National News

Massive amounts of money have passed through Democratic Party of Japan (DPJ) Secretary-General Ichiro Ozawa's fund-management body Rikuzan-kai without being recorded in its political fund reports, it has emerged.

The Tokyo District Public Prosecutors Office has apparently questioned Ozawa over a total of 1.3 billion yen unrecorded cash flow at Rikuzan-kai. Ozawa has reportedly denied any knowledge of the funds.

According to sources close to the case, a transaction of some 900 million yen involving a Rikuzan-kai bank account between 2004 and 2005 was not recorded in the group's political fund reports. The transaction apparently took place between Rikuzan-kai and Kaikaku Forum 21 (Forum), a political group controlled by Ozawa, on top of a transaction of an additional 400 million yen between the two parties in March and May 2005.

Forum started funneling the approximately 900 million yen into Rikuzan-kai's account in December 2004, with the latter repaying the entire amount in May 2005, according to the sources.

Furthermore, the transaction of 400 million yen -- remitted to Rikuzan-kai's bank account in March 2005 and withdrawn in May the same year -- also took place with Forum, according to the sources. The transactions were not recorded in Rikuzan-kai's political fund reports.

Some 1.5 billion yen that was remitted to Forum's bank account in October 2004 also failed to be recorded.

The funds are likely to originate from party subsidies for the now-defunct Liberal Party, once headed by Ozawa, which were disbursed to then party Secretary-General Hirohisa Fujii in 2002, according to the sources. The amount has since remained unaccounted for. Fujii resigned as finance minister earlier this month.

The reason for the transactions between Rikuzan-kai and Forum remains unknown. One possibility is that they tried to replace old 10,000 yen bills with new ones, which were introduced in November 2004 and include an anti-counterfeit hologram, according to the sources.

It is believed that a late close aide to Ozawa, who was called Ozawa's personal treasurer and was serving as chief accountant for Forum, played a leading role in the transfers.

The March 2005 remittance of 400 million yen to Rikuzan-kai's account was handled by Ozawa's then private secretary Tomohiro Ishikawa, 36, who was in charge of clerical work for the group. Ishikawa, who is under arrest for violating the Law to Regulate Money Used for Political Activities, reportedly said that the 400 million yen was split up into smaller amounts when it was remitted.

Forum was established in 1993, when Ozawa belonged to the Liberal Democratic Party, and is based in Ozawa's personal office in Tokyo's Chiyoda Ward, along with two other political groups linked to Ozawa.

It has so far been revealed that over 900 million yen was transferred to Forum from the Japan Renewal Party (Shinsei-to) when the Ozawa-led party was dissolved. The amount included government subsidies to the party.