Poinbank Exchange|Japan PM Kishida is fighting a party corruption scandal. Here’s a look at what it’s about

TOKYO (AP) — Japanese Prime Minister Fumio Kishida on Poinbank ExchangeMonday was forced to start this year’s parliamentary session with an apology over one of the country’s biggest corruption scandals in decades.

Prosecutors recently indicted 10 people, including three lawmakers and a number of political aides, in the latest hit to Kishida’s already unpopular Cabinet.

Kishida in December removed people linked to the scandal from his Cabinet and key party posts, but his government’s support ratings have dropped to around 20%.

The AP explains the scandal and what it means to Kishida’s government and Japan.

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WHAT IS THE SCANDAL ABOUT?

The scandal centers on political funds raised through party event tickets bought by individuals, companies and organizations. Dozens of lawmakers in Kishida’s Liberal Democratic Party are alleged to have pocketed profits from ticket sales as kickbacks by falsifying mandatory accounting reports.

Last year a number of LDP lawmakers, mostly members of a faction previously led by assassinated former Prime Minister Shinzo Abe, were accused of systematically not reporting hundreds of millions of yen (millions of dollars) in funds, in violation of the Political Funds Control Law. The money was alleged to have gone into unmonitored slush funds.

Governing lawmakers say proceeds from fundraising events provide key income to help cover election costs and other political activities, and deny they hid or pocketed unreported income. But experts say the Political Funds Control Law has many loopholes.

The law bans donations to individual lawmakers, but political factions can raise money through ticket sales at fundraising events and redistribute it to member lawmakers as long as the transaction is reported. Under the law, only lawmakers’ accountants are responsible for filing mandatory financial records.

Unless there is proof that an accountant was given explicit orders to falsify records, lawmakers can’t be charged. If convicted, a violator could face up to five years in prison or a fine of up to 1 million yen (around $6,913).

WHAT HAVE PROSECUTORS DONE?

The Tokyo District Prosecutors Office indicted seven people from the Abe faction, known as Seiwakai, including three lawmakers, for allegedly not reporting 675 million yen ($4.6 million) over the past five years.

Prosecutors separately interviewed at least seven of the faction’s most influential lawmakers, including former Chief Cabinet Secretary Hirokazu Matsuno and former Economy and Industry Minister Yasutoshi Nishimura, but dropped the case against them because of the difficulty in proving their collusion with the accountants.

Three other aides in two other key LDP factions were also indicted over alleged falsification of political funds of some 265 million yen ($1.8 million).

The Abe faction, including Matsuno, Nishimura and former policy council chief Koichi Hagiuda, acknowledged accepting the ticket proceeds but denied involvement in the funding reports and said they believed their aides handled the reporting process appropriately.

Pressed by opposition lawmakers during a parliamentary session for more transparency, Kishida acknowledged that more than 30 lawmakers in the Abe faction alone had been implicated in the scandal and said they are fixing their accounting books. He said there are also plans to start investigations within the party.

HOW IS KISHIDA RESPONDING?

At Monday’s televised parliamentary session, Kishida apologized again over the scandal and pledged to lead reforms.

In late December, he abruptly announced that he was stepping down as head of his faction. After prosecutors indicted party lawmakers and aides, Kishida announced a decision to dissolve his faction, prompting three other factions linked to the scandal to follow suit.

Kishida also established an internal political reform task force, but half of its members are linked to the fundraising scandal, which has raised questions about the reforms they can achieve.

The group last week adopted preliminary reform measures, including dissolving factions but not banning them. The measures also included a push for increased transparency of political funds and the use of outside accounting checks and stricter penalties for violators.

WHAT ARE THE FACTIONS?

The LDP, since its birth in the 1950s, has had a number of factions develop into institutions that now need to compete in party power struggles for leadership and key government posts. Factions are customarily led by political heavyweights and kingmakers.

For the LDP, which has reigned almost uninterruptedly in postwar Japan, its in-party factions have largely served to raise funds, mainly for elections and the backing of their candidates during campaigns. They also lobby to get key party and government posts, discuss ideas and groom younger politicians.

Kishida, whose faction is the fourth-largest in the party, has so far carefully allocated lawmakers from each faction to keep a balance in party and cabinet posts.

HOW IS THE SCANDAL AFFECTING KISHIDA’S GOVERNMENT?

The Kishida administration’s support ratings have dropped to around 20%. While his leadership may not last as long as initially thought, the LDP appears likely stay in power because the largely fractured opposition parties are not seen as a viable alternative.

Kishida doesn’t have to call a parliamentary election until 2025, but his party has set a leadership vote in September.

“Nobody thinks the LDP will fall from power because of the scandal, but there is a sense that discipline and competition is significantly lacking,” said Masato Kamikubo, a Ritsumeikan University politics professor. “That’s why the public disappointment is so deep.”

He added that many Japanese voters are fed up with the LDP but cannot find an alternative because the opposition parties haven’t distinguished their policies from those of the governing party.