Friday, October 17, 2008

Facts Emerge from Seiko Noda’s Press Conference on Maruchi Shoho Incident

Let me dwell again on the maruchi shoho controversy, not because it’s a game changer—it’s not, really—but because it illuminates a corner of Japanese politics that adds a little local color and hopefully helps you understand what politicians here do and why they do it, which is at least more useful than any big-picture stuff that I can do right now. Or ever.
This morning, Consumer Affairs Minister Seiko Noda’s held a press conference to explain her relationship with the maruchi shoho industry. Now we have a clearer outline of the facts:
In 1996, Ms. Noda used question time in the Lower House Commerce and Industry Committee with regard to a legislative bill to amend the Act regarding Door-to-Door Sales, Etc. (the current Act regarding Specified Commercial Transactions) to ask questions that were by media accounts favorably inclined toward the businesses. In preparing for the Q&A, she received a briefing from Amway Japan. Later, she sold eight tickets (three each in 2002, 2003 and two in 2008) totaling 160,000 yen for fundraising parties to Amway. Her records do not go back beyond 2000. She is returning the money to Amway today.

15 other Cabinet Ministers denied that they had received any money from the maruchi shoho industry or used question time on their behalf. Yuko Obichi, the Minister for Social Affairs and Gender Equality, was still checking. That’s one Minister shy of the full 18, but I’ll leave it at that for now.
Ms. Noda’s alleged advocacy appears to be a one-off event and involves far less money than what Mr. Maeda and the DPJ earned for their sympathies. So far, other, more significant elements of the LDP have not been implicated. (A suggestion on that, later.) Nevertheless, the media is paying a lot of attention to her case, because she is a high-profile Diet member (whereas few people outside of his constituency had even seen Mr. Takada) and, more significantly, a Cabinet Minister, in charge of consumer protection of all things. It can’t have helped the LDP, either, that it had been bludgeoning the DPJ with the revelations regarding Mr. Maeda and his more illustrious DPJ colleagues, even as Ms. Noda’s case was about to break.

So has Ms. Noda been a rogue operator all along? No. Actually, I’m rather sympathetic to her case. Let me explain:

The Act regarding Specified Commercial Transactions began life in 1976 as the Act regarding Door-to-Door Sales. The ASCT currently regulates six types of business activities including, from the beginning, multilayer marketing, or maruchi shoho, as it is popularly known. The law’s objective is to “contribute to the wholesome development of the national economy by protecting the interests of the purchaser, etc. and rendering appropriate and facilitating the distribution of goods, etc. and the provision of services”. In other words, the law does not a priori condemn maruchi shoho and indeed implicitly assumes that, properly regulated, it can contribute to the public welfare.

From time to time, the ASCT has been amended, mostly to broaden the coverage and/or tighten existing regulation. 1999 was just such an occasion, when it was amended, first to enhance criminal sanctions and again to hand over responsibilities from the state to local governments. Ms. Noda’s questions must have come during the first legislative bill*.

When a legislative bill is submitted—in this case most certainly by the Cabinet and in any case not by the opposition—it is sent to the committee with jurisdiction over the subject of the law of the House to which the bill was specifically submitted. There, committee members on all sides interrogate the Cabinet Minister or Ministers under the oversight of that committee and their subordinates. Other sub-Cabinet government officials may also be summoned by the committee members for questioning. Time is allocated among the parties represented in the committee in the order of the size of their respective parliamentary representations, with the opposition parties usually more favored than their numbers warrant in the case of Cabinet-sponsored bills. I do not know how the time is allocated within each party; suffice to say that on that particular occasion, Ms. Noda was the one LDP Lower House member—or one of possibly two—assigned with the responsibility to use her time to draw out answers that assure the public that the government bill was not too lenient, not too heavy-handed, but just right. For maruchi shoho is not fraud; there’s good maruchi shoho and there’s bad maruchi shoho. I mean, multilayered marketing. Or, if you prefer, network business.

Whatever. In any case, Ms, Noda was bound by party loyalty if not necessarily personal conviction—though I have no reason to doubt her then sincerity—to proceed under the assumption that, properly regulated—which being the amendment bill—the maruchi shoho industry (business model, actually) could in fact “contribute to the wholesome development of the national economy”. I’d have to see the transcript of the 1999 Q&A to be sure, but it appears that Ms. Noda at the time was guilty of no more than being a dutiful foot soldier for the government party.

As for Amway, I know that it has been the subject of many allegations, some proven, regarding the improper, on occasion illegal, consequences of its operations. It also happens to be the big fish in the lagoon, taking root in the U.S. business and entertainment establishments. It is about as respectable as it gets as far as this line of business is concerned (although I have stated that some traditional Japanese arts also follow this business model). Thus, it was not unreasonable for Ms. Noda (on the advice of a parliamentary colleague) to reach out to Amway Japan to hear from the other side. And there the matter would have ended, but for her 20,000 yen party tickets.

Party tickets have been the fundraising staple of every political party (I assume) bar the Communists, though the LDP easily must outdo them all. If you are a reasonably well-know business or professional organization, you are likely to be peppered with envelopes, each containing an invitation and an x-ty thousand yen ticket to a book-launch, or birthday celebration, or whatever reason they give for the event. I’m sure there’s someone in each of these institutions (or divisions and subdivisions thereof; for some of these institutions have their hands in many things and each hand cannot be expected to know what the other hands are doing or should be doing) who decides from whom and how many to purchase. If you’re a really big business, they can’t be easy decisions.

Now at the other end, it’s not quite the snail-mail version of spam, but it’s even less like selling a Rolls Royce; it’s inconceivable that in any of the years 2002, 2003 and 2008, Ms. Noda (or even anyone in her entourage) said to herself, damn, this year, we’re going to target the maruchi shoho guys. Instead, Amway Japan probably must have unwittingly ended up her mailing list, which she uses to pass out those envelopes, when it briefed her in 1999.

So why that odd, seemingly random distribution? Here, I am stumped. Assuming Ms. Noda’s people got the facts right, maybe something happened in each of those three years that made the Amway people think that it was the prudent thing to do to hedge politically. In any case, with regard to the tickets, I haven’t seen anything so far that makes Ms. Noda guilty of something more serious than carelessness in managing her mailing/sending list.

Now, you know what you can do if you happen to be a journalist? You can go read the Diet transcript of every discussion of the maruchi shoho industry and go to every Diet member that asked any question that did not vilify the business and ask if he/she has received any money from those businesses. Just sayin’. And here my online research ends.

* For true Japan otaku’s eyes only: The second amendment was included in an omnibus bill transferring power to local governments that covered 457 laws. It would not have been taken up in the Commerce and Industry Committees at all, except possibly in the form of a joint session of all the committees with jurisdiction over any of the laws that were to be amended. In any case, it would not have been billed as a CIC session, and it is highly unlikely that details such as maruchi shoho would have been taken up in any case.

I warned you.

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