Construction firm's loans saved business--and post--of pro-nuclear mayor

July 17, 2013

THE ASAHI SHIMBUN

Nishimatsu Construction Co. loaned 100 million yen (about $1 million) to save the family business of a mayor who wanted to bring a nuclear facility to his city, according to sources and internal documents.

The Tokyo-based company provided the money from a fund of a subsidiary in 2003 and 2004 after consulting with Tokyo Electric Power Co., the documents showed. At that time, TEPCO was planning to build an intermediate storage facility for spent nuclear fuel in Mutsu, Aomori Prefecture.

Of the loans, 70 million yen became unrecoverable. But the money kept alive Masago, a machinery manufacturer in Mutsu run by the family of the city’s mayor, Masashi Sugiyama.

Sugiyama remained Mutsu mayor until his death in 2007, and a joint venture between TEPCO and Japan Atomic Power Co. is now building the intermediate storage facility.

Nishimatsu was also found to have provided about 200 million yen from its slush fund to help TEPCO buy part of the land for the storage facility. After that land deal was completed, TEPCO gave a verbal promise to award lucrative contracts to Nishimatsu, according to documents.

Around 1999, Mayor Sugiyama started negotiations with TEPCO concerning the intermediate storage facility. In June 2003, he officially announced that Mutsu wanted to host the facility.

However, Masago fell into a business slump and was saddled with huge debts. Sugiyama had previously served as representative director of Masago and had personally guaranteed more than 100 million yen of the company’s debts.

If Masago had gone bankrupt, he could have been forced to step down as mayor.

“If Sugiyama had resigned, it would have become difficult to host the intermediate storage facility,” a source who was close to him said. “So it was necessary to support him financially.”

According to sources, Sugiyama asked his uncle, who was the president of a construction company, for financial help to save Masago.

Nishimatsu’s internal documents obtained by The Asahi Shimbun showed that the uncle consulted with Nishimatsu’s Tohoku branch.

The Nishimatsu subsidiary then extended a 50-million-yen loan to the uncle in July 2003 and provided another 50 million yen in November 2004, according to the documents.

The money was used mainly for Masago’s operating expenses. Nishimatsu wrote off 70 million yen of the loans as losses.

One Nishimatsu document quoted Tadashi Ishibashi, then vice president, as saying, “We started arrangement for (the loans) after confirmation in advance from TEPCO.”

The document also mentions the involvement of then Nishimatsu President Mikio Kunisawa.

“Mikio Kunisawa and Ishibashi went to make the confirmation,” the document said.

The internal documents also read, “(We are extending the loans) to provide an advantage to our business activities because this case involves an influential person of Mutsu city that aims to host the intermediate storage facility.”

Both Kunisawa and Ishibashi had met with TEPCO executives in Tokyo around November 2007 to hear the utility’s complaints about the amount of money a landowner in Mutsu was demanding for the plots where the nuclear facility was planned, according to documents.

Sugiyama died in May 2007 of chronic renal failure during his sixth term as mayor. He was 70 years old.

Construction of the intermediate storage facility started in 2010.

Nishimatsu’s public relations division chief said in a written statement, “We cannot answer questions (related to the loans) because there are no documents.”

TEPCO’s public relations division said the company has no knowledge about the loans.

The construction company led by Sugiyama’s uncle also declined to discuss the matter.

“Our president cannot see media reporters because he is now sick,” the company said.

(This article was written by Takashi Ichida, Kosuke Tauchi and Osamu Murayama.)

THE ASAHI SHIMBUN
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An agreement is signed in Aomori in October 2005 to construct an intermediate storage facility for spent nuclear fuel in Mutsu, Aomori Prefecture. From right: Mutsu Mayor Masashi Sugiyama, Aomori Governor Shingo Mimura, TEPCO President Tsunehisa Katsumata and Japan Atomic Power Co. President Yukinori Ichida. (Asahi Shimbun file photo)

An agreement is signed in Aomori in October 2005 to construct an intermediate storage facility for spent nuclear fuel in Mutsu, Aomori Prefecture. From right: Mutsu Mayor Masashi Sugiyama, Aomori Governor Shingo Mimura, TEPCO President Tsunehisa Katsumata and Japan Atomic Power Co. President Yukinori Ichida. (Asahi Shimbun file photo)

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  • An agreement is signed in Aomori in October 2005 to construct an intermediate storage facility for spent nuclear fuel in Mutsu, Aomori Prefecture. From right: Mutsu Mayor Masashi Sugiyama, Aomori Governor Shingo Mimura, TEPCO President Tsunehisa Katsumata and Japan Atomic Power Co. President Yukinori Ichida. (Asahi Shimbun file photo)

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