LDP Reform Body Agrees on Proposals for Funds Reform; Discussions with Coalition Partner Komeito to Follow

The Yomiuri Shimbun

20:00 JST, April 24, 2024

Draft proposals on political funds reform were presented at a meeting of a task force of the Liberal Democratic Party’s Headquarters for Political Reform on Tuesday, and the members reached a general agreement on the draft.

The LDP and its ruling coalition partner Komeito, which jointly held a working-level meeting on Wednesday, are poised to finalize the draft proposal as ruling parties in early May. The draft proposals aim to revise the Political Funds Control Law.

One proposed measure would oblige lawmakers to certify in writing that they properly checked the contents of their political funds reports and found them legally adequate. The proposed requirement is meant to clarify lawmakers’ responsibility to supervise their treasurers.

If a treasurer is punished for failing to adequately report political funds, lawmakers who fail to provide sufficient oversight would be subject to penalties including loss of their position and suspension of their civil rights. If they fail to report revenues in their political funds report, they would be required to pay the same amount into the national treasury.

The LDP hopes this measure to “seize” unreported political funds will prevent lawmakers from creating hidden funds.

The LDP’s reform proposals also include strengthening third-party audits of political funds reports and expanding the scope of audits for political organizations related to Diet members to include revenues. Currently, such audits look only at expenses.

Factions will also be subject to audits. Lawmakers will be required to submit and disclose political funds reports on the internet.

The party plans to consider additional measures in the future, such as reforms regarding funds that parties provide to lawmakers for political activities. Komeito and opposition parties are demanding that such funds be disclosed.

The issue of expanding the reporting of names and other information on party ticket purchasers is also left open for future consideration.

The Constitutional Democratic Party of Japan announced the outline of its political reform plan that would require not only treasurers but also lawmakers themselves to sign the political fund reports of political organizations. It would make them liable to punishment if they make omissions or false entries, either intentionally or with gross negligence.

Careful discussion needed

The ruling and opposition parties are in general agreement on the direction of legal revisions to introduce tougher penalties against politicians and stricter supervisory obligations with regard to the management of political funds.

Even so, they still need to discuss many points, such as the scope of political organizations subject to the law, and what to do in cases of willful misconduct by a treasurer.

Tomoaki Iwai, a professor emeritus at Nihon University, said the LDP’s proposal fails to fully ensure transparency because it does not call for a third party to judge the degree of culpability in misreporting or failing to report political funds.

“The decision to disqualify a legislator elected by the voters is a serious matter and requires careful discussion,” he said.

Rough going within ruling parties

The LDP hopes to reach a consensus with Komeito over the proposal in early May and move on to full-fledged talks between the ruling and opposition parties that will begin after the Golden Week holidays.

To realize a quick decision within the ruling parties, the LDP’s proposal reflects Komeito’s wishes, such as the creation of statements by lawmakers certifing that they checked the contents of their political funds reports and a wider scope of third-party audits, on top of tougher penalties for lawmakers themselves.

Even so, the two parties still need to bridge gaps on many topics, such as funds for political activities provided by a party to its members and the standards for disclosing names of fundraising party ticket purchasers.

Komeito calls for the disclosure of how political activity funds are used, but Prime Minister Fumio Kishida, who is also president of the LDP, said, “We must take into consideration the privacy of individuals who cooperate with political parties and the trade secrets of companies.”

Komeito also calls for lowering the mandatory reporting threshold for the names of those who buy fundraising party tickets from the current level of “over ¥200,000” to “over ¥50,000,” but there is a strong reluctance within the LDP to do so.

Even if the LDP and Komeito manage to reach an agreement, the hurdles to revising the law are still high. The CDPJ advocates a total ban on political fundraising parties, and Nippon Ishin (Japan Innovation Party) calls for full disclosure of the names of ticket purchasers. The CDPJ, Ishin, the Japan Communist Party and the Democratic Party for the People are all in agreement in calling for a ban on funds that parties provide to lawmakers for political activities.

In a past case of a bill contested between the ruling and opposition parties — revision of the Immigration Control and Refugee Recognition Law — the government and the ruling parties won the support of Ishin and some other parties to pass the bill.

“If a bill [to revise the Political Funds Control Law] is not enacted in the current Diet session, it will cause further public distrust of politics,” a senior Ishin official said. “Ishin will work as a mediator if the gaps are not bridged in talks between the ruling and opposition parties.”