Voluntarily giving up all or part of one’s pay for a given duration is a common form for members of organizations to assume moral responsibility while escaping legal responsibility and thus avoiding formal sanctions, which in turn would amplify calls for resignation or dismissal. Twelve months’ pay is the heftiest that I’ve ever seen, though. It indicates the seriousness with which Aso and by extension the Abe administration is making a show of taking the MOF transgressions. However, this will surely raise doubts in the progressive media over the appropriateness of shielding Aso from formal sanctions, which would have inflamed demands for Aso to resign, which in turn would have pushed the Abe administration out into deep waters.
With the sanctions and Aso’s voluntary penitence locked in, the Abe administration and the LDP-Komeito coalition will push forward with less patience through the rest of the Diet session to pass as much of their legislative agenda as possible, and Abe will be duly reelected as LDP president and, barring another unforeseen political disaster, continue on as prime minister until the 2019 upper house election.
The one risk on the horizon for the market concerns the possible criminal prosecution of MOF officials. Crucial to the Abe administration’s attempt to bring administrative and therefore political closure to the Moritomo affair was the Prosecutor’s Office ‘s decision not to prosecute. However, concerned citizens have recourse to a Committee for the Inquest of Prosecution, which could force prosecution by a supermajority of 8 of its 11 members. (A simple majority recommendation for prosecution can be overruled, if unlikely in my view in a case of this import.) I am sure that a petition will be filed, if it has not been already. The Committees, apparently highly independent, meet in March, June, September, and December. A June session should be too soon for a decision, but what about September? The LDP presidential election happens to be on the schedule for September. Bet on an early election and, if there is to be prosecution, subsequent turbulence in what has become routine in recent years, an autumn/early winter, extraordinary Diet session.
Q: Nikkei just reported that Aso will be returning 1 year's worth of salary over the Moritomo issue. Is this kind of gesture common for Japanese ministers? I haven't heard of it happening, but I've only been covering Japanese politics for a couple of years... How sufficient is this in taking responsibility for the scandal?
A. Given how common this practice is, I’m sure ministers have done it before. (Ask your research team.) But 12 months? That’s a level one only sees from heads of firms facing catastrophic scandals. At this level, a minister of less importance to the survival of the prime minister would hve resigned by now. Is it sufficient? I’ll decline to answer it since only a person with authority to enforce judgement is competent to do so.
Q: MOF will be announcing its punishments for the scandal later today. Where do things go from here? It seems like all official lines of inquiry have ended, but is this issue still a political liability for Abe and Aso?
A. The polls have stabilized and the experts’ consensus is that Abe will be reelected as LDP president in September, allowing him to continue as prime minister. Abe will do his best to keep Aso in the cabinet, since his support is crucial to the stability of the Abe administration.
Q: What is the likelihood that Aso has to step down as finance minister? Surely the opposition will keep pushing for that, but they haven't been successful thus far...
A. His acceptance of 12 months without pay—not that he needs the money—actually indicates that he will stay on. A September judgment for prosecution, enforceable or not—the Prosecutor’s Office has three months to reply, but it should come to a head before that—could push Aso even further, so there’s the possibility that he will step down preemptively at the post-LDP election cabinet reshuffle or forced to do so as the result of public outcry. I’d bet against it though.
Q: What kind of impact will Moritomo exert on the Abe administration from here? Its legislative agenda has been thrown into disorder already. Will that continue, or will Abe finally be able to put this issue to rest?
A. As already mentioned. Beyond that, even without a September redux, Abe’s public support has been diminished permanently, though, making it more difficult for him to push items on his agenda that do not have broad appeal. Think, constitutional amendment, and deep labor reform.