The LDP slush fund scandal: What will make politicians accountable?

Tremors ran through Japan’s political scene when a member of the Diet was arrested for violating the Political Funds Control Act. In the slush fund scandal concerning political fundraising parties held by Japan’s ruling Liberal Democratic Party leading faction, the faction’s accounting manager has been indicted. The LDP’s Political Reform Headquarters has compiled an interim report for rectifications, but it has not gone so far as to abolish factions and political fundraising parties, which the opposition parties are fiercely pursuing in the regular Diet session. Why are scandals around “politics and money” so common? How should politics change? We asked FUJIMURA Naofumi, a professor at the Graduate School of Law who specializes in political science.

Organization-wide non-compliance

How did you react to the recent slush fund scandal over LDP factions’ political fundraising parties?

Fujimura: I was surprised. In general society, compliance is a matter of course, but politicians are violating laws. The peculiarity of this case is not that individual lawmakers violated the law, but that factions of the LDP, as an organization, violated it, which is a very serious problem.

In January of this year, the Tokyo District Public Prosecutors Office arrested a member of the Diet and his secretary, and indicted or summarily indicted eight others, including another member of the Diet and the faction’s accounting manager, for violating the Political Funds Control Act (on misstatements). On the other hand, the Abe faction’s senior Diet members, known as the “Gang of Five,” were not charged, on the grounds that the secretariat was responsible for preparing the balance reports on political funds. How do you see this investigation result?

Fujimura:  It’s a very puzzling result and regrettable. It is an endorsement that, for slush funds up to this amount and for this degree of proven involvement of lawmakers, no charges will be brought forward. In fact, the number of lawmakers who came forward after the indictment increased. Former Economy, Trade and Industry Minister NISHIMURA Yasutoshi (elected from Hyogo Prefecture) even clearly stated, “There is no diversion for personal use, so it’s not a slush fund.” In his constituency of Akashi City, he distributed flyers stating, “I have used the funds for political purposes. Therefore, this is not a slush fund at all,” but changing the definition of slush funds to defend himself is by no means justifiable.

In response to this situation, the LDP’s Political Reform Headquarters, headed by Prime Minister Kishida, has compiled an interim report on party reform and announced a policy to preserve factions as “policy groups.” How do you evaluate the faction issue?

Fujimura: I think we can give some credit for the fact that factions have lost their role of a fund management organization, so they are no longer able to collect funds. However, the factions were revived after being dissolved in 1994 during the Recruit scandal and other incidents, so we will have to wait and see whether it will be effective or not.

There are three functions of a faction for its members, namely money, posts, and nominations during elections. The role of nominations has been reduced significantly since the current election system, which is centered on single-member districts, replaced the old multiple-member districts with single non-transferable vote, and with this incident, the collection and distribution of money will probably decrease as well. What remains to be seen is how the appointment of ministers and senior vice-ministers will be handled. However, I think that ordinary members of the Diet will not be too troubled by the disappearance of factions, but those who want to be prime minister will be. The LDP presidential election has a high ratio of Diet members’ votes, and support from Diet members easily determines the president. This time, too, LDP Secretary-General Motegi, who is aiming to become prime minister and party president, is the most reluctant to dissolve the factions. In terms of the decline in the function of factions, this is likely to affect the leaders who are aiming to become prime minister more than ordinary members.

The interim report includes the abolition of activity funds distributed to lawmakers and the prohibition of political fundraising parties by policy groups (factions). What do you think about this revision related to political funds?

Fujimura: Although it is stated that political fundraising parties by policy groups are prohibited, whether or not other parties will remain legal is the key. In the wake of the Recruit scandal, corporations and organizations were banned from donating to individual lawmakers, and instead, about 30 billion yen of taxpayer money was used to support political parties. If party events remain, corporations and organizations will still have a loophole to donate to politicians. First of all, the loophole is absurd.

No change of government, no accountability

“Politics and money” scandals such as the Lockheed scandal and the Recruit scandal are recurring. It is often said that “politics costs money,” but what is it used for?

Fujimura: It’s somewhat understandable that costs are incurred for offices and secretaries. The number of secretaries that can be hired with public funds is limited to three, but for faction leaders, there are more than ten. I can understand that they spend it on personnel expenses for secretaries, but they are also used for food and drink. I occasionally look at individual politicians’ political fund statements, and most of the money is spent on food, drinks and gifts. Since participants and recipients are not written, it is difficult for a third party to judge the appropriateness, as it is only necessary to write “meeting expenses” and “gifts.”

In a recent opinion poll, over 80% of respondents said that “lawmakers need to explain how they use the money” in response to the current slush fund scandal. However, the Abe faction executives only amended the use of slush funds in the political fund balance report to “unknown,” and Prime Minister Kishida also approved it. At present, the use of the funds has not been clarified in the Diet either.

Fujimura: The government and the LDP have not fulfilled their duty of accountability at all. The executive lawmakers of the Abe faction did not respond during the investigation of the Tokyo District Public Prosecutors Office, and they only held a press conference once after the investigation was over. In early February, the LDP published a list of lawmakers who had not reported receiving kickbacks in their income and expenditure reports, but it was not exhaustive and was completely insufficient.

The fact that there is no change of government seems to be one of the causes of this political fund problem. If there were democratic control where voters could vote them out in elections, they would likely take their accountability more seriously. In particular, the executives of the Abe faction involved in the slush fund issue are strong in elections. The Constitutional Democratic Party of Japan, an opposition party, is demanding the abolition of all political fundraising parties, the introduction of a joint responsibility system, and the public disclosure of the use of policy activity funds, all of which may be implemented if they take power. The lack of a change of government makes it difficult to change the rules. These two factors, the lack of regime change and the individuals’ strength in elections, are both involved in accountability and the monitoring of power. After all, I think it’s also a problem for us voters.

Changing the local election system to proportional representation

The LDP’s one-party rule has been unbroken since the start of the second Abe administration in 2012 and the opposition parties lack momentum, making a change of government seem unfeasible.

Fujimura: Around 2008-2009, voters had a strong sense of stagnation surrounding the LDP, leading to a change of government in 2009. Recently, however, even with issues like the former Unification Church issue and this slush fund issue, there is neither a sense of crisis in the LDP nor a strong expectation of a change of government among voters. After all, I think one of the main reasons why there is no change of government is that the opposition parties are divided. Even with the single-member districts-centered system, the existence of proportional representation allows small political parties to survive, so the opposition parties are divided. If it were only a single-member district, opposition parties would have to unite to win. The single-member district system makes it easy to form a majority and create a stable government. On the other hand, proportional representation makes it easier for small parties to win seats and reflect minority opinions. Each electoral system has its advantages and disadvantages, and the choice of electoral system involves such trade-offs.

Most European countries use proportional representation, and it is difficult to secure a majority, making coalition governments more likely. Typically, when we think of political minority, we imagine the weak and social minorities, and we tend to want to support representatives of such minorities, but in some European countries, even minority far-right parties that are anti-immigrant can join coalition governments.

What should political parties or politics change in order to eliminate the political distrust that originated from this slush money scandal?

Fujimura: First of all, local politics is a problem. The reason why a change of government does not occur is because the LDP is still running strong election campaigns in local areas, while parties affiliated to the former Democratic Party of Japan do not have a sufficient base at the local councilor level, so they rely on the so-called supporting “wind” of non-partisan voters in elections. I think we need to change politics from the local level up and have party competition that can bring about a change of government. I don’t support any particular political party, but I think a change of government is necessary. To that end, we need to change the local electoral system.

Currently, prefectural and municipal council elections generally use multiple-member districts with single non-transferable vote. For example, in the city of Nishinomiya where I live there are 41 councilors, but 66 people ran for election in 2023 and one only needed to win about 2% of the votes cast to be elected. With multiple-member districts with single non-transferable vote, even a minor party can win an election, as in the example of Nishinomiya, so there is no mechanism driving the opposition parties to unite. Another local problem is the increase in uncontested elections. In the 2023 unified local elections, a quarter of the seats in the 41 prefectural assembly elections were won uncontested. The problem with uncontested elections is twofold: the lack of candidates for councilors and the fact that voters have no choice. Elections, the foundation of democracy, are not functioning.

We should first consider reforming the local electoral system. There is no best electoral system, but if we adopt proportional representation, the election will become party-centered, which will free voters from the need to evaluate individual candidates, make it easier for women and young people to run for office, and alleviate the lack of candidates for local councilors.

Finally, please tell us about your current research.

Fujimura: My research usually focuses on political systems, legislatures, political parties, and legislators. Among these, I am currently studying whether lawmakers really keep their promises using text analysis and machine learning of election manifestos. It has been conditionally accepted by the journal Political Science Research and Methods. Also, I am currently studying why there are so many dynamic politicians in Japan, I presented it at workshops in Taiwan and Switzerland last year, and I am now preparing to submit a paper on this.

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