First arrest made by Japanese prosecutors in financial scandal involving ruling party.

The public prosecutors’ office in the Tokyo district has announced the arrest of Yoshitaka Ikeda, a former vice-education minister. This is the first arrest made in the financial scandal that has impacted Japan’s ruling party and raised questions about the prime minister’s future. Fumio Kishida.

The scandal goes beyond Ikeda and has negatively affected Kishida’s popularity, who already had poor approval ratings. Members of the Liberal Democratic party (LDP), including politicians from Kishida’s faction, were accused of not reporting around ¥600m (£3.3m) in funds, potentially violating campaign and election laws.

The majority of the politicians involved belong to the LDP’s largest faction, previously led by former prime minister Shinzō Abe, who passed away in July 2022. The money, undisclosed to tax authorities, was allegedly funneled into slush funds.

Ikeda is suspected of not reporting additional income generated from the sale of tickets for fundraising parties organized by the Abe faction. Prosecutors stated that between 2018 and 2022, he omitted over ¥48m from his political funds management organization’s reports.

Kazuhiro Kakinuma, Ikeda’s policy secretary and alleged collaborator in falsifying reports, was also arrested during the weekend. Kishida, under scrutiny for his handling of the cost-of-living crisis, expressed disappointment at Ikeda’s arrest and vowed to establish a panel of experts to strengthen fundraising regulations.

According to Japanese media, prosecutors are investigating five out of the six LDP factions regarding unreported political funds. The Abe faction, now known as the Seiwa policy study group, has the majority of its 99 members suspected of receiving undisclosed cash. However, Ikeda allegedly received a significantly larger sum than others, as reported by the Kyodo news agency.

Having already dismissed four ministers from the Abe faction, including his top spokesman and the trade minister, at the end of the previous year, Kishida is still facing the scandal as he approaches an election for the LDP presidency in nine months. His approval ratings have fallen below 20%, the lowest for a Japanese prime minister in over a decade. Speculation grows that the scandal will lead to an internal power struggle among LDP members who view Kishida as an electoral liability.

Lawmakers are given a quota of fundraising party tickets, usually valued at ¥200,000 each. They submit the proceeds to their faction, and any surplus amount is reimbursed. Although this practice is not illegal, failure to report the income can result in up to five years in prison or a maximum fine of ¥1m. MPs may face charges if found to have colluded with their administrative staff.

While Kishida’s future is uncertain, it is unclear if the scandal will significantly impact the LDP’s electoral prospects. The party, which has held power almost continuously since the mid-1950s, will not face a general election until 2025, and the fragmented opposition is not expected to mount a strong challenge.

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