Japan’s ‘Shadow Shogun’ Acquitted in Fund-Raising Scandal

Posted April 26th, 2012 at 10:20 am (UTC-5)
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One of Japan's most influential politicians, Ichiro Ozawa, has been acquitted on charges of violating fund-raising laws, setting up a possible showdown inside the country's ruling party.

The Tokyo District Court on Thursday said there was no evidence that Ozawa knowingly falsified reports to hide his campaign's 2004 involvement in a fund-raising scandal. Ozawa — known in political circles as Japan's “shadow shogun” — welcomed his acquittal in a brief statement, calling the ruling “sensible and fair.”

The acquittal means the Ozawa faction of the ruling Democratic Party of Japan could take steps to unfreeze the membership of the 69-year-old power broker, who was forced to step down as head of the DPJ following his indictment.

Ozawa, who has retained a loyal core of supporters, has been a vocal critic of Prime Minister Yoshihiko Noda — also a member of the DPJ. He has opposed Mr. Noda's controversial plan to double the sales tax to 10 percent to address massive government debt.

Tomohiko Taniguchi, a professor at Keio University and former foreign ministry spokesman, tells VOA that Ozawa's return to parliament is, in his word, “likely” to spell trouble for the Noda-backed sales tax hike.

“At the end of the day, Mr. Noda can not prevail, because at the upper house (of parliament) there is no majority for the ruling party. So there has to be a bipartisan effort. And in order for that to happen, Prime Minister Noda has to do (his) utmost to get support from the opposition party.”

Taniguchi said he does not expect that support to materialize. Without it, he said the tax hike is in “serious jeopardy” and that credit agencies could lower their ratings for Japanese government bonds.

Government spokesman Osamu Fujimura says he hopes Ozawa's acquittal will not hurt the sales tax bill's chances of being approved.

“Facing this decision, our response as a government is just to hope for the fastest possible passing of legislation (on raising the consumer sales tax).”

Mr. Noda says his tax hike plan is necessary to bring down the country's historic debt and pay for social security expenses that continue to skyrocket as Japan's population ages. For his part, Ozawa says Japan's already fragile economy cannot handle the tax increase.