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HOME  > Past issues  > 2009 March 11 - 17  > Political parties subsidized by government also receive corporate donations
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2009 March 11 - 17 [POLITICS]

Political parties subsidized by government also receive corporate donations

March 16, 2009
“The introduction of government subsidies to political parties should be considered in order to pave the way to ban corporate political donations which have caused political corruption scandals involving so many politicians.”

Then Prime Minister Hosokawa Morihiro made this remark in 1993, when a “political reform” was a major issue in the Diet in the face of numerous plutocratic corruption scandals.

Under the government subsidy system, political parties divided up 32 billion yen in tax money every year since 1995. The then “non-Liberal Democratic Party” ruling coalition and the LDP bulldozed through the bill to introduce the government subsidy system on the pretext of the need to prohibit political donations by corporations and other organizations.

Initially, the amounts of subsidies were limited to up to two-thirds of their previous year’s revenues. The LDP, the New Frontier Party, the New Party Sakigake, and the Socialist Party (later renamed the Social Democratic Party) tried hard to increase their share by holding as many fundraisers as possible or by collecting corporate and organizational donations so that they could receive an increased amount of government subsidies. Thus, the government subsidy system actually contributed to increasing corporate donations.
Since then, instead of calling for a ban on corporate and organizational contributions, these political parties and their successors have tried to keep them by claiming that corporations are important social entities. Facing strong public criticism, individual politician’s fund raising groups have been prohibited from receiving cash donations from corporations and other organizations since 2000.

However, a “loophole” was created at the same time since such donations can be given to party headquarters and their branches (headed by individual politicians). Since then, all political parties except the Japanese Communist Party have been accepting both corporate donations as well as the government subsidies.

The LDP and Democratic Party of Japan have deepened their dependence on government subsidies. 65.6 percent of the LDP headquarters’ income and 84.2 percent of the DPJ headquarters’ income in 2007 was from the public fund. In the 14 years to 2008, 440 billion yen in government subsidies had been given to political parties (with the exception of the JCP).
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