An investigation by The Asahi Shimbun has shed light on how the deputy mayor of a town in Fukui Prefecture exerted an amazing level of influence over Kansai Electric Power Co. for decades.

It was already known that the late Eiji Moriyama distributed cash and lavish gifts to executives of Kansai Electric over many years. His first brush with the utility was when he helped to alleviate local opposition to building a nuclear power plant in Takahama, where he served as deputy mayor between 1977 and 1987. He died in March 2019 at the age of 90.

A third-party committee looking into the ties between Moriyama and Kansai Electric focused its attention on a real estate transaction in 1987 involving Kansai Electric and a Takahama harbor transport company. Kansai Electric ended up purchasing the land for about double the assessed value. Those with an insight into the transaction said Moriyama played a key mediating role in sealing the deal.

In addition to the ongoing committee investigation, The Asahi Shimbun obtained information that backs up the assertion of Moriyama being a key behind-the-scenes player.

Chimori Naito, who was a vice president at Kansai Electric between 1983 and 1987, let slip in an Asahi Shimbun interview in 2014 that the utility had requested Moriyama to intervene. Naito died in 2018.

The current chairman of the harbor transport company has also admitted in a recent interview that Moriyama helped to resolve the problems related to the acquisition of the land by Kansai Electric. That background was also revealed to the third-party committee, the chairman said.

The land in question is located about one kilometer north of the Takahama nuclear plant. The roughly 89,000-square-meter site is made up of forest and reclaimed land. Land records show that Kansai Electric acquired legal ownership of the plot in April 1987.

Based on land assessments of neighboring sites as well as the cost of land reclamation, the plot had a value of between 500 million yen and 600 million yen ($4.7 million and $5.7 million). The harbor transport company chairman also gave a similar explanation.

The harbor transport company stored lumber on the site after using soil and sand from the forested area to reclaim land along the coast. But after the No. 3 and No. 4 reactors at the Takahama plant came online in 1985, heated waste water from the plant raised the ocean temperature, which triggered the spread of shipworms, also known as termites of the sea because the bivalve mollusks eat into wood immersed in water.

The shipworms began damaging so much of the lumber stored by the harbor transport company that it fell into major financial difficulties.

Company officials pleaded with Kansai Electric for compensation because of the damage done to the lumber.

In the 2014 interview, Naito recalled how he told subordinates to never budge on those compensation claims.

“Compensation for heated waste water was completed with the construction of the plant,” Naito said at that time. “If we agreed to compensation, it could continue endlessly.”

But Naito did agree to meet with the then company president, the late father of the current chairman. The president said his company needed the money to stay afloat.

Naito agreed to provide money, but insisted it had to be totally unrelated to the heated waste water. Naito also sought a favor in return. When Naito learned that the company owned the lumber storage yard as well as land behind the Takahama plant, he proposed having the company sell the real estate to Kansai Electric.

According to the current company chairman, an asking price of about 1.23 billion yen was proposed to Kansai Electric, but it came back with an offer of about half that.

When negotiations became bogged down, Naito turned to Moriyama and asked him to intervene. Moriyama played a key role in ensuring that construction of the No. 3 and No. 4 reactors at Takahama went ahead.

The company chairman said that in summer 1986 Moriyama brought together the two sides and a deal was reached to sell the land to Kansai Electric for about 1.1 billion yen.

Under the land use and planning law of the time, any real estate transaction involving a plot of 10,000 square meters or more required the parties involved to report it to the prefectural government. This was so authorities could check that the price was in the same range as the value of nearby land. If the price was considered inappropriate, the prefectural government was empowered to recommend that the purchase not go ahead.

In the 2014 interview, Naito indicated that he asked Moriyama to discuss the matter with the Fukui prefectural government because, as he told the Asahi, the deal “was a circumvention of the law.”

Naito’s comment indicated that Moriyama somehow managed to obtain the consent of the Fukui prefectural government.

However, when asked about the land transaction, Fukui prefectural government officials said they were not aware of it.

Kansai Electric also refused to comment about any specific real estate transaction.

Kansai Electric has already admitted that 20 current and former executives and other officials received a total of 320 million yen in cash and gifts from Moriyama.

Kansai Electric Chairman Makoto Yagi resigned as a result and Shigeki Iwane is expected to resign as company president in the near future.

The third-party committee will release its report on March 14.

(This article was written by Hideki Muroya and Tomoya Nozaki.)