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Political Finance and the Scandal Train

SNA (Tokyo) — Whether it be the Lockheed Scandal of the 1970s, the Recruit Scandal of the 1980s, or the more recent misadventures that shook the Abe administration, such as the fall of prominent ministers Akira Amari and Yuko Obuchi, the issue of “money and politics” is a theme that runs like a steam train through the center of postwar Japanese political history. It has a systemic aspect that penetrates beyond the many unique cases it encompasses.

Unlike the US political system, there are no registered lobbyists in Japan. The whole method of how private interests influence policymaking is considerably more informal. As always, access to the politicians is key, and the political finance system defines both the scope and limitations of the nation’s outright political corruption.

Politicians in Japan have three basic sources of income to support both themselves and their political activities.

The first is the direct salary that they receive as political officeholders. These salaries, of course, vary widely depending upon the office, but they are not insubstantial. Even a local city councillor receives a salary of about US$80,000 a year, depending upon the regulations of the local municipality. City council members also receive a monthly political budget of perhaps US$500 or more.

The second source of funds comes from the politician’s own fundraising activities. This includes both direct monetary donations from individual supporters, as well as political gatherings with high ticket prices and a chance for the private supporters to hobnob with the political class.

Corporations and other organizations are banned from making direct financial donations to politicians, but this rule can easily be circumvented. The tickets for the expensive political gatherings can indeed be purchased by corporations or—in a practice often used by major utility companies—the executives of a major firm can make donations in their own names as individuals, with it being mutually understood that the money is effectively a donation on behalf of the interests of the company.

Labor unions also give some financial support to politicians, but the main asset they bring is manpower during election periods. Unions can put bodies on the street, fixing posters to election boards, handing out fliers, and driving the loudspeaker trucks around the neighborhoods.

The third source of income for politicians comes from their political party (if they are a member of a national party). Corporations are allowed to donate to political parties, but the real source of most parties’ wealth are the taxpayer subsidies they receive each year based upon the size of their lawmaker delegations.

The exception is the Japan Communist Party, which refuses on principle to accept taxpayer subsidies. Nevertheless, it is one of the richest political parties due to its tight organization, including systemized financial support from party members and sales of its newspaper, Akahata.

These three basic sources of political finance for politicians create different incentives. The officeholder salary is public financing, and provides a politician with the basic income they need to survive if all else fails. The donations and fundraising gatherings give local grandees, businesses, professional associations, and labor unions their crack at an oversized influence on policymaking. Finally, the taxpayer subsidies and corporate donations reinforce the central power of the political parties. It gives the party leaders the main whip that they can crack over recalcitrant individual politicians.

On the whole, Japanese politics is much less systematically corrupt than, for example, the United States. The amounts of private money involved in US national elections is of an entirely different magnitude. Japan does not have political advertisements for individual politicians on television, nor does it have expensive political consultants whose salaries need to be paid.

Some elections can be won in Japan without any substantial support from private companies or wealthy individuals.

One of the reasons why the Japanese media is often consumed by politicians’ financial scandals is precisely because of the public’s relatively low tolerance for the idea that their leaders might not be serving the broader interest. When a politician does get caught with his or her hand in the cookie jar, it can easily be a political career-killer.

With a weapon of that level of power lying around, it’s no wonder that individual politicians who step out of line with the preferences of powerful interest groups can often find their personal financial practices under disproportionately close scrutiny.

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