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Many questions remain despite arrest of Moritomo Gakuen ex-chairman

Yasunori Kagoike, former chairman of Moritomo Gakuen, speaks to reporters in front of his home in Toyonaka, Osaka Prefecture, on July 27, 2017. (Mainichi)

The former chairman of scandal-mired Moritomo Gakuen and his wife were arrested on July 31 over the alleged fraud of public subsidies for their school businesses, less than six months after a shady land deal involving the school operator's heavily discounted purchase of a state-owned land plot in Osaka Prefecture surfaced.

The investigation into the case has taken an unusual turn, as Yasunori Kagoike, 64, had media representatives stay over at his home in Toyonaka, Osaka Prefecture, to let them report on the fine details of the probe process. When Kagoike and his 60-year-old wife, Junko, were heading to the Osaka District Public Prosecutors Office in a car driven by their son at shortly past 2 p.m. on July 31, a member of a media organization streamed their movements live while sitting in the passenger seat of the same car.

When a special investigation unit of the district prosecutors' office searched Kagoike's home on June 19, a Tokyo-based broadcaster, which had a reporter inside his home, aired the scene, from the expression on the face of a prosecutor pushing the intercom, to the search warrant issued by a court. The following morning, Kagoike invited reporters into his home, blasting the investigation as "national policy" in front of their cameras.

On July 26, just several hours after the special investigation unit requested Kagoike present himself for questioning, Tamotsu Sugano, a writer who is close to Kagoike, broke the news via Twitter. Kagoike's son also posted on Facebook saying that "Questioning by the district prosecutors' office will be held tomorrow."

From the early stage of the investigation, Kagoike has sought advice from a lawyer specialized in criminal cases. He has avoided discussing in public the suspected illicit receipt of public subsidies by citing "fears of criminal prosecution," and remained silent almost throughout prosecutors' voluntary-based questioning on July 27. He brought with him the so-called "suspect's note," which is issued by the Japan Federation of Bar Associations for suspects to keep a record of interviews and interrogations by investigators.

Faced with Kagoike's media tactics, a senior prosecutor lamented, "He has attracted such tremendous attention, making it difficult for us to move forward (with the investigation) easily." After receiving a complaint against Kagoike over the alleged fraud, prosecutors spent a full four months interviewing concerned parties on a voluntary basis. Prosecutors also did not arrest Kagoike right away in his initial questioning in an apparent bid to avoid giving the impression that they were carrying out a "forcible investigation."

Meanwhile, there are no prospects of prosecutors building a criminal case over the murky land sale to Moritomo Gakuen, in which the price of a state-owned land plot was discounted by some 800 million yen from the appraised value. The special investigation unit accepted a complaint in April accusing employees of the Finance Ministry's Kinki Local Finance Bureau of breach of trust for overestimating the cost of removing waste from the land lot and selling the property at an unjustly cheap price. While prosecutors are questioning bureau employees on a voluntary basis, they have yet to conduct a search of related offices in connection with the case.

Furthermore, prosecutors haven't verified the allegations that Prime Minister Shinzo Abe's wife, Akie Abe, played a role in the shady land deal as the parties involved on the government's side have refused to open up. Akie once assumed the post of honorary principal of an elementary school that Moritomo Gakuen was planning to open in Toyonaka.

In order to charge Kinki Local Finance Bureau officials with breach of trust, prosecutors must prove that they had "intent" to benefit themselves or third parties through the land sale. "If the bureau employees just surmised the wishes of the prime minister, it wouldn't make up a criminal case," said a senior prosecutor. Another source close to the investigation confided, "Even if bureau employees had given favors in the land deal negotiations, there is no decisive factor (for accusing them of breach of trust) at the moment as we cannot rule out the possibility that Kagoike himself forced them to give him such favors."

Opposition parties are taking a wait-and-see stance over the investigation following Kagoike's arrest. "The essence of the problem lies in the 800 million yen discount," said opposition Democratic Party (DP) lawmaker Masato Imai. "If investigators are to dodge the main issue (the large discount), their probe could well be regarded as national policy."

DP Deputy Secretary-General Yuichiro Tamaki told reporters at the Diet, "Why has the arrest (of Kagoike) come at this point in time, when there were apparently no fears of him fleeing or destroying evidence? Isn't it the government that is scrapping documents and data (over the land deal)?"

Many in the government and ruling coalition hope that the investigation will corroborate Prime Minister Abe's claim that he and his wife were never involved in the land deal, relieving the headwind blowing against the government.

"It was a matter of course that Kagoike and his wife were arrested," commented a senior official with the ruling Liberal Democratic Party.

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