Kishida Says He Regrets A Ruling Party Funds Scandal And Will Work On Partial Changes To His Cabinet

The scandal mostly involves the Liberal Democratic Party's largest and most powerful faction formerly led by assassinated ex-Prime Minister Shinzo Abe. Its key members, including those in top Cabinet and party posts, were suspected of systematically failing to report several hundred million yen (several million dollars) in funds in possible violation of campaign and election laws, media reports say. The money is alleged to have gone into unmonitored slush funds.

The scandal and a purge of Abe's faction, which was key to Kishida's own future, could stir a power struggle within the party ahead of a key leadership vote in September, even though Kishida doesn't have to call a parliamentary election nearly two more years. The grip on power of the LDP, which has almost continually ruled postwar Japan, is seen unchanged as long as the opposition remains fractured. Kishida, at a news conference on Wednesday marking the end of this year's parliamentary session, said he regretted that the party fundraising scandal has deepened political distrust and that he is determined to tackle it with “a sense of crisis.”

“It is my responsibility to lead the LDP reform in order to regain the public trust,” he said. Kishida refused to disclose details, but the key changes involve four ministers from the Abe faction — Chief Cabinet Secretary Hirokazu Matsuno, Economy and Industry Minister Yasutoshi Nishimura, Agriculture Minister Ichiro Miyashita and Internal Affairs Minister Junji Suzuki — as well as a few serving key party posts. Former Foreign Minister Yoshimasa Hayashi, who belongs to Kishida's faction, is expected to replace Matsuno, Kyodo News agency reported.

Earlier Wednesday, Kishida faced a no-confidence motion submitted by opposition groups led by the Constitutional Democratic Party of Japan. It was voted down because of the LDP dominance in both houses of parliament.?“The LDP has no self-cleansing ability,” CDPJ leader Kenta Izumi said. “It is questionable if they can choose anyone who is not involved in slush funds.” Japanese Communist Party leader Kazuo Shii called the scandal “a bottomless, serious problem.”

Kishida has acknowledged that authorities are investigating the scandal following a criminal complaint. He said those who have faced the accounting questions must examine their records and explain to the public, but gave no timeline. Approval ratings for his Cabinet have continued to fall. Most recently, one released by NHK national television said his support ratings fell to 23 per cent, lowest since the governing party returned to power in 2012, after a three-year rule by Democratic Party of Japan.

Matsuno allegedly diverted more than 10 million yen (USD 68,700) over the past five years from money he raised from faction fundraising events to a slush fund, while Nishimura allegedly kept 1 million yen (USD 6,870), according to media reports. Collecting proceeds from party events and paying kickbacks to lawmakers are not illegal if recorded appropriately under the political funds law. Violations could result in penalty of up to five years in prison, but prosecution is difficult as it requires proof of a specific instruction to an accountant to not report the money transfer.