MNI 5 THINGS: Japan Land Deal Scandal Blow to Abe Govt Ratings

     TOKYO (MNI) - A year-long political scandal is threatening to hurt Japanese

public support for Prime Minister Shinzo Abe's cabinet as Finance Minister Taro

Aso on Monday revealed that ministry officials doctored public documents to

cover up details of a state land sale.

     Here are the key points of the scandal which Abe has so far survived

because there are no strong candidates to succeed him within his party and the

opposition parties remain fragmented.

     * The fiscal 2018 budget and government nominations of Bank of Japan

leaders will eventually win parliamentary approval even if Diet proceedings are

stalled over the scandal and the opposition camp boycotts a vote. The ruling

coalition holds a majority of seats in both chambers of the Diet.

     * Deputy Prime Minister and Finance Minister Aso, who has supported Abe for

over five years, is unlikely to step down at this point. Aso is a political

survivor despite many gaffes over the years. The opposition has demanded Aso's

resignation but his departure would weaken the Abe cabinet, and thus Abe's

leadership of the ruling party.

     * If the political scandal sends public approval ratings sharply lower,

Abe's reelection in September for an unprecedented third term as party chief,

and thus prime minister, may not be assured.

     * Opposition parties are calling for sworn testimony by Nobuhisa Sagawa,

who stepped down as National Tax Agency chief on Friday. He was the head of the

Financial Bureau of the MOF overseeing government assets from 2016 to 2017.

Sagawa told lawmakers last year that there had been no price negotiations with

the buyer prior to the land sale in June 2016 and that government records of the

negotiations had been discarded. Audio recordings and internal documents

regarding the deal were uncovered later.

     * Untampered MOF documents unveiled Monday quoted the owner of Moritomo

Gakuen, the buyer of the land, as saying the Prime Minister's wife Akie had

recommended that the project "move forward because it is a good plot of land."

     -- Background:

     In 2016, Moritomo Gakuen, which owns a kindergarten and a nursery school,

bought an 8,770-square-meter government-owned plot of land at Y134 million, only

14% of the appraised value of Y956 million. Politicians have denied they were

involved in the securing the favorable transaction.

     Yasunori Kagoike, president of Moritomo Gakuen, testified under oath in

parliament about a year ago that he had received a Y1 million donation in the

name of Prime Minister Abe, repeating his earlier claim that political influence

helped him prepare for opening a nationalist school. Abe has denied that he made

any such donation and has shown displeasure that his name was used in the past

to drum up support for promoting right-wing education.

     The school said it needed a significant discount to pay to dispose of the

garbage left in the ground of the tract. After the land deal was criticized in

media reports and debated in the Diet, Kagoike withdraw his application with the

Osaka Prefecture to open an elementary school in April 2017.

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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