Sights along the Taro Aso Money Trail

The blog gifts you on this the Tanabatas Day with political financing money miscellany.

According to its FY2007 report filed with the Ministry of Internal Affairs and Communication, Yukio Hatoyama’s political finances management organization raked in 208,705,324 yen (of which 8,395,145 were carried over from FY2006) that year while incurring 159,665,501 in expenditures. Of the revenue, 49,926,000 came by way of individual donations, while 99,330,000 came from “political organizations” i.e. the DPJ. Most of the difference was made up by 45,830,000 from a single fundraising party held on 3 December 2007. Nastay! But what about the other side?

During the same period, according to the FY2007 report it filed, Taro Aso’s political finances management organization took in 193,343,250 while spending 143,911,327. However, 56,773,691 consisted of carryover from the previous FY, so the true gross revenue for FY2007 was only 136,569,559. Where donations were concerned, Aso received only 9,660,000 from individuals and 39,972,000 from political organizations. Most of the difference was made up by 84,734,240 from a single fundraising party held on 8 June 2007.

The donations from political organizations are of particular interest though. For the sole reason for the existence of six of the eleven organizations named as 50,000-and-up donors and yielding 31,500,000 or 78.8% of those donations appears to be holding once-a-year fundraising parties for Aso and his faction members*…and I don’t think the party tickets were being snapped up by goth-lolis and B-Boys. Unlike Hatoyama’s case, it’s perfectly legal, but it makes you wonder. In fact, if you go through all the reports filed at the MIAC portal, you are likely to come to the conclusion that fundraising parties will leave a gaping loophole in the DPJ pledge to ban corporate donations altogether.

There’s an interesting side story here. The Japanese Communist Party has seized on the corporate money issue**. In fact, their main line of attack for the election season appears to be that the LDP and DPJ are two peas in a pod. Yesterday, a top JCP official drew an unusually large crowd in front of the local train station. He was campaigning for the 12 July Tokyo Prefectural Assembly election, which is being seen as a virtual referendum on the Aso administration. As I passed by twice a couple of minutes apart, the official was hammering on the two-peas-in-a-pod message with a couple of talking points: the Tokyo DPJ’s near-consistent support for Governor Ishihara’s legislative initiatives***—and corporate money. The mostly middle-aged and elderly audience—it’s that kind of a neighborhood—appeared to be soaking it up. I came away with the feeling that the Communists are going to capture a large chunk of the protest vote. It’s a side story worth keeping an eye on, because if that happens, it will have ramifications beyond the 12 July Tokyo election.

* The national associations of doctors and pharmaceuticals accounted for 7,000,000 or 17.5%, or most of the remainder. The expenditures are also of some interest. Filed reports show that Aso’s organizations donated 21,500,000 (including 11,500,000 from his political finance management organization) to his faction’s political finance management organization in addition to 550,000 in annual dues from his own pocket. His political finance management organization received 4,000,000 in return like those of all the other faction members. 21,500,000 – 4,000,000 = 16,500,000 appears to be the price he pays for ownership. Even a twenty-member faction is an expensive plaything. Former owner Yohei Kono and Taro Kono pay 2,000,000 and 2,560,000 respectively. Other faction members only paid the 550,000 each in dues. Incidentally, 4,000,000 – 550,000 = 3,450,000 covers about 5% of the annual costs incurred by an LDP Diet member running a very tight ship.

** The Social Democrats have their own issues regarding labor unions. Besides, they want to hitch a ride on the DPJ bandwagon.

*** Governor Ishihara is campaigning hard for the Tokyo LDP. I think it means that his two political sons will not be breaking out of the national LDP any time soon.

If I Didn’t Know Better, I’d Think the Aso Administration Was Preparing to Step Away from the 2-Trillion Yen Giveaway

The Fiscal System Council gives advice to the Finance Minister on the fiscal system and related matters. The Council consists of thirty full members as well as the hundreds of lesser worthies who populate its five sub-councils. Once a year, usually in January, the thirty wise men and women usually get together in a plenary session with the Finance Minister and his senior subordinates, take care of housekeeping matters, and let loose with whatever they have on their minds. Since there are no specific items on the agenda, no issues put forth by the MOF Minister for advice—what really counts are the twice-s-year (what else?) proposals the Fiscal System Sub-council issues—the plenary session usually passes with scant notice. Not so this year…

On 15 January, the Fiscal System Council met for their annual plenary session, where, as all the dailies reported (surely on page one) that the council members mostly agreed that the 2-trillion yen giveaway that the New Komeito forced on the Aso administration would be ineffective and that other more useful ways should be found to spend the money. We know this from the press conference by Taizo Nishimuro, the Council Chairman and former head of Toshiba, after the meeting. His statement (including who said what at the plenary session) as well as a summary of the proceedings should be available on the MOF website as soon as they’re ready.

MOF Minister Shoichi Nakagawa did his best to brush it off, claiming that nothing had been decided (true), that he hadn’t received any orders (true again). The Chief Cabinet Secretary stated that it was only the doing of three, four of the Council members. We’ll know if that’s true after MOF updates its website. In the meantime, I have to wonder, is this really happening without the blessing of the MOF bureaucracy and Keidanren?

LDP Pays Hardball

It’s becoming evident that the LDP has been playing hardball since the LDP-New Kōmeitō coalition forced the vote in the Lower House on the budget and budget-related bills including the tax bill covering the gasoline tax surcharge extension and passed them along to the Upper House. There, the DPJ, the Social Democrats and the New People’s Party are boycotting the Budget Committee, making it impossible to reach the required quorum to hold sessions. The rest of the business in the Upper House is reportedly at a standstill as well; the standoff should last all week, and possibly more.

This should not have been an unexpected turn of events. Boycotting parliamentary activities is a common political tactic, and it has been used extensively over the years by the opposition in the Japanese Diet as well. The big difference in the here and now, though, is that the opposition holds a collective majority in the Upper House. Armed with this powerful weapon, opposition leaders are claiming with varied nuances that the consent decree by the two Chairmen of the Houses that promised a decision on the tax bills by the end of this month no longer holds*. DPJ leaders are also making ominous noises about the replacement for BOJ Governor Toshihiko Fukui. So what did the LDP gain in exchange for all this ill-will and ominous threats from the opposition?

If DPJ claims are to be believed － the LDP has not denied them － it had offered to allow a Lower House vote after another, March 4, Budget Committee session. If, as is the custom, the bills were passed by the Lower House plenary and sent to the Upper House on the same day, the budget would become effective 30 days later on April 3 even if, as expected, the opposition rejected the budget in the Upper house, where it holds a collective majority. This would leave a two day gap during which there would be no government budget. But such things have happened before and there are laws in place to deal with such an event. A two-day hiatus by itself has no effect on the public weal. Far more serious would be the effects on the revenue side if the gasoline tax surcharge were allowed to expire. If the opposition-dominated Upper House refuses to vote on the tax bills (or any other ordinary legislation for that matter), the coalition must wait 60 days after the initial Lowe House vote before it can use its supermajority there to enact the legislation anyway**. The revenue loss will be substantial, and the administrative difficulties of suspending then re-imposing the surcharge would be substantial. There are no override provisions for Diet consent for BOJ, as well as other, appointments. So it appears that the coalition has taken a huge risk in exchange for a meaningless gesture in favor of fiscal probity. Now that the opposition, the DPJ in particular, is up in arms, one would expect that the coalition would go hat in hand to beg forgiveness, no?

But the hardball tactics continue. Yesterday, Mr. Yoshitada Kōnoike, the LDP Chairman of the Upper House Budget Committee*** called the committee to order. The entire Cabinet arrived before 9 AM and waited for about 50 minutes, when the Chairman canceled the session as the opposition failed to arrive and a quorum could not be reached. The opposition is understandably indignant, but the provocation continued today, as yet another Budget Committee session was called and canceled. The coalition is working on the Lower House too, as it is holding a session today of the Land, Infrastructure, and Transport Committee (where, this being the Lower House, it has a comfortable majority) absent its coalition members, who join their Upper House colleagues in the protest boycott.

The coalition has evidently shifted from a strategy centered on the low-profile, consensus-seeking posture that comes so naturally to Prime Minister Fukuda. Mr. Fukuda’s efforts had failed to achieve any understanding with the opposition on budget-related issues, let alone a Grand Coalition with the DPJ. Instead, it became clearer than ever that the DPJ would not stop at anything to force a snap election while public support for the coalition faded. As for the Fukuda administration itself, it looked increasingly weak and vacillating. The coalition leadership must have decided that, where the opposition was not forthcoming, it would be politically less damaging for the coalition’s political fortunes if it confronted the opposition rather than caved in the hopes of gaining a measure of cooperation.

There are real costs to this. The market would much prefer the BOJ succession settled as quickly as possible; any delay is potentially unsettling. As for the gasoline taxes, a one-month suspension** would open a one-shot, 20-plus billion yen hole in gasoline tax revenues during April; certainly not life-threatening certainly, but not peanuts either.

However, the DPJ has not made a good case independent of the political game to oppose ex-Vice Minister of Finance Toshirō Mutō, the government’s choice. As for the gasoline taxes and road construction, a healthy majority of the public wants the both side to come together on a compromise, and that’s exactly what the coalition has been advocating. Against this background, the coalition has evidently decided that the risk is worth taking in order to inject new life into the waning fortunes of the coalition and the Fukuda administration.

Neither the coalition nor the Fukuda Cabinet is going to abandon its quest for dialogue and collaboration on economic, financial and fiscal issues. But they are now holding a stick in the other hand***. They must be calculating that a total standoff that forces the coalition to find solutions on its own will be more damaging to the DPJ than to themselves. According to this line of thinking, the coalition can’t lose. In this, they have the unintended cooperation of the Communist Party, which is engaging the coalition instead of joining the boycott. Will it work? I have no idea. But that’s what appears to be going on.

* Satsuki Eda, the DPJ Chairman of the Upper House (technically an independent; by custom, a Chairman leaves his party when he is elected to the Chair), apparently thinks that the decree still holds.

** Committee Chairs are allocated in proportion to the number of seats each party holds in that House. The DPJ could have grabbed the Budget Committee Chair by forcing a vote on it.

*** According to my latest reading of the draft bill, it does not have to be amended before the Lower House can vote on it again even if April 1 passes without the bill having been adopted. I am now of the view that an unconstitutional retroactivity that I believed would arise from the gap can be interpreted away. I’ve changed my mind on this.

**** I suspect that the coalition tactic is the brainchild of Bunmei Ibuki, who has been advocating a hard-line approach every chance he gets. Besides, as LDP Secretary-General, he has the primary responsibility for parliamentary strategies in the first place.

I Arrive in Hino City; Two Years Later A Quarter Century of Communist Rule Ends There. Coincidence? Maybe…

Mind you, this happened in 1997, exactly ten years ago, even as the national government raised the consumption tax rate from 3% to 5% and the economy was taking a dive, which would lead the following year to an LDP loss of epic proportions in the Upper House election and the demise of the Hashimoto administration.

Then, again, the downfall of the Hino Communists may have had something to do with the fact that the incumbent had been mayor for all of those 24 years and was 85 years old when he hit the campaign trails for the last time.

In fact, Kimio Morita was the last surviving member of the massive wave of progressive governors and mayors supported by the Socialist and Communist Parties that saw its heyday in the mid-seventies. At its peak in 1975, 12 (out of 47) provinces including Tokyo, Osaka, Kanagawa and Kyoto were administered by progressive governors, and countless municipalities, including major metropolitan centers such as Yokohama, Nagoya, Kyoto and Kobe had progressive mayors. This progressive surge came during the high-growth sixties and maintained its front through the mid-seventies, but receded as Japan reached the bubbly eighties.

Currently, the progressives have only one governor (Yukiko Kada; Shiga Prefecture), eight city mayors including one in a Prefectural capital (Okinawa), and a smattering of mayors in smaller municipalities. Remarkably, four of the eight mayors, in Warabi, Higashi-Osaka, Yuzawa and Komae, are Japanese Communist Party members or received their main support from it in the election, while two others, in Ginowan and Kunitachi, received support from both parties. (The Ginowan candidate also received support from the DPJ and a local progressive party.) The other two mayors are Social Democrats.

This is a far cry from the Golden Era of progressive politics. Still, the public can be quite adventuresome in local governance (remember, these are winner-take-all elections), and experimentation is not limited to electing comedians.

But one of the principles of JCP diplomacy:

“We will work for the reversion of the Chishima (Kurile) Islands, and Habomai and Shikotan Islands, which are Japan’s historical territories.”

Those namby-pamby appeasers like Taro Aso and Shoichi Nakagawa will clearly have a hard time fitting into a coalition led by the revanchist JCP.

note: This is a very rough survey based on online sources (news reports and official websites). Wikipedia has an article on progressive governors and mayors if you would like to do your own digging.