending and standard comparisons of income and expenses using bankbooks, and other rec­ords are not required. Auditing expenses may be new, but the failure to include revenue suggests that transparency has only been extended so far. 12. ​This can range from outright fraud of public funds to more trivial cases where politicians “accidently” count personal home electricity costs u ­ nder t­ hose of the subsidized electricity expenses of their local party office. The party subsidy law was enacted in 1994, so scandals concerning it did not happen u ­ ntil ­after this time.



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Postreform Campaign Finance Reports as Scandal Material Since the 1994 reforms we find a rise in the number of newspaper reports concerning questionable uses of funds and pos­si­ble accounting “irregularities.” We interpret this as another piece of evidence supporting the idea that transparency reduces the level of po­liti­cal corruption but increases the number of scandals. Asahi’s subsidiary magazine once again provides a useful article that focuses on fifty-­eight politicians where questions surfaced over their campaign finance reports. During the period before and a­ fter the 1996 lower h ­ ouse election, the first held ­under the new rules, neither of ­these trends was vis­ib ­ le ­because most of the scandals involved corrupt prereform practices. The misuse of funds and violations of campaign finance rules w ­ ere certainly involved, but the l­egal t­ rials focused on prosecuting the prereform practices that many hoped the new system would eradicate. The additional layers of transparency induced by the 1994 reforms helped in ­these cases, but campaign finance issues w ­ ere not on the front burner. It is also impor­tant to note that one of the more controversial changes introduced in 1994 was a so-­called ban on direct corporate contributions to individual politicians. This provision was not implemented ­until 1999 ­because parties and politicians wanted time to adjust their fund-­raising strategies, and so the effect of this provision could not be observed in 1996. ­Because the campaign finance reports are scattered across Japan’s forty-­seven prefectures, and ­because ­there is no national database like the Federal Election Commission in the United States, it was not u ­ ntil 1999 that a group of scholars and reporters from Asahi collected and analyzed the official annual and campaign-­ period reports linked to all winning candidates in the 1996 election (Sasaki et al. 1999), providing the first glimpse of how the new campaign finance system was working. Asahi then built upon this proj­ect and began to publish the total amounts of funds raised and spent by sitting Diet members ­every year. This not only became a staple feature of campaign finance news reporting, but also provided reporters with detailed materials to conduct their own investigations. One of the first serious Asahi investigations focused on the so-­called ban on direct corporate contributions being made to individual politicians mentioned above. Many politicians, particularly in the LDP, could circumvent the ban by establishing local party branch offices in their election district, which allows them to receive corporate donations.13 When reporters carefully searched the 13. ​To create a local party branch, politicians must fill out appropriate paperwork and pledge to follow the rules governing such branches. In many cases politicians converted the addresses of their main local office into a local party branch, which becomes the entity they use to accept corporate donations as well as shares of the party subsidy from their party headquarters.

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disclosure reports for all sitting Diet members, they discovered that thirty-­seven had received corporate funds through their personal support group or another po­liti­cal group, in violation of the ban (Asahi, 14 September 2001). If the politicians had established their local party branch office earlier and routed such donations this way, t­here would have been no news to report. The Asahi’s discovery, however, failed to generate much in the way of a scandal and the ­legal authorities did not fine or jail anyone as all the Diet members ­either pledged to return the funds or claimed they ­were acquired prior to the start of the cutoff period. It was not u ­ ntil the Suzuki Muneo scandals described in chapter 4 erupted in 2002 that copies of the official reports w ­ ere flashed on tele­v i­sion for every­one to see. In Diet committee meetings in 1999 and again in 2002, JCP member Sasaki Kenshou claimed that Suzuki was abusing government-­funded proj­ects to funnel money to his po­liti­cal organ­izations and used Suzuki’s campaign finance reports as evidence. The JCP skillfully used the paper trail to embarrass Suzuki and the LDP government. Prosecutors built their case of bribery against Suzuki by using the list of donors that he had officially disclosed. The Suzuki scandals and trial largely ended Suzuki’s po­liti­cal ­career and generated a few other scandals in the Koizumi administration. The media tried to broaden the scandals by publishing a list of all the Diet members that had accepted money from Suzuki. Publishing scandal lists had been a staple of many of the major postwar po­liti­cal corruption scandals. The list, however, was relegated to the pages of Asahi’s subsidiary magazine (Shuukan Asahi, 5 July 2002) and failed to taint ­those on the receiving end. The main discovery was simply that Suzuki gave generously to his friends. While the JCP was considerably ahead of the curve, the DPJ followed suit and by 2003 had set up its own investigative team within its party to scrutinize Diet members suspected of flouting campaign finance laws. Reports of campaign finance irregularities exploded during the divided period of government between 2007 and 2009. Yet ­these reports generated few major po­ liti­cal scandals and did not incur much public anger, receive much media attention, or have significant po­liti­cal consequences. In a similar pattern with the sex scandals, the tabloids took the lead in sensationalizing the details, even if the evidence was extremely thin. Misuse of funds is a common ingredient in most Japan’s postwar po­liti­cal corruption scandals, but the transparency generated by regulatory changes to the Po­liti­cal Funds Control Law revealed more details about how politicians raised and spent po­liti­cal funds, and many of ­those details, ­whether serious corruption or not, ­were sensationalized by weekly magazines. Shuukan Asahi provides us with a con­ve­nient summary of examples of questionable campaign finance entries based on reports from its parent newspaper. Specifically, the report lists a total of fifty-­eight dif­fer­ent politicians in the LDP



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and DPJ that w ­ ere connected to cases of “sloppy financial management” (zusan na shikin kanri) from 2006 u ­ ntil 2009 (Shuukan Asahi, 10 July 2009). Of the fifty-­ eight, 50 w ­ ere from the LDP and 8 ­were from the DPJ, but the list does not cover the ­whole period of DPJ government, which generated many more examples. The list includes some of the targeted cabinet ministers detailed in chapter 4, but ­because the list is on sloppy practices, the reporter included more questionable cases. The reporter also attempts to weigh the consequences, noting w ­ hether the irregularity generated ­either a resignation from a post or a defection from a party. Although the list runs several pages and is too long to be reproduced ­here, a few pertinent points are worthy of discussion. First, most of the income-­related discrepancies involve questionable donations or other sources of funds. T ­ hese ­were typically discovered a­ fter a po­liti­cal group filed a report or submitted a revised report. For example, accountants “forgot” to disclose a source of income such as a donation, or made a ­mistake in listing the amount of income derived from a source, such as speaker fees or the selling of party fund-­raising tickets. The politician contacts the election bureau in charge of administering his or her report and requests the correction, which is made in the politician’s official report and can be viewed by anyone so inclined during a public viewing period mandated by law. The mainstream media can report on the correction as a m ­ atter of fact. The details also fuel tabloid stories and investigations into the background of the error, sometimes generating larger scandals that are deemed newsworthy by the mainstream press. While some of the details can be useful in the construction of scandals, it is often difficult to judge w ­ hether the sloppy management crossed any sort of ­legal line. Accountants make m ­ istakes and correct the official report, which means that the ­legal issue has been resolved, at least temporarily. If further discrepancies arise, accountants can amend the reports an unlimited number of times and t­ hose in charge of making the corrections have no investigative or punitive powers other than to tip off ­legal authorities if bad be­hav­ior is discovered or suspected. Similarly, it proves difficult to monitor laws such as the ban on accepting donations from foreigners or companies subsidized by the government.14 If accountants can express ignorance and return any possibly tainted donation a­ fter the fact, ­there is moreover ­little reason to scrutinize donors so intensely. The list also includes many expense-­related issues, such as declaring office expenses for an office that is supposed to be rent-­free. In many cases, an accountant has filed an amended return that ­settles any ­legal issues before journalists discover

14. ​In recent efforts of politicians to fund-­raise on the Internet, donors are often required to mark off a text box indicating that they are a Japa­nese citizen. This is yet another example of politicians learning from past scandals by shifting the l­egal issue back to the donor.

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the sloppy management. Most questionable expenses emerged only ­after regulations ­were revised beginning in 2007. Fi­nally, the reporter only links 8 of the 58 examples to a resignation from a government or party post. Few politicians suffer serious po­liti­cal fallout from sloppy financial management. In September of 2007, for example, the newspaper reported that Tsutsui Nobutaka used the same receipt for postage purchases twice, once in his reports for official campaign period expenses in the 2005 general election and again during the same year for his local party branch report (Asahi, 26 September 2007). He claimed it was an administrative ­mistake and filed a corrected report with the electoral commission. This settled the ­legal issue, ­silenced any scandal, and was the end of the news story. Details of campaign finance also generated many news stories u ­ nder the DPJ administration, but we found no reason to think that the increase in DPJ-­linked scandals ­after 2009 was related to something intrinsic about this party. The DPJ was formed ­after the 1994 reforms and the weight of prereform practices on the party organ­ization is considerably lighter than the LDP. In terms of fund-­raising, for example, individual DPJ members and the party headquarters rely much more heavi­ly on the party subsidies provided by Japa­nese taxpayers, and much less on donations from corporate Japan (Carlson 2016). The DPJ, however, lacked experience and thus provided a relatively easy target for constructing embarrassment scandals. The LDP once again entered the spotlight ­after its return to power, but the total number of scandals generated by embarrassing details fell as politicians paid more attention to their accounting. The requirement to use certified auditors a­ fter 2009 to check Diet-­related reports forced more attention on expenses but did not cover sources of revenue. Then, in January of 2015, the secretary-­general of the LDP created a structure within the party to check for prob­lems in their members’ po­liti­cal finances and 90 ­percent of sitting members requested the ser­vice (Yomiuri, 2 May 2015). We can thus expect better accounting procedures to reduce the number of campaign finance irregularities and similarly related scandals. The sex and campaign finance scandals detailed in this chapter provide another indication that po­liti­cal corruption and scandal construction have considerably changed in postwar Japan. Multiple ­causes for this shift are responsible, including ­factors that emerged prior or a­ fter the po­liti­cal reforms of 1994. Depending on the ingredients and responses of po­liti­cal actors, the scandals’ consequences likewise varied for politicians and parties. It is also clear that candidates and parties have learned to avoid making ­mistakes that might cause embarrassment.

7 ELECTION LAW VIOLATIONS AS PO­L ITI­C AL CORRUPTION The election laws in Japan are complex and strict, and it is said that almost all successful candidates must violate them to be elected. Walter L. Ames, Police and Community in Japan

Elections are the key mechanism for implementing the demo­cratic pro­cess. Nothing fits our definition of corruption better than perverting the course of the electoral pro­cess. By the 1960s election law violations had become SOP for many candidates and politicians. To win elections, breaking election laws and having a few of one’s campaigners arrested ­after ­every election was viewed as ­little more than a necessary cost of being in politics. Election law violations w ­ ere common partly b ­ ecause Japa­nese election campaigns are among the most strictly regulated in the world and partly ­because intraparty competition is linked to higher levels of corruption (Nyblade and Reed 2008; Carlson and Reed 2013).1 We analyze election law violations in this chapter as a mea­sure of corruption. We use both data collected by the Japa­nese police and information from newspaper reports. We discuss trends over time and offer explanations for the ­factors that cause election law violations to rise or fall. We then turn to examine the vari­ous election rules used in Japan over the postwar period to consider w ­ hether election law violations are the most common in ­those electoral systems that are the most candidate-­centered. We show that structural reforms—­the lower ­house in 1994 as well as in the upper ­house in 1983 and 2001—­produced changes in the prevalence of election law violations in the direction predicted by theory. We are fortunate to have two types of data on violations. The first data source is police reports, which are seldom used in other countries b ­ ecause few governments 1. ​See the latter for a statistical analy­sis of election violations in the upper h ­ ouse, which we build on for parts of this chapter. 131

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publish such po­liti­cally sensitive data (Lehoucq 2003). Yet the NPA systematically collects data on election law violations and publishes the aggregate number of violations and violators ­after each election. Police departments set up investigative committees across the country to systematically monitor, report, and respond to electoral law violations for each election. The reports they publish include all officially reported cases of election violations—­not just the cases that draw interest from the mass media. The police rec­ord is also significant as the most impor­tant source of information for journalists in the police press club (Farley 1996, 114). The National Public Safety Commission and a system of prefectural public safety commissions w ­ ere established ­after World War II to guarantee the neutrality of the police and their ability to operate without po­liti­cal pressure. One early study of the Japa­nese police found that this guarantee had been effective: “We can prob­ably conclude that the police are formally neutral in the enforcement of the election laws” (Ames 1981, 224). T ­ here may be some variation across administrative jurisdictions and between elections, but we have found no reason to revise this assessment. The main shortcoming of the police reports is that the aggregate data are stripped of their identifying information, thus omitting the data of greatest interest to researchers (and Japa­nese voters). The reports do not identify who committed the violations or the election districts where they occurred.2 We partially alleviate this shortcoming by using a second data source, newspaper reports.3 Newspapers collect data by following police investigations. Before elections their reports maintain the anonymity of the candidates ­under investigation, but ­after the election the focus turns to ­those candidates who have been investigated, making it pos­si­ble to unpack some of the aggregate data in the police reports. One shortcoming in using ­these reports to study change over time, however, is that he decision rules used by the media in choosing the cases to report seem to vary much more than the rules used by the police.4 Neither data source is a perfect mea­sure, but their combined use is better than relying on one source alone.

2. ​­There is a breakdown by prefectural level, which proved useful for studying the upper ­house but less so for the lower ­house, as most prefectures have more than one district. 3. ​Following Nyblade and Reed 2008, we searched Asahi to learn more about the identifying information omitted in the police reports. We also used t­ hese reports to gain clues about pos­si­ble reasons for change in the prevalence of election violations over time. 4. ​In early postwar elections, for example, newspapers often failed to mention candidates by name, mentioning only hints concerning party affiliation or district. Sometime a­ fter the 1950s, however, this ambiguity ended and the names of individual politicians ­under investigation by the police ­were commonly identified.



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Violating Election Laws Becomes SOP By the mid-1960s at the latest, election law violations had become SOP for many politicians. The clearest indication of this is the degree to which politicians thought of breaking election laws as no more serious than a minor traffic violation. At each election from 1953 through 1979 the Japa­nese police investigated over ten thousand potential election law violations. Why ­were election law violations so common during this period? First, Japa­ nese elections are strictly regulated. Not only was campaigning strictly regulated, but also the most effective campaign techniques ­were also outlawed. ­There are two basic types of campaigns (J. K. Smith 2009) and Japa­nese law outlaws the most effective ways of conducting ­either. Campaigns of mobilization aim to maximize the number of your supporters who go to the polls. The most effective means of conducting a campaign of mobilization is door-­to-­door canvassing, the classic style of election campaigning in G ­ reat Britain. Despite having modeled their election laws on the British example, Japa­nese officials in the Meiji era chose to outlaw door-­to-­door campaigning on the grounds that it might interfere with the “peace of electors’ home life” and become a “hotbed of bribery or other malpractice” (Hayashida 1967, 42). The po­liti­cal reforms of 1994 did not loosen any of ­these restrictions and made some of the penalties more severe. Campaigns of persuasion, on the other hand, aim to convince as many voters as pos­si­ble to support your party relative to your rivals. The most effective means of conducting a campaign of persuasion is through the mass media, but Japa­nese election law severely restricts the use of tele­vi­sion advertising (Plasser with Plasser 2002, 208). The only liberalization of t­ hese rules came in 2013 when the ban on Internet campaigning and the use of social media was lifted (Tkach-­Kawasaki 2011; Wilson 2011). Election campaigns are necessary for the proper functioning of democracy. Anything that makes campaigning less effective depresses turnout, reduces the information available to voters, protects incumbents from challengers, and promotes single-­party dominance by hindering alternation in power. Japa­nese regulations make it difficult to conduct an effective campaign and should therefore be considered a form of systemic corruption. T ­ hese regulations would pervert the demo­cratic pro­cess even if no candidate ever committed an election law violation. In addition, the regulations produce power­ful incentives to ignore them. It has repeatedly been demonstrated that campaigning increases turnout.5 It is also clear that campaigns inform voters about the issues at stake in the 5. ​See, for example, Cox and Munger 1989; Cox, Rosenbluth, and Thies 1998; and Gerber and Green 2000.

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election.6 Restrictive campaign regulations also hurt challengers and help incumbents.7 If one believes that higher turnout is better than low, more informed voters better than less informed, and that challengers should compete on a level playing field with incumbents, then Japan’s strict regulatory regime should be considered a form of systemic corruption. The LDP understood the advantages of reducing the effectiveness of campaigns and enacted even stricter regulations. Between 1960 and 1993 over forty changes ­were made in campaign regulations, ignoring the prochallenger recommendations of nonpartisan electoral reform councils and enacting the proincumbent recommendations instead (McElwain 2008). The LDP also enacted high deposit requirements that failed to deter the entry of fringe candidates but did deter the entry of candidates from competitive parties (Harada and Smith 2014). One study estimated that the LDP might have lost its majority in 1980 instead of 1993 if it had not enacted t­hese campaign restrictions (McElwain 2008). More directly, single-­party dominance, mea­sured by the number of years a governing party has spent in office, has been shown to increase levels of corruption as mea­sured by the Transparency International Index (see Schleiter and Voznaya 2014). A second explanation for the prevalence of violations lies with the failure to punish violations severely. In the late 1950s, for example, over 95 ­percent of t­ hose convicted of election law violations ­were given suspended sentences.8 Similarly, interviews conducted around 1980 indicate that most violations ­were treated as minor offenses, though vote buying may have been something of an exception: “A high prefectural police official told me that many aspects of the election laws are enforced loosely, like traffic laws, except for bribery cases, which would ‘rot the nation and destroy it, like narcotics, if left unchecked’ ” (Ames 1981, 223).

Asahi’s Special Investigative Reports: Election Violations in the 1960s ­ fter the 1960 election Asahi sent questionnaires to all newly elected Diet memA bers whose camps had experienced arrests for violating election laws, asking them why the violations had occurred (Asahi, 17–19 December 1960). We have translated some of their justifications for why their camp cheated. The responses clearly indicate that candidates did not take the violations seriously.

6. ​See Pattie and Johnston 2004; Arcenaux 2005; Horiuchi, Imai, and Taniguchi 2007; Kam and Utych 2011. 7. ​See McElwain 2008, 37. 8. ​Calculated by the authors using Hanzai Toukei (vari­ous years).



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Thirty candidates responded, but five responses amounted to l­ ittle more than “no comment.” Of the twenty-­five that gave more substantive answers, all offered excuses but only seven candidates also offered some form of apology. Four combined their excuses with attacks on the media or the prosecutors for taking election law violations too seriously. One of the common claims was that the amounts of money involved ­were trivial and it seems clear that some of the candidates whose campaigners ­were arrested for election law violations could not be classified as corrupt bad apples. The most common excuse is some version of the statement, “I just give speeches. I am not involved in the daily campaign and thus know nothing of the activities that produced the arrests.” By all accounts, this excuse is an accurate description of the a­ ctual conduct of many election campaigns run by conservatives (i.e., the LDP and LDP-­affiliated in­de­pen­dents). Many of the candidates who responded to the Asahi survey in 1960 expressed their deep appreciation for the efforts of ­those who had been arrested. O ­ thers blamed the violations on young campaigners drinking too much. Another suggested that the only crime committed was that some ­house­wives passed out snacks to voters. One excuse, however, stepped well beyond the bounds of common sense. The candidate was charged with yakuza connections but defended the suspect organ­ization by arguing that “the Nakatani-­gumi is r­ eally an organ­ization of gentlemen.” Predictably, many candidates claimed that every­one was d ­ oing the same ­thing, a claim that may have been accurate as well as self-­serving. One candidate argued, “Our camp was not the worst offender. Indeed, we are prob­ably the cleanest.” Another agreed with our analy­sis of election law violations as SOP corruption, calling it “a necessary evil.” Two candidates blamed the police; for example, “Classifying l­abor costs and advertising costs as vote buying is truly worrisome. ­There are prob­lems with the way election law violations are investigated.” Fi­nally, two blamed the media; for example, “The media pays too much attention to such ­things. It upsets voters.” Should voters be informed? Should they be upset? Candidates w ­ ere likely to answer in the negative to both questions. In 1967 an Asahi reporter went through the police reports from each prefecture and wrote a detailed article listing all the candidates, their relatives, campaign officials, and secretaries investigated for election law violations that w ­ ere investigated by the police (Asahi eve­ning, 25 February 1967). This article gives the name of the offender, that person’s relationship to the candidate, a one-­line description of the alleged violation, and ­whether the person had been arrested. ­Because the reporter is trying to cover all known cases, it is not biased ­toward the more serious violations, as are most media reports. The articles reported on 135 individuals that ­were investigated, of which 101, just short of 75 ­percent, ­were arrested. Of ­those investigated 7 ­percent ­were the

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candidates themselves, 29 ­percent ­were relatives of the candidate, 23 ­percent w ­ ere campaign officials, and 41 ­percent ­were po­liti­cal secretaries. By party, 61 ­percent ran for the LDP, with the remainder r­ unning for the JSP, DSP, or as an in­de­pen­ dent. We also find several other cases of individuals getting arrested for election law violations in 1967 but successfully ­running for the Diet in subsequent elections, indicating that voters did not necessarily treat election law violations as serious offenses. In appendix C we have translated some of the vari­ous election violations linked to all the LDP campaigns. We think it would be worth the reader’s time to glance over them to get a sense of what is meant by an “electoral law violation.” Concrete examples can leave quite a dif­fer­ent impression from the abstract concept.

Electoral Systems as a Cause of Corruption Electoral systems can be an impor­tant cause of corruption. How election systems distribute legislative seats among candidates “affects the extent to which individual politicians can benefit by developing personal reputations distinct from ­those of their party” (Carey and Shugart 1995, 117–18). The cultivation of a “personal vote” refers to the extent that politicians’ electoral support is reflected in such ­things as their personal qualities, qualifications, and rec­ord (Cain et al. 1987, 9). John Carey and Matthew Shugart (1995) ranked the world’s election systems in terms of the degree that they encourage incentives to cultivate a personal vote.9 They classify electoral systems on a spectrum from systems that advantage candidates who develop a personal vote to party-­centered systems that render a personal vote irrelevant. ­Table 7.1 arranges the several electoral systems used in Japa­nese national elections based upon their study. We find that their theory predicts the base level of election violations remarkably well.

Election Law Violations in the House of Representatives Japan used the single nontransferable vote (SNTV) system in MMDs to elect the more power­ful lower ­house from 1947 through 1993. District magnitude 9. ​Their ranking is based on pos­si­ble combinations derived from four mea­sures: ballot control, vote pooling, types of votes, and district magnitude. The latter is defined as the number of legislative seats assigned to a district. In the United States and Britain, a district elects one representative, but in other countries, including Japan, it can be more. Carey and Shugart claim that as district magnitude rises, the value of a personal reputation also rises. For a discussion of their methods, see Carey and Shugart 1995, 418.



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­TABLE 7.1  Japan’s electoral systems from more to less candidate-­centered HOUSE OF REPRESENTATIVES

HOUSE OF COUNCILLORS

More candidate-­centered

1) SNTV

1947–1993

1) national district

1947–80

ô

2) MMM

1994–­pres­ent

2) prefectural district

1947–­pres­ent

3) open-­list PR

2001–­pres­ent

4) closed-­list PR

1983–98

Less candidate-­centered

Notes: Ordering by authors. SNTV = single nontransferable vote; MMM =  mixed-­member majoritarian; PR =  proportional repre­sen­ta­tion.

ranged from three to five with one SMD and a few two-­and six-­member districts. ­Under this system, any party seeking a majority was forced to run more than one candidate per district, thus producing intraparty competition. The LDP not only ran multiple candidates, it also faced competition from candidates who had been denied the nomination and ­were r­ unning as in­de­pen­dents (Reed 2009). B ­ ecause the party proved incapable of disciplining such in­de­pen­dents, the conservative camp experienced intense intraparty competition in nearly ­every district. Carey and Shugart (1995, 129) describe this system as “­every candidate for herself” and placed it among the most personalistic types pos­si­ble. In 1994 Japan abandoned this system and a­ dopted an MMM system featuring two tiers, one based on SMDs and the other on PR. The switch from one of the world’s most candidate-­centered system to a new mixed system helped reduce the incentives for politicians to cultivate a personal vote, particularly with the elimination of intraparty competition at the general election stage. The 1994 reforms also included rules that make it easier to secure convictions on election law violations. The result was a dramatic fall in the number of election law violations, as reflected in figure 7.1. The average number of ­people investigated ­under the old system (1947–93) was close to 16,000 per year, whereas the average of the new system is less than 1,000 ­ nder the new system, less than 2,000 ­people annually.10 In 1996, the first election u ­people w ­ ere investigated, nearly 4,000 less than the number for 1993, the last year of the old MMD system. Since 1996, the number of violators has continued to

10. ​The numbers in figure 7.1 for MMM represent election violations investigated in both the SMD and PR tier. We have examined separate figures for the PR tier for a few of the elections when ­there was separate reporting and note that that the numbers of violators ­were quite small, typically around 5 ­percent for the entire election. While this also is in line with Carey and Shugart 1995, Japan’s PR tier has some in­ter­est­ing features such as “dual candidacy,” “best-­loser” provision, and informal party norms on how to rank candidates on party lists, including the use of “Costa Rica” arrangements discussed in the Nakajima example below.

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50,000 45,000 40,000

Violators

35,000 30,000 25,000 20,000 15,000 10,000

0

1946 1948 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

5,000

Year

FIGURE 7.1.  Number of election law violators in Japan’s lower h ­ ouse, 1946–2014

decrease steadily over each election, ranging from a high of 1,713 in 1996 to a historical low of 105 in 2014. We also find a g­ reat deal of fluctuation between 1946 and 1993 u ­ nder the old electoral system, indicating that something other than the electoral system was causing the number of violators to rise and fall. Most notably, the number of violators ballooned to almost 49,000 in 1952, representing a sixfold increase over the previous election. A tightening of campaign regulations caused this increase. ­Under the American occupation election laws ­were rewritten in 1945 to relax or eliminate many campaign restrictions in the name of encouraging greater po­ liti­cal participation. However, this freedom proved to be short-­lived as subsequent revisions between 1947 and 1952 tightened restrictions (Curtis 1971, 214; Kanemaru 1952). When the American occupation ended in 1952, most of the prewar restrictions ­were reenacted but candidates continued to follow the practices that had just been outlawed, producing the peak in that year. Candidates learned their lesson and adjusted their campaigning techniques in the next election, but violations r­ ose again in 1960. The 1960 election was the second since the official creation of the LDP in November of 1955. It quickly turned dirty due to factional rivalries, the costly use of personal support groups, and large injections of campaign cash from the business world (Carlson and Reed 2013). The 1963 election featured an unusually long preelection campaign period, which gave parties and candidates one hundred days to prepare through both ­legal and



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illegal routes. Thereafter we see a steady decline as candidates learned how to campaign within the limits of the new law. Of course, prob­lems remain, and we pres­ent two illustrative cases of election violations in the lower ­house next. The first is an example of a candidate’s failure to adjust to the new system and the second is an example of a prob­lem the reforms have yet to solve.

Nakajima Youjirou’s Multiple Arrests and Tragic Suicide (1998) Nakajima Youjirou was first elected in the 1992 by-­election held to fill the seat vacated by the death of his ­father, Nakajima Gentarou, following the standard LDP practice of passing a seat in the Diet from a ­father to his son (D. Smith 2012). In his first general election in 1993, two of his campaign workers ran afoul of election laws by handing out money (50,000 yen per person, around $450) to members of the town assembly in exchange for their help in securing votes (Asahi Gunma, 20 July 1993). Nakajima’s second general election came ­under the new system in 1996. This time he faced serious competition for the LDP nomination in his preferred 3rd district. The LDP often faced the prob­lem of two incumbents seeking the same SMD nomination and had devised a novel way of resolving it: a “Costa Rica” agreement (Carlson 2007; Reed and Shimizu 2009). U ­ nder this arrangement, the LDP would nominate both candidates, but one would run in the PR tier instead of the SMD. In the subsequent election, they would switch. In Gunma 3rd district the LDP nominated Yatsu Yoshio in the SMD and gave Nakajima a secure position on the PR list. Nakajima was guaranteed a seat in 1996 and had been promised the SMD nomination in the subsequent election. Yet, like most conservative politicians with roots in the prereform era, his po­liti­cal capital was concentrated in his kouenkai, the only reliable guarantee of his po­liti­cal ­future. Though his safe PR listing meant that he had no need to worry about the current 1996 election, he felt the need to maintain his kouenkai and his name ­recognition among voters in preparation for the next election (Yomiuri eve­ning, 19 November 1998). Nakajima’s activities became public in June 1998 a­ fter a former secretary sued him for not paying her salary (Asahi, 3 June 1998). Nakajima had opened a bank account in her name but did not allow her to access the account even ­after she left the job (Asahi eve­ning, 26 August 1998 and 29 October 1998). This episode and ongoing conflict between Nakajima and his former secretary led investigators to look more closely at Nakajima’s books. In September that year Tokyo prosecutors confirmed that Nakajima’s office was suspected of creating fictitious receipts. Schemes to pad campaign finance

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reports in order to obscure misconduct ­were a common practice before the reforms and one more likely to be discovered ­after them. Violations of the party subsidy law, moreover, only became pos­si­ble a­ fter the subsidy system had been enacted. Nakajima and his former secretaries accused each other of being responsible for filling in false information on blank receipts provided by a local publishing com­pany (Asahi, 9 September 1998). Nakajima was also suspected of having used part of his former secretary’s salary to pay for expenses of his support group and falsifying his campaign finance reports to make the funds appear to have been a legitimate donation (Asahi, 10 September 1998). At the end of October, Nakajima and three of his secretaries ­were arrested on charges of violating campaign finance and party subsidy laws (Asahi, 30 October 1998). Not wanting to further embarrass the LDP, Nakajima immediately withdrew from the party, again standard prereform practice. Nakajima’s first arrest only marked the beginning of his trou­bles. The following month he was arrested again on vote buying charges ­after investigators learned how he had used the funds he had raised improperly. Nakajima’s office had distributed money to local politicians and to leaders of his kouenkai in exchange for help gathering votes in the 1996 general election (Asahi, 20 November 1998). Buying votes for that election made l­ ittle sense. His safe PR nomination all but guaranteed him a seat so nothing he could do would increase probability of victory any further. ­There was no ballot on which writing Nakajima’s name would have been counted as a valid vote. Nakajima was maintaining his kouenkai, which would increase his bargaining power within the party to gain the nomination in the subsequent election but served no purpose in the current election. Nakajima’s third arrest followed within the week. It had been reported earlier that Fuji Heavy Industries, a part of which had been founded by Nakajima’s grand­ father, had been providing Nakajima with use of an office as well as paying the salaries of office workers on his behalf, which Nakajima had not disclosed as required by law (Asahi, 31 November 1998). Investigators further uncovered evidence used to charge Nakajima with accepting a bribe to help the com­pany join a proj­ect to develop a search-­and-­rescue flying boat for the Maritime Self-­Defense Forces. When Nakajima was parliamentary vice minister of defense, the com­pany gave him 5 million yen (about $38,000) on the day that the Ministry of Defense awarded it the contract. The chairman of Fuji Heavy Industries, along with another executive, was arrested and charged with giving the bribe (Asahi, 27 November 1998). Investigators searched Nakajima’s home and offices and located his appointment book where he had written incriminating details of his deal with Fuji Heavy Industries (Asahi, 16 December 1998). The charges against Nakajima can be summarized ­under three headings: (1) practices that may have been discovered u ­ nder the old system (such as vote



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buying); (2) practices that occurred before the reforms but w ­ ere more likely to be discovered ­because of the new reporting requirements (“accepting a bribe,” “reporting false information,” and “fraud of the secretary system”); and (3) new crimes created by the new regulations (“violation of the party subsidy law”). In addition, the new SMDs played a role in Nakajima’s downfall by forcing the LDP to nominate only one candidate per SMD. In court Nakajima pleaded guilty to the charges in the hope that he might get a suspended jail sentence. In 1999 the Tokyo District Court sentenced him to an unsuspended thirty-­month sentence and a 10-­million-­yen (around $88,000) fine. Nakajima appealed to the Tokyo High Court, which upheld the ruling but reduced his prison term by six months. In 2001 prior to commencing his prison term, Nakajima committed suicide. His abuse of taxpayer funds, his arrest three times in one year, as well as his tragic death generated major news coverage but no significant reforms.

Tokuda Takeshi: Using the Tokushuukai Hospital Chain Tokuda Takeshi succeeded his ­father in Kagoshima 2nd district in 2005, winning a seat as an in­de­pen­dent before joining the LDP the following year. He won reelection in 2009 and 2012 and was appointed a parliamentary secretary in the first Abe administration ­after the LDP returned to power. In chapter 6 we detailed his role in a major sex scandal that forced him to resign from his post in February 2012. In November of the same year he resigned from the LDP ­after members of his ­family ­were arrested over election violations connected with his successful 2012 bid. We cover this event in detail b ­ ecause it arguably represents the worst case of cheating since the reforms and points to a pos­si­ble loophole: using one’s connections with a corporate group as a campaign vehicle and as a source of po­liti­cal funds. Tokuda Torao, Takeshi’s f­ ather, was elected to the Diet in 1990 from Amami Ooshima, the only SMD in the prereform lower ­house. The district was also known for hosting some of the most corrupt elections in all Japan (Weiner 2003, 124). The elder Tokuda was president of the Tokushuukai Group, Japan’s largest medical conglomerate (Asahi, 17 September 2013). Part of the elder Tokuda’s success in winning election was his use of the conglomerate to gather votes and as a source of po­liti­cal funds, and his son continued the practice. It is not clear how this scandal emerged, but ­there ­were leaks from within the Tokushuukai Group, including the surfacing of internal com­pany documents (Asahi eve­ning, 17 September 2013) as well as the embezzlement case of a former aide of Tokuda Torao, who handed prosecutors information about the election violations most likely in the

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hope of receiving a more lenient sentence (Asahi eve­ning, 3 December 2013). In any case, investigators raided the Tokyo head office and affiliated medical facilities of the Tokushuukai Group and then the younger Tokuda’s home and office (Asahi, 18 and 21 September 2013). The raids ­were coordinated with the arrests of Tokuda’s ­sisters, two presidents of Tokushuukai Group companies, and several ­others. Charges included sending more than five hundred employees of the conglomerate to Tokuda’s constituency to do door-­to-­door canvassing (Asahi, 18 November 2013). During the official campaign period, ­these workers ­were listed as absent or on paid holiday and the com­pany reimbursed them for their campaign efforts by giving them a bonus at the end of the year, a total sum estimated to be around 150 million yen ($1.9 million) (Asahi eve­ning, 12 November 2013). A wide range of election laws w ­ ere broken or ignored. Tokuda’s ­sisters w ­ ere also charged with making illegal payments to local politicians for their help in gathering votes. Asahi analyzed Tokuda’s yearly disclosure reports and found that a high percentage of his po­liti­cal income came from family-­controlled corporations or ­family members (Asahi, 17 November 2013). Funds from Tokushuukai w ­ ere also used by Tokuda to pay off his ­legal settlement with a ­woman over his sex scandal and again to pay for employees to work on his behalf during the election period (Asahi, 21 September 2013). It was eventually revealed that Tokushuukai had for years amassed a secret fund ­under the elder Tokuda (Asahi, 3 December 2013). Before his successful gubernatorial bid in 2012, the governor of Tokyo, Inose Naoki, accepted 50 million yen ($627,000) from Tokushuukai a­ fter paying the elder Tokuda a visit in the hospital.11 When Inose’s name surfaced during the investigations into the Tokushuukai Group, he argued that the funds w ­ ere a personal loan that did not require disclosure (Asahi, 23 November 2013). If Tokuda had not been involved in a scandal, it is unlikely that anyone would have ever found out that Inose had received the funds. Instead he was forced to resign.12 The ju­nior Tokuda resigned from the LDP ­after the arrest of his ­family members in November 2012 but did not resign from parliament ­until it was clear that he would be forced out ­under the guilt-­by-­association provision (renzasei). In January 2014 his second-­oldest ­sister pleaded guilty for violating election laws in her first hearing at the Tokyo District Court and the following month Tokuda resigned from parliament. She received a suspended thirty-­month prison sentence 11. ​He had been hospitalized ­after being diagnosed with a progressive neurodegenerative disease in 2002 but apparently was still able to control the purse strings of the slush fund from his hospital bed. 12. ​Some of the media reports have suggested that the funds may have been linked to a request by Tokushuukai for Inose’s help in purchasing a hospital in Tokyo owned by the struggling TEPCO (which had been in charge of the Fukushima nuclear plant). Tokushuukai wisely withdrew its bid for the hospital a­ fter the scandal erupted. As well as Inose, funds from Tokushuukai w ­ ere also distributed to other LDP politicians (Asahi, 13 and 30 November 2013).



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(Asahi, 11 March 2014). Having secured their first conviction out of the many individuals arrested, prosecutors filed an administrative suit that now prohibits Tokuda from ­running again in the same district for five years.

Election Law Violations in the House of Councillors Elections to the House of Councillors use a mixed-­member system in which the lower tier consists of prefectural districts with a varying number of seats and an upper tier that has been reformed twice. The original upper tier system, called the “national district” (zenkokuku) system, was SNTV with a district magnitude of fifty. Carey and Shugart (1995) argue that the incentive to cultivate a personal vote increases with district magnitude and the national district system predictably produced chaos. Campaigning was so chaotic that many called it the “brutal district” (zankokuku) and the number of candidates willing to accept nominations to compete in the national district declined over time (Asahi, 7 June 1962). The secret of winning a seat in the upper tier of the upper ­house ­under SNTV was getting the support of a large, nationwide organ­ization (Carlson and Reed 2013). The candidate needed to find a way to get six hundred thousand voters (the number varying over time) to write his or her name on the ballot. Groups such as doctors, dentists, specific industrial groups such as the tobacco industry, religious groups and retired postal workers elected one or two representatives to the upper ­house, normally with an LDP nomination. Campaigning was delegated to the groups with ­little involvement from e­ ither the candidate or the LDP. Upon their election, the councilor became the spokesperson for the group in the upper ­house and in the councils of the ruling LDP. Some of the worst cases of election law violations in the early postwar period involved the use of such an “orga­nizational vote.” In 1974 Asahi published an article detailing the country’s most significant postwar election violations (Asahi, 5 June 1974). Its list contained a total of nine of the “worst” cases spanning lower and upper ­house elections between 1952 and 1971. The two earliest entries of significant cases focused on conservative candidates in the lower h ­ ouse prior to the formation of the LDP. One involved an LDP lower ­house candidate in 1960. The remaining six cases occurred in the upper tier of the upper h ­ ouse. All six featured the extensive use of an orga­nizational vote, as we explain below using three examples from the 1959 and 1971 elections. In the 1959 upper h ­ ouse election, Tokyo prosecutors uncovered massive vote buying in a campaign for a candidate competing in the Tokyo district for the upper ­house whose principal sponsor was Chuuseiren, the po­liti­cal federation for small and medium businesses. A total of fifty-­six individuals ­were charged with vote buying, including many from the federation as well as a former Tokyo vice

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governor. The uproar over the case forced LDP member Aikawa Kinjirou and his ­father, who had participated in his son’s first campaign, to accept responsibility and resign from the upper ­house. In the same year, an LDP candidate backed by the JDF was linked to a large-­scale and or­ga­nized use of vote buying that partly involved the use of funds amassed from twenty-­seven thousand members of the federation. Leaders and personnel from the federation ­were arrested in more than ten dif­fer­ent prefectures across the country. The 1971 election saw seven former high-­ranking bureaucrats from the finance, construction, agriculture, and transport ministries run for the House of Councillors. Six of the seven won seats, but widespread vote buying and the illegal use of advertisements marred their campaigns. All of them used their connections with organ­izations that had been their clients while they served in the bureaucracy. In the former minister of transport’s campaign, for example, illegal funds ­were distributed to active bus and automobile associations in multiple prefectures. In the former minister of finance’s campaign, illegal funds w ­ ere channeled to groups linked to tax accountants, rice wine producers, and distributors of oil. The worst cases of postwar election violations, as listed by Asahi, involved cases where the police had uncovered massive vote-­buying schemes linked to an orga­nizational vote in multiple prefectures and often involving multiple industry groups. Not surprisingly, the police statistics also confirm that the upper tier of the upper ­house generates many more election violations than its lower tier. The lower tier of the upper h ­ ouse uses the MMD system with prefectures serving as districts and with most district magnitudes between one and three. This tier has not under­ gone any significant structural reform.13 Based on the difference in district magnitudes between the upper and lower tiers, we expect the national system tier to have considerably more election violations than the prefectural tier. Based on our analy­sis of the lower ­house, we also expect to find variation over time even without any structural reforms. In figure 7.2 we pres­ent the trends for both the national and prefectural systems from 1950, when the figures ­were first obtainable, ­until the last election when the national system was utilized in 1980. We find, first, that ­there are many more election violations in the national compared to the prefectural system. Second, we find that the trends in the two tiers are similar. The first major peak in the number of violations occurred in 1962. What made 1962 the most “corrupt” upper ­house election on rec­ord? As in the 1952 lower h ­ ouse election, what changed in 1962 was not so much the be­hav­ior of candidates but rather changes in the regulatory environment. In this case, a 13. ​Campaigning in the prefectural tier of the upper h ­ ouse is like the well-­studied campaigning in the lower ­house, with two impor­tant variations on the theme: first, district magnitude is lower, and, second, the party system was formed primarily around elections to the lower ­house so the fit between the party system and the electoral system has not been as close.



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16,000 14,000

Violators

12,000 10,000 8,000 6,000 4,000 2,000

80 19

77 19

74 19

71 19

68 19

65 19

62 19

59 19

56 19

53 19

19

50

0

Year National district

Prefectural district

FIGURE 7.2.  Number of election law violators in the national and prefectural districts, 1950–1980

new law increased penalties for criminal law offenses such as bribery and outlawed campaigning by public officials, a standard practice up to that time that suddenly became illegal (Asahi, 1 March 1962; Hayashida 1967, 9; Curtis 1988, 165–66). The 1962 upper ­house election took place two months ­after the new laws ­were enacted, giving parties and candidates l­ittle time to adjust their campaign practices. The result was the greatest volume of illicit practices ever recorded, committed by a l­ittle over twenty thousand individuals. This represented a threefold increase in the number of individuals suspected of vote buying and door-­to-­door canvassing and more than a twofold increase in the number of monetary fines issued. In addition, a total of 320 public officials ­were investigated for campaigning on behalf of specific candidates. A second, smaller peak is linked to the 1974 upper ­house election. The LDP selected Tanaka Kakuei, whom they believed could help reverse their declining vote. Tanaka helped pioneer the use of “company-­organized campaigning” (kigyou-­gurumi senkyo) where national system candidates w ­ ere assigned to specific industrial groups (see Tanaka’s money-power politics scandal in chapter 2). T ­ here was a jump in election law violations almost exclusively in the national system where company-­organized campaigning was utilized. The national district was such a prob­lem for all concerned that government fi­nally ­adopted a drastic reform, moving to closed-­list PR, which was first used

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in 1983. U ­ nder closed-­list PR voters cannot choose from among candidates. They can only choose a party. Theoretically, this should be the least candidate-­centered of all the systems used in the upper ­house and election law violations virtually dis­appeared just as Carey and Shugart’s (1995) model would predict. In 1980, the last election ­under the national system, police found 2,810 violators. In 1983, the first election ­under closed-­list PR, they found only 135, which was followed by further declines, reaching a historic low of 13 in 1995. Structural reform worked precisely as expected. Unfortunately, an unanticipated development had corrupting consequences. ­Under closed-­list PR voters decide how many seats a party wins by voting for a party label, but parties decide which candidates ­will win ­those seats by drawing up lists. Candidates who receive safe rankings on the list are virtually assured victory and t­hose with lower rankings are virtually certain to lose. The LDP had evolved ­under electoral systems that favored candidate-­based campaigns, and had never needed any institutions, procedures, or criteria for drawing up a party list. The party thus resorted to a decision rule more consonant with their traditional candidate-­centered practices than with the closed-­list PR system. The party rule in 1983 was, first, any incumbent who chose to run would be re-­nominated and, second, new candidates would prove their contribution to the party by signing up new members. Candidates thus pressured their vari­ous clienteles to join the party. Interest groups signed up their members, often without their permission, and paid their dues to ensure a high list position for their sponsored candidates. In this case, structural reform reduced election law violations precisely as expected, but an informal party rule reversed that result and produced a dif­fer­ent, un­regu­la­ted, kind of corruption. Though dif­fer­ent kinds of corruption are hard to compare, one can make the case that the new form of the orga­nizational vote was the more serious prob­lem. ­Under the national district system, organ­izations had to mobilize their members to vote for the organ­ization’s candidate but, u ­ nder closed-­list PR, organ­izations could win a seat just by making a large donation to the party ­under the guise of membership dues. The LDP sought to solve ­these new prob­lems by changing to open-­list PR, first used in the 2001 election. U ­ nder open-­list PR voters can vote e­ ither for a candidate or for a party. The total party vote is the sum of the votes for the party plus the votes for each of the candidates nominated by that party. The total vote determines the number of seats allocated to the party and the candidate votes determine which candidates ­will take ­those seats. The only way a candidate can get elected is by winning personal votes so we would expect the number of election law violations to rise. Unfortunately, police reports do not provide the information necessary to test this hypothesis, but anecdotal evidence from newspaper coverage indicates that violations did go up as expected. It is also clear from the



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newspapers that election law violations ­under open-­list PR have not reached the level of violations witnessed ­under the old national system. The biggest difference between the national district system and the current open-­list PR system is the steep decline in the number of personal votes needed to win a seat. Commentators expected that open-­list candidates would need at least one million votes to win (Asahi, 27 October 2000). The ­actual number turned out to be much smaller ­because many more voters chose to vote for a party instead of a candidate than anyone expected. The PR ballot lists the party label followed by the name of each candidate nominated by the party. Large parties tend to nominate around thirty candidates, so the voter has the choice of writing the name of his party or searching for his favorite candidate from a long list. Many choose the simpler option and just vote for the party. We calculated the average personal vote required to win a seat (i.e., the vote total for the last winning candidate) for the LDP between 2001 and 2013 and found that it was a ­little less than 130,000, less than 1 ­percent of eligible voters nationwide. One result has been a higher proportion of candidates with local po­liti­cal experience and a higher concentration of candidate votes in a prefecture or region (Nemoto and Shugart 2013). However, national organ­izations can continue using the techniques of mobilizing votes for internal candidates developed ­under the national district system. Many organ­izations continue to send one of their own members to the House of Councillors ­every election. Their candidates are nominated by a party but are dependent on the organ­ization’s votes to win their seat. Local candidates r­ unning on their local reputation and candidates r­ unning as representatives of national organ­izations are precisely the types of candidate we would expect to commit election law violations and to be involved in other kinds of corruption. Cheating by the JDA described below illustrates this point in more detail.

Cheating ­under Open-­List PR: The JDA Nearly 70 ­percent of all Japan’s dentists belong to the JDA. Through its po­liti­cal wing, the JDF, dentists have sponsored candidates nominated by the LDP in the upper tier of the upper h ­ ouse since the 1950s. Most have been internal candidates, that is, dentists themselves. The sponsored councilors represent dentists’ interests in general but most crucially in the biennial revisions to medical ser­v ice fees, which directly affect the income of dentists (Yomiuri, 1 October 2015). The JDF has been repeatedly involved in corruption scandals. In Asahi’s list of the worst early postwar election violations detailed above, JDF executives w ­ ere jailed for their involvement in a massive vote buying effort to elect their sponsored LDP candidate in the 1959 election. We also detailed the involvement of

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the federation in funneling undisclosed money to LDP politicians in chapter 4, including an illegal payment to the Hashimoto faction that resulted in reform of the Po­liti­cal Funds Control Law. In 2015 the activities of the JDF fell ­under the spotlight again for its efforts to elect its candidates in the 2010 and 2013 upper ­house races held u ­ nder open-­list PR. Corrupt SOPs seem to have been deeply rooted in the orga­nizational culture. Scandals that expose their practices have not worked well in reducing the likelihood of ­future scandals. In 2010, with the DPJ in power, the JDF broke with tradition and had their candidate, Nishimura Masami, nominated by that party. In the 2013 election, when it was clear that the DPJ would lose, the federation sponsored another one of its members, Ishii Midori, and had the LDP nominate her. Both parties ­were happy to nominate a candidate who was virtually guaranteed to win a seat (and perhaps even increase the party’s seat total by adding the dental vote) while letting the JDF fund and run each candidate’s campaign. In 2013 the JDF conducted an intensive campaign to mobilize votes for Ishii. Prefectural branches of the dental organ­izations compiled a list of names and phone numbers for some 550,000 ­people and used the list to conduct a telephone call campaign before the official election campaign was announced. The JDF also collected a sum of close to 1 billion yen ($10.2 million) from its members and distributed the money to federation branches across the country. About 400 million ($4.1 million) was allegedly used to support Ishii (Yomiuri, 1 October 2015). Along with allegations that the JDF ­v iolated campaign regulations, JDF-­linked funds appear to have exceeded the annual limits established by the Po­liti­cal Funds Control Law ­after the JDF scandal in 2004. Although the exact nature of how the scandal surfaced has not become public, the Tokyo Public Prosecutor’s Office had enough evidence on paper to arrest three former JDF officials, including the former president as well as the chief accounting official, on suspicion of making donations that exceed ­legal limits. Two of the po­liti­cal groups linked to Ishii and Nishimura w ­ ere formally registered to the same address as the JDF and managed by the federation’s chief accountant. Neither candidate appears to have been managing their own kouenkai. One fact that attracted media attention was dentist and DPJ councilor Nishimura’s kouenkai contributing to dentist and LDP candidate Ishii (Yomiuri, 4 May 2015). The kouenkai belonged to neither party nor to ­either candidate; both belonged to the dental association. Both the chief accountant and the president w ­ ere investigated for their involvement in the telephone campaign that ­v iolated campaign regulations ­because it began before the official period. An internal document surfaced with the president’s name which went out to all JDF prefectural offices that requested that the telephone campaign begin before the election campaign starts (Yomiuri, 11



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October 2015). The document reportedly informs prefectural offices that the ministry had granted permission to start the telephone campaign early, which was a complete fabrication (Yomiuri, 11 October 2015). The JDF as well as the LDP and DPJ have tried to minimize the scandal and any adverse po­liti­cal consequences. The JDF, for instance, has posted a formal letter of apology to the citizens of Japan on its website. Ishii and Nishimura, both current members of the upper ­house for the LDP and DPJ, respectively, maintained that they ­were unaware of the illegal activities and have not been charged with any crime (Yomiuri, 6 October 2015).The scandal also made the operation of the orga­nizational vote more manifest. It became clear that the dentists ­were concerned with their ability to influence policymaking and w ­ ere willing to go to ­great lengths to support whichever party seemed likely to control the government.

Election Law Violations and Corruption Perverting the electoral pro­cess is a clear manifestation of our definition of corruption as perverting the course of the demo­cratic pro­cess. Our data is systematically collected, clearly defined, and suitable for statistical analy­sis. Our basic conclusions are perfectly clear: if a state wants to reduce the number of election law violations, it should adopt a party-­centered as opposed to a candidate-­centered electoral system. Of course, the government must enact and enforce significant penalties for violating election laws and several other ­factors also influence the number of electoral system, but the electoral system is the most power­ful influence. All in all, this seems a very satisfactory result, but one question remains: “Is the number of election law violations a good mea­sure of the levels of po­liti­cal corruption?” Unfortunately, the answer to this question is “no.” The clearest evidence comes from the closed-­list PR era in the House of Councillors. Election law violations virtually dis­appeared, but corruption did not. Informal party rules produced another form of corruption that should prob­ably be considered more serious than election law violations. Note also that the periods in which electoral violations ­were high do not necessarily correspond to the eras of the most serious corruption based on the evidence from scandals. In the early postwar period in which scandals involved the raw purchase of public policy, election law violations ­were low ­because of the looser regulation of campaigning during the occupation era. The large number of election law violations in the 1974 House of Councillors election is certainly part of the rise of po­liti­cal corruption associated with the Tanaka era, but corruption got worse in the 1980s and 1990s when election law violations dropped dramatically in the upper ­house.

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Election law violations have the advantage of being identified by reliable and accurate data that can be analyzed statistically, but statistical data yields only very narrow mea­sures of corruption. Information derived from the analy­sis of scandals clearly indicates that corruption changes form over time and, we might add, varies across nations. The case of open-­list PR in the upper h ­ ouse makes the same point for election law violations. Reducing election law violations does not necessarily reduce the overall level of corruption in a society.

Conclusion

THE EVOLUTION OF PO­L ITI­C AL CORRUPTION AND SCANDALS Po­liti­cal corruption is the most acute expressions of triumphant democracy’s unresolved prob­lems. Donatella della Porta and Alberto Vannucci, Corrupt Exchanges

We now return to our original question: What f­actors cause changes in the level of po­liti­cal corruption over time? We first review the evidence for our hypotheses about the kind of policies that reduce each of our three types of corruption: systematic, bad apple, and SOP. We then turn to our unanticipated findings, most notably ­those concerning how the forms of corruption and scandals change over time. We developed three middle-­range definitions of corruption: systemic, bad apple, and SOP corruption. We hypothesized that controlling each type of corruption would require dif­fer­ent types of control mea­sures. Systemic corruption requires structural reform. Bad apple corruption can be handled through the l­ egal system by simply punishing the individuals involved. Fi­nally, SOP corruption can be controlled with transparency. First, we feel confident in claiming that structural reform works in the direction predicted by theory. Second, we find strong evidence that transparency also works to control SOP corruption, though we also found some theoretically impor­ tant exceptions to that rule. Our primary finding about bad apple corruption is that it seldom proves impor­tant. We find only one significant exception to that conclusion: Tanaka Kakuei.

Structural Reform Works We find remarkably strong and consistent support for the idea that structural reform works to ameliorate systemic corruption. The clearest cases are the effects 151

152 Conclusion

of changing the electoral system on the prevalence of election law violations analyzed in chapter 7. We applied Carey and Shugart’s (1995) theory to rank the vari­ous electoral systems used in Japan for both the lower and upper ­houses based on the degree to which they produce incentives to use a personal vote strategy of electoral campaigning. We found, first, that systems that promote personal vote strategies produced more election law violations than ­those less likely to do so. More impor­tant, changing the electoral system produces changes in the number of election law violations in the direction predicted by Carey and Shugart’s theory. The police statistics we examined all showed a similar pattern, an immediate change in the number of violations in the predicted direction followed by a continuing trend in the same direction as candidates adjusted to the reformed system. We also presented evidence that confirms the effectiveness of the structural reform of 1994. Many of the goals of that reform have been realized. First, a g­ reat deal of evidence supports the idea that Japa­nese politics is moving away from candidate-­centered and ­toward party-­centered competition. Intraparty competition was rapidly eliminated in the new SMDs and was one reason for the overall decline in election law violations. In addition, evidence presented in chapter 6 indicates that elections have become less costly. The average sums raised and spent by LDP politicians during election years and during the official campaign period are considerably lower ­today relative to the 1980s and 1990s. Fi­nally, the scandal chapters also support this conclusion. In chapter 4 we argued that the structural reforms enacted in 1994 did reduce the level of corruption by changing patterns of scandal construction. Before the reforms corruption was discovered through serendipity. Transparency was so low that investigation by l­ egal authorities, the media, or po­liti­cal rivals was in­effec­tive. However, when a light was accidentally shone on the dark corners of Japa­nese politics, serious corruption involving large numbers of politicians became vis­i­ble. Reform increased transparency, making it pos­si­ble to uncover corruption systematically. Yet nothing like the Lockheed, KSD, or Recruit scandals has occurred since the reforms. In sum, we see more but find less. It is hard to avoid the conclusion that t­ here is less to be found. Though early analyses tended to be pessimistic about the effectiveness of the 1994 reforms, the evidence presented in this book thus supports the more positive conclusions reached by the more recent lit­er­at­ ure about the reforms in general.1 Much of the pessimism was due to drawing conclusions before the evidence was in. One of the most frustrating aspects of analyzing po­liti­cal reform is that it 1. ​See, for example, Maeda 2009; Rosenbluth and Thies 2010; Krauss and Pekkanen 2011; and Reed, Scheiner, and Thies 2012.



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takes so long to produce results. The appropriate time frame for analyzing po­ liti­cal reform is, unfortunately, de­cades, not years.

The Limits of Structural Reform ­ here are three main caveats to our findings concerning structural reform. First, T even though structural reforms do reduce corruption as predicted, ­those same reforms produce several highly predictable side effects. One highly predictable result of reform is based on Duverger’s (1959) law, that the introduction of SMDs would encourage movement ­toward bipolar competition. The 1994 reforms did indeed produce bipolar competition at the district level and soon led to bipolar competition at the national level, precisely as predicted. They reduced intraparty competition and election law violations, and competition became more about party policy and less about candidate quality. However, bipolar competition between the government and the opposition also tends to produce more scandals even as corruption declines. Each side searches for “dirt” on the other and, if t­here is no dirt that involves corruption, one can always construct scandals from anything that embarrasses the government or one of its leaders. Bipolar competition reduces corruption but may also reduce trust in government. A second caveat: Duverger’s law is a law that concerns elections but not governing. SMDs do not directly affect the capacity of any party to govern and both the Japa­nese and Italian cases suggest that ­there is no guarantee that the winning party ­will be able to govern effectively. Effective governance is simply beyond the scope of Duverger’s law. The third caveat is that reform does not work instantaneously; it takes time. Rein Taagepera (1988, 85) suggests that the effects of an electoral system should not be judged ­until ­after the third election ­because “parties and voters need time to learn how to use them to their best advantage. An electoral system consists of rules and skills in using ­these rules. If the rules are continuously altered, no stable electoral system can emerge.” We agree. We would add that one should thus never look for “final outcomes” simply b ­ ecause change never stops. One should rather look for trends: “Is the direction of change in the predicted direction?” Voters and po­liti­cal commentators seem to have expected change to have been much more rapid and ­were thus disappointed with the slow pace of reform. Though we understand both the hope and the disappointment, we see no empirical reason to expect change to happen any faster than it did. The three-­election rule suggested above would lead one to expect a two-­ party system to emerge in the 2003 election, and the evidence confirms that this was the case.

154 Conclusion

Transparency Works We find strong evidence supporting the proposition that transparency reduces corruption. We see no reason to revise the proposition that enhancing trans­ parency is a good way to reduce SOP corruption. However, we also find some theoretically significant exceptions and need to add several caveats. The 1994 reforms enhanced transparency in the following ways. In the realm of campaign finance, rules ­were tightened to reduce the disclosure ceiling and require po­liti­cal groups to provide more detail regarding the source of their funds. The subsidy system also introduced detailed reporting requirements. The transparency introduced by the reforms made it pos­si­ble to follow a g­ reat deal more concerning the flow of po­liti­cal funds in Japa­nese politics. The mainstream media and po­liti­cal rivals played an impor­tant role in collecting and analyzing the official disclosure reports. The fundamental mechanism through which transparency reduces corruption is learning from the experience of scandals. When a politician is caught ­doing something corrupt and it damages her po­liti­cal ­career, other politicians take note and revise their SOPs to avoid meeting the same fate. Similarly, opposition parties learn that exposing governmental corruption makes it easier to unseat the governing parties and take control of government. Parties thus learn to construct scandals about their rivals and adjust their SOPs to avoid being caught in such scandals themselves. By making it harder to keep corruption covered up and easier to construct scandals, enhanced transparency tends to make this learning mechanism operate more effectively and more rapidly. Note that the transparency produced by reform does not directly reduce corrupt be­hav­ior. Instead it is learning from the scandals that result from transparency that changes be­hav­ior. Some politicians take longer to learn than ­others. Obuchi Yuuko and Amari Akira are cases in point. Both seem to have left their ­fathers’ secretaries in charge of their respective finances and the secretaries continued to follow the corrupt SOPs that worked perfectly well before the reforms but could no longer be kept covered up a­ fter them. We observe rapid learning among both politicians and parties. The clearest case of candidate learning involves the filing of required income and expenditure reports. Politicians and their secretaries had been following incredibly lax accounting practices. In the first years ­after the reforms, rivals could examine reports and find that candidates reported expenditures for renting an office but also reported offices that ­were rent-­free. Even a cursory review of receipts revealed that a single receipt was often used for several dif­fer­ent expenditures. Simply checking over the report for consistency provided ample materials for scandal construction. That is no longer the case. For example, ­after the LDP lost the 2007 upper ­house election, Prime Minister Abe reor­ga­nized his cabinet. One reason



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for the loss was linked to the number of cabinet ministers involved in scandals. The LDP leadership indicated that no one who seemed likely to be the object of a similar scandal would be appointed to a cabinet post. In response, at least twelve members of the Diet investigated their campaign finance reports and revised the (often many and serious) errors they found (Asahi eve­ning, 24 August 2007). Another clear case of learning was the rapidity of responses to scandals. ­Under the old election system dominated by the LDP, scandals could be weathered. A candidate could run as an in­de­pen­dent and, if he could win reelection, his c­ areer could resume as if the scandal had never occurred. ­After the reforms, scandals had more serious consequences and candidates soon learned to retire rather than face ­those consequences. Parties also learned to drop scandal-­tainted candidates rather than rely on the time-­tested technique of publicly repeating that the decision was up to the candidate while pressuring the candidate to retire b ­ ehind the scenes. One egregious example comes from Tokyo 4th district. Nakanishi Kazuyoshi won ­running for the LDP in 2003 but in 2005 was arrested for molesting a w ­ oman on the street ­after an eve­ning of drinking in Roppongi (Yomiuri, 11 March 2005). Five days ­later, the LDP expelled him from the party (Yomiuri, 16 March 2005). Not only did this violate the LDP tradition of never expelling a winning candidate, his resignation and the expulsion tran­spired in rec­ord time. Nakanishi resigned his seat but in the subsequent election tried the traditional practice of r­ unning as an in­de­pen­dent against the new LDP nominee. Without the nomination, however, he found his vote had dropped from over 90,000 to u ­ nder 20,000. Traditional practices w ­ ere no longer effective ­under the reformed system. The best example with re­spect to ministers is the difference between the first and second Abe administrations. In his first administration, Abe tried to protect his cabinet members. In the worst example, he refused to fire Minister of Agriculture Matsuoka even though he was being ridiculed in the media; ultimately Matsuoka became the first sitting cabinet member in postwar Japan to commit suicide. In his second administration, he had two ministers resign rapidly and on the same day to limit media coverage. Perhaps the most impressive example of learning is the way the Abe administration handled the Amari Akira scandal. If the Matsuoka case was an object lesson in the worst pos­si­ble way to deal with a minister’s scandal, the Amari case was close to being a lesson in the ideal way to ­handle a scandal. Both government and opposition have also learned to make sure that their own ­house is in order before attacking their rivals. In the pension premiums scandal, the DPJ tried to embarrass the LDP by pointing out that many of their leaders had not paid their premiums only to find that many DPJ leaders had also failed to keep up with their premiums. Based on this experience, the party learned to clean up their own ­house before attacking the LDP (Asahi, 17 March 2007). In

156 Conclusion

sum, transparency provided materials from which to construct scandals and scandals forced candidates and parties to revise their corrupt SOPs to avoid scandals.

The Limits of Transparency We must add several caveats to our findings concerning transparency. First, like bipolar competition discussed above, enhanced transparency reduces corruption but has two predictable side effects. First, b ­ ecause the information from which a scandal might be constructed becomes more easily obtainable, scandals become more common. Japa­nese voters thus cannot be blamed for finding it hard to believe that Japan’s corruption prob­lem has gotten less serious. As they scan the media headlines (without necessarily reading the stories or comparing what they read about past corruption scandals) they gain the impression that politics is dirty and that corruption is serious. It is only when one stops looking at the frequency of scandals and compares the corruption from which the scandal was constructed that one sees that corruption has clearly declined. Thus, enhanced transparency tends to reduce corruption but may also increase public cynicism t­ oward politics. During the period of LDP predominance, ignorance was bliss, albeit a bliss that was periodically interrupted by the shock of serendipitous revelations. The transparency introduced by the reforms reduced both ignorance and bliss. Second, scandals generated by increased transparency may not reduce SOP corruption if the incentives to continue the SOP are strong enough and the costs low enough. Before the lower ­house election reform, conservatives (LDP and LDP-­affiliated in­de­pen­dents) regularly competed against each other. Violating the election laws was an effective way of competing with candidates from the same camp and candidates continued to do so b ­ ecause it was worth the cost. Both the ­legal and electoral costs for getting caught violating election laws ­were less than the benefits of committing the violation. For transparency to generate learning and reduce violations the incentives to cheat had to be reduced and that required structural reform. ­After the 1994 reforms that changed the electoral system to a mix of SMD and PR, intraparty competition virtually dis­appeared and competition between parties became the norm. Violating election laws is an effective means of electoral competition in intraparty competition but is not effective in interparty competition (Nyblade and Reed 2008; Carlson and Reed 2013). Structural reform reduced intraparty competition and increased interparty competition, thus lowering candidate incentives to violate election laws. Reform also raised the cost of violating election laws, most notably through the strengthening of the guilt-­by-­association rules (renzasei), making candidates responsible for electoral law violations committed by their immediate relatives or campaign man­ag­ers.



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We also found other exceptions to the hypothesis that transparency reduces SOP corruption. The most significant of ­these are, however, not politicians but bureaucrats and interest groups. In the example of police SOPs for creating slush funds (uragane) discussed in chapter 2, we found that they w ­ ere caught using essentially the same corrupt SOPs repeatedly. Pension administration showed the same pattern. A ­ fter the lost pensions scandal, the SIA was reor­ga­nized into the JPS in 2010. In 2015 the JPS faced another scandal in the second Abe administration a­ fter hackers stole personal information on more than one million Japa­nese citizens a­ fter sending virus-­infected emails that ­were opened by JPS employees (Asahi, 7 July 2015). Another significant exception was the repeated cover-­ups in the nuclear industry by nuclear operators, including TEPCO. We have not done enough work on nonpo­liti­cal organ­izations to know w ­ hether this is a m ­ atter of ­those organ­izations learning more slowly or not learning at all, but our hypothesis concerning the effectiveness of transparency on t­ hese organ­ izations clearly does not apply, at least in the Japa­nese case. We attribute this asymmetry between politicians on the one hand and bureaucrats and interest groups on the other to the asymmetry we noted with re­spect to the reputations of Japa­nese politicians and bureaucrats in chapter 5: politicians remain in the public eye ­because they must run for reelection whereas bureaucrats who are embroiled in a corruption scandal need never face public scrutiny again.

Punishing Bad Apples We have detailed many corrupt officials throughout this book. Our primary conclusion was that bad apples ­were seldom, if ever, responsible for making corruption worse. ­There is only one potential exception to this conclusion: Tanaka Kakuei. Tanaka was closely associated with the rise in corruption between the 1966 Black Mist scandals and the 1976 Lockheed scandal. He served as secretary-­ general in the 1969 election and was credited with the LDP’s gains in that election. In 1972 he was elected president of the LDP and became prime minister. In 1974 he ran the dirtiest upper ­house campaign in Japa­nese history, perfecting an orga­nizational vote strategy that is associated with election law violations and other forms of corruption. Revelations about Tanaka precipitated a “money-­ power” politics scandal that led to his resignation. In 1976 he became embroiled in the Lockheed scandal and was convicted in 1983. Many of Tanaka’s allies and protégés, notably Kanemaru Shin, Suzuki Muneo, and Ozawa Ichirou, w ­ ere also involved in major corruption scandals. This would seem to be more than sufficient evidence to blame Tanaka, the “worst apple,” for the rise in corruption. However, other explanations are pos­si­ble.

158 Conclusion

The situation faced by the LDP explains much. The LDP had established single-­ party dominance but was facing declining electoral results. Like the prereform candidates who lost their seats and used any means, including violating election laws, to regain them, the LDP was desperate to hold on to power. One of the reasons the party selected Tanaka Kakuei as their leader and prime minister was to reverse the decline of their electoral fortunes. Though Tanaka was not solely responsible for rising corruption, it seems highly likely that, if the party had chosen some other leader, the resulting corruption would not have been so g­ reat. Bad apples are not particularly impor­tant, but we cannot say the same t­hing about laws and regulations. The rules governing election campaigns, campaign finance regulations, and criminal codes did prove impor­tant in controlling corruption. ­These rules and regulations also interact in significant ways with the election system to change the be­hav­ior of politicians in general, not just potential bad apples.

What Else Affects Levels of Corruption? The clearest type of change that leads to more corruption is a revision of the law to outlaw a SOP. Corruption gets worse but then tends to drop as politicians adapt to the new law. The 1952 and 1962 revisions of the election laws are the clearest cases in point. In each case, many standard campaign practices ­were suddenly outlawed, but candidates continued to follow their old ways and got investigated for crossing a line that had moved. The ­legal system is the main line of defense against corruption, but the attention it pays to po­liti­cal corruption relative to other criminal activities varies over time. The Japa­nese l­egal system was proactive early in the postwar period, playing a central role in the Shouwa Denkou and shipbuilding scandals. What prosecutors learned from ­those two experiences, however, is that one can prosecute politicians and bureaucrats but one is unlikely to gain a conviction. Thereafter, the l­ egal system became less proactive in investigating corruption and more reactive. Corruption was prosecuted aggressively, but only when it was revealed by some serendipitous event. Prosecutors became somewhat more proactive a­ fter the 1994 reforms, empowered by several of the newly enacted provisions and the interaction between the new rules, and the reenergized ­legal system did play a role in reducing corruption. Media attention also varies over time for vari­ous reasons. When the media focuses on corruption, journalists construct scandals, which in turn affects both corruption and the perceived need for reform. The Japa­nese media focused on po­liti­cal corruption a­ fter LDP single-­party dominance was established in 1963, which led to the Black Mist scandals of 1966, but reduced their coverage after-



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ward ­doing ­little to stem rising corruption ­until the 1970s. In the 1970s the mainstream of Japa­nese media was drawn again to corruption by the activities of bad apple Tanaka Kakuei but became active only ­after being stimulated by an in­de­ pen­dent reporter and the foreign media. The 1994 reforms stimulated newspaper attention to corruption in several ways. Transparency gave the media greater access to the information from which scandals could be constructed and then two-­ party competition made t­ hose scandals more impor­tant to the po­liti­cal pro­cess. Another consistent finding is that intraparty competition tends to increase corruption while interparty competition tends to reduce it (Nyblade and Reed 2008; Carlson and Reed 2013). Of course, electoral systems affect the probability of interparty competition both for candidates in their respective electoral districts and for parties at the national level. Nevertheless, even u ­ nder an electoral system that promotes intraparty competition, some candidates, most notably ­those from smaller parties, face only interparty competition. In Japan’s prereform election system, candidates from smaller parties w ­ ere much less likely than candidates from larger parties to face intraparty competition and much less likely to commit election law violations. In the postreform system intraparty competition declined, but we discovered that the few candidates who faced such competition ­were more likely to commit violations.2 We can summarize our central findings as follows: 1. Structural reform reduces systemic corruption (with some caveats). 2. Transparency reduces SOP corruption (with some caveats and exceptions). 3. Bad apple corruption is not a significant cause of corruption (with few exceptions—­only one in our sample). 4. Several other ­factors, including outlawing corrupt practices that have become SOP, the rules and regulations available to the l­egal system, the attention paid to corruption by the police and the mass media, and the prevalence of interparty and intraparty competition, also affect the prevalence of corruption.

Evolving Forms of Scandals and Corruption Perhaps our most unexpected finding was the degree to which the form of both scandals and corruption changes form over time. We found that the form of cor2. ​For this book we updated Nyblade and Reed’s 2008 statistical analy­sis of cheating for the lower ­house from 1996 ­until 2014.

160 Conclusion

ruption changed from the raw purchase of public policy by interest groups to abuse of power to purchasing diffuse access. The same point applies to cross-­ country comparisons. Italy and Japan before their respective reforms both had serious prob­lems with corruption, but the form taken by corruption varied significantly between the two countries, making them surprisingly hard to compare. If we had started with a clear operational definition of corruption as, for example, the percentage of citizens who routinely paid bribes to receive basic ser­ vices, or the number of election law violations, or the cost of election campaigning, or any of the other mea­sures of corruption, we would have never spotted t­ hese changes. Polls that estimate the percentage of citizens who have paid a bribe within the last year and police statistics on the number of election law violations are excellent mea­sures of corruption. Such mea­sures have the advantages of being objective, relatively accurate, and easy to analyze statistically. They are also, however, narrow and limited to a single form of corruption and may thus miss much of the story. Instead, we started with a clear conceptual definition of corruption and looked for anything that seemed to pervert the demo­cratic pro­cess. This approach is like asking an open-­ended question on a survey: sometimes you get surprising answers. If we had limited ourselves to any of the vari­ous other mea­sures used to compare countries, Japan would have looked quite clean. Broadening our vision and analyzing scandals allowed us to see much more corruption than would have been revealed by any clearly defined statistical mea­sure. A country in which few citizens pay bribes but which also experiences the massive expenditures revealed in the Lockheed, Recruit, and Sagawa Kyuubin scandals has a serious corruption prob­lem, even though the objective mea­sures would seem to indicate other­wise. Our decision to analyze scandals was originally driven more by necessity than preference but, reviewing our findings, we are happy with the results. We tried to find more objective mea­sures, but the number of scandals per year, the number of politicians involved, and the amount of money expended in each case proved much harder to count than we had ­imagined and suffered from the same limitations as other statistical mea­sures. Our focus on corruption scandals allowed us to see the changing forms of corruption over time and even notice the increasing number of scandals that did not involve allegations of corruption. Obviously, such an open-­ended approach cannot replace the narrower, more objective, and more scientific approaches, but it may well produce new hypotheses that deserve testing. We took a first step ­toward testing our finding that corruption and scandal construction change form over time by categorizing the content of scandals. We find that bribery was the only type of scandal in the 1950s and never dis­appeared. Bribery is the most common form of corrupt exchange and prob­ably the most common form of po­liti­cal corruption worldwide. Even so, the form taken by



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bribery also changes over time. The first three postwar scandals, analyzed in chapter 3, ­were cases of corporations purchasing public policy. Scandals involving spreading money around to purchase diffuse access to the policymaking pro­ cess became common in the 1980s. Second, scandals that do not involve po­liti­cal corruption as we define it—­ policy failure and embarrassment scandals—­only became prominent ­after the reforms. Policy failures w ­ ere common and politicians did embarrassing t­ hings before the reforms, but the postreform context was much more conducive to turning t­ hose failures and embarrassments into scandals. We also found significant variation in scandal construction over time. The most impor­tant finding was that scandals u ­ nder LDP dominance tended to result from serendipitous discovery while scandals a­ fter the reforms tended to result from the targeting of specific parties and individuals. The change was made pos­si­ble by the enhanced transparency produced by reform and stimulated by two-­party competition. The scandals before the reforms and the scandals a­ fter them reveal a very dif­fer­ent sample of the corruption that existed in Japa­nese politics at the time. We also found an increase in scandals that targeted specific parties or individuals. Tabloids targeted the JSP in the pachinko scandal but opposition targeting of prominent government officials only became prominent ­after the DPJ could challenge the LDP. Note also that the transparency produced by the reforms provided most of the information needed to target individuals. The opposition could choose a few weak links in the government and go through their financial reports looking for something illegal or embarrassing. Though the opposition was often involved in scandal construction, we find that the opposition only began targeting individuals in the government a­ fter 1994 and especially during the period between 2003 and 2012 when a two-­party system was functioning. During the first Abe administration, the DPJ was successful in forcing the resignation of four LDP ministers. When the DPJ came to power, its ministers proved to be easy targets b ­ ecause they lacked significant governing experience. Targeting did not dis­appear ­after 2012, but the second Abe administration has proved better able to manage media coverage of scandals. Turning to the actors that constructed the scandal, we first note the unsurprising fact that the l­egal system played an impor­tant role throughout the postwar period. It is also in­ter­est­ing that two scandals ­were precipitated by members of the governing co­ali­tion, Minister of Health Kan Naoto in the HIV-­tainted blood scandal and Minister of Foreign Affairs Tanaka Makiko in the vari­ous misdeeds of her ministry. Both cases involved a minister blowing the whistle on bureaucratic activities within their respective ministries. It seems likely that only maverick ministers would have had the information necessary to construct t­ hese two scandals.

162 Conclusion

The most in­ter­est­ing pattern is the relative absence of ­either opposition or journalistic activity a­ fter the Black Mist scandals in 1966 ­until the first election a­ fter the reforms in 1996. If one focuses on mainstream Japa­nese journalism, ignoring foreign journalists and tabloids, the pattern is even starker. This is also the era during which serendipity played such a large role in revealing corrupt activity. Though ­these data only concern scandals, the patterns strongly suggest that opposition parties and the mass media w ­ ere not playing the roles normally assigned to them by demo­cratic theory. We should not be surprised that corruption grew worse when neither the opposition nor the mass media had access to the information necessary to investigate governmental corruption.

Po­l iti­c al Corruption and the ­F uture of LDP Rule We have argued that the po­liti­cal reforms of 1994 reduced po­liti­cal corruption in Japan. Obviously, we are not claiming that Japan has eliminated all po­liti­cal corruption or that it has turned into a virtual heaven on earth, only that Japa­nese democracy works better now than it did before. One positive sign ­going forward is that many of the changes made by reform ­will be hard to reverse. Most clearly, as long as the electoral system features SMDs, intraparty competition ­will be rare. SMDs ­will also put pressure on the opposition parties to coalesce in order to unseat the governing co­ali­tion. ­After the 2012 and 2014 elections, it became difficult to imagine how a serious challenge to the LDP could possibly be mounted. The failure of the DPJ was so devastating and the opposition so fragmented that it became easy to assume that the LDP had reestablished single-­party dominance, but t­ here is good reason to expect that dominance to be temporary. Consider the following example from British politics. ­After the British L ­ abour Party was devastated in the 1983 election, many po­ liti­cal commentators doubted that it could e­ very recover. In 1997, however, that party won such an overwhelming victory that many ­were then doubting the Conservatives could ever recover. However, the Conservatives ­were soon back in power. One cannot predict how long it w ­ ill take for a credible alternative to the LDP to emerge again or what form that alternative ­will take, but the pressure to build such an alternative ­will remain strong. In the 2016 upper ­house election, for instance, the opposition parties cooperated on fielding a single candidate to challenge the LDP in the SMDs. The pressures and incentives to cooperate and form alliances to challenge the LDP are not ­going to dis­appear. It would not be surprising to see the LDP revert to past patterns during this period of single-­party dominance, but any such reversion would only hasten the



THE EVOLUTION OF PO­LITI­CAL CORRUPTION AND SCANDALS

163

return of bipolar competition. Since 2012, the LDP has experienced dynamic and effective leadership u ­ nder Prime Minister Abe. Most importantly, the party has allowed Abe to lead, which represents a major shift in Japa­nese politics. Abe has kept the LDP ­behind him despite opposition to many of his policies and dissatisfaction with his leadership style. The experience of three years and three months out of power and fear of another period in opposition keeps them in line but, ­after winning four landslides in the lower and upper h ­ ouse, party unity has begun to weaken. The biggest threat to the LDP in the f­ uture would be a policy failure scandal. The most likely source for such a scandal would be an incompetent and/or corrupt bureaucracy. To prevent such scandals from happening, the party must be able to exercise effective oversight, something it has never done. The party knows that when bureaucratic mismanagement generates a policy failure scandal, the ruling party suffers and can lose an election, while the bureaucrats retreat into the background and escape punishment. ­There are some indications that the LDP is adopting a stronger stance against bureaucratic corruption. In 2017, for example, a government watchdog panel, the Reemployment Surveillance Commission, uncovered systemic efforts within the Ministry of Education, Culture, Sports, Science and Technology to help retiring se­nior officials land postretirement jobs in the practice known as amakudari (Yomiuri, 21 January 2017). To curb the practice, the national public ser­v ice law was revised in 2008 to prohibit current civil servants from using their influence to help find jobs for retiring bureaucrats, but the ministry found ways to circumvent that law. The media has covered the issue extensively and the opposition has attacked the administration for failing to enforce the law. In Diet hearings, the LDP has criticized the bureaucrats almost as severely as the opposition. The Abe administration quickly ordered an investigation that examined e­ very ministry and agency to determine ­whether ­there are other government officials that found jobs with organ­izations or companies that have interests with a ministry or agency. The probe failed to confirm a systematic practice in other ministries or agencies, but did find 27 cases that spanned at least 12 dif­fer­ent organ­izations (Kyodo, 15 June 2017). Though many of the reforms would be difficult to reverse, we do see some efforts by the LDP to limit transparency. First, the passage of the state secrets law in 2013 and the anti-­conspiracy bill in 2017 grants the government new powers. The former, which punishes whistle­-blowers who reveal confidential information, is intended to protect information from falling into the hands of foreign governments, but might also be used to discourage journalists from investigating potential policy failures (Asahi, 15 October 2015). The latter allows authorities to prosecute “criminal organ­izations” of two or more ­people for 277 vari­ous

164 Conclusion

criminal acts. The United Nations special rapporteur on the right to privacy, Joseph Cannataci, warned that the bill w ­ ill “lead to undue restrictions to the rights to privacy and to freedom of expression” (New York Times, 23 May 2017). Second, comments made by LDP leaders also suggest that the government is applying more pressure on the media. In 2016 the minister of internal affairs and communications, Takaichi Sanae, said in a Bud­get Committee meeting that she cannot rule out forcing a broadcasting station to go off the air if they do not follow Article 4 of Japan’s Broadcast Act to be “po­liti­cally fair.” Opposition leaders seized upon her remarks as being draconian and an example of how the Abe government is strengthening its grip over the media. Takaichi l­ater clarified that while she has no plans to resort to such mea­sures, ­future ministers of internal affairs might be dif­fer­ent (Asahi, 10 February 2016), but the discussion itself is a form of po­liti­cal pressure. It is unclear how far the LDP ­will go to pressure or curtail the operations of the mass media, but it is impor­tant to note that the levels of transparency can decrease or increase. A final solution to corruption is as likely as a final solution to viruses, ­either computer or biological. No m ­ atter what the type, t­here is no reason to expect corruption ever to dis­appear completely. Incumbents and governing parties are constantly looking for ways to increase their advantages over challengers and opposition parties. Some individuals are always ready to take advantage of any opportunity. New reforms must be enacted regularly to keep up with the new forms of corruption. The clearest conclusion that we can make is that corruption and scandals w ­ ill continue to evolve, which means that the solutions must evolve as well.

Acknowl­e dgments

The intellectual journey that culminated in this book developed from curiosity about reform and po­liti­cal corruption in Japan and other established democracies. Japan enacted major po­liti­cal reforms in 1994 but most observers, including us, w ­ ere pessimistic that they would make a significant dent in its serious and long-­standing corruption prob­lems. To our surprise we discovered that Japa­nese democracy is working better now than it did before and believe we have made pro­gress ­toward understanding what aspects of the reforms worked and what aspects did not. We thank the many individuals and institutions that helped us tell this story. Work on the core of the book took place during Carlson’s 2012–13 sabbatical when he was a visiting professor at Nanzan and Chuo Universities. Fujimoto Hiroshi and Kamada Osamu ­were excellent hosts, and Reed thanks Chuo University for hosting him during that time. Carlson is grateful to the Department of Po­liti­cal Science and the College of Arts and Sciences at the University of Vermont for supporting this research. Special thanks also go to Candace Smith for helping with reimbursement forms. We discussed some of the ideas and results of this research at the following events: the Workshop on Corruption and Democracy held at the University of British Columbia (June 2007); the Woodrow Wilson Center talk on “Squaring the Iron Triangle: The Fate of Economic and Po­liti­cal Reform in Japan” (January 2010); the conference on “Exploring the Tectonic Change in the Po­liti­cal Economy of Japan” at Yale University (April 2010); the Center for Asian Democracy’s “Asia in Focus” speaker series at the University of Louisville (October 2011); and the Con­temporary Japa­nese Politics Study Group at Harvard University (May 2014). We also published some of the results in Democ­ratization (Taylor & Francis, 2013) and Japan Decides 2012 (Palgrave Macmillan, 2013). We are appreciative to our many colleagues who aided us, among them Daniel Smith, Fujihira Shin, Robert Pekkanen, Kenneth Mori McElwain, and Ellis Krauss. We also thank Tanaka Nobuaki for help with the cover. At Cornell University Press, we thank Roger Haydon, Scott Levine, and Susan Specter, along with the anonymous reviewers for their constructive comments. In addition, we are grateful to Erin Davis and Paul Vincent for getting the manuscript in order. Carlson thanks his Japa­nese and American families for their love and encouragement when this book was being written. Reed is grateful to his wife, Michiko. 165

Appendix A YEN EXCHANGE RATE PER 1 U.S. DOLLAR, 1950–2016

YEAR

JAPA­NESE YEN (¥)

YEAR

JAPA­NESE YEN (¥)

1950

361.1

1984

237.5

1951

361.1

1985

238.5

1952

361.1

1986

168.5

1953

360.0

1987

144.6

1954

360.0

1988

128.2

1955

360.0

1989

138.0

1956

360.0

1990

144.8

1957

360.0

1991

134.7

1958

360.0

1992

126.7

1959

360.0

1993

111.2

1960

360.0

1994

102.2

1961

360.0

1995

94.1

1962

360.0

1996

108.8

1963

360.0

1997

121.0

1964

360.0

1998

130.9

1965

360.0

1999

113.9

1966

360.0

2000

107.8

1967

360.0

2001

121.5

1968

360.0

2002

125.4

1969

360.0

2003

115.9

1970

360.0

2004

108.2

1971

350.7

2005

110.2

1972

303.2

2006

116.3

(cont.) 167

168

Appendix A

YEAR

JAPA­NESE YEN (¥)

YEAR

JAPA­NESE YEN (¥)

1973

271.7

2007

117.8

1974

292.1

2008

103.4

1975

296.8

2009

93.6

1976

296.6

2010

87.8

1977

268.5

2011

79.8

1978

210.4

2012

79.8

1979

219.1

2013

97.6

1980

226.7

2014

105.9

1981

220.5

2015

121.0

1982

249.1

2016

108.8

1983

237.5

Source: Pacific Exchange Rate Ser­vice.

Appendix B PRIME MINISTERS OF JAPAN ­A FTER 1945

NAME

PARTY

DATES

Higashikuni Haruhiko

—­*

17 Aug. 1945–9 Oct. 1945

Shidehara Kijurou

PRO

9 Oct. 1945–22 May 1946

Yoshida Shigeru

LIB

22 May 1946–24 May 1947

Katayama Tetsu

JSP

24 May 1947–10 May 1948

Ashida Hitoshi

DP

10 Mar. 1948–15 Oct. 1948

Yoshida Shigeru

DLP/LIB

15 Oct. 1948–10 Dec. 1954

Hatoyama Ichirou

JDP/LDP

10 Dec. 1954–23 Dec. 1956

Ishibashi Tanzan

LDP

23 Dec. 1956–25 Feb. 1957

Kishi Nobusuke

LDP

25 Feb. 1957–19 July 1960

Ikeda Hayato

LDP

19 July 1960–9 Nov. 1964

Satou Eisaku

LDP

9 Nov. 1964–7 July 1972

Tanaka Kakuei

LDP

7 July 1972–9 Dec. 1974

Miki Takeo

LDP

9 Dec. 1974–24 Dec. 1976

Fukuda Takeo

LDP

24 Dec. 1976–7 Dec. 1978

Oohira Masayoshi**

LDP

7 Dec. 1978–12 July 1980**

Suzuki Zenkou

LDP

17 July 1980–27 Nov. 1982

Nakasone Yasuhiro

LDP

27 Nov. 1982–6 Nov. 1987

Takeshita Noboru

LDP

6 Nov. 1987–3 June 1989

Uno Sousuke

LDP

3 June 1989–10 Aug. 1989

Kaifu Toshiki

LDP

10 Aug. 1989–5 Nov. 1991

Miyazawa Kiichi

LDP

5 Nov. 1991–9 Aug. 1993

Hosokawa Morihiro

JNP

9 Aug. 1993–28 Apr. 1994

Hata Tsutomu

JRP

28 Apr. 1994–30 June 1994

(cont.) 169

170

Appendix B

NAME

PARTY

DATES

Murayama Tomiichi

JSP

30 June 1994–11 Jan. 1996

Hashimoto Ryuutarou

LDP

11 Jan. 1996–30 July 1998

Obuchi Keizou

LDP

30 July 1998–5 Apr. 2000

Mori Yoshirou

LDP

5 Apr. 2000–26 Apr. 2001

Koizumi Junichirou

LDP

26 Apr. 2001–26 Sept. 2006

Abe Shinzou

LDP

26 Sept. 2006–26 Sept. 2007

Fukuda Yasuo

LDP

26 Sept. 2007–24 Sept. 2008

Asou Tarou

LDP

24 Sept. 2008–16 Sept. 2009

Hatoyama Yukio

DPJ

16 Sept. 2009–8 June 2010

Kan Naoto

DPJ

8 June 2010–2 Sept. 2011

Noda Yoshihiko

DPJ

2 Sept. 2011–26 Dec. 2012

Abe Shinzou

LDP

26 Dec. 2012–­

Notes: * = Imperial f­amily; ** = died in office (Itou Masayoshi served as interim prime minister); DLP =  Demo­cratic Liberal Party (Yoshida’s party ­until Feb. 1949); DP = Demo­cratic Party; DPJ = Demo­cratic Party of Japan; JDP = Japan Demo­cratic Party (Hatoyama’s party ­until Nov. 1955); JNP = Japan New Party; JRP = Japan Renewal Party; JSP = Japan Socialist Party; LDP = Liberal Demo­cratic Party; LIB = Liberal Party; PRO = Progressive Party.

Appendix C ASAHI’S INVESTIGATION INTO ELECTION VIOLATIONS IN THE 1960S

Candidates Explain Why They Cheated (Asahi, 17–19 December 1960)   1. “The amount was small . . . ​I stay within the expenditure limit . . . ​The newspapers played this up too much. It makes voters worry.”   2. “I am not yet used to r­ unning a campaign.”   3. “I am a new candidate ­running without the nomination. My campaigners seem to have gone a bit overboard.”   4. “My secretaries prob­ably spent my money. . . . ​The newspapers should not play this up so much.”   5. “The day before I won, I provided sake and they said it was a violation. Seventy ­percent of ­people pres­ent ­were from other camps.”   6. “My opponent reported minor violations to the police. All of the other candidates prob­ably had to do the same ­thing.”   7. “I apologize for the violations. . . . ​This is my first campaign so my campaigners are still beginners.”   8. “I gave them 200 yen for gasoline but, ­because I forget to get a receipt, they called it vote buying. . . . ​I feel a moral responsibility.”   9. When asked about the yakuza who campaigned for him, the candidate responded: “The Nakatani group is an organ­ization of gentlemen. You should ­really go and investigate this point yourself.” 10. “I just give speeches. I know nothing about the conduct of the campaign but I feel responsible.” 171

172

Appendix C

11. “I apologize to the voters. They worked so hard for my election. Putting aside the ­legal prob­lems, I am so thankful that the tears well up in my eyes.” 12. “We campaigned in other candidates’ bailiwicks (jiban) and that seems to have caused friction. . . . ​Any expense might be interpreted as vote buying. It is scary. ­There is a prob­lem with the way the law is enforced.” 13. “Every­one worked so hard and some seem to have gone overboard. It was mainly the youth group.” 14. “It is a shame that p ­ eople so committed to my election got arrested.” 15. “My ­people w ­ ere so focused on my election that they overdid it. Of course, I bear some responsibility.” 16. “Conservative parties have no organ­ization so one must pay some expenses to mobilize campaign workers. It is sad that p ­ eople who worked so hard w ­ ere punished.” 17. “My campaign workers ­were all amateurs and did not know the law.” 18. “The ­women’s group provided tea and cakes.” 19. “Election law violations are a necessary evil. . . . ​It is a prob­lem with the way the law is enforced.” 20. “My workers ­were enthusiastic.” 21. “My camp was not the worst. We prob­ably committed the fewest violations.” 22. “­People ­were focused on getting me elected.” 23. “I was not familiar with all of the laws. . . . ​I am truly sorry.” 24. “My campaigners lacked training. When you gather young p ­ eople together, they are likely to drink a bit of sake.” 25. “I am truly sorry. We accepted too many gifts of sake during the election.”

LDP Candidates, Relatives, Campaign Workers, and Secretaries Caught Cheating in 1967 (Asahi, 25 Februar y 1967; * = arrested)   1. Candidate canvassed 16 prefectural offices.   2. Candidate investigated for violation connected to campaign pamphlet.   3. ­Brother gave tens of thousands of yen to 4 p ­ eople.*   4. ­Brother gave hundreds of thousands of yen to campaigners.   5. ­Brother gave tens of thousands of yen to campaigners.*   6. ­Brother gave 2.5 million yen to campaigners.*   7. ­Brother gave 3 million yen to dozens of ­people.*



Appendix C

173

  8. Brother-­in-­law gave 5,000 yen to ­campaigners.*   9. Brother-­in-­law mailed cash to dozens of ­people.* 10. ­Father gave 2,000 yen to a friend. 11. ­Mother gave tens of thousands of yen to members of the youth ­association. 12. Mother-­in-­law gave towels to several voters.* 13. Nephew gave 500,000 yen to campaigners. 14. ­Sister instructed campaigners to canvass 200 com­pany employees. 15. Son canvassed ten homes. 16. Son gave tens of thousands of yen to campaigners.* 17. Son gave hundreds of thousands of yen to several v­ oters.* 18. Son-­in-­law gave tens of thousands of yen to c­ ampaigners.* 19. Son-­in-­law gave 3 ­bottles of sake to the volunteer fire brigade. 20. Wife canvassed over 20 homes. 21. Wife canvassed 25 homes. 22. Wife gave 1 million yen to campaigners.* 23. Wife gave hundreds of thousands of yen to campaigners. 24. Wife canvassed dozens of homes. 25. Campaign man­ag­er gave 1.5 million yen to 6 ­people.* 26. Campaign chief treated 70 p ­ eople to goods worth 100,000 yen.* 27. Campaign man­ag­er gave 1 million yen to 25 other workers.* 28. Adviser gave hundreds of thousands of yen to campaigners.* 29. Campaign worker gave 1.6 million yen to other workers.* 30. Campaign man­ag­er gave 400,000 yen to other workers.* 31. Kouenkai official gave hundreds of thousands of yen to other campaigners.* 32. Campaign chief gave tens of thousands of yen to campaigners. 33. Kouenkai official gave tens of thousands of yen to campaigners.* 34. Accounts man­ag­er gave tens of thousands of yen to campaigners.* 35. Election man­ag­er canvassed 16 prefectural offices with the candidate. 36. Adviser gave 20,000–30,000 yen to several city assembly members. 37. Kouenkai official treated dozens of voters.* 38. Campaign man­ag­er gave 300,000 yen to several ­people.* 39. Campaign man­ag­er gave 500,000 yen to several ­people.* 40. Accounts man­ag­er gave tens of thousands of yen to several p ­ eople.* 41. Accountant received 800,0000 yen for buying votes.* 42. Accounts man­ag­er gave hundreds of thousands of yen to former mayor.* 43. Secretary gave 1.6 million yen to more than 10 ­people.* 44. Secretary gave over 300,000 yen to more than 10 p ­ eople.* 45. Secretary treated more than 10 ­people.* 46. Secretary treated more than 20 ­people.* 47. Secretary gave alcohol and cash to 21 p ­ eople.*

174

Appendix C

48. Secretary gave 100,000 yen to 3 ­people.* 49. Secretary treated 40 ­people. 50. Secretary gave health medicine to 4 ­people.* 51. Secretary canvassed 7 homes.* 52. Secretary sent 4,000 illegal tele­grams.* 53. Secretary gave hundreds of thousands of yen to campaigners.* 54. Secretary gave 300,000 yen to campaigners.* 55. Secretary gave 50,000 yen to campaigners.* 56. Secretary gave hundreds of thousands of yen to voters.* 57. Secretary gave tens of thousands of yen to campaigners.* 58. Secretary gave tens of thousands of yen to campaigners. 59. Secretary gave tens of thousands of yen to campaigners.* 60. Secretary gave tens of thousands of yen to campaigners.* 61. Secretary handed out 60 tickets to a concert.* 62. Secretary accepted hundreds of thousands of yen.* 63. Secretary handed out money for food and drink.* 64. Secretary gave 100,000 yen to the head of the kouenkai.* 65. Secretary canvassed and distributed gift towels.* 66. Another secretary canvassed and distributed gift towels.* 67. Secretary gave tens of thousands of yen to city assembly members.* 68. Secretary gave hundreds of thousands of yen to city assembly members.* 69. Secretary gave tens of thousands of yen to city assembly members.* 70. Secretary gave 1 million yen to city assembly members.* 71. Secretary gave money to a newspaper delivery person.* 72. Secretary gave more than 1,000 yen to several ­people.* 73. Secretary gave tens of thousands of yen to several p ­ eople. 74. Secretary gave 500 yen and alcoholic drinks to several hundred ­people.* 75. Secretary sent congratulation tele­grams to new voters. 76. Secretary distributed large amounts of money for vote buying.* 77. Secretary gave 30,000 yen to the head of an organ­ization.* 78. Secretary treated town assembly members.* 79. Secretary sent over 20,000 tele­grams.* 80. Secretary distributed money for buying votes.* 81. Secretary gave 500 yen each to 200 ­house­wives.*

References

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Index

Note: Page numbers in italics indicate figures; t­ hose with a t indicate ­tables. Abe Fumio, 56 Abe Shinzou, 69, 77–79, 86–90; cabinet of, 154–55, 161; Recruit scandal and, 49; successes of, 163; on w ­ omen’s rights, 87 Abe Takeshi, 104n4 Afghan aid conference (Tokyo 2002), 70 Aikawa Kinjirou, 143 Aizawa Shigeaki, 35 Akagi Norihiko, 79 All Japan Coal Mine Control Committee, 29 All Nippon Airways (ANA), 41, 94 amakudari sinecures, 15, 95–98, 102. See also bureaucratic corruption Amari Akira, 88–89, 154, 155 Ames, Walter L., 134 Anshin Zaidan (Peace of Mind Foundation), 61n11 Aoki Ai, 119 Aoki Ihei, 55 Arita Jirou, 31 Armitage, Richard, 99 Asakawa Akio, 100–101 Ashida Hitoshi, 28, 30; coal mine scandal and, 30; Shouwa Denkou scandal and, 28, 30 Asou Tarou, 80, 106 Australia, 9 “bad apple” corruption, 12–13, 17, 24, 159; punishing of, 67, 151, 157–58 “best-­loser” provision, 137 bid rigging, 3, 58, 78; by construction companies, 21–22, 93 bipolar competition, 8, 68–69, 153, 163 “Black Mist” scandals (1966), 35–37, 43, 47t, 157, 158 blackmail, 35 Blair, Tony, 70 bribery, 3, 14, 30, 134, 160–61; by Fuji Heavy Industries, 140–41; ­legal definition of, 49; “mediation,” 61, 74; of Nakamura Kishirou, 58–59; of Nakao Eiichi, 60–61; prosecution of, 32, 43–44, 61; in Recruit scandal, 50; of

Suzuki Muneo, 71–74. See also Lockheed scandal (1976) Bridgestone Corporation, 83 bud­get screening pro­cess ( jigyou shiwake), 97 bureaucratic corruption, 16, 18, 92–112, 157, 163; amakudari sinecures as, 15, 95–98, 102; Matsuo Katsutoshi and, 92; slush funds and, 18, 98–103, 157; Yamashita Steamship scandal and, 31 bureaucratic inefficiency, 92, 97, 111–12 buying access, 45–47, 47t, 160; KDD scandal and, 47–49; pachinko scandal and, 52–53; Recruit scandal and, 49–52; Sagawa Kyuubin scandal and, 54–58 campaign finance laws, 48–49, 79, 83, 124–30, 154; reform of, 89–91, 127–30. See also election law violations Cannataci, Joseph, 164 Carey, John, 136–37, 137t, 143, 146, 152 Central Cooperative Bank for Agriculture and Forestry, 35 Chirac, Jacques, 23 Church, Frank, 40–41, 43 Chuuseiren federation, 143 coal mine nationalization scandal (1948), 28–30, 44; bureaucrats linked to, 94; politicians linked to, 33t, 47t construction companies, 3, 33t, 56; bid rigging by, 21–22, 93; Matsuoka Toshikatsu’s scandal with, 78–79; Nakamura Kishirou’s scandal with, 58–59; Nakao Eiichi’s scandal with, 60–61; in Northern Territories, 71; Suzuki Muneo’s scandal with, 72 Corrupt Practices Act (US), 28 corruption, 4–7; “bad apple,” 12–13, 17, 24, 67.151, 157–59; definitions of, 11–16, 92, 151, 160; democracy and, 151, 162; evolving forms of, 159–64; types of, 16–23. See also scandals Corruption Perceptions Index (CPI), 8–9, 134 “Costa Rica” agreement, 73n3, 137n10, 139 185

186 INDEX

crime syndicates, 135; Nakao Eiichi scandal and, 60; Sagawa Kyuubin scandal and, 54; Tanaka Keishuu scandal and, 85–86

Eto Akinori, 87n9 extortion, 35, 38, 45, 54 Ezoe Hiromasa, 49–51

Daiwa Securities, 50n6 dangou (“agreement by consultation”), 22, 96 De Graaf, Gjalt, 12 defense ministry scandals, 101–3 della Porta, Donatella, 14 Demo­cratic Liberal Party (DLP), 30–32 Demo­cratic Party of Japan (DPJ), 3, 29n12, 68; campaign finance scandals of, 129; fall of, 7, 81–86; formation of, 29n12, 67; Fukushima nuclear accident and, 3, 84–86, 107–11; Hatoyama ­family and, 83; Himei Yumiko and, 118; Japan Dentists Federation and, 148–49; “orga­nizational mea­sures” expenses of, 19–20; pension scandal and, 75, 105, 106 Demo­cratic Socialist Party (DSP), 29n12, 53 Denmark, 9 dentists. See Japan Dentists Federation (JDF) divorce, 118 Doi Takako, 36, 52, 115, 116 Douglas Aircraft, 41 “dual candidacy,” 137 Duverger’s law, 68–69, 153

Federal Corrupt Practices Act (US), 28 Federal Election Commission (US), 127 Federation of Economic Organ­izations (Keidanren), 32 Finland, 9 Flick Affair, 12, 23 Ford, Gerald, 40 Foundation for Promoting Welfare of In­de­pen­ dent Entrepreneurs. See KSD scandal (2001) France, scandals in, 12, 19 Fuji Heavy Industries, 140 Fujinami Takao, 51, 60 Fukuda Yasuo, 75, 79, 106 Fukuoka Masayuki, 37n18 Fukushima nuclear accident (2011), 7, 84–86, 107–11 Fukushirou Nukaga, 102 Funada Hajime, 117–18

Eating Habits Association (Nihon Shokuseikatsu Kyoukai), 97 Economic Stabilization Board (ESB), 26–27 election law violations, 2, 38–39, 57–58, 131–50; Asahi’s investigations on, 132n3, 134–36, 143–44; decline in, 22–23, 145; excuses for, 134–35, 171–72; in House of Councillors, 137t, 143–47, 145, 149; in House of Representatives, 136–39, 137t, 138; by Nakao Eiichi, 60; National Police Agency on, 20, 131–32, 144; reform of, 46; spike in, 10, 13, 138, 144–45, 145; as standard operating procedure, 131, 133–34, 148; by Tokuda Takeshi, 121; in United Kingdom, 13, 23. See also campaign finance laws Elf Aquitaine scandal, 19 embarrassment scandals, 5–6, 69, 84–85, 113, 130 embezzlement, 3, 14; in KDD scandal, 47–48; by Matsuo Katsutoshi, 92, 98–99, 101; of slush funds, 18–20, 98–103 Emergency Coal Industry Control Law (1947), 29 Endou Takehiko, 79 espionage-­sex scandal, 118 Esser, Frank, 23 Esumi Makiko, 75

gaikaku dantai (“satellite organ­izations”), 62 gambling. See pachinko scandal (1989) Gengou Tsuboi, 31 Germany, 96; campaign costs in, 124; election law violations in, 13; Flick Affair in, 12, 23; Kohl scandal in, 12; Lockheed scandal in, 40 Golden, Miriam A., 15n4 golf clubs, 47–48, 98 Goodin, Robert, 15 Green Cross Corporation (Midori Juuji), 64, 104 Grumman-­McDonnell scandal, 48 guilt-­by-­association provision (renzasei), 142 Hachiro Yoshio, 85 Harada Ken, 51 Harada Kouji, 18–19 Hasegawa Shin, 55 Hasegawa Takashi, 51 Hashimoto Ryuutarou, 118 Hashimoto Tomisaburou, 40; Japan Dentists Federation scandal of, 76–77, 148 Hashimoto Tooru, 86 Hata Megumi, 117–18 Hata Tsutomu, 57 Hatoyama Ichirou, 31, 36 Hatoyama Yukio, 81–84 Healthy Eating Association (Sukoyaka Shokuseikatsu Kyoukai), 97 Heo Young-­joong, 60

INDEX 187

Himei Yumiko, 118 Hirano Hirofumi, 19n5 HIV-­tainted blood scandal (1996), 64–65, 67, 96, 104, 111, 161 Hokkaido Development Agency, 56, 72 Horinouchi Hisao, 116 Hosokawa Morihiro, 57 Hosono Goushi, 123 House of Councillors elections: of 1959, 143; of 1962, 144–45; of 1971, 144; of 1974, 38–39, 145, 149; of 1983, 146; of 1989, 53, 116; of 2001, 63, 70, 146; of 2007, 105–6; of 2016, 162 House of Representatives elections: of 1947, 26; of 1949, 30; of 1955, 31; of 1958, 34; of 1960, 35, 134, 138; of 1963, 138; of 1967, 36; of 1976, 42; of 1980, 42, 48; of 1990, 65; of 1993, 3, 46, 57; of 1996, 66, 127; of 2003, 153; of 2005, 70; of 2009, 69, 83, 86, 106; of 2012, 68, 86, 111; of 2014, 88 housing loan scandal (1996), 65–66, 96, 104

Japan Dentists Federation (JDF), 76–77, 144, 147–49 Japan Fair Trade Commission, 59 Japan Food Specialist Association (Nihon Fu-do Supesiarisuto Kyoukai), 97 Japan Highway Public Corporation, 98 Japan Innovation Party (JIP), 86 Japan New Party, 57 Japan Newspaper Publishers and Editors Association, 37n17 Japan Pension Ser­v ice (JPS), 106–7, 157. See also pension scandals Japan Restoration Party (Nippon Ishin no Kai), 86 Japan Socialist Party (JSP), 35, 36; coal industry nationalization and, 29; Demo­cratic Party of Japan and, 29n12; KDD scandal and, 47; pachinko scandal and, 52–53 Johnson, David T., 1; on police slush funds, 18; on public prosecutors, 32 juusen. See housing loan scandal (1996)

Ibuki Bunmei, 78 Ikeda Hayato, 31, 44 Ikeda Katsuya, 51 Inagawa-­kai crime syndicate, 54 Indonesia, 96 infidelity, 114–20, 123. See also sex scandals Inoguchi Takeshi, 94n1 Inose Naoki, 142 insider trading, 49–51 Institute of Technologists (Monotsukuri Daigaku), 62 International Telephone and Telegraph Com­pany. See KDD scandal (1979) Internet campaigning, 133 Inukai Takeru, 31 Iraq War, 103 Ishibashi Sangyou com­pany, 60 Ishibashi Shoujirou, 83 Ishii Midori, 148–49 Ishikawa Masumi, 27n7 Ishikawa Tomohiro, 73 Italy, 14; campaign finance in, 13, 124; Lockheed scandal in, 40; mani pulite investigations in, 24 Itoman Corporation scandal, 60

Kajima Corporation, 58–59 Kanbayashiyama Eikichi, 36 Kaneko Megumi, 119 Kanemaru Shin, 1, 67, 157; Nakamura Kishirou and, 58; Ozawa Ichirou and, 81; Sagawa Kyuubin scandal and, 54–56, 66, 67; Tanaka Kakuei and, 38 kan-­kan settai (“local officials wining and dining national bureaucrats”), 65–66 Kan Naoto, 64, 67, 83–86, 161; on bureaucratic corruption, 104; Fukushima nuclear accident and, 84, 107, 109; Ozawa Ichirou and, 83–84; pension scandal and, 75 Katayama Tetsu, 29 Kawabata Tatsuo, 122 KDD scandal (1979), 47–49, 66; bureaucrats linked to, 93; politicians linked to, 47t ­Kenya, 71 kickback schemes, 14, 15; Sagawa Kyuubin scandal and, 54, 56; Shouwa Denkou scandal and, 28; taxi ­drivers and, 105. See also Lockheed scandal (1976) Kobayashi Hiromu, 100 Kodama Yoshio, 41 Kohl, Helmut, 12 Koizumi Junichirou, 69–77, 86, 99 Komeito Party: LDP co­ali­tion with, 68, 74, 86n8, 88, 106; pachinko scandal and, 53; pension scandal and, 75; Recruit scandal and, 51 Korean residents in Japan, 52, 84 Korean War, 30

Japan Broadcasting Corporation, 71 Japan Citizens’ Ombudsman Association, 17 Japan Communist Party (JCP), 3, 19–20; pension scandal and, 75 Japan Dental Association (JDA), 76, 147

188 INDEX

Koseki Tadao, 62, 63 kouenkai, 33–34, 44, 59; of Nakajima Youjirou, 139, 140; of Nishimura Masami, 148; of Obuchi Yuuko, 87; of Ozawa Ichirou, 81; of Tokuda Takeshi, 121 Kouno Youhei, 42, 99 Kounoike Yoshitada, 118–19 Koyama Takao, 62–63 KSD scandal (2001), 33t, 61–64, 96 Kurer, Oskar, 11 Kurokawa Kiyoshi, 108 Kurusu Takeo, 28 Kushida Kenji E., 107 Kyouwa steel frame com­pany, 56 Kyouwa sugar refining com­pany, 35 Kyuuma Fumio, 79, 102 Liberal Demo­cratic Party (LDP), 2, 43–44, 154–56; “Black Mist” scandals of, 35–37; campaign finance scandals of, 128–29; election law violations by, 133–47, 156; election reforms of, 46; fall of, 7–8, 66, 77–80, 116; formation of, 31; as franchise party, 33–34, 44; ­future of, 162–64; Japan Dentists Federation and, 144, 147–49; Komeito co­ali­tion with, 68, 74, 86n8, 88, 106; kouenkai and, 33–34, 44; KSD scandal and, 62–64; “orga­nizational mea­sures” expenses of, 19–20; pachinko scandal and, 53; Recruit scandal and, 49, 116; return to power of, 86–89 Lockheed scandal (1976), 1, 39–43, 66, 160; bureaucrats linked to, 94; election ­after, 36, 42; politicians linked to, 33t, 47t, 157; scandals ­after, 45 “lost pensions.” See pension scandals MacArthur, Douglas, 27n4 Maehara Seiji, 85 Malaysia, 96 Maritime Self-­Defense Forces, 140 Marubeni Trading Com­pany, 41–42 Matsubara Hiroshi, 50 Matsumoto Ryuu, 84 Matsumura Akihito, 104n4 Matsuno Raizou, 35, 48 Matsuo Katsutoshi, 19, 92, 98–99, 101 Matsuoka Toshikatsu, 78–79, 155 Matsushima Midori, 87 Matsushita Renzou, 104n4 McDonnell Douglas Corporation, 48n3 “mediation bribery” (assen shuuwaizai), 61, 74 Miki Takeo, 39–44

Mitsubishi Group, 29n13, 38 Mitsui Corporation, 29n13, 41 Miyazaki Kensuke, 119, 123 Miyazawa Kiichi, 49, 51, 56–57 Miyazawa Youichi, 122–23 Mizuno Kenichi, 61 Mizutani Makoto, 100 mobilization campaigns, 133 Mori Yoshirou, 73n3 Moriya Takemasa, 102–3, 111 Murakami Masakuni, 62–63 Nagatsuma Akira, 105 Nakagawa Hidenao, 123 Nakagawa Ichirou, 73 Nakagawa Shouichi, 73, 80 Nakai Hiroshi, 119 Nakajima Gentarou, 139 Nakajima Youjirou, 139–41 Nakamura Kishirou, 33t, 58–60, 90 Nakanishi Kazuyoshi, 120–21, 155 Nakanishi Mitsuko, 115 Nakano Koichi, 96n2 Nakao Eiichi, 33t, 60–61, 90, 96 Nakao Hiroshi, 55 Nakasone Yasuhiro, 55 Nakatani-­gumi, 135 Nakayama Nariaki, 80 Narazaki Yanosuke, 49–50 National Federation of Entertainment Associations, 52 National Police Agency (NPA): on election law violations, 20, 131–32, 144; Shouwa Denkou scandal and, 28; slush funds of, 18–19 National Public Safety Commission, 132 NEC Corporation, 102 Netherlands, 40 New Frontier Party (NFP), 65, 81; Himei Yumiko and, 118; housing loan scandal and, 104 New Liberal Club (NLC), 36, 42, 44, 46 New Party Daichi (Shintou Daichi), 73 New Party Sakigake (Shintou Sakigake), 57, 64, 83 Nico Electronics, 102 Ninomiya Yoshitomo, 93–94 Nippon Housou Kyoukai (Japan Broadcasting Corporation), 71 Nippon Telegraph and Telephone (NTT), 51 Nishida Shouji, 85 Nishikawa Kouya, 88 Nishimatsu Construction scandal (2009), 81–82 Nishimura Masami, 148–49 Nishio Suehiro, 28 Nishioka Kensuke, 115

INDEX 189

Nisshou-­Iwai Corporation, 48 Nonaka Hiromu, 19n5 Nonomura Ryuutarou, 20 Nuclear Accident In­de­pen­dent Investigation Commission (NAIIC), 108 Nuclear and Industrial Safety Agency (NISA), 108 Nukaga Fukushirou, 63 Nyblade, Ben, 27n6 Obuchi Keizou, 63 Obuchi Yuuko, 87, 154 oil shock of 1973, 94 Ookubo Takanori, 82 Oota Seiichi, 80, 120, 123 or­ga­nized crime. See crime syndicates Osano Kenji, 35, 41 Ozawa Ichirou, 57, 81–82, 157; Aoki Ai and, 119; housing loan scandal and, 65; Kan Naoto and, 83–84; kouenkai of, 81; Nishimatsu Construction scandal and, 81–82; pachinko scandal and, 53; as “shadow shogun,” 82; Tanaka Kakuei and, 38 pachinko scandal (1989), 47t, 52–53, 75, 161 party subsidies, 19–20, 89, 126, 127n13, 130, 154; laws on, 90, 125, 126n12, 140–41 paternity leave, 119, 123 patronage system (US), 22 pension scandals, 7, 74–77, 105–7, 112, 157 ­People’s Life First Party (Kokumin no Seikatsu ga Daiichi), 82 persuasion campaigns, 133 police. See National Police Agency (NPA) policy failure scandals, 7, 16, 25, 91 Po­liti­cal Funds Control Law (1948), 76, 125; foreign donations and, 52; Miki’s revisions of, 39, 44; Miyazawa’s revisions of, 56; postreform scandals of, 127–30; revisions to, 125–26, 148; Suzuki Muneo and, 72–73 Po­liti­cal Parties, Elections, and Referendums Act 2000 (UK), 5 postal privatization bill, 70 Powell, Colin, 99–100 press clubs, 37 principal-­agent framework, 14 Priority Production System, 26 prostitution laws, 33t, 34, 47t public interest corporation (koueki houjin), 63 quangos, 96–97 Reconstruction Bank, 27–29, 93–94 Recruit Cosmos, 49–50

Recruit scandal (1988), 1–2, 24, 49–52, 66–67, 160; bureaucrats linked to, 94; election ­after, 36; politicians linked to, 33t, 47t Reed, Steven R., 27n6 Reemployment Surveillance Commission, 163 Renewal Party (Shinseitou), 57 Rikuzankai fund management group, 82 Sagawa Kiyoshi, 54, 56 Sagawa Kyuubin scandal (1992), 1–2, 47t, 54–58, 66, 67, 160 Saitama Doyou-­kai, 59 Saitou Kunio, 19 Sasagawa Takashi, 120, 123 Sasaki Kenshou, 71–72, 128 Sata Genichirou, 78, 121 “satellite organ­izations” (gaikaku dantai), 62 Satou Eisaku, 31, 32, 36, 44 Satou Takayuki, 40 Satou Yukari, 118n6 Saudi Arabia, 99 savings and loans scandal (US), 65 scandals, 4–7; “Black Mist,” 36–37, 43, 47t, 157, 158; construction of, 6, 23–24, 48–49, 129; definitions of, 4, 23; embarrassment, 5–6, 69, 84–85, 113, 130; evolving forms of, 159–64; policy failure, 7, 16, 25, 91; po­liti­cal reforms ­after, 24, 46, 48; sex, 6, 16, 52, 113–26. See also corruption Schlesinger, Jacob, 37n18 “secret funds” (kimitsuhi), 19, 98, 101 Securities and Exchange Law (1988), 51 Sekou Kouichi, 26n3 September 11 attacks, 101 sex scandals, 6, 52, 113–26; consequences of, 123; definitions of, 16, 114; espionage and, 118; evolution of, 116–17; infidelity and, 114–20, 123 Sherman, Lawrence W., 4n3 Shimada Construction com­pany, 72 shingikai (“deliberative councils”), 44 Shintou Sakigake (New Party Sakigake), 57, 64, 83 Shiokawa Masajurou, 19n5 shipbuilding scandal (1954), 30–32, 36, 43, 44; bureaucrats linked to, 94, 158; Lockheed scandal and, 41; politicians linked to, 33t, 47t, 158 Shouwa Denkou scandal (1948), 27–28, 30, 33t, 47t, 94, 158; Lockheed scandal and, 41 Shugart, Matthew, 136–37, 137t, 143, 146, 152

190 INDEX

slush funds (uragane), 3, 14, 18–20, 98–103, 157; estimates of, 17–18; in KDD scandal, 47–48 smuggling, 47, 48 Social Demo­cratic League, 50 Social Demo­cratic Party (SDP), 29n12, 73–74 Social Insurance Agency (SIA), 7, 74–76, 105–7, 157 social media campaigning, 133 soshiki taisakuhi (“orga­nizational mea­sures”), 19–20 standard operating procedure (SOP) corruption, 14, 17–21, 151; campaign finances and, 124; defense procurements and, 102–3; election law violations as, 124, 131, 133–34, 148; fictitious jobs as, 74; reforms of, 82; smuggling as, 48; of Suzuki Muneo, 74; transparency of, 21, 151, 154–57, 159 stock scandals, 1, 49–51 Strauss, Franz Josef, 40 Sugaoka, Kei 108n7 Super ­Free gang, 120 Supreme Commander for the Allied Power (SCAP), 27–29 Suzuki Muneo, 19, 33t, 81, 90, 96; Sasaki Kenshou and, 71–72; scandals of, 70–74, 128, 157; Tanaka Makiko and, 70–71, 99, 101 Suzuki Zenkou, 53 systemic corruption, 21–23, 151; bureaucratic, 92, 95–98, 157, 163; election law violations as, 124, 133–34; structural reform of, 151–53, 159 Taagepera, Rein, 153 Tachibana Takashi, 39 Takahashi Takeo, 55 Takaichi Sanae, 164 Takebe Tsutomu, 73 Takemura Masayoshi, 57 Takeshita Noboru, 1, 49, 51–52, 54–55 Tanaka Kakuei, 7–8, 13, 25, 37–43, 85–86, 157–59; “Black Mist” scandals and, 35, 157; coal mine scandal and, 29–30, 44; company-­ organized campaigning by, 145; Lockheed scandal and, 1, 33t, 39–43, 66, 157; mistresses of, 115n1; “money-­power politics” scandal of, 38–39, 66, 157; Nakamura Kishirou and, 58; Ozawa Ichirou and, 81; resignation of, 38, 39, 157 Tanaka Makiko, 19, 74; as foreign affairs minister, 99–101; Mori Yoshirou and, 100; Suzuki Muneo and, 70–71, 98, 101; on zoku giin, 95, 101

Tanaka Mieko, 119 Tanaka Shouji, 35 tax evasion, 3, 55–56 Thatcher, Margaret, 116 Thompson, John B., 16 Toida Saburou, 53 Tokuda Takeshi, 121, 141–43 Tokuda Torao, 141 Tokushuukai Group, 141–42 Tokyo Electric Power Com­pany (TEPCO), 107–9, 157 Tomorrow Party of Japan (Nippon Mirai no Tou), 82 Toshiki Kaifu, 53 Touhoku earthquake, tsunami, and nuclear disaster (2011), 84, 85, 107–11 Toyama City Assembly scandal, 20 Toyo Communications Equipment, 102 Trans-­Pacific Partnership, 88 transparency, 24, 49, 77n4, 104, 152, 159; ­after campaign finance reforms, 89–91, 127–30; limits of, 66, 156–57, 163–64; of po­liti­cal finance system, 126n11; of SOP corruption, 21, 151, 154–57, 159 Transparency International, 8–9, 134 Tsujimoto Kiyomi, 73–74 Tsutsui Nobutaka, 128–29 United Kingdom, 29, 35, 97–98, 162; campaign costs in, 124; election law violations in, 13, 23; mobilization campaigns in, 133 Uno Sousuke, 51–52, 114–16 uragane. See slush funds Usuda Sadao, 76 Vannucci, Alberto, 14, 151 vote buying, 3, 134–35, 140–44, 147–48, 171–74 Wakachiku Construction, 60 Warner, Carolyn M., 23 Warren, Mark E., 12, 15n3 Waseda University, 120 Watanabe Hiroyasu, 54, 56 Watergate scandal, 12 whistle-­blowers, 20, 23, 78, 108, 161, 163 yakugai eizu (HIV-­tainted blood) scandal (1996), 64–65, 67, 96, 104, 111, 161 yakuza. See crime syndicates Yamada Youkou Corporation, 103 Yamamoto Kenji, 27n7 Yamarin lumber com­pany, 71, 72, 96

INDEX 191

Yamasaki Taku, 123 Yamashita Steamship Com­pany, 31 Yamashita Tokuo, 116 Yanagida Minoru, 84 Yanagisawa Hakuo, 120, 123 Yatsu Yoshio, 139 Yoshida Shigeru, 30, 31, 36

Yoshida Yukihiro, 76 Yoshinaga Yuusuke, 40n19, 50 zaibatsu (“financial cliques”), 29n13 zenekon (“general contractors”) scandal, 33t, 56, 58. See also construction companies zoku giin (“policy tribesmen”), 70, 72, 94–95, 101