OSAKA -- A second round of investigations has provided insufficient evidence to prosecute a group of government employees and others over allegations relating to the discounted sale of government land to a school operator in 2016, the special investigation unit of the Osaka District Public Prosecutors Office said on Aug. 9.
Former National Tax Agency Commissioner Nobuhisa Sagawa, 61, and nine others including Ministry of Finance employees faced allegations including breach of trust to help secure a huge discount for the incorporated educational institution, Moritomo Gakuen, and altering public documents on the deal.
After announcing the decision not to prosecute, the head of the special investigation unit said, "We carried out necessary investigations as directed by the committee for the inquest of prosecution, but could not gather evidence that was sufficient to lead to prosecution."
The decision not to prosecute due to insufficient grounds for suspicion means the line of inquiry has ended without sentences for any of the accused.
Previously in May 2018, the special investigation unit announced it would not prosecute Sagawa and 37 others including government employees due to insufficient grounds for suspicion or no suspicion.
In response, Osaka's first committee for the inquest of prosecution concluded in March this year that it was inappropriate not to charge 10 of the individuals against whom the allegations were leveled.
Six people were re-investigated for altering public documents, including Sagawa as well as the Financial Bureau's then Planning and Administration Division director and the Kinki Local Finance Bureau's then properties administration department director. Another four were investigated again by the unit for suspicions relating to breach of trust.
The written decision from the committee for the inquest of prosecution details its suspicions regarding the Kinki Local Finance Bureau's choice to discount the government land by some 800 million yen. The price was discounted on the basis that trash was buried in the plot. The committee suggested the discount was made with the intention of selling the land at that price from the outset. It also called for thorough checks of the costs of removing garbage from the site.
The special investigation unit questioned people connected to the case again, but it maintains the same judgment it arrived at after the first time, stating, "We cannot say that the removal costs were mispriced." It says it cannot recognize that government employees and others concerned aimed to do damage to the national government through their actions.
Regarding the alteration of documents detailing the final decision on the sale, and the disposal of negotiation records, the committee for the inquest stated, "Some documents have a vast number of deletions, and the contents of the original documents have been changed."
But the special investigation unit concluded they did not have grounds to prosecute the suspects, partly because the fundamental reason for the sale had not changed, and because of internal rules at the Ministry of Finance stipulating that documents do not have to be kept for longer than a year.
In the event that prosecutors re-investigate a case after a committee for the inquest of prosecution rules that a decision not to prosecute suspects over the case as inappropriate, and decides once again not to prosecute them, the inquest panel will not be able to examine the case again.
-- Moritomo Gakuen scandal overview
Details emerged in February 2017 of a June 2016 sale of heavily discounted government land in Toyonaka, Osaka Prefecture, to Moritomo Gakuen, a nationalist educational corporation that ran a kindergarten. The discount came to some 800 million yen.
The educational institution planned to build an elementary school on the purchased land, with Akie Abe, the wife of Prime Minister Shinzo Abe, temporarily serving as honorary principal.
The school's former chairman Yasunori Kagoike and his wife Junko were later both arrested and charged with defrauding subsidies from national, prefectural and city governments. They are currently facing trial.
It subsequently came to light that documents relating to the final decision on the sale were altered between February and April of 2017.
In June 2018, it was announced in a Ministry of Finance report that former National Tax Agency Commissioner Nobuhisa Sagawa was believed to have guided the alteration.
(Japanese original by Masayuki Takashima and Shiho Matsumoto, Osaka City News Department)