Hidden Funds: Consequences of a Corrupt Practice / Lawmaker Sold Party Tickets to Please Faction, Get Minister Post

The Yomiuri Shimbun

7:00 JST, January 23, 2024

Public distrust in politics has grown amid the ongoing scandal involving the creation of hidden funds by factions of the ruling Liberal Democratic Party.

This is the third installment of a series in which The Yomiuri Shimbun looks at the growing sense of crisis among LDP lawmakers, how the practice has been conducted over the years, and the challenges facing the legal system.

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“He was trying to appeal to his faction by selling tickets for political fundraising parties so that he could be a minister as soon as possible,” a source close to Yaichi Tanigawa said of the House of Representatives member who submitted a letter of resignation from the Diet on Monday. Tanigawa, 82, faces a summary indictment over a fundraising party scandal involving Liberal Democratic Party factions. The source was explaining why Tanigawa, elected from Nagasaki Constituency No. 3, sold so many party tickets.

Tanigawa is from Goto, a city in Nagasaki Prefecture that stretches over dozens of remote islands, and he was first elected to the lower house in 2003. He is currently serving his seventh term. He has devoted himself to developing the region, which lies in Nagasaki Constituency No. 3.

The lawmaker has been elected more times than Koichi Hagiuda, 60, who was appointed education, culture, sports, science and technology minister. Hagiuda also served as the chairperson of the party’s Policy Research Council until he resigned from the post last month in the wake of the scandal. In contrast, Tanigawa has never served as a cabinet minister.

Since being appointed senior vice minister of the education ministry in 2012 in the second Cabinet of then Prime Minister Shinzo Abe, Tanigawa has not been given a post in any administration. While one colleague after another landed cabinet posts, he was left on a waiting list for appointments kept by the Abe faction, to which he belonged.

A “lone wolf” figure in the faction, Tanigawa focused on selling tickets for the group’s fundraising parties.

In doing so, he made broad use of the construction industry, especially in his home base of Nagasaki Prefecture. Tanigawa set up his own construction company, Tanigawakensetsu Co., in 1971 with a main office in Nagasaki City. He built it into one of the leading housing companies in Kyushu. After he won his first election to the Nagasaki prefectural assembly in 1987, he handed management of the company over to his family, but he has maintained his influence as company chairman.

Staff at the company were assigned to sell fundraising party tickets to subcontractors across Kyushu. Once, ticket sales by the staff topped ¥10 million for a single party, three times more than the quota given by the faction.

In the construction industry, there is still a pyramid-like hierarchy, with a prime contractor at the top and subcontractors below them. “Subcontractors want to get work. He [Tanigawa] took advantage of that,” a source close to the company said.

In just the five years from 2018 to 2022, Tanigawa received some ¥43 million in kickbacks from the faction, for ticket sales he had made in excess of his quota. According to several sources, Tanigawa has been taking kickbacks since around 2010, and when the payments were large, he would personally visit the faction office to get his cash.

The faction did not ask for receipts, so Tanigawa was able to save money that he could use as he liked. Some of the funds were spent in ways he did not want the public to know about, such as on food and drink.

Lawmakers’ desire for money and posts leveraged the Abe faction’s kickback scheme. It also helped the faction to be able to retain its members and its strength, making for a “win-win” situation.

Wining and dining officials

Some of the kickbacks given to lawmakers were spent on things that would likely draw criticism from the public, such as expensive food and drink, according to sources.

One such use was hosting meals with bureaucrats. By keeping close ties with key officials in ministries and agencies, lawmakers could more easily get local petitions accepted.

As a Goto native, Tanigawa has devoted himself to developing and promoting the remote islands. Such work has required him to deal with various government bodies, such as the Agriculture, Forestry and Fisheries Ministry, the Land, Infrastructure, Transport and Tourism Ministry and the Internal Affairs and Communications Ministry. “He was wining and dining [bureaucrats] to create access to ministries,” one source said.

Tanigawa sometimes used high-class Japanese restaurants to treat officials, and afterwards would take them to establishments where they would be entertained by women. Concerned about criticism from the media and civic groups, Tanigawa used his kickbacks, which would not require receipts, and left the funds off his political funds reports.

Since first being elected to the lower house in 2003, Tanigawa has tried to secure a ministerial post, but his career has gradually slowed down and he has had fewer opportunities to use his hidden funds. He hardly used any of the funds over the past five years or so. Staff at his office felt they could not deposit the funds at a bank because they were “filthy money,” a source said.

In voluntary questioning by the Tokyo District Public Prosecutors Office about the kickbacks from his faction, Tanigawa allegedly explained, “I was told by my faction that I did not have to list them on my political funds reports, and so that’s how I’ve done it for many years.”

Aiming for higher position

House of Councillors lawmaker Yasutada Ono, 64, who was indicted without arrest Friday on suspicion of violating the Political Funds Control Law, was born to a family of politicians. His grandfather held important positions such as LDP vice president and his parents were lawmakers as well.

After serving as a Gifu prefectural assembly member, Ono moved into national politics in 2013. He is currently serving his second term in the Diet but is not as well known as his grandfather Bamboku Ono or his parents. Ono has no notable achievements as a politician, either.

Ono is said to have told supporters that he would have no place in the faction if he could not sell party tickets. Ono reportedly did not hold his own political fundraising parties in his home area of Gifu, but asked people around him to buy tickets for faction parties instead.

According to his secretary, he did this because his position in the faction would be improved and he would look good in various ways if he sold many party tickets.

Ono allegedly told another LDP lawmaker that he frequently wined and dined officials of the Land, Infrastructure, Transport and Tourism Ministry.

“Ono said that because his father was a former transport minister and he himself has held such posts as parliamentary secretary for land, infrastructure, transport and tourism, he would rise through the ranks as a legislator representing the interests of the ministry,” the lawmaker said.

Ono’s office, however, is believed to have struggled financially.

Campaigning must be conducted over a wide area in upper house elections for his constituency, which covers all of Gifu Prefecture. “Ono complained that he ‘got poorer every time he ran for office,’” a supporter said.

Multiple election losses

House of Representatives member Yoshitaka Ikeda, 57, also displayed the desire to boost his status by selling many party tickets for his faction. Ikeda was arrested on Jan. 7 over suspected violations of the law.

He is believed to have made full use of the connections he developed during his time as head of the Junior Chamber International Japan to ask companies in various regions to purchase party tickets.

Ikeda was first elected to the lower house in 2012 from Aichi Constituency No. 3. However, he was defeated in his single-seat constituency in lower house elections in 2014, 2017 and 2021. He managed to secure a Diet seat under the proportional representation system in those three polls.

Ikeda reportedly told people around him that he had lost his status in the party because he could not win in his constituency. An LDP Diet member suspects that Ikeda may have wanted to show his power to factional leaders by selling a large number of party tickets.

All revenue from selling fundraising party tickets in excess of quotas is distributed to LDP Diet members. “Most of the money was spent on food and drink. It was used to pay for meetings among lawmakers and with bureaucrats,” a secretary for a Diet member who belongs to the Abe faction said.

“It looks bad if it gets out that political funds are being used to pay for feasts. There’s nothing better than having a lot of money at your disposal,” the secretary said.

A number of criminal cases have been built against former and current LDP lawmakers since 2019. A total of 11 former and current Diet members, including Tanigawa, Ono and Ikeda, have had criminal cases built against them in a series of scandals involving politics and money, and the public’s distrust of politics has never been higher.

The LDP has established a political reform headquarters to discuss the future of LDP factions and to find methods to improve transparency in political funding.

The party now faces a major turning point, and is being tested as to whether it can end this unprincipled practice despite the vested interests held by various people.