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Shinzo Abe

Contractor admits faking survey for government as Japan’s crony crisis widens

Fallout from scandal has forced Finance Minister Taro Aso to skip G20 meeting to face parliamentary hearing

PUBLISHED : Friday, 16 March, 2018, 12:44pm
UPDATED : Friday, 16 March, 2018, 8:21pm

A contractor involved in a cut-price state land sale linked to Prime Minister Shinzo Abe has said it falsified a report at the government’s request on buried waste that led to the huge discount, sources close to the matter said on Friday.

The construction company that examined the waste buried in the plot in Osaka told prosecutors it falsely stated that rubbish was deeper underground than in reality, as demanded also by the school operator, the plot’s buyer with ties to Abe’s wife Akie.

The prosecutors are looking into the dubious land deal in 2016 on suspicion of breach of trust on the part of the Finance Ministry, which manages state properties.

The state-owned plot was sold to the school operator Moritomo Gakuen at roughly 14 per cent of its appraisal value, as costs of removing the buried waste were subtracted. The operator planned to build a junior school there, with Akie Abe initially named its honorary president.

Government officials are suspected to have dramatically reduced the land price in light of her role in the school project. She withdrew after the scandal came to light in February last year.

The revelation on the waste could erode the validity of the massive discount and serve as fresh ammunition for opposition parties to grill Abe and Finance Minister Taro Aso, who has been under pressure to step down after the ministry admitted earlier this week to altering its documents related to the land sale.

Ruling and opposition lawmakers have agreed to hold a hearing on Monday on the growing scandal over the cut-price sale of government land to a supporter of Abe, and the alteration of finance ministry documents related to the deal.

Japan finance minister Taro Aso may skip G20 meeting as cronyism scandal plagues Abe’s government

Aso and Abe will go to the parliamentary session, according to opposition Democratic Party officials.

Both have been on the ropes in recent days as the cronyism and cover-up scandal balloons.

Support for Abe has fallen 9.4 points to 39.3 per cent, a survey by Jiji news agency showed. Chief Cabinet Secretary Yoshihide Suga told a news conference that while support rates always fluctuate, the government is taking the current fall seriously.

Aso is under intense scrutiny after he admitted this week that official papers related to the favouritism scandal had been altered.

He has repeatedly apologised, but rejected calls from the opposition to step down over the row, saying his job is “to find out truth” about the scandal.

Aso has blamed the alterations on “some staff members” at the ministry, and said he only learned about them on Sunday.

However, Suga said on Thursday that he and Abe learned about the possibility that documents had been altered days earlier.

Opposition parties want to summon Nobuhisa Sagawa, formerly the head of the finance ministry department that oversaw the land deal, to testify in parliament.

Sagawa was promoted last year to tax agency chief but stepped down last week over the scandal.

Abe’s party is expected to approve the request for Sagawa to appear with the testimony coming as early as next week.

Adding to the row, a ministry official at the heart of the land deal was found dead last week in a suspected suicide.

The 8,770-square-metre plot was sold to Moritomo in June 2016 for 134 million yen (US$1.26 million), far below its appraisal value of 956 million yen.

The constructor has told the prosecutors that it has maintained the depth of the buried waste was three metres as confirmed by its plot inspection in late March 2016, but was requested by the state and Moritomo to change the depth to 3.8 metres, according to the sources.

In November last year, the Board of Audit of Japan concluded that the basis of the land discount was “insufficient” as there were no materials that proved the 3.8-metre depth and the Finance Ministry’s local bureau as well as other government officials did not measure the depth of the waste at the site.

Meanwhile, one of the sources told Kyodo News: “The state-owned land was worthless because it contained toxic substances and waste.” Even if calculated based on the real depth of the materials, the steep discount could have been given as well, the source said.

Aso will miss a G20 meeting next week, officials said on Friday and “will concentrate on” dealing with parliament. He will be represented at the meeting by his deputy Minoru Kihara, a ministry official said.

The decision came as a new poll showed support for Prime Minister Shinzo Abe’s government down 9.4 percentage points from last month to 39.3 per cent, the lowest since his resounding re-election in October.

The Jiji Press poll published on Friday, which comes after two other media surveys this week showing drops in support for Abe, put the premier’s disapproval rating at 40.4 per cent.

Additional reporting by Reuters and Agence France-Presse