Questionable loan swamps Japanese prime minister in own 'Whitewater'

March 18, 1994|By Thomas Easton PTC | Thomas Easton PTC,Tokyo Bureau of The Sun

TOKYO -- Prime Minister Morihiro Hosokawa, who likes to compare himself to President Clinton, now has a Whitewater of his own, revolving around complex deals he was involved in while governor.

As with Mr. Clinton, it is difficult to determine culpability, if any.

The affair concerns a 1982 loan to Mr. Hosokawa of 100 million yen (then worth about $750,000) from a package delivery firm, Tokyo Sagawa Kyubin, that was subsequently involved in political scandals.

The money, Mr. Hosokawa has said, was used to buy a Tokyo apartment and fix up a family estate. It was repaid from inheritance, the sale of land and the retirement benefits from his tenure as governor.

There appear to be inconsistencies. The condo was purchased before the loan was granted, the loan repaid before the retirement benefits could be realized. There is no firm evidence that the loan has been repaid entirely. There has been an implication that the money was a political donation, but what the company hoped to gain is unclear.

Mr. Hosokawa has avowed his innocence, but because he, like Mr. and Mrs. Clinton, has demurred from answering questions, much remains undisclosed and more is suspected. There have been reported lapses of memory. Documents have been demanded. Senior aides have been asked to testify. The Japanese equivalent of a congressional probe has been requested.

With a few notable exceptions, the Japanese media have been restrained -- possibly because they shun adversarial reporting, possibly because they think the possible offenses are not that severe.

Yet, as in the United States, festering allegations have badly damaged other initiatives. Opposition parties have seized upon the issue and stalled government.

Budget discussions for the 1994 fiscal year were to have begun this week and concluded by the end of the month. Instead, another of Japan's seemingly infinite temporary budget measures almost certainly will have to be implemented.

That further complicates efforts to stimulate Japan's recessed economy and provides yet another irritation for U.S. officials who have been adamant about the need for Japan to initiate a large, and sustained, spending program to boost domestic demand as a critical step for reducing the country's vast trade surplus.

The inability to pass a budget also means that attention cannot be focused on reforming Japan's ossified bureaucracies -- a major objective of the Hosokawa administration.

Equally disconcerting, parliamentary gridlock has prompted Mr. Hosokawa's ruling coalition to return to the style of back-room deals that it renounced last summer upon breaking the decades-old hold of the increasingly corrupt Liberal Democratic Party.

That method of politics was perceived to have made a mockery of open discussion of ideas and had alienated the electorate from politics.

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