Japan’s Crisis of Confidence

The resignation of four Japanese cabinet ministers in the most serious political corruption scandal in recent memory begs for a certain appraisal of affairs. In the past year and a half, Japan has been going through a spectacular series of corruption incidents and fraud at the highest levels of government and industry, eroding an already brittle trust in public institutions. 

To be sure, Japan has had its dose of government scandals in the past, the most looming example no doubt being the Recruit Scandal under the Takeshita administration, the corruption and insider trading scandal that besmirched Prime Minister Takeshita Noboru himself and former Prime Minister Nakasone Yasuhiro, the herald of liberal market reform in the 1980s and the New Right to come. The Recruit Scandal was the emblem of an inebriated political elite in the midst of the ‘80s bubble economy, oblivious to the thunderous financial crash to come, well depicted in Tsukasa Jōnen's “Japanese History Explained Through Economics: The Heisei Era (Volume 6).” This was an era where, like rain droplets before the storm, newspapers were filled with lewd stories about prominent politicians in hostess clubs and lavish Tokyo restaurants.

Could the latest scandal be the precursor to a similar storm brewing in Japan?

The current series of scandals is particularly striking. The revelation in 2022 that at least 32 members of the second Kishida government, including, at the time, former Minister for the Green Transformation Koichi Hagiuda, and other prominent leaders of the long-ruling Liberal Democratic Party, had deep ties with the Unification Church left commentators and the public aghast. The religious group – long derided by critics as a “cult” – stands accused of predatory practices, including coercing members to purchase the religious sect's spiritual idols and objects 

With an estimated 56,000 members of the Unification Church nationwide, it remains difficult to estimate the number of families and individuals led to financial ruin. It is perhaps one of the greatest symbols of this age in Japanese politics that the most preeminent leader Japan has had in decades – former Prime Minister Abe Shinzo – was killed by a man seeking revenge after his family’s financial standing was ruined by his mother’s donations to the sect.

The relationship between the LDP and the Unification Church began decades ago, with the sect de facto promising the LDP the votes of tens of thousands of Japanese members as well as robust and resilient campaign support. Investigations and questions remain as to the full extent to which the intimate relationship between the Unification Church and the LDP has affected public policymaking ranging back decades. 

In December, the Lawyers from Across Japan for the Victims of the Unification Church Association estimated that the amount of money the church had made off of victims, regular Japanese citizens, potentially soared up to 100 billion yen (currently approximately $700 million). The Kishida administration has announced that it would finalize the settlements toward victims in February. After months of successful debates over the constitutionality of a Dissolution Order targeting the sect’s Japanese chapter, a special law was passed in December which allows for a special designation and supervision of religious organizations deemed malicious to the public interest.

The high-profile scandal surrounding the LDP’s entanglement with the Unification Church was just the tip of the iceberg.

News cycles in late 2022 and early 2023 were similarly filled with an investigation into illicit financial meddling between the Olympic Committee for the 2020 Tokyo Olympic Games and, most notably, Japanese advertising giant Dentsu. Dentsu and five other marketing companies went to trial in December for bid-rigging for Tokyo Olympic accounts and violating antitrust laws. None other than former Prime Minister Mori Yoshino was head of the Olympic Committee until his inevitable resignation as the scandal broke. The story overwhelmingly became the main reference to the Olympics in national news and continues to sully its image in the national esteem – posing a stark contrast with the roaring success of the Tokyo 1964 Summer Olympics for national prestige.

Over the summer of 2023, Japan’s biggest used car dealer, Big Motor, was found to have been engaging in large-scale insurance fraud, with mechanics allegedly further wrecking brought-in damaged cars for larger insurance refunds. One of Japan’s largest insurance companies, Sompo Japan Insurance Inc., was found to have been aware of the fraud, but kept pushing Big Motor repair shops as safe options onto clients, leading to the resignation of President Shirakawa Giichi in September of last year. 

Problematic behavior seems widespread at the industry level, as all three of Japan’s largest property and casualty insurers (MS&AD, Sompo, Tokio Marine) were penalized recently for price-fixing by Japan’s Financial Services Agency (FSA), are being investigated by the Japan Fair Trade Commission for breach of antitrust law, and have all been under scrutiny for their alleged links to the Big Motor scandal. The three firms represent 90 percent of the market.

In the October edition of Bungakukai, Japan’s prestigious literary review, philosopher Koichiro Kokubun and Mansai-style comedian Masayasu Wakabayashi speak about the “Big-Motorfication” (ビッグモータ化, biggumōtaka) of society. They coined the term in relation to the additional revelation that nine Big Motor retailers in cities across the country actively pursued a strange zero-plant policy, illegally using pesticides to kill or straight out chop down trees on public and private land around stores for increased “store visibility.” 

In a fascinating discussion about the origins of the philosophy, Kokubun and Wakabayashi speak of a Kafkaesque world in which individuals trapped within convention seem doomed to propagate actions despite having no idea of the rationale for what they are doing. They go on to speak of the “Big-Motorfication” of Tokyo, a Babylon of sorts where profit and gain are pursued until climate exhaustion.

And finally, the current slush-fund scandal, one of the greatest political scandals in decades, has taken down no less than four cabinet ministers, including the mighty minister of Economy, Trade and Industry Nishimura Yasutoshi, Chief Cabinet Secretary Matsuno Hirokazu, Minister of Agriculture Miyashita Ichiro, and Minister of the Interior Suzuki Junji. The scandal has also felled countless senior party officials. These members of the Abe faction of the LDP have allegedly accepted hundreds of millions of yen in undeclared donations from political fundraising parties. 

On January 11 a special meeting was held by the LDP in which former Prime Minister Suga Yoshihide – Abe's immediate successor – surprisingly called for the elimination of the faction, which has ruled conservative politics for a decade. (Suga, despite his proximity to Abe as his chief cabinet secretary for eight years, was not part of Abe's faction.) Needless to say, the affair is sending shattering shock waves through the world of Japanese power, as no member of the LDP’s largest faction remains in Kishida’s cabinet.

As a bonus, one could even mention the arrest of former LDP, then unaffiliated, ex-Lower House representative Kakizawa Mito, son of Kakizawa Koji, who served as foreign minister in the 1990s. The ex-parliamentarian was revealed to have paid elected officials to campaign in his favor in Tokyo’s Koto ward.

The current staggering displays of ethical recklessness and insouciance by Japan’s political class come after the great stability of Abe’s helmsmanship as longest-serving prime minister of postwar Japan. There were of course controversies throughout his reign, such as the Sakura viewing party incident, in which Abe was accused of illicitly using premiership funds to lavishly invite and accommodate world leaders to celebrate the blossoming of the prized trees. He was also much criticized for his tacit and indirect efforts to stifle World War II-era Korean comfort women coverage at the NHK and Asahi Shimbun in the early 2010s. And of course much more substantially and controversially, Abe’s 2015 security reforms inched Japan that much closer to nominally possessing an army.

Despite his posthumous centrality in many of the current scandals, Abe’s Imperial-era styled funeral demonstrated above all a staunch and fervent national admiration for his world leadership in the solidification of the Western alliance in the Indo-Pacific. Many millennials in street interviews around the time could often be heard referring to the assassinated prime minister as a grandfatherly figure, having seen his first election (for an ill-fated one-year term) in 2006 as children and his resignation in 2020 as young adults. 

Asahi Shimbun wrote about Abe’s surprising popularity among Japan’s youth at the time of his state funeral. A poll by the newspaper at the time showed that 64 percent of people aged 18-29 supported the lavish state funeral, as opposed to a mere 30 percent of those over 60. 

Abe was elected for his second and by far longest mandate in 2012. Japan had finally opted for a change in leadership in 2009, with discontent running high after the mass privatizations and liberalization of the New Right in the early 2000s. Two new coalition governments succeeded in rapid interval, notably mishandling the 2011 earthquake, tsunami and Fukushima nuclear catastrophe, with the immediate consequence of power returning to the LDP in 2012. 

Emerging above the chaos, Abe’s near-decade as prime minister is still seen by many as having restored stability to Japan’s government. How much of this is circumstantial, purely aesthetic, or the narrow view of foreign commentators mainly focused on Abe’s efforts to promote gender equality (his famed “Womenomics”) or serve as a bulwark in the United States’ strategy to counter Chinese influence is an open debate. Many of Abe’s left-wing critics tirelessly repeat a different mantra: that Abe was the greatest populist threat to Japanese democracy to have emerged in past decades.

The sharp contrast to Abe’s stable governance is what makes the current crisis in Japanese politics so dismaying. Both the scale and senior-level centrality of the scandals of the last two years seem to have exposed a shriveled and shivering ruling class to a nation already turning away from politics, despite the flare of national pride occasioned by Abe’s tragic passing. 

For decades, Japan has been experiencing the withering of the democratic vitality of its citizens, a trend explored at length by researchers. Waseda professor Xavier Mellet writes at length about the complex undercurrents of what has been dubbed “Silver Democracy,” in which the demographic decline of the youth’s share in electoral power has gradually led to a sense that political participation is futile, documenting the disinterest and default-voting contingent to the youth’s passionless preference for the LDP. Political participation among Japanese youth is the lowest among G-7 countries.

Each of these incidents has received occasional treatment as isolated affairs in Western news. However, they must be put together to create a more holistic portrait of contemporary Japanese politics, and more particularly of public trust in institutions. The past two years alone seem to have profoundly shaken the foundation of trust in Japanese institutions at a time when news columns across the country have been panicking over the new-normal low standing of the yen and the perceived decline of the country’s economic stature after being downgraded to fourth place in GDP, behind Germany. Kishida’s seemingly persistent calls for a “return of trust” these past two years have started to seem morosely redundant. 

On January 11, Kishida helmed the first meeting of his announced Political Reform Headquarters. Despite its proclaimed mission to properly supervise and assure the transparency of political funding, one can expect weary Japanese citizens to eye this with the same disbelief with which they have been following the news from COVID-19 onwards.

The political, industrial, and financial events of post-pandemic Japan highlight the uncertainties of one of the fundamental economic and increasingly geopolitical players of the world. At a time where the world will need to count on Japan more than ever for peace in Asia and the energy transformation, addressing the apparent excesses of its decision centers will be fundamental for Japanese democratic vitality and trust, as well as Japan’s capacity to project credibility and responsibility of governance in the world.