Ex-aides' scandal nags Japan's leader


POSTED: Friday, December 25, 2009

TOKYO—A campaign finance scandal that has nagged at Japan's new prime minister deepened Thursday with the indictment of two former aides accused of falsely reporting donations, forcing him to make a televised apology over the type of corruption he has pledged to end.

But the prime minister, Yukio Hatoyama, who has been in office for only three months, said he had no intention of resigning. He said he had done nothing wrong himself and had been unaware of any transgressions by his aides. Opposition politicians said his assertions mocked the intelligence of taxpayers and his own supporters.

The latest development in the scandal could further erode the credibility of Hatoyama's government, which took power in September on promises of wide-ranging reforms after a half-century of almost uninterrupted single-party rule. His term in office already has been mired by policy missteps and backtracking on some of his main pledges.

Prosecutors said in a statement that they had charged the two former aides of Hatoyama, Keiji Katsuba, 59, and Daisuke Haga, 55, with false reporting of almost 400 million yen in donations, roughly $4.4 million.

The two, who resigned after the scandal first broke a few months ago, are accused of listing contributions in the names of dead people and underreporting some donations.

Prosecutors said Hatoyama, who leads the Democratic Party, would not face any charges.

“;I feel a deep responsibility,”; Hatoyama said, bowing deeply at the nationally televised news conference. “;If there is an overwhelming call for Hatoyama to resign, then I will respect that. But I cannot throw out all we have achieved.”;

The scandal had at first appeared to raise few anxieties among voters because much of the dubious money was in the form of donations from Hatoyama's own coffers or his mother, an heiress to the fortunes of the Japanese tire maker Bridgestone.

But the charges have increasingly painted Hatoyama as a leader out of touch with the economic plight of average Japanese, which has worsened sharply in the aftermath of the country's worst recession since World War II.

By highlighting Hatoyama's privileged lineage, the scandal has also hurt his reputation as a reformer. His grandfather was a prime minister in the 1950s who helped found the long-governing Liberal Democratic Party that Hatoyama ultimately cast from power. The prime minister's brother remains a prominent lawmaker for the Liberal Democrats.

Hatoyama acknowledged receiving 15 million yen (about $164,000) per month in political contributions from his mother, and said he would pay back taxes and penalties, dating back to 2002, of more than 600 million yen ($6.5 million).

The Liberal Democratic leader, Sadakazu Tanigaki, urged the prime minister to resign. “;This makes a mockery of hardworking taxpayers,”; Tanigaki said on the public broadcaster NHK. “;He should immediately take political responsibility.”;

There has been no suggestion that the dubious campaign finance reporting approaches the scope or seriousness of past scandals, which occurred regularly under the Liberal Democrats, often involving secret payments from corporate interests trying to gain advantages in public work projects and government contracts.

But Hatoyama had promised to end such payments, an important reason that Japanese voters ousted the Liberal Democrats from power.

Hatoyama has already come under fire in recent weeks for flip-flopping on whether to renegotiate a deal to relocate a U.S. military air base, and for reneging on a campaign pledge to eliminate an unpopular gasoline tax.

His government's lack of progress in trimming huge budget deficits and curbing deflation has also hurt Hatoyama's standing.

Most voters had appeared to be willing to give Hatoyama time to deliver on his promises, which include an ambitious increase in spending to support families with small children.

But polls show that public support for Hatoyama is declining. Public opinion polls in Japan recently showed his approval rating had fallen below 50 percent from a post-election high of 71 percent.

The falling support puts the Democrats in a potentially precarious position ahead of elections for Parliament's upper house, which must be held next year. The Democrats hope to clinch a majority in that chamber to match their control of Parliament's powerful lower house.