News Navigator: What is the ‘mystery money’ slush fund scandal rocking Japan’s LDP?

The Mainichi Shimbun answers some common questions readers may have about the secret slush fund scandal now roiling Japan’s ruling Liberal Democratic Party (LDP).

Question: What’s this money scandal that’s hit the LDP?

Answer: There are suspicions that some revenue from LDP faction fundraising parties was not disclosed in political income and expenditure reports and was given as kickbacks to member lawmakers as secret funds. Particularly, there are allegations that the largest faction, known as the Abe faction after the late former Prime Minister Shinzo Abe, converted over 500 million yen (approx. $3.45 million) into secret funds over the past five years. One lawmaker has even been arrested.

Q: The amount is shocking, isn’t it?

A: Many insiders are saying that the funds were used to cover office expenses and that they weren’t aware the money was secret. There has always been a lot of money in the political world that doesn’t require usage disclosure, and there seems to have been a lack of awareness of the issue.

Q: What do you mean, money that doesn’t require usage disclosure?

A: For example, the policy activity funds that the LDP distributes to party executives. The Political Funds Control Act prohibits donations from companies and other organizations to individual politicians, but donations from parties are treated as an exception, and that forms the basis for expenditure. According to the party headquarters’ 2022 report, over 1.4 billion yen (roughly $9.65 million) was distributed to 15 people, including Secretary-General Toshimitsu Motegi. It appears to have been used for campaign support, but the details are unclear. Similar outlays are seen among opposition parties. The monthly 1 million yen (about $6,900) research and publicity allowance given to members of the Diet also does not require usage disclosure.

Q: There are also the Cabinet Secretariat’s confidential funds, right?

A: Formally called the Cabinet Secretariat honorarium, this is government money that mainly the chief Cabinet secretary can use freely in principle, with an annual budget of more than 1 billion yen (in the range of tens of millions of dollars). Last year, Ishikawa Gov. Hiroshi Hase raised brows when he stated that secret Cabinet Secretariat funds were used to give gifts to individuals concerned in connection with Tokyo’s Olympic bid activities, and then retracted his statement.

Q: The political world is rife with mysterious money, right?

A: Use of money that invites political distrust is unacceptable. In the wake of this incident, there is a need to reassess the overall relationship between politics and money.

(Japanese original by Hiroshi Miyajima, Political News Department)