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Olympics minister tied to 9 million yen in donations from founder of ALT staffing agency

Political organizations linked to Olympics Minister Toshiaki Endo received over 9 million yen in donations from the founder of a company that dispatches foreign assistant language teachers (ALTs) for English classes at schools, around the time he pushed policies in favor of the firm, it has been learned.

Groups linked to Endo, 66, minister in charge of the 2020 Tokyo Olympic and Paralympic Games, accepted a total of 9.55 million yen from the 71-year-old founder of the Tokyo-based company between 2010 and 2014. The firm sends out ALTs who assist Japanese teachers during English classes at schools. Around the time the groups received the donations, Endo was serving as chairman of the Liberal Democratic Party (LDP)'s Headquarters for the Revitalization of Education, spearheading the move to expand the use of ALTs at schools. The Ministry of Education, Culture, Sports, Science and Technology then set out a policy to authorize national budgets for private-sector ALT dispatching businesses for the first time. The company was subsequently resold at a high price, helping the founder gain a fortune.

Endo has denied having received any request for favors from the company or its founder, nor having exerted his influence in mediating between them and the education ministry. However, some of the company's executives have admitted that there were approaches for Endo to work toward budgeting for ALT dispatch businesses. "Endo worked behind the scenes," one of the executives testified. An education ministry official in charge of ALTs also testified that Endo himself approached the ministry to request the expansion of ALT projects.

Over a five-year period, the 71-year-old company founder paid 700,000 yen in donations to Shinpukai, a fund-management organization for Endo, in 2010; a total of 3.5 million yen to Shinpukai, the LDP's Yamagata No. 1 constituency branch headed by Endo and his political group in his constituency in 2011; a total of 2 million yen to Shinpukai and the party branch in 2012; 1.5 million yen to Shinpukai in 2013; and a total of 1.85 million yen to the three organizations in 2014.

The Political Funds Control Act sets a limit to the maximum amount of individual donations to one organization at 1.5 million yen a year, but the company founder donated up to 3.5 million yen a year by dispersing his donations to multiple organizations. The founder of the Tokyo-based company has acknowledged that he had also purchased tickets for Endo's political fundraising parties.

Endo had belonged to the House of Representatives Committee on Education, Culture, Sports, Science and Technology since the fall of 2009, and assumed the post of chairman of the LDP's Headquarters for the Revitalization of Education in January 2013 after the party returned to power. In April and May that year, he coordinated proposals including one for utilizing 300,000 outside personnel in English and other classes as school supporters. The proposal was put to debate at the Education Rebuilding Council, an advisory panel to the prime minister, and eventually took shape at the initiative of the education ministry.

Endo also pushed for utilizing ALTs during meetings of the Education Rebuilding Council in September and October 2013. In December that year, the education ministry drew up the English education reform plan, in which it specified a policy to expand the use of ALTs, and set out a plan to inject public funds in private-sector ALT dispatching businesses. The scheme was given shape through the fiscal 2016 budget draft.

An executive of the company in question said about Endo around that time, "I talked with him a lot about English education. He also encouraged the education ministry (to authorize budgeting for ALT dispatching businesses)." The executive admitted that the company purchased tickets to Endo's political fundraising parties. Meanwhile, an education ministry official testified that he was approached by Endo about expanding the use of ALTs on occasions besides official meetings. The official also received phone calls from a secretary at Endo's office. Endo resigned as chairman of the LDP's Headquarters for the Revitalization of Education when he assumed the current ministerial post in June last year.

Established in 1972, the company in question has focused on the ALT dispatch business since the 1990s and became one of the largest firms of its kind in the industry. After the company ran into financial trouble in March 2010 due to deficits of a subsidiary and other factors, a Tokyo-based investment firm acquired the company from its founder. According to sources close to the deal, the initial arrangement had been set to the effect that about 300 million yen out of the 1 billion yen in acquisition costs was to be paid in arrears to the founder in installments after the company secured certain amounts of profits. In return, the founder was entitled to 600 million shares of a new company launched in October 2010, which holds the same name of the firm in question. The founder's donation to Shinpukai that same year took place right after the new company was inaugurated.

In March 2014 -- after the government's policy to expand the use of ALTs was finalized -- the company in question was resold to a Tokyo-based consultancy firm for about 5.1 billion yen. As a result, the founder received the aforementioned payments in arrears and sold off the 600 million shares.

Endo was elected to the House of Representatives from the Yamagata No. 1 constituency and is currently serving his seventh term.

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