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Reconstruction minister’s office received donations from firm that won state subsidy

  • October 18, 2018
  • , The Mainichi
  • English Press

CHIBA — A branch of the ruling Liberal Democratic Party (LDP) in Chiba Prefecture headed by new reconstruction minister Hiromichi Watanabe received a total of 360,000 yen in donations from a local company between 2014 and 2016 that won a subsidy paid with central government funds in 2015, according to people involved in the donations.

 

Experts say that the practice is not desirable judging by the spirit of the Political Funds Control Act prohibiting companies from making political donations within one year after they become entitled to state subsidies to be paid directly to them. This provision is intended to prevent collusion between subsidy recipients and politicians. The donations made to the LDP branch headed by Watanabe are not illegal because the subsidy was awarded indirectly.

 

The donor is Yukiwa Foods Co. in the city of Matsudo in eastern Chiba, part of Watanabe’s home constituency. According to company officials, the National Federation of Small Business Associations decided around December 2015 to pay some 8 million yen in subsidies for the company’s development of Halal food for Muslims. The money was allocated from a fund the federation runs for innovative manufacturing, commercial and service projects using contributions from state coffers.

 

Meanwhile, the company donated 10,000 yen a month from 2014 through 2016 for a total of 360,000 yen to the LDP branch for the Chiba No. 6 constituency for the House of Representatives, according to the branch’s political funding reports. A senior company official explained that the donations were made because the chairman personally knows Watanabe. “It was not in return for winning the subsidy,” said the official.

 

An official of Watanabe’s office told the Mainichi Shimbun that there is “no legal problem” about receiving the payments because the donor received “an indirect subsidy.” The official added that they do not intend to repay the money.

 

But professor Tomoaki Iwai of Nihon University, who specializes in Japanese politics, questions the argument that there is no problem with the donations. The subsidy the donor received was paid from state funds, even if indirectly, pointed out the professor. “In essence, it can be construed that the subsidy was used to pay for political donations.” Iwai added that companies should try to make sure that there are no problems with their donations, “and politicians need to be cautious about receiving such funds.”

 

In June this year, an LDP branch in the southern prefecture of Miyazaki headed by the party’s lawmaker was found to have received donations from a company that had been given an indirect subsidy. The legislator paid back the donations, saying the transaction entailed “moral problems.”

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