ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter

Japan's Finance Ministry admits altering land sale documents

Revived scandal threatens Prime Minister Abe's grip on power

Prime Minister Shinzo Abe speaks to reporters at his office on March 12. (Photo by Masayuki Terazawa)

TOKYO  -- Japan's Ministry of Finance has admitted doctoring documents related to a questionable public land deal, a senior official from the ruling Liberal Democratic Party told reporters on Monday. The involvement of former National Tax Agency chief Nobuhisa Sagawa, who resigned Friday, has also been confirmed.

The scandal linking Prime Minister Shinzo Abe to the sale of publicly owned land to a nationalist private school operator flared up again after 14 documents were found to have been altered by the Finance Ministry. It was found that the name of Abe's wife, Akie, appeared in the original documents but was deleted, sources said. The revelations pose a growing threat to the leader's legislative agenda and grip on power.

An in-house probe by the ministry found that they had been doctored after February 2017 -- when the issue gained political and national attention. This suggests that they had been purposely altered to make them consistent with responses to Diet questions on the matter, as had been suspected. The alterations also removed the names of four lawmakers from the documents, sources said.

The probe found that the alterations did not distort the basic facts of the deal, but opposition parties are likely to press Taro Aso, the deputy prime minister and finance minister, on his responsibility for the matter.

In the originals, there was a reference to representatives of Moritomo Gakuen in April 2014 who told officials at the ministry's Kinki bureau that the school operator "took the prime minister's wife, Akie, to the planned site and got the word from her: 'Please proceed with the plan as it is a good site.'"

She was initially named honorary principal of an elementary school planned for the site but withdrew after the scandal surfaced.

Prime Minister Abe apologized for the document alterations Monday afternoon, but denied the possibility of Aso resigning.

The alterations "could erode trust in the entire administration. As the head of the administration, I deeply apologize for that," Abe said. He said he wanted Aso to "take charge of completing the investigation to determine why the alterations happened."

Japan's Finance Minister Taro Aso answers reporters' questions at the Finance Ministry on March 12. (Photo by Akira Kodaka)

Aso also said Monday afternoon that he had no intention of resigning over the revelations. 

He said the alterations to the documents were conducted under the direction of the ministry's Financial Bureau. 

"The final responsibility for it lies with Sagawa," who at that time was serving as director general of  the bureau, Aso said.

Allegations first emerged over a year ago that Abe's influence had played a role in the sale of heavily discounted public land to Moritomo Gakuen, an operator of private schools with ties to his wife Akie. The scandal re-entered the spotlight earlier this month, when it was reported that the Finance Ministry may have altered key documents related to the 2016 sale before submitting them to parliament.

Ministry officials issued a report to Aso on Sunday. Before the news of Sagawa's resignation broke on Friday, it was reported that an employee of the Finance Ministry bureau responsible for the land sale had been found dead, apparently of suicide.

Documents related to a sale of state-owned land to school operator Moritomo Gakuen were submitted to the upper house of Japan's Diet on March 8.   © Kyodo

Asked about Aso's responsibility for the scandal, Chief Cabinet Secretary Yoshihide Suga said at a regular press conference on Monday that Aso "should lead a thorough probe to make everything clear," as the Finance Ministry is investigating the matter at the moment.

The ministry is weighing punishments -- pay cuts or worse -- for officials involved in the document alterations. But Japan's political opposition is demanding more.

Tetsuro Fukuyama, secretary-general of the opposition Constitutional Democratic Party, told reporters the same day that the scandal is an "unprecedented abnormal situation that could overturn the trust in the Diet," demanding resignation of Aso.

Kazuo Shii, head of the Japanese Communist Party, said on Sunday that he would like to see both Sagawa and Akie Abe called in to testify. "Bureaucrats don't simply doctor data of their own volition," Shii said. "That comes from political pressure," he continued, speculating that Prime Minister Abe's wife, who served as honorary principal of an elementary school run by Moritomo, may have something to do with the situation.

If the ministry did indeed falsify documents, "the Abe government must resign en masse," Shii said.

The government is prepared to rebut calls for Aso's resignation, as such a step would risk placing responsibility for the scandal on Abe's shoulders. But not even Abe's Liberal Democratic Party is entirely on board with that strategy.

If the document-doctoring allegations are true, "the public needs to be told the truth," Chief Deputy Secretary-General Shinjiro Koizumi said. "This is not a problem with the administration but a problem with the entire political system," he said. The government "must demonstrate that it is not the type to simply force responsibility onto one official" and then give them the ax, Koizumi told Nikkei, suggesting that Aso and others must go as well. Others in the party have shown support for this view.

Abe's government will likely be able to contain the fallout from the scandal in the immediate term. Though opposition lawmakers have walked out of fiscal 2018 budget talks in parliament's upper house, Japanese budgets are automatically enacted 30 days after they are sent to that chamber, assuring passage by the fiscal year-end on March 31.

Other budget-related measures carry no such provision, however. If legislation such as income tax reform fails to pass this month, it will throw off revenue estimates for fiscal 2018. Opposition lawmakers could also block bills related to Abe's signature work-style reform effort, the government's top priority during the current legislative session. Debate on potential changes to the constitution, which Abe hoped to kick off sometime in 2018, could be delayed as well.

Elements of the LDP fed up with Abe's tight grip on Japanese politics could also take advantage of the scandal. Shigeru Ishiba, a senior LDP lawmaker who has clashed with Abe in the past and intends to run against him for the party presidency in September, said Sunday that it is "tough to believe ordinary bureaucrats have the authority" to alter documents as the Finance Ministry allegedly did, according to Kyodo News.

"If we cannot figure out who is behind this, trust in the LDP will suffer," Ishiba said. With regional and upper house parliamentary elections looming in 2019, a significant drop in Abe's approval could signal demand for a new face at the top of Japan's ruling party.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more