Market2023–2024 Japanese slush fund scandal
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2023–2024 Japanese slush fund scandal

Beginning in November 2023, a scandal involving the misuse of campaign funds by members of the Liberal Democratic Party of Japan's conservative Seiwa Seisaku Kenkyūkai and Shisuikai factions became public after it was revealed the faction had failed to report over ¥600 million in campaign funds and stored them in illegal slush funds.

Background
governed Japan as Prime Minister from 2006 to 2007 and again from 2012 to 2020, and continued to exert significant influence until his assassination in 2022. The Liberal Democratic Party has been the dominant party in Japanese politics since its formation in 1955. The dominance of the LDP, referred to popularly as the 1955 System, has only been interrupted twice: between 1993 and 1994, as a result of corruption scandals and the end of the Japanese asset price bubble, and from 2009 to 2012 as a result of continuing economic crisis during the Lost Decades. The LDP later recovered both times: in 1994 by forming a coalition with the Japan Socialist Party, and in 2012. The LDP has numerous factions, but since 2012 has been dominated by the right-wing Seiwa Seisaku Kenkyūkai, also referred to as the Seiwakai or Abe faction. Formerly led by Shinzo Abe (for whom it is nicknamed), the Seiwakai continued to wield significant influence even after Abe resigned as Prime Minister in 2020. Prime Minister Fumio Kishida is a member of the liberal Kōchikai faction, which competes with the Seiwakai for influence. Other factions include the Shisuikai, or Nikai faction, led by Toshihiro Nikai; the Shikōkai, led by Tarō Asō; and the Heisei Kenkyūkai, led by Toshimitsu Motegi, among others. Following the assassination of Shinzo Abe in 2022, the LDP's popularity was significantly shaken after the extent of political influence by the Unification Church new religious movement was revealed. Kishida reshuffled his cabinet on 10 August 2022 in an attempt to purge UC-associated ministers from the government and regain popular support, Amidst continuing unpopularity, Kishida again reshuffled his cabinet on 13 September 2023, promising change. The new cabinet was primarily noted by The Japan Times as having a relatively high number of women in official positions, as well as including members of rival factions in high-ranking positions ahead of a leadership election within the LDP in 2024. The Japan Times assessed that the placement of Heisei Kenkyūkai leader Motegi as Secretary-General of the Liberal Democratic Party was a measure to reduce his ability to criticise Kishida, while Shikōkai member Taro Kono was appointed as Minister for Digital Transformation despite controversy regarding his handling of an Individual Number Card data breach. Important Seiwakai members Kōichi Hagiuda and Hirokazu Matsuno retained their cabinet positions, as did Shikōkai leader Asō. == Scandal ==
Scandal
On 8 December 2023, Kishida, as well as other members of the LDP, were questioned by opposition lawmakers during a meeting of the National Diet. According to initial public allegations, dozens of members of the Diet from the Seiwakai were suspected of collecting at least ¥100 million from fundraising and storing the money in slush funds, in violation of Japanese campaign finance and election law. Amidst questioning, Kishida stated that the scandal was being publicly investigated and ordered the LDP to stop fundraising. Hirokazu Matsuno, Chief Cabinet Secretary, was the first individual to be named in the scandal. According to the allegations, he diverted over ¥10 million from fundraising events to a slush fund over a timeline of five years. Matsuno refused to speak about the scandal, noting that it was under investigation by police and stating that the Seiwakai was investigating its accounts. On 13 December 2023, amidst the growing size of the scandal, Kishida announced the removal of four ministers from his cabinet: Matsuno, Minister of Economy, Trade, and Industry Yasutoshi Nishimura, Minister for Internal Affairs and Communications Junji Suzuki, and Minister of Agriculture Ichiro Miyashita. Deputy Minister of Defence Hiroyuki Miyazawa was also removed from office. == Aftermath ==
Aftermath
Kishida's approval ratings fell as a result of the scandal, decreasing to 23% as of 13 December 2023, the lowest such rating any Prime Minister has had since the LDP's 2012 return to power. On 18 January 2024, Kishida announced his intention to dissolve the Kōchikai faction as a result of the scandal. Referred to by American journalist Anthony Kuhn as "Japan's worst political corruption scandal in decades," the scandal had threatened the LDP's authority and fueled public speculation that the party might lose power in the 2024 Japanese general election. Japanese diplomat Hitoshi Tanaka speculated that the scandal could lead to a change of government, potentially impacting Japan–United States relations. Voter turnout was 53.84%, around two percentage points down from the previous election in 2021 and the third lowest in the postwar era. == References ==
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