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Scandals highlight 'we can do what we want' attitude at Finance Ministry

Deputy Vice Finance Minister Koji Yano, right, and Financial Bureau head Mitsuru Ota bow in apology for the ministry's doctoring of documents related to the sale of state land to school operator Moritomo Gakuen, at a June 4, 2018 news conference at the ministry building in Tokyo. (Mainichi)

TOKYO -- The day that suspicions of Finance Ministry doctoring of documents on the decision to sell state land to school operator Moritomo Gakuen at a steep discount were reported in the media, ministry official Minoru Nakamura found himself being grilled on the subject at a multipartisan opposition party hearing.

Sweating visibly and speaking barely above a whisper, the director of the Planning and Administration Division in the ministry's Financial Bureau told the March 2 hearing, "I would like to refrain from answering." It was eventually revealed that Nakamura had been involved in the document tampering, which had gone on for over a year, and the senior bureaucrat did not raise his eyes to meet those of his interlocutors that day.

Despite Nakamura's obvious nervousness, the mood in the following days was remarkably calm among Finance Ministry officials, known as the cream of Japan's bureaucratic elite. One senior official said the ministry could "weather the storm" over the document doctoring, which included deleting the names of politicians and of Akie Abe, wife of Prime Minister Shinzo Abe who at one time was set to be honorary principal of the elementary school Moritomo planned to open on the property concerned. The attitude in the ministry was that there was no real problem, as only documents that were being compiled before the land sale was finally decided were being reported on in the news, and nothing had been changed after the deal was done.

This rosy outlook changed quickly as an internal probe found a number of staff at the ministry's Kinki Local Finance Bureau -- which brokered the Moritomo deal -- who said they had effectively been ordered to alter the documents under the direction of then Financial Bureau chief Nobuhisa Sagawa. Ten days after the first March 2 reports, the ministry admitted to document doctoring on an unprecedented scale.

Apparently pressed by public criticism, the Finance Ministry announced it would continue its investigation into the Moritomo deal, triggering yet more revelations: the Financial Bureau asked Moritomo to massage its story on the scale of the garbage found buried at the property to justify the discounted price; and the bureau hid or destroyed some records of its negotiations with the school operator.

However, ministry officials were always playing catch-up, left to confirm facts already being reported in the news media. Meanwhile, opposition parties demanded the results of the internal investigation be released sooner rather than later, but the ministry demurred, pushing the release back until after the Osaka District Public Prosecutors Office had decided not to pursue criminal charges against Sagawa and others.

"It would not have been beneficial for the defense of the organization for us to state ourselves, 'Look, here is what we were doing.' Because if we revealed something the district prosecutors didn't already know, they would say, 'Well, what's going on here,' and start investigating," commented a senior Finance Ministry official.

The final report on the Moritomo scandal released by the ministry on June 4 states that officials doctored the documents "due to worries that Diet deliberations would be thrown into disorder," and that they "believed the essential nature of the documents had not been altered by the changes."

However, regarding the report's claims that officials had sought to "reduce to the utmost material that could lead to yet more questions in the Diet," one ministry official said, "It's ridiculous because it is bureaucrats' job to provide thorough explanations in the Diet." Meanwhile, another senior Finance Ministry official told the Mainichi Shimbun that staff simply "felt they had the luxury to say, 'We can do whatever we want.'"

The Moritomo case bears some similarity to the ministry's reaction to the alleged sexual harassment of a female TV Asahi reporter by now ex-Vice Finance Minister Junichi Fukuda which came to light in April. Then, too, the ministry's first response was to issue a statement by Fukuda categorically denying the accusation, and then asking female reporters who had been victimized to come forward to cooperate in an investigation. One ministry official said the response "couldn't be helped, because the vice minister, who is the top bureaucrat in the ministry, is denying everything."

The Finance Ministry on June 4 also announced punishments for 20 officials over the Moritomo document doctoring scandal, including the equivalent of a three-month suspension for former Financial Bureau head Sagawa, whom the investigative report said had "set the direction" for the document tampering. Suspensions are the second-most severe punishment permissible under the National Public Service Act, below dismissal but above pay reductions and reprimands.

Meanwhile, Deputy Vice Finance Minister Koji Yano told a news conference that day, "While it remains a fact that there was document tampering, we will accept our shame and strive to regain trust. We must have good sense and serve the public, seeking to be useful government officials."

However, one government official commented to the Mainichi, "The doctoring of documents is more vicious than a 1998 corruption case that rocked the ministry. The sexual harassment allegations and the ministry's response to the case are just beyond the pale," adding, "It's a shame, but it will take a decade or so for the organization to earn back trust."

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