Online fundraising parties for Japan’s politicians raise both cash and questions

A growing number of political fundraising parties are being held online amid the COVID-19 disaster, as a way to raise money while avoiding crowded venues.

According to political funds reports released by the Internal Affairs and Communications Ministry and other agencies for last year, many political organizations included expenses for “video distribution” in their reports. Such online events may become common, but a number of issues also need to be dealt with, including unclear rules and insufficient transparency in reporting.

Maintaining revenue levels

The ruling Liberal Democratic Party’s Shikokai faction, headed by LDP heavyweight Taro Aso, held an online fundraising party in addition to an in-person event for the first time in July last year.

“It was nice that we could have this once-a-year interaction with our supporters despite the coronavirus disaster,” a person in charge of the event said.

Of approximately 7,000 individuals and companies that paid to attend the party, about 1,000 gathered at the venue, a luxury hotel in Tokyo. The remaining participants attended from their homes and elsewhere by accessing the URL for the live broadcast of the event.

Although the faction had to bear the cost of video distribution and other expenses, the revenue from the party remained at the same level as the previous year, at about ¥217 million.

Fundraising revenues for political organizations under the jurisdiction of the ministry totaled ¥6.38 billion last year, down 28% from the previous year.

Many of the organizations included such expenses as “video distribution” and “lighting for filming” — indicating their efforts to use online events to maintain the level of revenue they derive from fundraising parties.

“[An online party] has the advantage that the elderly and physically impaired can easily participate without having to travel,” a secretary of a member of the Constitutional Democratic Party of Japan said.

Losing sense of unity

An official in the office of an LDP member of the House of Representatives who also held an online party in July said it took more time and effort than expected.

“It’s hard to get a sense of unity with supporters online, and some of them may lose interest,” the official said.

The Political Funds Control Law requires that donors’ names and other information about them be included in the reporting of donations of more than ¥50,000 per year. But in the case of fundraising parties, supporters’ names and other information do not need to be included in a report if they paid ¥200,000 or less to attend.

Revenues from fundraising parties are differentiated from donations in that they are deemed to be “compensation for business.”

One LDP member of the House of Councillors said, “How can we say that just video distribution deserves ‘compensation?’ … Many of my colleagues don’t feel they can go online.”

Vague rules, no transparency

The rules are also vague about how to record income and expenditures in political funds reports.

An upper house member who held an online and in-person party earned about ¥16 million from the event. Details about individuals and groups who gathered at the venue were included in the relevant report, but the number of online participants was not.

A situation has developed in which political funds reports do not reflect the actual situation.

While more online-only parties are expected to be held in the future, the ministry says it is difficult to classify gatherings that do not physically bring people together as political fundraising parties. Therefore, organizers are not obliged to include details about their supporters in the political funds reports even if they pay more than ¥200,000 for the event.

“[Holding political fundraising parties] online can encourage people to get involved in politics,” said Prof. Takashi Tomizaki of Komazawa University.

“In view of a key purpose of the Political Funds Control Law — which stipulates that political funds should be open to the public in principle — the ruling and opposition parties should work together to create rules to ensure transparency regarding revenue and spending from online fundraising parties, among other events,” Tomizaki said.