Fallen politician in Japan had amassed $51 million


TOKYO -- Japan's fallen political kingmaker Shin Kanemaru piled up hundreds of pounds of gold bars and at least $51 million in secret stashes of bearer bonds and cash in his decade in power, a Japanese public already weary of scandal and recession learned yesterday.

For two days, tax officials used cardboard boxes to haul parts of the hidden fortune, mostly in hard-to-trace bearer bonds, from the houses and offices of Mr. Kanemaru and his chief money handler after arresting them over the weekend, Japanese news media reported.

Stunned by the size of the haul, investigators said last night that they were not ready to rule out additional surprises. They gave no indication that they knew where Mr. Kanemaru got the money but said they were preparing to indict him and his aide on charges of failing to report it as income.

Prime Minister Kiichi Miyazawa, who owes his job to Mr. Kanemaru's early support, was thrown back onto the political defensive by yet another huge scandal. Trying to distance himself from the disclosures, he called them "a personal matter" of "no direct influence now" because Mr. Kanemaru resigned from politics under an unrelated cloud last fall.

But other Japanese politicians and commentators, some of them visibly awed by the scale of the stashes, said the revelations threatened to paralyze the government anew, given the likelihood that the clamor from opposition parties will stall government action on several pressing issues.

Especially imperiled are attempts to put together a convincing stimulus package to revive Japan's economy. Mr. Miyazawa has been struggling to assemble such a package in time for his meetings with President Clinton in Washington April 15-18.

The revelations also raised troubling questions about Japan's already scandal-plagued financial institutions.

The Japanese media reported that officers of two of the country's most prestigious banks -- Industrial Bank of Japan and Nippon Credit Bank -- helped Mr. Kanemaru and his aide keep their millions secret.

Bank officers went to Nagatacho, Tokyo's political center, to carry out transactions. Senior officers were assigned to advise on buying and managing the assets. The bearer bonds don't have to be recorded and thus are widely used by Japanese who have money they don't want the tax authorities to know about.

A year ago, Mr. Kanemaru was the dinner guest of presidents and the darling of ambassadors. He made Mr. Miyazawa prime minister after having named the previous three and told them when to step aside.

But he resigned from the Diet, Japan's parliament, on Oct. 13 at age 78, ending a five-decade political career. He was driven out by public outrage over his ability to duck prosecutors questioning on an illegal $4 million political donation from a mob-connected trucking company.

Many Japanese thought they had heard the worst with October's revelations that the man who made and unmade heads of government had dined with a top yakuza gang boss to plead for help in making Noboru Takeshita prime minister.

But the news that tens of millions of dollars went into a single politician's personal cache seemed to cut even deeper.

It blew away politicians' most widely tolerated excuse for the scandals that have rocked the world's No. 2 economic power for nearly two decades: that politicians needed to accumulate piles of money to take care of the public's expectations.

The cost of a politician's handing out $90 or so every time there's a wedding or funeral in his district is at the root of the scandals, politicians have long said.

But the amount of money discovered last weekend went far beyond those needs.

"A fig leaf," Asahi said of that excuse in an editorial yesterday. The new revelations have "made it plain for all to see that politicians line their own pockets under the pretext of raising political funds," the newspaper said.

The loss of that "fig leaf" threw Mr. Miyazawa's governing Liberal Democratic Party back onto the election-year defensive just as polls showed that the Cabinet was recuperating from last fall's round of Kanemaru scandals.

Already frightened by seeing their leaders appear impotent for the first time in the face of a recession and numbed by decades of political money scandals, many Japanese seemed to be having trouble yesterday taking in the size of the personal hoards.

Many usually sober Japanese lapsed into a kind of giddiness as the news began to sink in.

Fuji Television, usually a staunch backer of the governing Liberal Democratic Party that spawned the "money politics" Mr. Kanemaru came to master, sent staff members into the streets wearing Kanemaru masks. Accompanying reporters invited passers-by to tell the masked interviewers, on camera, what they would like to tell Mr. Kanemaru.

"Please, I don't want to lose my appetite," a woman said with a giggle.

"I don't even want to look at that face," another said, grimacing.

Prosecutors and tax investigators leaked word yesterday that they had taken an unexpected cache of $8.3 million in bearer bonds from Mr. Kanemaru's stately red-brick house in Tokyo's expensive Moto Azabu neighborhood after arresting him on tax-evasion charges Saturday.

Hundreds of pounds of gold bars, not counted in the $51 million estimate, came out of his and his aides' offices at Nagatacho, Tokyo's political center.

Sunday, reportedly acting on a tip from a family member, officials carried $14.2 million more in certificates out of a one-room office containing only a steel safe, Japanese news organizations reported.

Additional tens of millions reportedly were revealed to investigators by the issuing banks, where some of the stash had been left for safekeeping.

Japan's statute of limitations prohibits prosecution for tax evasion after five years. That means undeclared income from any year earlier than 1987 is already exempt from prosecution.

If investigators are to base part of their case on Mr. Kanemaru's 1987 taxes, they will have to hurry to place indictments by the weekend, five years after Mr. Kanemaru filed his return for that year.

The investigators are preparing indictments asserting that Mr. Kanemaru and his aide, Masahisa Haibara, 49, evaded at least $3.4 million in taxes by not reporting income in 1987 and 1989, according to news reports.

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