Photo/Illutration Toshihiro Nikai speaks at a fund-raising party organized in Tokyo in April by a ruling Liberal Democratic Party faction that he heads. (Asahi Shimbun file photo)

A second faction of the ruling Liberal Democratic Party has found itself in hot water over suspicions it failed to report an estimated 100 million yen ($676,000) in its political fund income and expenditure reports over the past five years.

The Tokyo District Public Prosecutors Office’s Special Investigation Department has questioned officials of the faction headed by former Secretary-General Toshihiro Nikai over the flow of money from fund-raising parties organized by the bloc, sources said.

Diet members belonging to an LDP faction are usually assigned quotas for selling party tickets and pass on the income from ticket sales, including the amount in excess of their quotas, to the faction. The faction then returns portions in excess of quotas to faction members.

The Nikai faction is believed to have only included income based on quotas--and not the amounts in excess of the quotas--in the income section of its political fund reports, the sources said.

A failure to list an income or an expenditure in a political fund report would constitute a violation of the Political Fund Control Law.

The total amount is estimated to have exceeded 100 million yen over five years through 2022, for which the statute of limitations has not expired, the sources said.

Prosecutors are looking into similar arrangements by the Abe faction, the largest in the LDP, and which still uses the name of the former prime minister after his death in July 2022 at the hands of a gunman. 

But the key difference is that the Nikai faction recorded the money returned to faction members in the expenditure section of its political fund reports, the sources said.

Faction members also listed that money in the income sections of the political fund reports of their political organizations, the sources said.

The Abe faction apparently omitted recording such funds in both the income section and the expenditure section of its political fund reports, the sources said.

In addition, Abe faction members did not include the money returned to them in their political fund reports, effectively making it a slush fund, the sources said.

The amount unreported in the faction’s political fund reports is estimated to have totaled more than 100 million yen over the past five years, the sources said.

Asked about the suspicions concerning the Abe faction, Prime Minister Fumio Kishida said Dec. 2 that it is very regrettable the public harbors doubt about activities of the faction.

“We will consider how to respond as a party after grasping the situation,” Kishida told reporters in Dubai, where he was visiting to attend the COP28 climate conference, without offering any specifics.

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