Leaving Loophole in Political Reform

The Headquarters for Political Reform in the Liberal Democratic Party wrapped up its proposals for revision of Political Funds Control Act, which will be submitted to the extraordinary session of the Diet scheduled to be convoked on November 28th. The proposals do not include abolition of donation from corporations and organizations to parties, which the opposition parties regard as the core factor of corruption in the LDP. The LDP also left a loophole in repealing the policy activities fund. It is unclear whether the opposition parties will approve it. 

Private corporations and organizations such as labor union are prohibited to donate to politician. But the donation can be made for parties and their branches. Private business owners can financially support specific politician by donating to an organization which is headed by that politician, or purchasing ticket of fundraising party held by the party or party branch.

 

Donation from private corporations have been a main financial source of the LDP. According to a report of Tokyo Shimbun, Tokyo Election Administration Commission found that about ninety percent of donation from corporations and organizations in 2023 went to the LDP. The total of donation from corporations and organizations to parties was 361 million yen.

 

Prime Minister Shigeru Ishiba hoped further discussion among the parties based on the proposals of the LDP. “Parties have not agreed on treatment of donation from corporations and organizations. I hope them to make detailed discussion,” told Ishiba to the reporters. The lawmakers of the LDP do not recognize donation from corporations and organizations as absolute evil, as they criticize argument in some opposition parties to shift political donations from by corporations and organizations to by individuals.

 

While the LDP proposals include abolition of the policy activities fund, which is distributed from party to its members without requiring to disclose how it was spent, it excluded funds related to diplomatic secret or secret related to management of business from disclosure. Although the LDP proposed establishment of third-party organization to check political funds, secrets of diplomacy and business may be used for hiding inappropriate political funds.

 

The Constitutional Democratic Party, Japan Innovation Party and Japan Communist Party are taking similar stances in banning donation from corporations and organizations. Only Democratic Party for the People (DPP) has not determined its stance. DPP agreed on removing “Wall of 1.03 million yen” from income tax with the LDP on the day before. The party which holds decisive vote will face difficult choice between abolishment and preservation of donation from corporations and organizations, which meanwhile means choice between the leading coalition and the opposition parties.

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