Friday, March 20, 2009

Why Ichiro Ozawa Is the Target: My Take

This is my answer to questions raised in a comment on the previous post. It is already too long and has taken up too much of my time, so I’m putting it out here to see if anyone has any thoughts on it one way or the other.
First of all, my guess is that not only does Ozawa believe that he is innocent, he actually is innocent: that is, I believe that he has managed to sufficiently shield himself from a) the active involvement of his political aide under arrest in setting up the Nishimatsu political action committees and b) personal knowledge of the fictional=dummy nature of the PACs that he will not be indicted under the Political Funds Control Act as a principal or accomplice for personally accepting corporate funds. An indictment for negligence subject to a criminal fine under the PFCA is theoretically possible, but that will be very hard to prove before the courts, making the legal and political risks of an Ozawa indictment too high for the Public Prosecutors Office. In any case, a mere negligence charge is no doubt irrelevant in Ozawa’s mind. I believe that he has likewise shielded himself from indictment under the politically more serious Act Regarding the Punishment of Gains, Etc., through Acts of Intercession by Persons Holding Public Office, Etc. It looks increasingly likely that his top political aide, his primary publicly-accredited secretary will be indicted under this law (not to mention the first law), in which case I don’t see Ozawa being able to hold on much longer, but that’s a political question. Ozawa’s situation is probably closer to plausible denial than the innocence of a babe, but that’ll do as far as legal consequences are concerned.

On the possibility of a political motive for the Public Prosecutors Office, Ozawa does have a certain point there. Based on what I’ve read over the years and some credible hearsay, I’ve come to believe that public prosecutors see themselves as something akin to a fourth branch of government that is entrusted with keeping corruption in the legislative and administrative branches within reasonable limits. As such, they will go where the evidence leads them. They are not vigilantes though, and do not disregard prospects for finding corroborating evidence and actively see out individual politicians or political parties as targets to go after. Now I would be extremely surprised to learn that the prosecutors were not aware through its normal information gathering process that a lot of construction money was flowing to the Ozawa camp and that a disproportionate amount was coming from Nishimatsu. They might even have had a hunch that the homebound Nishimatsu money had found its way into political pockets there, including the Ozawa camp’s. But note that the criminal investigation into Nishimatsu began only after a former Nishimatsu executive—as opposed to its no doubt more gruntled executives past and present—walked in and started blabbing about amassing a huge slush fund and illegally remitting a big chunk of the money to Japan (in addition to bribing Thai officials and helping himself to some of it). You don’t waste your finite resources on tips and allegations unless you have the leverage, and the ex-employee was that lever. The former Nishimatsu bagman came to the PPO, not the other way around.

So this is what politicians, both LDP and DPJ, have to worry about—the PPO may have what amounts to a political agenda, but it’s the PPO’s own agenda. Should the public mind as well? I’ll leave it at that.

Now at this point, someone will be thinking, What about Toshihiro Nikai, the METI Minister? Why aren’t the prosecutors going after his secretary? And what the hell was the Deputy Chief Cabinet Secretary—a former top cop at that—thinking when he said that there wasn’t enough money in the other cases to warrant an arrest? Wait, Okumura is an ex-METI official! Aha, now I get it! Well, as I’ve looked into the law and heard a real legal expert hold forth on it, it has become clear to me that it is extremely difficult to pierce the corporate veil and charge a politician or his political aide with accepting political funds directly from Nishimatsu and not from its two dummy PACs—unless the prosecutors can prove that the PACs were nothing more than pieces of legal fiction and that the recipient were aware of this. Even then, I don’t think it’s an open-and-shut case; it is a criminal case, where the courts tend to interpret the law restrictively, and also happens to be without a relevant precedent. But it’s certainly worth exploring for the PPO. In any case, if the PPO doesn’t think it won’t obtain enough stuff to indict Nikai’s political aide, it will be very reluctant to pursue the matter in the highly public form of an arrest.

Here, I believe that there was an important difference between Nishimatsu’s money for Ozawa and the money that went to the other, mainly LDP politicians, including Nikai,that is reflected in the disproportionate amount (itself not totally irrelevant) that went to the Ozawa camp. Simply put, the Ozawa money was more than just Ozawa money—it was faction money appropriated as party money that ultimately appears to have wound up in his personal political pocket. As such, it took some legal maneuvering to maintain it through the twists and turns of Ozawa’s post-LDP career. The construction money flowing to the Ozawa camp is likely to have its origins as the construction money that the Tanaka faction as successively inherited had been raking in. When Ichiro Ozawa took the lead in taking the Hata faction (which was a significant portion of the old Tanaka faction) out of the LDP in 1993 and creating the Japan Renewal Party, he established the Kaikaku Kokumin Kaigi (People’s Congress for Reform) as the repository of the JRP’s share of the construction money and other political funds that had been accruing to the Hata faction when it was still in the LDP. At that point, all the construction money going to the Ozawa side was made to flow into the PCR, and continued to be the case through Ozawa’s New Frontier Party and early Liberal Party years. However, in 2001, for reasons that I have been unable to figure out, about half the money began to flow into Ozawa’s personal camp; after 2003, when the Liberal Party merged with the old Democratic Party to form the DPJ, the Ozawa camp took over all future receipts from Nishimatsu, leaving the PCR a dormant repository of funds previously amassed as well as a large sum of money received from the old Democrats as part of a political dowry*. Another way of looking at this is that Ozawa took the Liberal Party private and maintained it as a private fiefdom. The challenges of the financial restructurings that these political rearrangements precipitated must have been further complicated by the shifting relationship between Ozawa and his party of the day. Thus, it is likely that the political aide in question had to become deeply involved with the details of any relevant arrangements, including those with the disproportionately munificent Nishimatsu. This would have been much less of a necessity for Nikai’s treasurer given the solitary nature of his boss’s wanderings, not to mention the treasurers of Nishimatsu beneficiaries who had never left the LDP in the first place.

Then why isn’t the LDP piling on? Well, a lot of LDP names have come up, and the court of public opinion will not look as benignly as the criminal courts do on claims of legal distinctions that I’ve tried to explain here. I took Nishimatsu’s money but the public prosecutors can’t prove I took it illegally and I took Nishimatsu’s money but the public prosecutors can’t prove it was a bribe don’t quite make it. Besides, only the politicians who have been fingered know for sure, so the others are well-advised to be cautious in the first place.

Of course any or all of my conjectures may prove to be wrong. But the one significant alternative, which is to believe in a vast conspiracy theory involving among others a corps of highly motivated elite lawyers (as well as yours truly) as the handmaiden of the LDP, seems a little too far-fetched to me.

*Search “Yukio Edano” on this blog if you want to see my take on one aspect of that event.

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