Political funding in Japan
Encyclopedia
In Japan
, the problem of political funding was intensely debated during the late 1980s and early 1990s, partly as a result of revelations following the Recruit scandal
of 1988-89. The scandal arose as a result of the dealings of Ezoe Hiromasa, the ambitious chairman of the board of the Recruit Corporation (a professional search service that had diversified into finance and real estate and had become involved in politics), who sold large blocks of untraded shares in a subsidiary, Recruit Cosmos, to seventy-six individuals. When the stock was traded over the counter in 1986, its price jumped, earning individual investors as much as ¥100 million in after-sales profits. The persons involved included the most influential leaders of the LDP
(usually through their aides or spouses) and a smaller number of opposition party figures. Although such insider trading
was not strictly illegal, it caused public outrage at a time when the ruling party was considering a highly controversial consumption tax
. Before the scandal ran its course, Takeshita Noboru was obliged to resign as prime minister
in April 1989, a senior aide committed suicide in expiation for his leader's humiliation, and former Prime Minister Nakasone Yasuhiro resigned from the LDP—becoming an "independent" Diet member—to spare the much-tainted party further shame.
Regarding the background issue of political funding, a group of parliamentarians belonging to the ruling LDP estimated in 1987 that annual expenses for ten newly elected members of the Diet averaged ¥120 million each, or about US$800,000. This figure, which included expenses for staff and constituent services in a member's home district, including local supporters
, was less than the average for Diet members as a whole, because long-term incumbents tended to incur higher expenses. Yet in the late 1980s, the government provided each Diet member with only ¥20 million for annual operating expenses, leaving ¥100 million to be obtained through private contributions, political party faction
bosses, or other means. The lack of public funding meant that politicians—especially, but not exclusively, members of the LDP— needed constant infusions of cash or milk money to stay in office.
Maintaining staff and offices in Tokyo
and the home district constituted the biggest expense for Diet members. Near-obligatory attendance at the weddings and funerals of constituents and their families, however, was another large financial drain: the Japanese custom requires that attendees contribute cash, handed over discreetly in elaborately decorated envelopes, to the parents of the bride and groom or to the bereaved.
After revelations of corrupt activities forced the resignation of Prime Minister Tanaka Kakuei, postwar Japan's most skillful practitioner of "money politics," in 1974, the 1948 Political Funds Control Law was amended to establish ceilings for contributions from corporations, other organizations, and individuals. This change forced Diet members to seek a larger number of smaller contributions to maintain cash flow. Fund-raising
parties to which tickets were sold were a major revenue source during the 1980s, and the abuse of these ticket sales became a public concern. Another related problem was the secrecy surrounding political funds and their use. Although many politicians, including members of newly appointed cabinets, voluntarily disclosed their personal finances, such disclosure is not compulsory and many sources of revenue remain obscure.
Proposals for system reform in the early 1990s included compulsory full disclosure of campaign funding, more generous public allowances for Diet members to reduce (or, ideally, to eliminate) their reliance on under-the-table contributions, and stricter penalties for violators, including lengthy periods of being barred from running for public office. Some commentators advocated replacement of the lower house's multiple-seat election district system with single-seat constituencies like those found in Britain and the United States. It was argued that the multiple-seat districts made election campaigning more expensive because party members from the same district had to compete among themselves for the votes of the same constituents. It was hoped that the smaller size of single-seat districts would also reduce the expense of staff, offices, and constituent services. Critics argued, however, that the creation of single-seat constituencies would virtually eliminate the smaller opposition parties and would either create a United States-style two-party system or give the LDP an even greater majority in the lower house than it enjoyed under the multiple-seat system.
In contrast with multimillion-dollar United States political campaigns, direct expenses for the comparatively short campaigns before Japanese general, upper house, and local elections are relatively modest. The use of posters and pamphlets is strictly regulated, and candidates appear on the noncommercial public television station, NHK
, to give short campaign speeches. Most of this activity is publicly funded. Campaign sound-trucks wove their way through urban and rural streets, often bombarding residents with earsplitting harangues from candidates or their supporters. No politician, however, could expect to remain in office without considering expenses for constituent services the most important component of campaign expenses.
In the summer of 1993, the LDP government of Miyazawa Kiichi was brought down largely as a result of its failure to pass effective political reform legislation. The minority government of Hosokawa Morihiro that succeeded it proposed legislation to ban direct contributions by companies or unions to parliamentary candidates and to reform the diet. Public funding of political parties was strengthened, giving each party 250 Yen for each vote it attained.
A new electoral system was installed: The lower house was divided between 300 single-seat constituencies and 200 seats distributed by proportional representation. Candidates on the proportional representation bloc were elected from 11 regional voting blocs, where the party was given a vote. When the LDP gained power again in 1996, large parts of the reform were kept, but the representation bloc was shrunk to 180 seats in the year 2000.
Both critics and advocates of the new system were largely proven right, while there is less political infighting between candidates of one party (unless there is a real difference in opinion, such as the postal privatization issue), the system also reduced the number of small parties. The LDP remained dominant in a coalition government with the New Komeito party, until the Democratic Party of Japan
seized power in 2009 under the leadership of Yukio Hatoyama
.
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
, the problem of political funding was intensely debated during the late 1980s and early 1990s, partly as a result of revelations following the Recruit scandal
Recruit scandal
The was an insider trading and corruption scandal that forced many prominent Japanese politicians to resign in 1988.Recruit is a human resources and classifieds company based in Tokyo. Its chairman, Hiromasa Ezoe, offered a number of shares in a Recruit subsidiary, Cosmos, to business leaders and...
of 1988-89. The scandal arose as a result of the dealings of Ezoe Hiromasa, the ambitious chairman of the board of the Recruit Corporation (a professional search service that had diversified into finance and real estate and had become involved in politics), who sold large blocks of untraded shares in a subsidiary, Recruit Cosmos, to seventy-six individuals. When the stock was traded over the counter in 1986, its price jumped, earning individual investors as much as ¥100 million in after-sales profits. The persons involved included the most influential leaders of the LDP
Liberal Democratic Party (Japan)
The , frequently abbreviated to LDP or , is a centre-right political party in Japan. It is one of the most consistently successful political parties in the democratic world. The LDP ruled almost continuously for nearly 54 years from its founding in 1955 until its defeat in the 2009 election...
(usually through their aides or spouses) and a smaller number of opposition party figures. Although such insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
was not strictly illegal, it caused public outrage at a time when the ruling party was considering a highly controversial consumption tax
Consumption tax
A consumption tax is a tax on spending on goods and services. The tax base of such a tax is the money spent on consumption. Consumption taxes are usually indirect, such as a sales tax or a value added tax...
. Before the scandal ran its course, Takeshita Noboru was obliged to resign as prime minister
Prime Minister of Japan
The is the head of government of Japan. He is appointed by the Emperor of Japan after being designated by the Diet from among its members, and must enjoy the confidence of the House of Representatives to remain in office...
in April 1989, a senior aide committed suicide in expiation for his leader's humiliation, and former Prime Minister Nakasone Yasuhiro resigned from the LDP—becoming an "independent" Diet member—to spare the much-tainted party further shame.
Regarding the background issue of political funding, a group of parliamentarians belonging to the ruling LDP estimated in 1987 that annual expenses for ten newly elected members of the Diet averaged ¥120 million each, or about US$800,000. This figure, which included expenses for staff and constituent services in a member's home district, including local supporters
Koenkai
Koenkai are an invaluable tool of Japanese Diet members, especially of the Liberal Democratic Party . These groups serve as pipelines through which funds and other support are conveyed to legislators and through which the legislators can distribute favors to constituents in return...
, was less than the average for Diet members as a whole, because long-term incumbents tended to incur higher expenses. Yet in the late 1980s, the government provided each Diet member with only ¥20 million for annual operating expenses, leaving ¥100 million to be obtained through private contributions, political party faction
Political faction
A political faction is a grouping of individuals, such as a political party, a trade union, or other group with a political purpose. A faction or political party may include fragmented sub-factions, “parties within a party," which may be referred to as power blocs, or voting blocs. The individuals...
bosses, or other means. The lack of public funding meant that politicians—especially, but not exclusively, members of the LDP— needed constant infusions of cash or milk money to stay in office.
Maintaining staff and offices in Tokyo
Tokyo
, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...
and the home district constituted the biggest expense for Diet members. Near-obligatory attendance at the weddings and funerals of constituents and their families, however, was another large financial drain: the Japanese custom requires that attendees contribute cash, handed over discreetly in elaborately decorated envelopes, to the parents of the bride and groom or to the bereaved.
After revelations of corrupt activities forced the resignation of Prime Minister Tanaka Kakuei, postwar Japan's most skillful practitioner of "money politics," in 1974, the 1948 Political Funds Control Law was amended to establish ceilings for contributions from corporations, other organizations, and individuals. This change forced Diet members to seek a larger number of smaller contributions to maintain cash flow. Fund-raising
Fundraising
Fundraising or fund raising is the process of soliciting and gathering voluntary contributions as money or other resources, by requesting donations from individuals, businesses, charitable foundations, or governmental agencies...
parties to which tickets were sold were a major revenue source during the 1980s, and the abuse of these ticket sales became a public concern. Another related problem was the secrecy surrounding political funds and their use. Although many politicians, including members of newly appointed cabinets, voluntarily disclosed their personal finances, such disclosure is not compulsory and many sources of revenue remain obscure.
Proposals for system reform in the early 1990s included compulsory full disclosure of campaign funding, more generous public allowances for Diet members to reduce (or, ideally, to eliminate) their reliance on under-the-table contributions, and stricter penalties for violators, including lengthy periods of being barred from running for public office. Some commentators advocated replacement of the lower house's multiple-seat election district system with single-seat constituencies like those found in Britain and the United States. It was argued that the multiple-seat districts made election campaigning more expensive because party members from the same district had to compete among themselves for the votes of the same constituents. It was hoped that the smaller size of single-seat districts would also reduce the expense of staff, offices, and constituent services. Critics argued, however, that the creation of single-seat constituencies would virtually eliminate the smaller opposition parties and would either create a United States-style two-party system or give the LDP an even greater majority in the lower house than it enjoyed under the multiple-seat system.
In contrast with multimillion-dollar United States political campaigns, direct expenses for the comparatively short campaigns before Japanese general, upper house, and local elections are relatively modest. The use of posters and pamphlets is strictly regulated, and candidates appear on the noncommercial public television station, NHK
NHK
NHK is Japan's national public broadcasting organization. NHK, which has always identified itself to its audiences by the English pronunciation of its initials, is a publicly owned corporation funded by viewers' payments of a television license fee....
, to give short campaign speeches. Most of this activity is publicly funded. Campaign sound-trucks wove their way through urban and rural streets, often bombarding residents with earsplitting harangues from candidates or their supporters. No politician, however, could expect to remain in office without considering expenses for constituent services the most important component of campaign expenses.
In the summer of 1993, the LDP government of Miyazawa Kiichi was brought down largely as a result of its failure to pass effective political reform legislation. The minority government of Hosokawa Morihiro that succeeded it proposed legislation to ban direct contributions by companies or unions to parliamentary candidates and to reform the diet. Public funding of political parties was strengthened, giving each party 250 Yen for each vote it attained.
A new electoral system was installed: The lower house was divided between 300 single-seat constituencies and 200 seats distributed by proportional representation. Candidates on the proportional representation bloc were elected from 11 regional voting blocs, where the party was given a vote. When the LDP gained power again in 1996, large parts of the reform were kept, but the representation bloc was shrunk to 180 seats in the year 2000.
Both critics and advocates of the new system were largely proven right, while there is less political infighting between candidates of one party (unless there is a real difference in opinion, such as the postal privatization issue), the system also reduced the number of small parties. The LDP remained dominant in a coalition government with the New Komeito party, until the Democratic Party of Japan
Democratic Party of Japan
The is a political party in Japan founded in 1998 by the merger of several opposition parties. Its socially liberal platform is generally considered center-left in the Japanese political spectrum...
seized power in 2009 under the leadership of Yukio Hatoyama
Yukio Hatoyama
is a Japanese politician who served as Prime Minister of Japan between 16 September 2009 and 2 June 2010, and was the first ever Prime Minister from the modern Democratic Party of Japan....
.
See also
- Campaign financeCampaign financeCampaign finance refers to all funds that are raised and spent in order to promote candidates, parties or policies in some sort of electoral contest. In modern democracies such funds are not necessarily devoted to election campaigns. Issue campaigns in referendums, party activities and party...
- Political financePolitical financePolitical finance covers all funds that are raised and spent for political purposes. Necessarily such purposes include all political contests for voting by citizens, especially the election campaigns for various public offices that are run by parties and candidates. Moreover all modern democracies...
- Political donations in AustraliaPolitical donations in AustraliaThe term political donations refers to gifts to a politician, a political party, or an election campaign.In Australia, the majority of political donations come in the form of financial gifts from corporations, which go towards the funding of the parties' election advertising campaigns. Donations...
- Federal political financing in CanadaFederal political financing in CanadaThe fair and transparent financing of political parties, candidates, and election campaigns is a key determinant in the health and proper functioning of a democracy...
- Party finance in GermanyParty finance in GermanyParty finance in Germany became an issue of political discourse, when in 1949 the concept of transparency was discussed in the constitional convention in connection with a new article to be entered into the constitution...
- Political funding in the United KingdomPolitical funding in the United KingdomPolitical funding in the United Kingdom has been a source of controversy for many years. There are three main ways a political party is funded. The first is through membership subs; the second is through donations; the third is through state funding.-History:...
- Campaign finance in the United StatesCampaign finance in the United StatesCampaign finance in the United States is the financing of electoral campaigns at the federal, state, and local levels.At the federal level, the primary source of campaign funds is individuals; political action committees are a distant second. Contributions from both are limited, and direct...
- Campaign finance reform in the United States
- Elections in JapanElections in JapanThe Japanese political system has three types of elections: general elections to the House of Representatives held every four years , elections to the House of Councillors held every three years to choose one-half of its members, and local elections held every four years for offices in prefectures,...
- Politics of JapanPolitics of JapanThe politics of Japan is conducted in a framework of a parliamentary representative democratic monarchy, where Prime Minister of Japan is the head of government. Japanese politics uses a multi-party system. Executive power exercised by the government. Legislative power is vested in the Diet, with...
- Government-business relations in JapanGovernment-business relations in JapanGovernment-business relations are conducted in many ways and through numerous channels in Japan. The most important conduits in the postwar period are the economic ministries: the Ministry of Finance and the Ministry of Economy, Trade and Industry...
- Diet of JapanDiet of JapanThe is Japan's bicameral legislature. It is composed of a lower house, called the House of Representatives, and an upper house, called the House of Councillors. Both houses of the Diet are directly elected under a parallel voting system. In addition to passing laws, the Diet is formally...