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Finance Ministry in chaos after series of scandals, resignations

Opposition parties hold a joint hearing of Finance Ministry officials over newly released documents regarding the discounted sale of state land to Moritomo Gakuen, at the Diet on May 23, 2018. (Mainichi)

TOKYO -- After a slew of scandals, the Ministry of Finance has been hit hard at its highest levels, leaving strong public distrust and a lack of leadership due to resignations in their wake.

From the cover-up of negotiation records over the controversial sale of state land to school operator Moritomo Gakuen that surfaced on May 23, on top of previous scandals including the altering of other documents relating to the sale, to the sexual harassment claims leveled at a top bureaucrat, the Ministry of Finance has been unable to hold onto slipping public trust. Amidst all these scandals, confusion among employees within the ministry is spreading.

"The Moritomo negotiation documents were probably hidden to match former National Tax Agency chief Nobuhisa Sagawa's Diet testimony when he was the head of the Financial Bureau in the same way that documents approving the land sale were altered, but I guess I just can't wrap my head around it," said a midlevel Finance Ministry employee on May 23, shoulders slumping.

"This organization is now like a ship without a captain," an anonymous senior official also lamented. "No progress has been made with our work, and there will also be no one at the top to suggest a direction to overcome this crisis." With top officials such as Sagawa and former Vice Minister of Finance Junichi Fukuda, who was accused of sexually harassing a female reporter, all resigning to take responsibility for the ministry scandals, there is a noticeable void left in the leadership. Their replacements have yet to be named, leading to further internal chaos.

As for the Moritomo scandal, on March 2 of this year, the Asahi Shimbun reported that documents approving the sale of the state-owned plot may have been doctored. Sagawa stepped down as National Tax Agency chief on March 9 after it was pointed out that the revelations contradicted with Diet testimony he had provided when he was chief of the Financial Bureau.

However, Sagawa, who cited the possibility of being prosecuted to dodge questions about the doctoring of the documents during sworn Diet testimony, only strengthened the public's criticism of the ministry.

On March 12, 10 days after the first media report on the doctored documents, the Finance Ministry finally admitted that documents on the sale had indeed been doctored. Still, in April, it was discovered that an employee at the Financial Bureau secretly asked Moritomo Gakuen's lawyer to lie about the amount of garbage buried at the site, which was the reason for the hefty discount placed on the land plot. Once again, criticism of the ministry reached fever pitch.

But that wasn't the end to the ministry's woes. What followed was a report by a weekly magazine that top bureaucrat ex-vice minister Junichi Fukuda had allegedly sexually harassed a female TV reporter. As Fukuda continued to deny all claims, the ministry requested that the woman come forward to cooperate with an investigation. But this only highlighted the ministry's poor awareness of sexual harassment, and added even more fuel to fiery criticism.

While Fukuda eventually stepped down from his position, it was about two weeks after the magazine report that the ministry recognized the sexual harassment and as punishment, had reduced the amount of Fukuda's retirement allowance. The ministry's slow response to these scandals was only continuing to start new fires.

The Finance Ministry is currently tackling important issues such as drawing up plans to restore the country's fiscal health in June and handling the rise in the consumption tax from the current 8 percent to 10 percent slated for October 2019. Still, with the discovery of the "discarded" Moritomo negotiation documents, faith in the ministry has fallen to rock bottom. With the continual weakening of the Finance Ministry, the future of the government's policies to boost fiscal health has come into question.

(Japanese original by Daisuke Oka and Mikako Yokoyama, Business News Department)

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