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Japanese Lawmaker Ichiro Ozawa Indicted for Campaign Finance Law Violation

Ichiro Ozawa, the Japanese ruling party politician who lost a bid to become prime minister four months ago, was indicted for violating campaign finance laws.

Court-appointed lawyers announced the indictment today in Tokyo after a judicial panel ruled in October that Ozawa, 68, “must be charged” in a case that has led to the indictments of three of his aides. Ozawa, who challenged Prime Minister Naoto Kan in September to lead the Democratic Party of Japan, has denied any wrongdoing and refused to quit.

“As I’ve said many times, I have done nothing wrong,” Ozawa told reporters today, reading a statement. “I am sure I will be found innocent by the court.” He said he would not step down from parliament or leave the DPJ.

Kan today called the news “disappointing.” He has moved to downplay the influence of Ozawa, the head of the DPJ’s largest faction and the architect of the party’s August 2009 victory that brought it to power for the first time. He has signaled Ozawa should step down if indicted and appointed few of his allies to key government posts.

“Should there be an indictment, I believe that he should clarify his future course of action as a politician, and if he is going to focus his energies on the trial, then he should do so,” Kan said at a Jan. 4 press conference.

Photographer: Tomohiro Ohsumi/Bloomberg

Ichiro Ozawa, former secretary general of the Democratic Party of Japan (DPJ). Close

Ichiro Ozawa, former secretary general of the Democratic Party of Japan (DPJ).

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Photographer: Tomohiro Ohsumi/Bloomberg

Ichiro Ozawa, former secretary general of the Democratic Party of Japan (DPJ).

Inevitable

Today’s decision came after Tokyo prosecutors twice declined to charge Ozawa in the case. The judicial panel, Japan’s equivalent of a grand jury, overruled the decision, making an indictment inevitable. Lawyer Shunzo Omuro, part of the team that indicted Ozawa, said at a press conference that “we’ve done everything we can” in conducting the investigation.

Three current or former aides, including DPJ lawmaker Tomohiro Ishikawa, were indicted last February for under- reporting 545 million yen ($6.6 million) in income in 2004, part of which was used to buy land for Ozawa’s fund-raising group.

“Ozawa’s influence will diminish and he can no longer operate as a shadow shogun,” said Yasunori Sone, political science professor at Tokyo-based keio University. “Kan’s strategy is to make a fresh start of the DPJ without Ozawa, but the question is whether Kan can get Ozawa to leave the DPJ.”

Chief Cabinet Secretary Yukio Edano today said it was up to Ozawa to decide whether to give up his seat. Opposition lawmakers have called on Ozawa to testify before parliament about the case, which he has refused to do. Kan today reiterated that Ozawa should testify at the Diet.

Kan criticized Ozawa during their leadership battle, saying he hadn’t sufficiently explained his involvement in the campaign scandal. Polls taken at the time showed voters preferred Kan over Ozawa by a margin of more than 3 to 1 in the contest, which was decided by party members.

Ozawa’s 40-year career spans five political parties. He was first elected to parliament as a member of the Liberal Democratic Party, which governed almost uninterrupted for over half a century until the DPJ ousted in 2009.

To contact the reporter on this story: Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net; Sachiko Sakamaki in Tokyo at Ssakamaki1@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg in Hong Kong at phirschberg@bloomberg.net

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