In the Japanese political world, there has been a long-running series of problems stemming from the failure of some LDP factions to properly manage their income from fundraising parties. It is still fresh in our minds that the LDP lost its seats in all three of the electoral districts up for grabs in the recently held House of Representatives by-elections due to these issues. It seems that the Kishida administration is scrambling now, weighing measures to dispel the public’s distrust of politics. While eliminating the opacity surrounding money and politics is important, from what I have heard in news reports and discussions, it doesn’t seem that anyone is raising the essential issues. Therefore, I would like to share my thoughts on this, including some speculations.

I’ve been to political fundraising parties myself, so it’s easy for me to picture it. The scene: many participants gather in the hotel’s large banquet hall, where legislators give greetings and make short speeches. The time: about an hour altogether. Sometimes bento boxes or simple finger food is served, sometimes not. Well, everyone can see that they didn’t spend much on it. Party tickets: 20,000 yen a piece. From the participants’ point of view, that’s a 5,000-yen participation fee and a 15,000-yen donation, while the organizer sees it as 5,000 yen for expenses, leaving them with 15,000 yen.

It’s common knowledge that faction parties like these are primarily aimed at raising political funds rather than engaging with supporters or reporting on political activities. The funds raised are typically allocated to the faction’s organizational activities, with the faction leaders having a general understanding of the amount required. So, the idea is to give back whatever is left beyond that need to the legislators who helped raise the funds so that they can use it for their activities.

Curiously, however, there are claims that these funds were not going to the factions, were not being returned to the legislators, and the legislators were also denying that they had received the funds, which has become a significant issue. Let’s imagine a ramen shop (a corporation) that sells 300 bowls of ramen a day but claims that they only sold 200. The owner (an individual) puts the extra 100 bowls’ worth of money in his or her pocket. The situation is essentially the same—a corporation not reporting sales for 100 bowls and an individual not declaring income for those 100 bowls. So, unless legislators are considered as belonging to some special privileged class (which is not the case), then it is only natural that such actions be judged unacceptable. And it makes sense that people who engage in these types of acts should be appropriately punished. That’s in fact why some people have been punished. Some have been prosecuted, some have been forced to resign from the Diet, and others have been advised to leave the party. Meanwhile, there are people who were involved but escaped punishment because their role was relatively minor or the amount involved was small. Sparks from the half-extinguished fire clearly remain. One can almost hear the voices saying, “We were all involved in it, with the same motive, so why am I the only one who has to go through this?”

Right, the important thing is the motive. This is about why they needed money that they didn’t want to make public. If they simply change the rules on handling political funds, misconduct will rear its ugly head in another form, and that process will repeat until the motivation to engage in fraud itself is eliminated. So what exactly is the motive? It’s obviously not about the cost of surveys and research to improve politics, because you can declare that money.

Now, this is just speculation, but I don’t think legislators are stockpiling this money to build personal wealth, and I also doubt they’re using it to cover living expenses. If that were the motive, they could simply disclose it as income. Rather, I suspect it’s being used as campaign funds for the next election. Different from office workers and civil servants who are picked for the position through job interviews or examinations, legislators are chosen by the vote of the electorate. It is, so to speak, a high-risk, high-reward career choice. If they don’t get elected, they are basically unemployed. To avoid that, they have to beat their rivals and win an election, and the only way to do that is to get votes from the electorate. They do that by working to get people to vote for them. This means pounding the pavement with street speeches, going door-to-door, attending rallies, and making appearances at ceremonies. It’s a lot of work and it won’t amount to anything unless they keep at it for a considerable length of time. For legislators—intellectuals at heart who are averse to getting their hands dirty, the air-conditioned offices of Nagatacho would be the preferred environment over sweating it out on the campaign trail. So, what can they do to secure votes with far less time and trouble?

This is where local assembly members, like prefectural or city council members, come in. If we think of the electorate as customers, local assembly members have their own established “sales bases” in the same regions where legislators need to campaign, so it would be more efficient to have them carry out the sales/campaigning activities locally, without the need for legislators to travel all the way from Tokyo. On top of that, their extensive local networks can cover areas the legislators would not be able to reach. As such, there is an incentive for legislators to ask local assembly members to act as their sales representatives. To have their sales representatives take care of sales on their behalf, they have to pay them for their work, but they can’t say, “Give me a receipt so I can see what you used the money for.” Simply put, they need funds that can be used at their own discretion. Now, all of this is, as I said, speculation, but it is probably not far from the truth. They say that “politics costs money,” but in reality, the money is not spent on implementing policies; it’s spent on obtaining and maintaining the position of legislator.

Currently, discussions are ongoing between the ruling and opposition parties concerning revision of the Political Funds Control Act. However, in order to prevent fraud and opacity, the underlying motives must be brought to the light of day before changing the laws on how money is handled. Why is no one delving into this aspect of the issue? Could it be due to a low level of understanding among the media and the public? The next point that should be clarified is what it means when people say “politics costs money.” To restate, the money does not go to drafting or implementing policies but to obtaining and maintaining the position of legislator. Lastly, while everyone is eager to criticize the LDP, we must also not forget that we are the ones who elected them. If we don’t recognize that, the political situation may never improve.

Hirotaka Shimizu
Chairman and CEO
Kamakura Shinsho, Ltd.