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Tax-evading company owner bought minister's fundraising party tickets under another name

State Minister for Okinawa and Northern Territory Affairs Yosuke Tsuruho (Mainichi)

A company president who has been convicted of tax evasion bought tickets worth 1 million yen for a 2013 fundraising party of State Minister for Okinawa and Northern Territory Affairs Yosuke Tsuruho under the name of his company's executive, a practice that could be considered as violation of the Political Funds Control Act, it has been learned.

The 38-year-old Taiwanese American man who owns a duty-free shop management company purchased the tickets for a party held by Tsuruho's fund-management organization "Kakusho-kai" in October 2013. The man was arrested in February 2012 by the Tokyo District Public Prosecutors Office special investigative squad on suspicion of hiding income of some 300 million yen for the business year ending in March 2010 by booking false purchases and other illicit practices. He was found guilty in July and handed a suspended sentence.

On the organization's political fund report, the name of a Japanese executive of the company and its office address are written down as the person who purchased the tickets worth 1 million yen on Oct. 10, 2013. Using someone else's name to buy party tickets or receiving payments for such tickets signed under the name of a different person is against the political fund law.

According to sources close to the matter, the company president bought the tickets through the vice chairperson of a nonprofit tourism promotion organization in Yamanashi Prefecture, who had purchased 2 million yen worth of party tickets for Tsuruho's fund-management group -- an amount exceeding the 1.5 million yen cap approved under law -- under somebody else's name in January 2013. The president, however, did not appear at the October 2013 party. His sentence was suspended at the time.

The president told the Mainichi Shimbun through his company that he "had the executive remit the money for the party tickets" as he did not have time to do so himself. He also said he told the fund-management organization via the NPO chairperson that he was the buyer of the tickets.

While donations from foreigners and foreign capital are prohibited under the Political Funds Control Act, the law allows non-Japanese persons to buy fundraising party tickets. People can purchase such tickets regardless of their arrest or conviction records, but there have been numerous cases where politicians paid refunds to donators and ticket buyers after their criminal records came to light.

According to a credit research company, the president launched his business in 2002 and operated duty-free shops targeting Chinese and South Korean tourists as well as a tour bus company and hotels. He changed his company name after his arrest for violating the Corporation Tax Act, and has since seen sales spike due to the increasing number of foreign tourists to Japan. In a separate case, his company was ordered to pay back taxes after the Tokyo Regional Taxation Bureau pointed out income concealment worth 100 million yen over a period of three years up until December 2014.

In the meantime, Tsuruho was appointed the senior vice minister of land, infrastructure, transport and tourism in December 2012 and then became the secretary-general for the Liberal Democratic Party (LDP)'s Research Commission for the Establishment of a Tourism Oriented Nation after he left the vice ministerial position in September 2013. He worked on expanding duty-free products for foreign tourists while in the LDP commission.

Tsuruho wrote in a local newspaper column as an outgoing senior vice minister, "I regret leaving the duty-free system reform unfinished as I leave the vice ministerial post. I have applied for the position of the secretary-general of the research commission to complete the reform."

In October 2014, products subject to duty-free were expanded from house appliances to cosmetics, pharmaceutical and food items.

The representative of Tsuruho's office told the Mainichi Shimbun, "We wrote down the name, address and occupation of the ticket buyer as told by the NPO's vice chairperson, but we will handle the matter appropriately while checking the facts," adding that the president never lobbied the lawmaker over the duty-free system. The president also commented that he has never asked for policy favors to gain advantage in the market.

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