Revised Political Funds Control Act Passed the Diet

The House of Councillors approved the revised Political Funds Control Act, supported by the ruling Liberal Democratic Party and Komeito. Having been approved in the House of Representatives earlier this month, the bill passed the Diet and the law will be enacted from January 2026. The opposition parties sharply opposed the new law, denouncing the bill as full of loopholes.

The LDP submitted the bill in May after it faced broad public skepticisms on the slush fund scandal. After the submission, the LDP further revised the bill, accepting request from Kometo, to lower the threshold of disclosing information of purchaser of fundraising party tickets from ¥100,000 to ¥50,000. However, the revied bill has no annual limit for how many parties a lawmaker can have.

 

The LDP also added a clause that the disclosure of receipts on the spending of “policy activity fund,” the money from a party to its leaders without disclosing how it was used, should be made open ten years later. The clause was requested by Nippon Ishin no Kai (Japan Innovation Party). The top leaders of Ishin and the LDP made a deal that the LDP would achieve another reform in Houses’ allowance for each lawmaker by the end of this session to get Ishin’s support for the LDP bill. But the LDP abandoned Ishin’s reform, because time was running out. Infuriated Ishin turned its back to the LDP and voted against the LDP bill in the Upper House.

 

Missing report on spendings of the policy activity fund will be prescribed after five years have passed. Even if the case is found ten years after, the politician will no longer be indicted because of the five-year prescription. With an unexpected help from Ishin, the LDP could passed the bill with a great loophole. Although the LDP explained that it would set an annual limit on the spending of the policy activity fund, the details are still “under consideration.”

 

The new law will impose each lawmaker to submit “certification” of the record of political funds, and the lawmaker will be disfranchised, if the certification is wrong. However, the lawmaker will not be charged, if the accounting manager have been making a lie. The lawmaker can always escape its responsibility, attributing everything to the manager.

 

Transferring fund from an organization with strict rules for disclosure to another one with softer regulation will be closely watched under the new law. But there is no limit of how many organizations one lawmaker can establish. The LDP also proposed building third-party observation organization for checking political fund. But when and what kind of the organization will be built is “under consideration.”

 

The opposition parties criticized the bill as unworthy for a political reform. 77 percent regarded the bill as inefficient for preventing the same kind of scandal in the future in the poll of Asahi Shimbun in mid-June. 83 percent did not approve the handlings of the slush fund scandal by Kishida. It is obvious that the passing of new law will not raise the approval rate of current administration.