Sun, Jan 17, 2010 - Page 5 News List

Japan’s Ozawa vows to stay after aides arrested

A MISUNDERSTANDING? Pressure on the Democratic Party’s No. 2 official to step down is mounting, adding to the woes of the Yukio Hatoyama administration

REUTERS , TOKYO

A protester holds a poster during a demonstration against Democratic Party Secretary-General Ichiro Ozawa near the venue of the party’s annual convention in Tokyo, Japan, yesterday.

PHOTO: REUTERS

The Japanese ruling party’s No. 2, Ichiro Ozawa, said yesterday he would not resign, media reported, after the arrest of three aides over a funding scandal that could hit government support ahead of a key mid-year election.

Ozawa, widely seen as the real power in the Democratic Party, told a meeting of regional assembly members he would stay in his post, media said, while Japanese Prime Minister Yukio Hatoyama said he supported the decision.

“He told me he wanted to continue to work hard in his post and I have faith in that,” Hatoyama told reporters following a meeting with Ozawa.

The veteran Ozawa has repeatedly denied any intentional wrongdoing, but apologized for the fuss, domestic media said.

“I may have caused misunderstanding, but I have done nothing to be ashamed of,” Kyodo news agency quoted him as telling the assembly members. Media said Ozawa announced he would hand over his duties temporarily to another party executive, but Hatoyama was later reported as denying any such suspension from duty.

Analysts and media say pressure on Ozawa to step down is rising, adding to the woes of Hatoyama’s government ahead of an election for parliament’s upper house, where his Democratic Party relies on an awkward coalition with two tiny parties to pass bills.

A poor performance in this year’s election could result in stalemate between the two houses of parliament and even mean a return to the policy paralysis that has afflicted previous governments.

The Democrats swept to power in the August election promising to reduce bureaucrats’ grip on policy, reorient spending toward consumers and steer a diplomatic course less dependent on security ally Washington.

Hatoyama faces his own funding scandal and opposition lawmakers have vowed to attack the two leaders over corruption in the new session of parliament, potentially delaying debate on the budget.

Support for Hatoyama’s government has slid to just over 50 percent, compared with levels above 70 percent when he took office in September.

Many analysts, however, say the main opposition Liberal Democratic Party, itself often racked by scandal during its half-century of almost continuous rule, may not benefit much from a fall in support for the government.

In the nearer term, the scandal has erupted just ahead of tomorrow’s opening of a new session of parliament, during which Hatoyama must quickly pass two budget bills aimed at bolstering the ailing economy.

Data released on Thursday showed machinery orders had slumped to a record low in November, adding to government fears of a return to recession that would lead to calls for more spending by the deeply indebted government.

One analyst said Ozawa would have to step down.

“There is nothing for him to do now but resign,” said political commentator Minoru Morita, adding that the extent of the damage to the government would depend on the timing.

“If he does it quickly, before ­parliament starts, that will keep damage to a minimum,” Morita said.

Prosecutors arrested two former aides of Ozawa late on Friday, one a serving member of parliament, and a secretary yesterday in an investigation into the source of cash Ozawa’s funding group used to buy a plot of land in Tokyo.

Media quoted a lawyer for the arrested lawmaker as saying the funds were an inheritance from Ozawa’s father that he had kept in cash at his home.

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