The Scandal That Could Really Rock Japanese Politics

From the Lockheed Corp. mess of the 1970s to the Recruit debacle of the 1980s, Japanese political scandals seem to bloom and fade as regularly as cherry blossoms. They may lead to the ouster of prime ministers, but Japan's political decision-making machinery has been dominated by powerful kingpins who aren't hampered by such upsets. So, on the surface at least, the latest tempest seems typical. Tokyo Sagawa Kyubin Co., a trucking company whose ex-president has been linked to organized crime, is rumored to have funneled $4 billion to officials, including some $25 million to a dozen top politicians. Public hearings are expected to begin on Sept. 22.

Yet there's a possibility the Sagawa scandal could have an impact that far surpasses others. That's because it is bringing unusually heavy pressure on Shin Kanemaru, Japan's chief political puppeteer. Kanemaru has long controlled the largest faction of the Liberal Democratic Party thanks to his prodigious fund-raising ability. Now acknowledging he failed to report a $4 million contribution from Sagawa, Kanemaru stunned the LDP--and all of Japan--in late August by resigning as party vice-chairman and offering to step down as chief of its leading faction.

Kanemaru has been known to use scandals against his own enemies, but this time political experts say he is on the defensive against another behind-the-scenes power broker, former Justice Minister Seiroku Kajiyama, 66. Kajiyama has tried to stay out of the limelight since making his inflammatory 1990 remark comparing Japanese prostitutes to American blacks, saying both ruined good neighborhoods. With close friends in the prosecutors' office, Kajiyama has a powerful weapon to edge out Kanemaru and establish himself as the LDP's supreme elder. Kanemaru's faction hasn't accepted his resignation, but suddenly it seems only a question of when, not if, the 78-year-old godfather will make a departure from active political life. "He's ready to leave politics any time," says his son and local campaign manager Shingo Kanemaru.

If Kanemaru exits, Japanese politics could be in for a historic shakeout. As leader of the so-called Takeshita group, the largest and most powerful of the LDP's five factions, he has cultivated an image as pro-American. Operating on instinct, not ideology, Kanemaru has been able to handpick Japan's last three prime ministers, including the current one, Kiichi Miyazawa.

DIRTY WORK. Miyazawa could be the one most immediately affected. Until now, he has left to Kanemaru the dirty work of cajoling agreement among the five LDP factions and cutting deals with the opposition. Miyazawa has scored many policy coups this year, such as securing a bill allowing Japanese troops on overseas peacekeeping missions, designing an $87 billion spending package to boost the economy, and brokering a historic imperial visit to China. But he won these victories in large part thanks to Kanemaru. "If Miyazawa loses his dealmaker," says Cornelia Meyer, adviser to Diet member Yoshiro Mori, "it'll be tough for him to push through any new initiatives."

Kanemaru seems to be buying time in hopes of strengthening his handpicked successor, Ichiro Ozawa, another member of the Takeshita faction. So far, the 50-year-old Ozawa hasn't garnered enough support to shore up the master's seat, but the old man hopes to pull the strings one last time. Such a transition wouldn't have much impact on how Japan manages its economy or diplomatic affairs. But Kajiyama is of a more conservative bent and his posture to the U.S. is less predictable. The worst fear is that infighting within the LDP will completely paralyze Japanese decision-making.

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