Japan’s political world is bracing for a major confrontation over government plans to raise the consumption tax following the acquittal of Ichiro Ozawa on charges of falsifying political fund reports.
Ozawa, 69, who leads the largest intraparty group in the ruling Democratic Party of Japan, has been vehemently opposed to the tax hike and now has his hands free to take on the party leadership on the issue.
A Cabinet minister predicted: “Ozawa will go on an aggressive offensive. We have no choice but to huddle up.”
A senior government official said: “Ozawa is a man of influence. His power will first be felt within the (ruling) party and then spread over the government in many ways.”
The Tokyo District Court decision on April 26 said it had found no evidence that Ozawa conspired with three former aides convicted of falsifying reports from his political fund organization.
Prime Minister Yoshihiko Noda and other DPJ leaders who have kept their distance from Ozawa were largely silent on the court’s verdict.
Noda did not even bother to pretend to welcome the ruling. “I will accept it as a judicial decision,” he told reporters.
Noda was elected as DPJ president last autumn with support from lawmakers critical of Ozawa. He defeated Banri Kaieda, who was supported by the Ozawa group, in a runoff vote.
Former Prime Minister Naoto Kan, who decided to strip Ozawa of his party privileges following his indictment in the fund reporting case, refused to respond to reporters’ questions.
Yoshito Sengoku, acting chair of the DPJ’s Political Research Committee and a leading critic of Ozawa, told an aide: “A court decision depends on judges.”
On April 26, the DPJ and the opposition Liberal Democratic Party agreed to start deliberations on the consumption tax bill at a special Lower House committee on May 16.
It will be extremely difficult for the legislation to pass the Diet before the current session closes on June 21. Noda had called for the Diet deliberations to begin before he leaves for the United States on April 29.
The not guilty verdict is expected to strengthen the influence of Ozawa and his intraparty group and force Noda to make concessions to opponents of the tax hike within the DPJ.
DPJ Secretary-General Azuma Koshiishi, a close ally of Ozawa’s, said April 26 that the party will start procedures to reinstate Ozawa’s party privileges.
“(With privileges restored) Ozawa will be able to attend a variety of meetings and make his arguments freely,” Koshiishi told a news conference.
Koshiishi is opposed to an early vote on the consumption tax bill, fearing that the ruling party might be split on the issue.
If the bill is put to a vote, 50 to 60 members of the Ozawa group are expected to oppose it, making it difficult for the DPJ to pass the bill in the Lower House without opposition support.
After the court’s announcement, 105 lawmakers attended a meeting of the Ozawa group where there was strong criticism of Deputy Prime Minister Katsuya Okada, who decided on the DPJ’s disciplinary action against Ozawa in February 2011 while serving as party secretary-general under Kan.
In the afternoon, the group held a meeting to report the ruling to Ozawa supporters, and 70 group members then gathered at a Tokyo hotel to celebrate the acquittal later in the evening.
According to sources, Ozawa is planning to put up a candidate in the next DPJ leadership election due to be held after Noda’s term expires in September. That election could come earlier if Noda is forced to resign over the consumption tax bill.
Immediately after the not guilty verdict, Ozawa shook hands with two Lower House members and was heard saying: "It was good."
He did not hold a news conference but issued a short statement saying the ruling was in accordance with his position.
Faced with a resurgent Ozawa, Noda is likely to be forced to seek cooperation from the LDP on the consumption tax bill. However, the LDP, aware that Ozawa’s acquittal will make its support essential to Noda, wants to force the prime minister to agree to dissolve the Lower House for a snap election.
At a news conference on April 26, LDP President Sadakazu Tanigaki called for Ozawa to be summoned before the Diet to testify as a sworn witness about his involvement in the scandal.
Ozawa previously refused to explain to the Diet about his role in the falsification of political fund reports because the criminal trial was ongoing.
Tanigaki also called on Noda to dismiss Defense Minister Naoki Tanaka and land minister Takeshi Maeda. The opposition-controlled Upper House has passed censure motions submitted by the LDP and other opposition parties against the two ministers.
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