Janne drew a parallel between two examples of government involvement in fraudulent activity in an earlier comment. Here’s some background that explains the differences, and a few unsolicited tips for the DPJ on exploiting them to its advantage nevertheless.There’s actually a sensible reason for MAFF involvement in the Sumitomo-Mikasa transaction that ended up with 145 tons of defective rice being passed on to shochu* manufacturers. The government—to be more specific, the Ministry of Agriculture, Forestry and Fisheries (MAFF)—is responsible for all tariff-free rice imports under WTO minimum access requirements. The government uses an auction system, under which trading companies undertake to find the rice and import the rice for the government, which turns around and sells the minimum access rice to domestic businesses for processing into shochu, rice cakes, glue and other rice products. The government is careful not to allow the rice itself to enter the retail market, where it would come into competition with domestic rice. Unfortunately, 145 tons out of 7,000 tons that Sumitomo imported from Thailand on behalf of the Japanese government had became infected with molds. Under the terms of the contract, Sumitomo had to purchase the infected rice. In order to keep the supply chain in order and the merchandise flowing—remember, there is a WTO obligation to fulfill—a MAFF official suggested that Sumitomo use Mikasa Foods, one of the few rice processors with the processing capacity for non-food end use—glue as a suitable outlet for the defective rice. Unbeknownst to MAFF, Mikasa Foods had hit on the highly lucrative business model of buying up defective rice on the cheap far beyond its legitimate processing capacity and passing it off to unsuspecting food processing businesses at high mark-ups. Someone, somewhere, appears to have snitched.
Then, is MAFF merely an innocent bystander in just one transaction in a case of wholesale fraud? Not quite. According to a Yomiuri report, MAFF has conducted 96 inspections since 2004, when Mikasa Foods began passing on the defective rice. However, all the inspections have been announced beforehand, giving Mikasa Foods ample time to engineer a cover-up. Not anymore, but the political damage has been done.
The opposition has several courses of action at its disposal, a few of which come to mind immediately. It can demand that the government produce information on all government inspections to see if they do not carry similar risks of cover-ups as the result of prior notice. It can demand that the government produce a complete list of former government officials employed by firms doing business with the government on minimum rice (or, if it wants to expand the playing field, businesses otherwise subject to government inspection). It can search for the names of any LDP Diet members receiving political contributions from Mikasa Foods. I am sure that Akira Nagatsuma and his colleagues are already looking into these and other ways to exploit the latest revelations to the DPJ’s advantage.
As for the latest Social Insurance Agency revelations regarding the falsification of premium payment records to cover up corporate delinquencies, this is yet another example of the systemic failure at the SIA. The extent of the fraud is unknown and is likely never to be made clear; there’s good news and bad for the government in this. The saving grace for the LDP is that the SIA has been so openly and thoroughly discredited that it takes a misdeed of massive proportions to excite the Japanese public.
So, as far as the government is concerned, one, the contaminated rice, is a case of guilt by association; the other, a case of institutional breakdown. Or so MAFF would like to claim. The success of the DPJ turns on its ability to weave these and other issues into a narrative that implicates the LDP in a systemic failure as the result of 53 years of political neglect. The latest policy manifest from DPJ appears to shaping up as everything that it promised in 2007, then some (dropping the gasoline tax surcharge and expanding agricultural subsidies to fishermen), still without raising taxes. This exposes its flank to attack not only from the LDP but also from the mainstream media. The DPJ must open a new front for attack; here, recent events seem to be giving government incompetence a new lease of life.
* Shochu is the Japanese term for a large family of distilled alcoholic beverages made from any one of wide variety of grain and tubers. Soju the Korean equivalent, appears to have much older origins. They both appear to belong to an Asia-wide family of powerful, often odiferous alcoholic beverages. And I know it’s powerful becaush right now I am writing dish footno… ah whadda…