Japan `Abenomics' Minister Says Memory of Graft Claims `Fuzzy'

  • Article alleges he took cash from company in breach of law
  • Economy Minister Amari to hold regular briefing this evening

Japanese Economy Minister Akira Amari, a key architect of the government’s "Abenomics" policies, said his memory of a visit to his office by officials from a company alleged in a tabloid magazine article to have made illegal payments to him was "fuzzy."

The article, published in the weekly Shukan Bunshun magazine Thursday, says that Amari and his secretary took money from an unidentified Chiba prefecture-based construction company in an alleged violation of a political funding law, according to a summary published on the magazine’s website. The payments amounted to 12 million yen ($103,000), the magazine said, adding that there are no details of them in Amari’s political funding record.

"It’s true that the president and other people from the company visited my office," Amari told a parliamentary committee Thursday morning. "My memory is fuzzy as to what they actually did, and I want to get this straight and provide an explanation."

Amari will appear before the committee again between 1 p.m. and 5 p.m. local time, and is set to hold a press conference around 7 p.m. following an economic panel meeting.

Point Man

Amari, Japan’s point man in the Trans-Pacific Partnership trade talks, spearheads Prime Minister Shinzo Abe’s strategy to boost the nation’s competitiveness. With the yen strengthening to a one-year high this week and stocks in a bear market, the allegations come at a critical time for the "Abenomics" project aimed at pulling the world’s third-largest economy out of deflation. The report, if true, could also prove a headache for Abe in the run-up to elections this summer.

"The eruption of a scandal surrounding a key economic policymaker could complicate the Abe administration’s response to financial market volatility and its bid to ratify TPP during the current Diet session," Tobias Harris, a political risk analyst with Teneo Intelligence, wrote in an e-mailed note. "The Amari scandal differs from earlier administration scandals because Amari is not only a close ally of Prime Minister Shinzo Abe but is also effectively “minister for Abenomics."

Amari also said in parliament there was "no way" he’d be accused of a crime, and would do his utmost to fulfill his duties as minister. Abe backed him, saying he was confident that Amari would fulfill his responsibility to provide an explanation.

At a press conference Wednesday, Amari said he wouldn’t change his plan to attend the World Economic Forum in the Swiss resort of Davos later this week.

Three Resignations

Since taking office in December 2012, Abe has lost three ministers following allegations of impropriety, though none were ever charged with a crime.

Then Agriculture Minister Koya Nishikawa quit in February last year after claims that he accepted improper political donations from a company in the sugar industry while involved in negotiations over agricultural tariffs in the TPP trade talks.

In October 2014, two female ministers, Yuko Obuchi and Midori Matsushima, resigned after separate allegations of financial impropriety.

Obuchi’s support group was alleged to have subsidized trips to the theater, and the political funding group she headed was reported to have spent 2 million yen on goods from a company where her brother-in-law is a director. Matsushima had been criticized by opposition lawmakers for handing out paper fans to her constituents in a breach of election laws. Matsushima said she hadn’t broken the law and quit because she didn’t want the issue to hamper policy making.

While Abe recovered from the double resignation to win by a landslide in the December 2014 general election, a series of scandal-linked resignations contributed to the unraveling of his first administration in 2007 after less than a year.

Before it's here, it's on the Bloomberg Terminal.