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Japan’s New LDP Scandal Is Unlikely to Change Much

A number of bigshots have resigned after a party-funding scandal. Unlike previous scandals, the prime minister is not threatened because potential challengers within the party lack support and the opposition still stands discredited. Barring minor reforms, the status quo will persist.

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December 27, 2023 07:15 EDT

Japan is a democracy, but voters tend to vote for the Liberal Democratic Party (LDP) almost all the time. As observers wryly remark, there is little liberal or democratic about this party. The LDP is a political machine dispensing patronage with jostling factions.

A day after Christmas, prosecutors questioned the LDP’s former policy chief, Koichi Hagiuda. They have questioned four other top officials, who have all resigned. They are all loyalists of Shinzo Abe, the late Japanese prime minister who was in power from 2006 to 2007 and then again from 2012 to 2020. Abe was Japan’s longest-serving prime minister and was extremely powerful.

A very Japanese-style scandal

It turns out that the LDP made hay when Abe’s sun shone bright. The Abe faction, still the largest in the LDP, “systematically underreported about ¥500 million in ticket sales for fundraising events” over five years. This amounts to $3.51 million, which is mere piffle by Nigerian or Pakistani standards. However, Japan is a country that prizes probity, and this financial scandal is turning out to be a big deal.

The Abe faction allegedly gave the excess amount to lawmakers who sold more than their allotted quota of tickets. Kickbacks from fundraising events are not illegal, but failing to report these payments violates the law. That is why so many bigshots are in hot water.

Many in Japan are calling for reform. Prime Minister Fumio Kishida has promised “to do everything necessary to regain trust” for the LDP. He will set up a new party body. This will discuss reforms to the political funds law, cashless payments for fundraising party ticket sales and auditing of such fundraising events.

Despite his promises, Kishida is in trouble. Public anger is running high and his approval ratings have fallen to 17%. Analysts are calling this scandal a “once in a generation” political crisis. Yet it is important to remember that the LDP has been through many scandals before. The party has been in power almost all the time since 1955.

As a well-oiled political machine, the LDP needs off-the-books slush funds. Its leaders used these kickbacks to take care of their buddies in their political fiefdoms. This elaborate patronage machine is how the Japanese system works. In some ways, it is no different to the US or India. In both democracies, politicians have to watch out for the interests of their donors and reward loyalists who work on their campaigns. Yet money in politics evokes a whiff of disgust and, in the case of Japan, has led to outrage.

Prosecutors are probing not only the Abe faction but also the Nikai one. They are also investigating the prime minister’s faction, too. Kishida has been in power since October 2021, but scandals have dogged him since. This includes the LDP’s links to the controversial Unification Church and Kishida’s son’s use of the prime ministerial residence for a house party.

As pointed out earlier, these scandals are minuscule in comparison to most other countries. However, they have already caused heads to roll because they have come at a time of rising discontent.

Times are tough and people are hurting

Like many other first-world countries, Japan is experiencing a cost-of-living crisis. In January, Japan’s inflation rate jumped to a fresh 41-year high. Rent, food, fuel and almost everything cost more. Salaries have not risen accordingly. Increased military spending to counter China portends tax increases. A new invoice system is likely to lead to higher taxes for freelancers and self-employed people. Tellingly, the Japanese chose “tax” as the kanji character of the year. The last time they did so was in 2014 when the consumption (sales) tax rose from 5% to 8%.

Japan has long been known for being frightfully expensive. In part, this explains the low birth rate. In addition to many other reasons, young couples find high education costs daunting. Coming during a cost-of-living crisis, the LDP scandal has angered many Japanese who find politicians increasingly removed from their day-to-day realities.

In the past, scandals have damaged prime ministers.  In 1974, Kakuei Tanaka resigned as prime minister and was arrested two years later for taking bribes from Lockheed. In 1989, Noboru Takeshita lost his premiership after allegations of insider trading and a succession of prime ministers followed. Thanks to this instability, “the LDP lost its Diet [parliament] majority to a coalition of opposition parties, ending its 38-year rule.” In 2010, the Democratic Party of Japan was in power, and it turned out that its officials had underreported fundraising proceeds. As a result, Yukio Hatoyama had to resign from the prime ministership.

This time, things might be different. For now, Kishida has little to fear. The LDP leadership contest is only due in September 2024. Taro Kono and Shigeru Ishiba are popular with the public but lack support within the party. Kishida has reshuffled his cabinet twice, and the scandal weakens the Abe faction, strengthening the prime minister’s hand.

Kishida is also secure in the knowledge that national elections are only due in October 2025. The opposition Democratic Party of Japan still stands discredited. It was in power from 2009 to 2012, a time when the economy tanked and the Fukushima Daiichi nuclear power plant suffered a meltdown.

Given the lack of alternatives and entrenched interest groups, the status quo will continue. Kishida might introduce more stringent reporting measures on party fundraising, but he does not command enough support within the LDP to push through any fundamental reform.

No wonder young voters increasingly shun politics. Only 34% of 18- and 19-year-olds voted in 2022. This low turnout is not healthy for Japanese democracy, and the current scandal might increase political apathy further.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.


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