ICHIRO OZAWA: HIS POLITICAL CAREER AND SCANDALS

ICHIRO OZAWA

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Ozawa is a 14th-term veteran lower house member elected from Iwate Prefecture in northeastern Japan. He is known to have wielded huge political clout as DPJ secretary general, while Yukio Hatoyama was party president between September 2009 and June 2010. Ozawa graduated from Keio University in economics and was a protégée of former Prime Minister Kakuei Tanaka and other powerful lawmakers who were indIcted on corruption charges.

Ozawa is a skilled political organizer. For several decades he was known as an LDP deal maker, associated with some shady deals and disgraced politician. Ozawa quit the LDP in 1993 in part to escape associations with corruption. In April 2006, at the age of 63, Ozawa became the DJP leader after easily defeating Naoto Kan in a party poll 119-72. Ozawa had been the leaders of the parties: the Japan Renewal Party, the New Frontier Party and the Liberal Party. Ozawa named Kan as his deputy president. Ozawa was initially seen as the first choice in 2004 but he was passed over because he failed to make some pension payments.

Ozawa’s Political Career

Ozawa won a lower house seat for the first time in 1969 and was re-elected 13 times after that. As an LDP member he served as home affairs minister from 1985 to 1986 and was the LDP party secretary, the party’s No. 2 post, from 1989 to 1991.

Ozawa has been called the “the destroyer” of political parties.” He founded three political parties that disintegrated. Ozawa defected from the LDP in 1993 over disagreements with other LDP members over electoral system reforms and played a key role in the creation of the cabinet of Morihiro Hosokawa, prime minister from August 1993 to April 1994 and the leader of the first non-LDP administration since 1955.

Ozawa has been called the “Destroyer” and “Party breaker” because of his habit of forming parties only to have them merge with other parties. He helped former Prime Minister Tsutomu Hata form the breakaway but now defunct Japan Renewal party., which successfully topped the LDP in 1993. In 1998, Ozawa formed the Liberal Party, which formed a coalition with the LDP in 1999. After leaving the coalition he let the party merge with the DPJ in 2003.

Ozawa has suggested “disenshrining” the war criminals at Yasukuni shrine.

Ozawa as Opposition Leader

In November 2007, Ozawa turned down a proposal by Prime Minister Fukuda to form a grand coalition to end the deadlock in parliament and then abruptly changed his mind and said he was interested in forming such a coalition, an idea that was swiftly rejected by his party, the DPJ. Afterwards Ozawa said that he was going to resign but then retracted his resignation, stayed on as the head of the DPJ and apologized to members of his party for his “clumsy handling” of the affair.

Ozawa appeared be acting on his own in seeking the coalition without the endorsement of his party. Although he appeared to have noble intentions the whole episode made him look rather foolish and threw his party into a state of confusion, LDP members pleaded desperately with Ozawa not to resign, and their desire to cling to him showed their inability to come up with any other leaders. Ozawa was reelected as DPJ head in September 2008

Ozawa’s health and will is sometimes questioned. In September 2006, he was hospitalized for 10 days after experiencing chest pains. In 2009, he was shown dozing off at meetings and some asked if he even wanted to be prime minister.

Ozawa Resigns

In March 2008, Ozawa became embroiled in campaign contribution scandal after his first secretary Takanori Okubo, was arrested on suspicion of receiving illegal donations. Okuba was accused of violating campaign finance laws by accepting $360,000 in donations from construction contractor Nishimatsu and falsifying information about the source of the money. The money went to Ozawa’s political fund-raising organization and was donated over several years in an apparent attempt by the Nishimatsu to secure public works contracts in Ozawa’s political strongholds. Several hours Okuba’s arrest Ozawa apologized with tears in his eyes at a news conference but insisted he had done nothing wrong and said he would stay

One survey taken after the scandal broke found that 60 percent of Japanese wanted Ozawa to resign and only 10 percent thought he would be fit to prime minister. Some, however, Many felt he was singled out for an investigation for engaging in practice that many politician engaged in. Still, the scandal was damaging. After it was revealed the DPJ did poorly in local elections and Ozawa’s approval rating dropped markedly while that of Prime Minister Aso rose.

The scandal involved donations from Nishimatsu through dummy political associations to organizations associated with Ozawa. The donations were deemed illegal because they exceeded the amount one firm can give. An investigation of Nishimatsu revealed that it had a $10 million slush fund and hid $25 million in expenditures over a five year period and donated $50 million through shady political organizations to a number of politicians and political groups, including former Prime Minister Yoshito Mori and members of both the DPJ and LDP.

In May 2009, Ozawa finally resigned, citing the best interests of his party in the upcoming election. By that time his disapproval rating was very high, the media coverage was mostly negative, and there was a lot pressure to step down.

Ozawa After the 2009 Election

Ichiro Ozawa was selected as the head of the DPJ in the Hatoyama government. On Ozawa’s section as party head, Hatoyama said, Ozawa’s ability to devise shrewd election tactics would be indispensable for the DPJ’s attempt to gain a working majority of seats in the upper house in next year’s election.

Ozawa was described as a “shadow Prime Minister” or “shadow shogun.” His office was put in charge of screening all petitions from industrial associations, local governments and others. Ozawa had a hand in picking the Cabinet and coached first term representatives. Those that were late to his seminars were punished like school children. Many worried that Ozawa would take over the DPJ or divide it. Some of his allies took key positions in the government. A very close ally of Ozawa’s, 77-year-old Hirohisa Fujii, was named Finance Mister but was forced to resign only a few months after taking his post due to poor health.

Hatoyama was advised by his aides to pick cabinet members with a certain amount of distance from Ozawa and not ask permission to enact policies, simply tell him. Ozawa gave high positions in the DPJ to members of the upper house in anticipation of doing well and gaining supporters in the upper house elections.

In December 2009, Ozawa went to China, accompanied by 600 people, including 143 DPJ party members, each of whom had his or her photograph taken shaking hands with Chinese President Hu Jintao. The visit came across as a publicity stunt with no real purpose. Ozawa insisting it was part of the “Great Wall Plan” that he launched when he was a member of the LDP in the 1990s. Around the same time Ozawa drew criticism for putting pressure on the Japanese Emperor to meet the Chinese Vice President in a hastily-prepared meeting and for calling Christianity a “self righteous” religion.

Ozawa Money Politics

Ozawa was regarded as an “election strategic genius” within the DPJ but also a dictator who had withheld funds from some lawmakers. In December 2010, the Yomiuri Shimbun reported: “A government report on political funds clearly shows that Ozawa's political clout is based on his abundant financial resources and his funds management organization, Rikuzan-kai, still had the highest total revenue of any political organization in 2010. [Source: Yomiuri Shimbun, December 2, 2011]

According to the Yomiuri Shimbun: “The report highlighted the process by which Ozawa collected a huge amount of campaign funds, distributed them to candidates in the House of Representatives election and formed the largest group of supporters within the DPJ. When the lower house was dissolved on July 2010, heavyweights of both the ruling DPJ and the opposition Liberal Democratic Party scrambled to raise funds to finance the campaigns of candidates close to them. [Ibid]

On day parliament was dissolved, the Yomiuri Shimbun reported “dozens of DPJ incumbent and first-time candidates visited a hotel near JR Tokyo Station in small groups, sources said. All of them had blank receipts from their own political funds management organizations in their pockets. One of Ozawa's secretaries was waiting for them in a room at the hotel.” "If you issue a receipt to Rikuzan-kai, it will eventually become public," the secretary was quoted as saying by several of the candidates. "Is that all right with you?" [Ibid]

Having obtained their agreement, the secretary handed over envelopes containing cash, according to the candidates. After counting through the bundles of bills inside the envelope, each candidate filled out a receipt stating their political funds management organization had received 5 million yen from Rikuzan-kai. "We'll count on you in the future when it comes to a showdown," the secretary was quoted as saying. [Ibid]

On the same day, the DPJ headquarters distributed 5 million yen to each party-endorsed candidate. “I was told the amount of campaign funds the DPJ provided to a candidate on the party ticket was 10 million yen, so I was disappointed to find it was just 5 million yen," a DPJ lower house member told the Yomiuri Shimbun. "But because Mr. Ozawa gave an additional 5 million yen, I was sure I could mount a good campaign." [Ibid]

Rikuzan-kai provided a total of 449 million yen in election campaign funds to 91 candidates, including two who received only 2 million yen each. Of those 91 candidates, 88 won a seat in the lower house election, with 49 being elected for the first time. On July 20, the day before the meetings at the Tokyo hotel, Ozawa lent 370 million yen to Rikuzan-kai. It is highly likely that the campaign funds given to candidates came from this money. [Ibid]

Before the DPJ presidential election in September, The Yomiuri Shimbun interviewed the DPJ lawmakers who had received money from Ozawa. Sixty-six said they would vote for Ozawa in the party election, with six insisting on anonymity. Thirteen-three of whom spoke on condition of anonymity’said they would vote for Prime Minister Naoto Kan. [Ibid]

Ozawa Fled Tokyo Because of Fukushima Radiation Fears, Wife Claims

Ozawa’s former wife claimed Ozawa fled from Tokyo in fear of radiation shortly after the outbreak of the crisis at the Fukushima No. 1 nuclear power plant, The Yomiuri Shimbun reported. In a letter addressed to supporters in Ozawa's constituency in Iwate Prefecture, the 67-year-old wife of Ozawa, 70, wrote: “I decided to divorce him because seeing him flee, abandoning the people who supported him so much in their hour of greatest hardship, I knew he would not be beneficial to Iwate Prefecture or Japan," she wrote. [Source: Yomiuri Shimbun, June 24, 2012]

“Iwate Prefecture was hit hard by the tsunami. The letter in question was carried in a weekly magazine in mid-June and copies have circulated among DPJ lawmakers. The letter caused some lawmakers to distrust Ozawa and will likely affect his move to form a new party after leaving the DPJ. [Ibid]

According to the letter, one of Ozawa's secretaries visited his house in Setagaya Ward, Tokyo, on the morning of March 16 last year, after the outbreak of the crisis at the nuclear power plant. He told her to evacuate, saying: "We've received internal information about a radiation leak. We've instructed his secretaries to get away on Ozawa's order. As Ozawa will also evacuate, you and your sons need to find some place to escape." On June 21, a helper at home told her to use bottled water in cooking, saying tap water in Tokyo was contaminated with radiation, according to the letter. [Ibid]

“Ozawa visited Iwate Prefecture for the first time after the Great East Japan Earthquake on March 28, 2011. He met with Iwate Gov. Takuya Tasso at the prefectural government's office in Morioka. The wife believed Ozawa avoided visiting his home prefecture because "he was afraid of radiation."Sources close to the wife testified that the letter's handwriting is authentic. However, an official at Ozawa's office refuted this, saying: "The handwriting in the letter is not his wife's. [Ozawa] did not flee in fear of radiation.” [Ibid]

Ozawa Fundraising Scandal

Ozawa was involved in a scandal in which ¥400 million (about $4.4 million) from his political management fund was used to buy land in October 2004. In January 2010 three of his aides were arrested. Ozawa said the money came from his private funds. Why then was it necessary to buy the land through the political fund? Some of the money is thought to have come from construction firms in return for contracts to build structures for a dam project. Ozawa’s mentors President Kakui Tanaka and LDP Vice President Shin Kaemrua were both brought down in politics-over-money scandals. Ozawa’s political career began as a member of Tanaka’s LDP faction.

Ozawa refused to step down as DPJ Secretary General. In the end prosecutors didn’t bring charges against due to a lack of evidence. He was spared indictment over the scandal but faced a mandatory indictment January 2011 after an inquest panel comprised of ordinary citizens overturned earlier decisions by prosecutors not to pursue charges against him. Ozawa, who still wields considerable clout within the ruling party, had his party membership suspended following his indictment.

In October 2009, Ozawa’s political fund management admitted that it listed $3.4 million earned from a land made in 2004 in the wrong year (2005), presumably to dodge taxes, and borrowed money to buy the land.

In a poll in February 2010, 74 percent of respondents said Ozawa should resign as the party secretary general and 66 percent said he should resign as a lawmaker.

In April 2010, an independent judicial panel concluded it would be appropriate to indict Ozawa over the false records on political donations by his fund-management organization from 2004 to 2007. Afterwards Ozawa said “I won’t quit.” Afterwards Ozawa was hospitalized for treatment for kidney stones. Ozawa was taken to the hospital by ambulance after complaining about pain in his back. In 1991, Ozawa was hospitalized for more than a months die ot a heart problem.

In October 2010, Ozawa was indicted on charges on charges in falsifying financial reports in regards to a land purchase by his fund management body. The case hinges in statements to investigators by Ozawa’s chief secretary Tomohiro Ishikawa that he had reported the falsification to Ozawa and got Ozawa’s approval.

In January 2011, Ozawa was indicted over accounting irregularities involving his political fund. The decision was made by three court-appointed lawyers after an independent judicial panel of citizens twice decided not to indict him.

See Modern History

Three Ex-Ozawa Aides Found Guilty over False Political Fund Reporting

In September 2011, three former aides to Democratic Party of Japan heavyweight Ichiro Ozawa were found guilty of falsifying political fund reports for his fund management body. Tomohiro Ishikawa, 38, a former private secretary to Ozawa and now a House of Representatives member, was sentenced to two years in prison, suspended for three years, for violating the political funds control law. Two other former aides to Ozawa -- Takanori Okubo, 50, a state-paid secretary, and Mitsutomo Ikeda, 34, a private aide -- were sentenced to three years in prison, suspended for five years, and one year in prison, suspended for three years, respectively. [Source: Kyodo, September 26, 2011]

The defendants "deepened the public mistrust of the flows of political funds by intentionally making many false reports to avoid cozy ties with companies from being exposed," Presiding Judge Ikuro Toishi said in the ruling. Ishikawa said he intends to appeal the verdict, telling a news conference that the ruling's "unfairness is clear, given that the court arbitrarily acknowledged the facts the prosecution didn't even assert or try to prove." "I firmly believe that an appeals court will reject the ruling," he added. Hiroaki Yagi, deputy chief prosecutor at the Tokyo District Public Prosecutors Office, said the court acknowledged most of the arguments prosecutors had made during the trial, including motives behind the case.

Prosecutors had sought two years in prison for Ishikawa, while seeking three years and six months in prison for Okubo and one year in prison for Ikeda. All three defendants had pleaded not guilty. According to the ruling, the defendants failed to register a 400 million yen loan from Ozawa to his fund management body, called Rikuzankai, in 2004, and when returning the same amount to him in 2007. Okubo also falsified reports for donations totaling 35 million yen received from general contractor Nishimatsu Construction Co., the ruling said. The reports for 2004 and 2007 were falsified to conceal the 400 million yen, whose sources are "unaccounted for," as questions would otherwise be asked about where the money had come from, Toishi, the presiding judge, said.

On the question of whether Ishikawa and Okubo received 50 million yen each in a slush fund from Mizutani Construction Co., a medium-size general contractor in Mie Prefecture -- another focus of the trial -- the court acknowledged the receipt of the 100 million yen.The ruling said a former Mizutani president's testimony on the matter is deemed credible because it corresponded with other pieces of evidence presented to the court. Toishi pointed out that Ozawa's office had played a crucial role in picking winners in bids for public works projects in Iwate Prefecture, Ozawa's home constituency, and elsewhere, and that Okubo had asked Mizutani Construction to provide 100 million yen in connection with a dam construction project in Oshu, Iwate.

While the court did not examine Ozawa's alleged conspiracy in the case, its ruling could influence the defense to be mounted at Ozawa's trial at a different panel of the district court because his side has denied the falsification of political fund reports.

While DPJ Secretary General Azuma Koshiishi said at a news conference he does not intend to ask Ozawa to resign as a lawmaker, the main opposition Liberal Democratic Party called for his resignation. The matter could thus become an obstacle in starting interparty discussions about a new supplementary budget to fund post-disaster reconstruction projects. Ozawa's responsibility as "someone in charge of his secretaries is extremely grave," said LDP Secretary General Nobuteru Ishihara. The ruling "merits his resignation as a lawmaker," he added, signaling willingness to summon him to parliament as a sworn witness.

The guilty verdicts were handed down although a number of statements in which the defendants reportedly admitted to the allegations or to conspiracy during interrogations were found inadmissible as evidence in court due to questions over their reliability. In the trial, Ishikawa, who left the DPJ in February last year after his indictment but remains a lawmaker, maintained he properly reported the 400 million yen from Ozawa, while Okubo denied any involvement in making reports and Ikeda denied falsifying them.

Ozawa Pleads Not Guilty to Violating Fundraising Laws

In October 2011, Reuters reported, Japan's most controversial politician has pleaded not guilty to charges of violating fundraising laws. Ichiro Ozawa, 69, who has played a pivotal political role for four decades, most recently as powerbroker in the ruling Democratic party, said the charges appeared aimed at destroying him "politically and socially". [Source: Reuters, guardian.co.uk, October 6, 2011]

The trial comes after three former aides were found guilty last week of fundraising law violations and follows a series of political setbacks that suggest Ozawa's influence is diminishing.

In entering his not guilty plea at Tokyo district court on Thursday, Ozawa, whose mastery of backroom deals earned him nicknames of Prince of Darkness and Shadow Shogun, stayed true to his fighting style. "One can presume this is aimed at destroying me socially and politically. This is a clear abuse of state power," he told a panel of three judges.

The trial, expected to conclude in April, centres on charges that Ozawa allegedly oversaw false accounting by the body handling his political funds in a murky 2004 land deal. He has denied wrongdoing and prosecutors had originally decided not to charge him due to lack of evidence, but that was overturned by a judicial panel of ordinary citizens, prompting an indictment in January. If found guilty, Ozawa faces up to five years in jail or fines of up to 1 million yen (£5,500).

"If found guilty, he would naturally find his influence weakening markedly. His intraparty group would start dissolving," said Tomoaki Iwai, political science professor at Nihon University. "Would his influence strengthen if found not guilty? I don't think that would be much of a help for him ... He just will not be able to stop his power from dissipating."

That might be good news for Noda's Democratic party, where Ozawa has been a divisive force, but a blow for those who think his talent for challenging the status quo is what Japan needs to snap out of its prolonged stagnation.

Ozawa Trial

Ozawa is charged with conspiring with the three former aides in failing to list 400 million yen in loans from Ozawa to the Rikuzankai funds management body in its 2004 political funds report. He is also charged with listing about 350 million yen used to purchase a tract of land in a 2005 funds report, which should have been listed in the 2004 report. [Source: Kyodo, March 9, 2012]

After an 11-member independent judicial panel decided twice that Ozawa should be indicted, the Tokyo District Court picked the three lawyers to serve as prosecutors who brought the conspiracy charges against Ozawa in January 2011.

In January 2010, prosecutors arrested the three former aides “Ishikawa, Ishikawa's successor Mitsuo Ikeda, and Takanori Okubo, a former state-funded secretary and one-time chief accountant of Rikuzan-kai---on suspicion of violating the political funds control law. They were convicted at the Tokyo District Court last year and given suspended prison terms. They later filed appeals with the Tokyo High Court.

Ozawa Says 400 Million Yen from Parents, Book Royalties

In January 2012, the Yomiuri Shimbun reported: Ozawa denied conspiring with three former secretaries in connection with a land deal by Rikuzan-kai, his political funds management body, during a hearing in his trial at the Tokyo District Court. "My interest is higher affairs of the state. I've never seen any political funds reports before," Ozawa, 69, said during the hearing, the twelfth in his ongoing trial. [Source: Yomiuri Shimbun, January 11, 2011]

Regarding 400 million yen Ozawa lent to Rikuzan-kai to purchase a plot of land, Ozawa said the money was from book royalties among other sources. Ozawa has previously described the money as coming from his personal account, but during the hearing said, "[The money] came from profits on sale of real estate I inherited from my parents, book royalties and remuneration for being a lawmaker for more than 40 years."

Regarding relations with his former secretaries, Ozawa said: "I concentrated on political matters. It would be meaningless if I always double-checked work I entrusted to my secretaries and interfered with it." The court-appointed lawyers are insisting that Rikuzan-kai purchased the land with 400 million yen of Ozawa's personal cash, but his aides failed to enter this money and only reported bank loan received during the period in the political funds report.

The court-appointed lawyers are insisting the bank loan to Rikuzan-kai listed in the political funds report were "deceptive" and a means of hiding that the cash came from Ozawa. As to why he had personally given the 400 million yen to Tomohiro Ishikawa, a House of Representatives member and one of his former secretaries, to purchase the land, he did not provide details, but said: "About 400 million yen was needed to build housing for my secretaries. But I'd heard if my political funds management body paid for the housing, there would be operational problems. I happened to have 400 million yen on hand."

Ozawa has admitted signing documents to receive the bank loan, but said: "I wasn't given any explanation as to why we were receiving the bank loan. I agreed to purchase the land, and provided the money. [Ishikawa, who was in charge at the time] had discretion over how to utilize the money."

Rulings for the three former secretaries in September 2010 at the Tokyo District Court said they received a 100 million yen slush fund from second-tier general constructor Mizutani Construction Co. Ozawa described the decision as "...absurd reasoning by public prosecutors."

Questionable Evidence in the Ozawa Trial

In February 2012 Kyodo reported: the three-judge panel led by presiding Judge Fumio Daizen turned down the court-appointed lawyers' call for adopting as evidence depositions taken by prosecutors from one of the three former aides, lawmaker Tomohiro Ishikawa, that indicate a conspiracy among them over the alleged false reporting. In the depositions, Ishikawa, 38, said he had told Ozawa of the false reporting and gained approval from him. [Source: Kyodo, March 9, 2012]

The Yomiuri Shimbun reported: Tokyo District court judges in charge of a trial of Ozawa decided to exclude as evidence all statements in which Ishikawa said Ozawa was involved in the scandal. In arriving at the decision, the judges said Ishikawa's statements were involuntary and that he may have been intimidated or swayed by prosecutors into thinking they would be beneficial for Ozawa. The Criminal Procedure Code stipulates that records of statements made during investigations by prosecutors and police officers are considered hearsay. Unless it is proved that such statements were made voluntarily, they are viewed as illegal and are prohibited from being used as evidence in trials. [Source: Yomiuri Shimbun, February 18, 2012]

In their decision, the judges regarded a voice recording of a conversation between Ishikawa and a prosecutor made in secret after he was released on bail as "solid evidence," and considered its contents. The judges concluded that the prosecutor had told Ishikawa, "If you maintain what you said during investigations, [Ozawa] will not be indicted," while suggesting that Ishikawa himself might be rearrested. The judges concluded the interrogation was illegal, as Ishikawa was guided into giving possibly false evidence through intimidation and the suggestion that such statements would be beneficial. The judges concluded the records of the statements cannot be accepted as evidence.

But the court adopted as evidence depositions taken by prosecutors from another former aide, Mitsutomo Ikeda, who admitted to having reported to Ozawa and gained approval from him for listing the 350 million yen used to purchase the Tokyo land lot in the 2005 funds report instead of the 2004 funds report.

Ishikawa, a second-term lower house member, left the ruling party following his arrest and indictment in 2010 to become an independent. Ishikawa, who was aware of Ozawa's asset conditions but initially did not know the existence of the 400 million yen, sought to hide the nature of the funds because the media reported doubts about Ozawa's asset formation at that time.

In early 2012, a prosecutor who grilled Ishikawa during investigations was found to have worked out a false investigative report from depositions taken from him.

Ozawa's defense lawyers have called for the court to turn down the indictment against Ozawa, saying it was made on the basis of the false investigative report.

Three Year Prison Term Sought for Ozawa

In March 2012, Kyodo reported: A team of three court-appointed lawyers sought a prison term of three years for Ozawa who is accused of conspiracy with three of his former aides over false reporting of political funds by his funds management body Rikuzankai. The team of lawyers, who serve as prosecutors in Ozawa's trial, sought the penalties for Ozawa at the end of their closing statement in the 15th hearing of his trial at the Tokyo District Court.[Source: Kyodo, March 9, 2012]

In the closing statement, the lawyers said Ozawa repeatedly denied his involvement in the alleged conspiracy in irrational ways and that his sense of respect for social norms has weakened remarkably. In reading its closing statement, the team of court-appointed lawyers said Ozawa intentionally conspired with the former aides to fail to list the 400 million yen in loans and to falsify the reporting of the funds to purchase the land lot.

They said Ozawa apparently intended to cover up the existence of the 400 million yen, noting that Ishikawa deposited the loans from Ozawa into several bank accounts and that the Rikuzankai funds management body borrowed the same amount of bank loans and postponed the registration of the land lot. The lawyers also said it is hard to imagine that the former aides filed such false funds reports on their own decision without gaining Ozawa's approval.

Ozawa Not Guilty of Fund Conspiracy

In April 2012, Ozawa was acquitted of conspiring with former aides to make false financial reports, citing a lack of evidence to establish his alleged role in the false reporting of funds related to a land purchase by Ozawa's political fund management body, Rikuzan-kai, in 2004 and 2005. The ruling was the first involving a politician facing charges after a citizen panel overrode a decision by prosecutors not to indict. Ozawa maintained his innocence throughout his trial, which began in October. Court-appointed lawyers serving as prosecutors sought a three-year prison term without labor for Ozawa. [Source: Masami Ito and Setsuko Kamiya, Japan Times, April 27, 2012]

“Ozawa expressed happiness over the acquittal. "Today's ruling is in line with what I have been stating all this time---that I did not conspire (with the former secretaries) to make false entries," he said in a statement. "I would like to honor the court for being sensible and fair and would like to express my gratitude to my comrades and the people all over Japan for their support up to today.” The court-appointed lawyers said they will review the ruling and decide whether to file an appeal in the next two weeks. [Ibid]

“Masami Ito and Setsuko Kamiya wrote in the Japan Times: “The focus of the trial was whether the DPJ powerbroker knowingly conspired with his former aides to falsify Rikuzankai's reports over a ¥400 million land deal in Setagaya Ward, Tokyo. The ex-secretaries, Tomohiro Ishikawa, Mitsutomo Ikeda and Takanori Okubo, were found guilty in a separate trial in September and all three have appealed the verdict. All received suspended prison sentences. [Ibid]

“Presiding Judge Fumio Daizen ruled that even though there were grounds to the court-appointed lawyers' argument that Ozawa was involved in the conspiracy, evidence was lacking. "The court-appointed lawyers bore the responsibility of proving the defendant's criminal intent, but in this case, they did not establish (Ozawa's guilt), leaving behind reasonable doubt," Daizen said. Without evidence of criminal intent, "I must state that the defendant cannot be held criminally accountable by law.” [Ibid]

“Reporters stampeded out of the courtroom upon Daizen's declaration of Ozawa's innocence to spread the news, prompting the judge to repeat the verdict to make sure Ozawa heard it. "The defendant is found innocent. Do you understand?" Daizen asked Ozawa, who answered in a clear, steady voice, "Yes." In the ruling, which took 2 hours and 25 minutes to read out, Daizen pointed out that parts of Ozawa's testimony were questionable, including how the kingpin repeatedly insisted he never looked at his political funds reports. "There were some points where the defendant's testimony shifted or was unnatural," Daizen said. "I must say that generally speaking, his testimony . . . that he has never been told about the deal or the contents of the funds reports upon their drafting or submission, lacks credibility.” [Ibid]

“Meanwhile, the court ruled that Ishikawa broke the law by not entering the ¥400 million used to purchase the land in the 2004 funds report, and instead reported it a year later to avoid media attention during a politically sensitive time when Ozawa was getting ready to run in an upcoming DPJ presidential poll. "If reported and disclosed (in the 2004 report), the defendant may very well have been pursued by the media and become the object of criticism. . . . It can be said that there was a strong possibility that defendant's political career would have suffered a disadvantage," Daizen said, explaining the court's decision regarding Ishikawa's motives. But Daizen said the court recognized that there was no direct evidence to prove Ozawa conspired with the former secretaries with criminal intent. [Ibid]

“Ozawa's victory was partly influenced by the court's decision in February to reject key depositions made by the former aides that supported the court-appointed lawyers' argument after finding that prosecutors had used illegal tactics to pressure Ishikawa into sticking to a false confession that implicated his boss. Daizen once again slammed the prosecutors, saying such acts are "inexcusable.” [Ibid]

Ozawa's Statements 'Inconsistent, Astonishing'

Shin Watanabe, a reported who had covered the Ozawa story since it began, wrote Yomiuri Shimbun, “In October 2009, “Over the course of my investigation and analysis on the body's political funds reports, I discovered the flow of the money spent on the land deal and the balance statement by Rikuzan-kai were inconsistent to the tune of hundreds of millions of yen. "It was a simple mistake," a disgruntled Ozawa said at the first press conference after the allegation was reported in 2009. In January 2010, three of his former secretaries were arrested over the scandal. Ozawa criticized prosecutors soon after he was also questioned in connection with the case. However, once the prosecutors decided not to indict him, he did an about-face and began using the prosecutors' decision as proof of his innocence. [Source: Shin Watanabe, Yomiuri Shimbun, April 27, 2012]

However, in January 2011, when Ozawa faced mandatory indictment, he was back to criticizing prosecutors. Certainly, there were problems with the investigation. A falsified report was submitted to the Tokyo No. 5 Committee for the Inquest of Prosecution. As a journalist who has covered prosecutors for many years, I feel strong resentment over the action.However, this is a totally different issue from the fact that Ozawa stood in a courtroom indicted by an independent judicial panel of citizens, which reflects public opinion. The problematic investigation cannot be an excuse for Ozawa to turn away from the weight of the indictment. [Ibid]

“In his trial, the former DPJ leader said, as if nothing were wrong, "I've never seen a political funds report." I was astonished at such a comment. What I found ridiculous is that Ozawa said he himself put bundles of notes totaling 400 million yen into paper bags and covered them with newspaper before handing them to one of his secretaries. Ozawa once said, "My interest is the higher affairs of the state." Did the former DPJ leader who was too busy to check his political body's funds reports really pack the bills into paper bags in his office? My reporting left me with the impression that Ozawa's repeated statements that he was "the only one who was open about all his political funds" were merely a fiction. [Ibid]

Ozawa Acquittal Is Upheld in Appeal

In November 2012, a Tokyo High Court upheld Ozawa’s not-guilty verdict, agreeing with a lower court decision that Ozawa did not conspire with former aides to falsify financial statements in his political funding management body Rikuzankai in 2004 and 2005. Setsuko Kamiya and Masami Ito wrote in the Japan Times, The legal victory is likely to have little positive impact on the political influence of the "shadow shogun"... with critics suggesting his clout is a thing of the past. [Source: Setsuko Kamiya and Masami Ito, Japan Times, November 13, 2012]

In late April, the Tokyo District Court ruled there was not enough evidence to prove Ozawa had criminal intent in logging cash transactions to purchase ¥400 million worth of land in Setagaya Ward, Tokyo, in Rikuzankai's financial statement in 2005, although the purchase was made in 2004 and should have been reported for that year. But on Monday, presiding Judge Shoji Ogawa ruled that Ozawa's former secretaries, who basically ran Rikuzankai, may not have had criminal intent in the first place, and thus Ozawa may have assumed there actually was nothing wrong about the land transaction being reported in 2005.The high court said there was room to believe that former Ozawa aide Tomohiro Ishikawa may have thought that although the land purchase was made in 2004, its registration and official acquisition were done in 2005, and logging the transaction in 2005 was not a violation of law. Ishikawa's successor as Ozawa's aide, Mitsutomo Ikeda, could have had a similar understanding, the court ruled. [Ibid]

Ozawa is Reinstated Into the DPJ and Then Expelled

The DPJ quickly decided to reinstate Ozawa as a member after he was found not guilty of falsely reporting political funds. The DPJ suspended Ozawa after he was indicted in January 2011 on charges of violating the political funds control law. Jiji Press reported the DPJ's No. 2 leader, Secretary General Azuma Koshiishi, led support for lifting the suspension, brushing aside the caution shown by some DPJ members, including Policy Research Committee Chairman Seiji Maehara. At that time about 120 DPJ lawmakers supported Ozawa, the largest single group within the party. [Source: Jiji Press, May 9, 2012]

“In early July 2012, the DPJ decided to expel 37 House of Representatives members, including Ozawa, after they voted against legislation for a consumption tax hike in the lower house of the Diet last week. Jiji Press reported the decision came a day after the 37 lawmakers, together with another lower house member and 12 members of the House of Councillors submitted their resignations to the DPJ over their opposition to the planned doubling of the tax rate to 10 percent by October 2015, a centerpiece of Prime Minister Yoshihiko Noda's social security and tax reform agenda. The DPJ maintains a majority in the lower house even without the 37 members. Still, the mass defection split up the DPJ nearly three years after the party swept to power, and weakened Noda's grip on power. The upper house is already controlled by the opposition camp. [Source: Jiji Press, July 4, 2012]

“Despite opposition from a total of 57 DPJ lawmakers, the tax hike legislation passed the lower house on June 26, with support from the DPJ and the two largest opposition parties--the Liberal Democratic Party and New Komeito--following a three-party agreement. The DPJ leadership apparently found it necessary to punish the rebels in order not to jeopardize the cooperation of the two opposition parties on the tax hike legislation in the upper house, which will shortly begin deliberations on it. [Ibid]

“We decided on disciplinary action in order to restore party discipline as soon as possible," Noda, also DPJ president, told reporters. Cabinet ministers have also called for reaffirming party unity. "We should be united more than ever to enact legislation for comprehensive reforms" of the tax and social security systems, including the tax hike, Finance Minister Jun Azumi said at a press conference in Tokyo. [Ibid]

Ozawa, DPJ Rebels Create New Party

In late July 2012, Ozawa and other DPJ defectors created a new party aiming to block the planned consumption tax increase on which Prime Minister Yoshihiko Noda has staked his political career.An inaugural meeting was held in the Parliamentary Museum near the Diet Building in Tokyo with 49 former DPJ members who left the party in opposition to the plan to raise the current 5 percent tax rate to 8 percent in April 2014 and 10 percent in October 2015. The new party was named "Kokumin no Seikatsu ga Daiichi," after a key DPJ slogan that means "putting people's lives first." The party is the fourth created by Ozawa during a political career spanning more than four decades. [Source: Jiji Press, July 12, 2012]

“As well as its opposition to the consumption tax increase, Ozawa plans to set the goal of lowering Japan's dependence on nuclear energy to zero as a key campaign pledge for the new party. The new party's members include 37 of the 57 DPJ rebels who voted against the tax bills in the lower house and 12 upper house members who left the DPJ to follow Ozawa. [Ibid]

“According to a Yomiuri Shimbun poll 79 percent of Japanese are against the idea of an “Ozawa party.” The DPJ's split is expected to increase the risk of a political impasse, as a minority ruling coalition would not be able to vote down a no-confidence motion against the Noda Cabinet. If 42 or more lawmakers leave the DPJ and join with the Kizuna Party, a small party that was formed by DPJ defectors last year and has nine seats in the lower house, the total number is enough for a no-confidence motion under the chamber's rules. [Ibid]

Ozawa and the December 2012 Elections

After he left Minshuto in the summer of 2012, Ozawa formed the Kokumin no Seikatsu ga Daiichi (People's Life First) Party. Before the December 2012 lower house elections in Japan. Ozawa’s party joined forces with Nippon Mirai no To (the Tomorrow Party of Japan). The two party coalition did poorly in the election. The number of seats they held fell from 61 to nine. Most of Ozawa’s followers are first-term lawmakers lacking a strong electoral base and many lost in the lower house election. "Ozawa's People's Life First will be on the verge of extinction” after the election, Kazuhisa Kawakami, a political science professor at Meiji Gakuin University, told the Yomiuri Shimbun. "The public views Ozawa as someone whose political career is over.”

After the lower house election, the Yomiuri Shimbun reported: “Internal conflict in the Nippon Mirai no To (Tomorrow Party of Japan) deepened among members close to party leader Yukiko Kada and those supporting Ichiro Ozawa over appointments to top party posts. Kada, the governor of Shiga Prefecture, expressed frustration with Ozawa's actions over the issue at the prefectural office. "Mr. Ozawa joined us promising to work just as an ordinary member, but when I tried to contact him, he didn't reply," she said. [Source: Yomiuri Shimbun, December 27, 2012]

At a meeting of all party lawmakers from both Diet chambers Monday, Kada proposed naming Tomoko Abe, the party's current deputy leader and a former member of the Social Democratic Party, as co-leader, and Katsumasa Suzuki, who is close to Ozawa, as secretary general. Kada intended to give Ozawa an advisory post. However, Ozawa's allies submitted, and insisted they had gained approval for, two motions that ran counter to Kada's proposal at the meeting, sources close to the party said. One was against approving Kada's personnel lineup, while the other said the party should ask Ozawa to serve as coleader. Later the war of words between the two sides escalated. Kada issued a statement which criticized members close to Ozawa, saying, "As party leader, I cannot accept such undemocratic decision-making procedures.” [Ibid]

Image Sources: Japan Zone, Kantei and posters (Japan-Photo.de)

Text Sources: New York Times, Washington Post, Los Angeles Times, Daily Yomiuri, Times of London, Japan National Tourist Organization (JNTO), National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.

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© 2009 Jeffrey Hays

Last updated January 2013

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