A discount of about ¥800 million has come into question.
The Board of Audit has compiled a report on a case in which a state-owned land plot in Toyonaka, Osaka Prefecture, was sold to school operator Moritomo Gakuen, for ¥134 million.
The report criticized the government, saying, “The basis of the calculations for the appraisal [of the land plot] is inadequate, and careful discussion was lacking.”
After the cost of removing waste buried underground on the land plot was deducted, the selling price became one-seventh of the appraised value. The board rejected the government’s explanation that the land was disposed of through appropriate procedures based on the law. This is significant.
At the request of the Finance Ministry’s Kinki Local Finance Bureau, the Land, Infrastructure, Transport and Tourism Ministry’s West Japan Civil Aviation Bureau estimated the amount of the waste and the cost of removal. It was unusual in that the West Japan Civil Aviation Bureau calculated it on its own, not entrusting the task to private appraisers. The bureau estimated the total amount of waste by setting figures such as the size of the area containing the waste and the depth at which it was located, as well as the percentage of waste mixed in the soil.
The board mentioned the possibility that those figures may have been too large. It also presented its own estimate results showing the waste was only 30 percent or 70 percent of the figure estimated by the bureau.
The opaque situation regarding how the selling price was discounted was highlighted again.
It cannot be overlooked that only some of the documents that served as the basis for calculations still exist. The basis for the “disposal unit price,” or the costs to be incurred from drilling to disposal, was not confirmed. Therefore the board was unable to work out a fair price for the cost of removing the waste.
Thorough probe needed
A lack of clarity also remains in the words exchanged between the government and Moritomo Gakuen. It is said that former Moritomo Gakuen President Yasunori Kagoike, who was indicted for fraud and other charges, made a request to an official of the Kinki Local Finance Bureau, calling for “the sale of [the land plot] with the price very close to zero.”
The Finance Ministry has said that it discarded records of negotiations with Moritomo Gakuen, on the grounds that the land plot sale was completed last June. This is in accordance with rules for the handling of administrative documents, but even so, it is true that means to verify the negotiation process have been lost.
It is reasonable that the board expressed a candid opinion regarding the lax document management.
In response to a criminal complaint, the Osaka District Public Prosecutors Office’s special investigation squad is currently investigating the Kinki Local Finance Bureau officials on suspicion of breach of trust.
Proving intent is essential for a breach of trust charge to be constituted. The point is whether bureau officials discounted the selling price for the purpose of bringing benefits to themselves or Moritomo Gakuen and causing damage to the state. There must be a high hurdle for establishing the case, but the squad should conduct a thorough investigation based on the board’s report.
Prime Minister Shinzo Abe’s wife, Akie, was to assume the post of honorary principal at an elementary school that Moritomo Gakuen was constructing on the land plot in question. Abe has stressed, “Neither my wife nor I was involved at all in the sale of the state-owned land plot.”
Did any intentions of bureaucrats influence the discount? The government must give convincing explanations.