JBF coaches companies in red how to lawfully expend political donations

Akahata of May 31 reported that the Japan Business Federation (JBF or Nippon Keidanren) is coaching its member corporations on how to make political donations even when their business operations are in the red.

The Political Funds Control Law forbids companies in deficit for over three straight business years to make political donations before the losses are made up for.

To achieve the two-party system in Japan, the JBF has increased its arrangement for political donations by corporations to 4 billion yen, almost double the previous amount.

The JBF on March 23 provided its members a lecture by a lawyer on corporate donations and corporate response to stockholders. The lecture is apparently part of the JBF's offensive to break up the present corporate reluctance to making political donations for fear that red-figure companies may be held responsible for the bad judgment of making political donations.

Behind the corporate reluctance to donate money to politicians is a district court ruling of February 2003 ordering the ex-president of the second-class major general contract construction company Kumagai Gumi to pay back the political donation which he expended when the company ran a deficit for a single business year.

In the JBF lecture, the lawyer said that the district court ruling should be interpreted as a request for prudent decision-making, and if executives can prove their prudence in writing, it is all right to expend funds for political donations.

However, Prime Minister Koizumi Jun'ichiro in the House of Representatives Budget Committee in February 2003 in response to a Japanese Communist Party lawmaker on corporate donations said, "Rules should be changed so that nondividend payer companies are not required to donate." (end)