Japan prosecutors make first arrest in the political fundraising scandal sweeping the ruling party

On Sunday, Japanese law enforcement agencies executed their initial arrest in relation to a significant political finance scandal that has detrimentally impacted the shaky government of Prime Minister Fumio Kishida. The Tokyo District Public Prosecutors Office reported that they detained ex-deputy education minister Yoshitaka Ikeda on allegations of failure to declare proceeds from fundraising he captured from his group within the ruling party, the Liberal Democratic Party. Ikeda's group, which was formerly run by murdered ex-Prime Minister Shinzo Abe in 2022, still holds the most sway within Kishida's government. The suspicion is that over 600 million yen ($4.15M USD) have gone unreported within this ruling party group.

Ikeda is suspected of failing to report the excess funds he got from political event ticket-income from his cohort, thereby violating the Political Funds Control law. Accusations include him falsifying a mandatory report of his political funds management organization and excluding over 48 million yen ($332,000) from 2018 to 2022 with the help of an accomplice. This amount considerably exceeds the nearly 10 million yen ($69,140) allegedly received by each of several others embroiled in the scandal. Kazuhiro Kakinuma, Ikeda's assistant, was also taken into custody on Sunday. The purpose of arresting the duo was to prevent possible evidence tampering, as per local media reports.

Kishida expressed deep regret over the arrest and declared that the party has chosen Ikeda's expulsion. He passionately vowed seriousness towards the matter and plans to institute a panel of experts this week to discuss measures to bolster fund-raising regulations. Despite the last year’s accusation involving dozens of LDP members, mostly part of Abe's faction, failing to report about 600 million yen in funds, SPARKING suspect of breaking campaign and election laws, Kishida's rating has seen a severe plunge below 20 percent. This situation could potentially incite an in-party power wrestle within the ruling party.

According to local reports, factions traditionally allocated a quota to each lawmaker for fundraising party tickets, usually worth 200,000 yen each. Lawmakers first submitted the money to their faction, and those who sold more tickets than their quota were reimbursed the extra sum they made. As per the Political Funds Control law, an accountant appointed by the lawmaker is entrusted with filing financial records.

The LDP, which has wielded power in Japan since the end of World War II, has been embroiled in various money scandals, including the infamous 1970s Lockheed bribery case and an insider trading and corruption scandal in the '80s. Nevertheless, the LDP's command over power is likely to persist as long as the opposition remains split, even though Kishida's governance is wobbling. September will see a leadership vote in the Liberal Democratic Party, though the Prime Minister need not call for a parliamentary election until 2025.