Truth Behind LDP's Loss

Fall 1993

By Tomohito Shinoda

Washington-Japan Journal, Volume II, Number 3

On August 5, Japan witnessed the establishment of Morihiro

Hosokawa's non-LDP party government, an unprecedented event since

the Liberal Democratic Party took over power 38 years ago. The

new government's top priority is political reform. It was this

issue that toppled the previous administration and forced a

general election. Japan's political turmoil seems to evolve

around the issue of political reform. However, it is actually the

product of inner-party fighting within the LDP.

It all started with the death of former LDP Secretary General

Shintaro Abe in May 1991. His death left his faction--an

intra-party group that works to achieve the premiership for its

leader--in a state of confusion as to who would succeed him as

leader. The largest faction in the LDP, led by former Prime

Minister Noboru Takeshita, intervened in the leadership selection

process. Many members of the Abe faction were upset by this

interference, and went against the Takeshita faction's preference

by choosing former Foreign Minister Hiroshi Mitsuzuka. This shook

the status-quo within the ruling party. The solid coalition

between the Takeshita and Abe factions broke down, leading to an

LDP break-up two years later.

In Japanese Politics, it is often said, "The number is power."

The magic number was the equivalent of one quarter of the LDP

members. As long as the LDP has more than a half of the total

lower house members, it remains the ruling party. If a coalition

of factions is larger than a majority of all LDP diet members,

the coalition can be the mainstream within the party: It can have

decisive power over the selection of the prime minister and the

execution of major policies. The faction which holds a majority

within the coalition controls the coalition, thus the party, and

therefore the government. By this rule of "a majority of a

majority," a faction with over a quarter of the LDP members could

demonstrate strong influence in the political scene.

The largest faction, led by Takeshita and previously by former

Prime Minister Kakuei Tanaka, had long been influential within

the party because other factions constantly sought its favor in

order to benefit from the large membership count. Receiving

support from this faction was crucial for potential candidates to

achieve the premiership and for any prime minister to execute

major policies. At its peak the Tanaka faction was comprised of

more than one-third of the LDP diet members, and the subsequent

Takeshita faction, until its break-up, maintained more than a

quarter.

Under the Toshiki Kaifu Administration (1989-91), the Takeshita's

faction dominated the political scene enjoying a solid coalition

with the Abe and Komoto factions. Toshio Komoto was indebted to

the Takeshita faction, strong in the transportation policy area,

for rescuing Komoto's own company, Sanko Kisen Shipping which had

gone bankrupt. Shintaro Abe was loyal to the coalition with

Takeshita, knowing that the same coalition would choose him to

the premiership in the near future. With the loss of support from

the Abe faction, that faction could not sustain party control,

tied up only with the smallest Komoto faction. The three other

factions began publicly calling for the resignation of Kaifu.

On September 301991, political reform bills on which Prime

Minister Kaifu "staked his cabinet's life" died. Although Kaifu

expressed his desire to dissolve the lower house to force a

general election, his action was blocked by the Takeshita

faction. Kaifu's weakness was underscored, and the anti-Kaifu

campaign within the LDP accelerated. The Takeshita faction knew

that it could no longer maintain party control by supporting the

Kaifu Administration, and withdrew its support for Prime Minister

Kaifu. Powerless, Kaifu had no choice but to resign.

Once Kaifu's resignation became a matter of fact, all three

possible candidates asked for support from the dominant Takeshita

faction. Former LDP Secretary General Ichiro Ozawa, a young

leader of the faction only 49 years old at that time, called

meetings with the three candidates to his private office. This

was rather a humiliating experience for the three who were older

and more senior politicians. Miyazawa, swallowing his

widely-known pride, begged Ozawa with a forced smile for his

support, calling him "Great Secretary General." The Takeshita

faction subsequently picked Miyazawa who, in turn, promised to

delegate the power over party affairs to Takeshita's faction. The

Takeshita faction managed to form another dominant intra-party

coalition with the obedient Miyazawa faction.

Miyazawa had to accept the Takeshita faction's strong influence

over the formation of his first cabinet. Six members of

Takeshita's faction were appointed to cabinet posts, while the

Miyazawa faction had to settle for only two. Miyazawa could not

even control the post of Chief Cabinet Secretary, which serves as

the prime minister's right-hand man. The influence of the

Takeshita faction in LDP politics was dominant throughout the

first year of the Miyazawa Administration. Virtually all

important policy decisions required the approval of the Takeshita

faction.

The dominance of the Takeshita faction, however, did not last

much longer. Last October its co-leader, Shin Kanemaru was forced

to retire from the political scene due to his involvement with

the Tokyo Sagawa Kyubin which had made fraudulent loans to firms

allegedly affiliated with a Japanese mafia group. The other

co-leader, Noboru Takeshita was also in trouble with his own

scandal of a possible connection with a Japanese mafia group, and

could no longer control the faction. There arose a power struggle

for leadership within the faction. As a result, the Takeshita

faction began to fragment into two groups--one led by Keizo

Obuchi and the other by Tsutomu Hata and Ichiro Ozawa.

Last December when the split within the Takeshita faction became

obvious, Prime Minister Miyazawa reshuffled the cabinet. This

time Miyazawa, without the influence of the Takeshita faction,

freely chose cabinet members. He appointed Yohei Kono to the

Chief Cabinet Secretary--the appointment previously blocked by

the Takeshita faction. Miyazawa publicly displayed the power

shift by selecting a member of the Ozawa group to the cabinet

against Ozawa's will. Furthermore, Miyazawa chose Seiroku

Kajiyama, a member of the Obuchi group who changed from a close

buddy of Ozawa to the leader of anti-Ozawa movement, to the

powerful position of the LDP secretary general. These acts threw

the humiliation suffered by Miyazawa at the formation of his

first Cabinet back in the face of Ozawa.

With Miyazawa's demonstration of his anti-Ozawa stance, all the

other factions allied with Miyazawa to contain the political

influence of Ichiro Ozawa. Ozawa and Hata, now cornered, began

openly calling for political reform. For them political reform,

which would change the political environment, was the only

possible way to crush the anti-Ozawa alliance within the LDP.

Ironically, further revelation of the scandal of Ozawa's former

mentor, Shin Kanemaru, strengthened public support for political

reform, and thus provided stronger backing for Ozawa's call.

Strong reformists in the group, such as former Director General

of the Environmental Agency Kazuo Aichi, publicly expressed their

determination to leave the party if Prime Minister Miyazawa did

not see political reform through. An assistant to Aichi

privately told me that many junior members of the group saw that

they would have a better chance of getting re-elected if they

left the party. For many in the group, the break-off from the

ruling party was for their survival rather than for political

reform.

The break-off of the Hata faction was a serious threat since it

meant that the LDP would lose a majority in the lower house.

While it is very difficult to tell how seriously Prime Minister

Miyazawa and LDP Secretary General Kajiyama took the threat,

Kajiyama convinced Miyazawa to block Ozawa's initiative by making

a party decision to pursue the original LDP-proposed political

reform bills; bills which could never pass the Diet. As a result,

the opposition parties submitted a non- confidence resolution

against the Miyazawa Cabinet. The Hata group joined them to pass

the resolution, and left the LDP to establish a new party, the

Renewal Party.

Timing was crucial for the Hata group. The general election had

to take place before the trial of Shin Kanemaru which started on

July 22. Once the details of Kanemaru's deeds were exposed, their

close association with Kanemaru might have devastated public

support for their group. The Hata group with their break-off from

the ruling party successfully shifted public attention away from

the Kanemaru trial to political reorganization. Issues for the

July 18 election focused on political reform which the Hata group

pursued, and the reformist image won Hata's new party 55 seats,

up from 36. The power struggle within the party, disguised as a

policy split, drove the LDP to lose a majority in the lower

house.

The death of Abe created a chain of unexpected events, which

ultimately led to the establishment of a new government, breaking

political stalemate in Japan. Despite the actual cause, Japan's

political changes are real. Real political debates are taking

place everyday for the first time in a long time. Political

parties are trying to persuade voters across the nation, rather

than please their client special interest groups and

constituents. Outspoken politicians have gained public support,

while traditional political insiders who mainly acted behind the

scenes have lost their stage. In order to emphasize the change,

the coalition government has chosen Hosokawa as their leader over

Tsutomu Hata who would have provided an image of old LDP

politics.

Of course, this was not the only reason for Hosokawa's rise to

the premiership. It was easier for the coalition government to

maintain its unity with Hosokawa as a leader. Some members of the

Japan Socialist Party, the weakest link of the coalition, were

openly opposed to the selection of the other strong candidate,

Hata. More importantly, there would be no future for the non-LDP

coalition government if Hata, with his impressive portfolio, were

chosen as the premier and then failed in political reform.

Picking Hosokawa provides a possible second chance for a

coalition government even if Hosokawa fails--Hata would emerge as

the back up leader to form a new government.

Political changes are so drastic that it is difficult to imagine

Japan going back to the old rigid political system which

developed under the long-reign of the LDP. It is unlikely for the

LDP to regain the majority in the powerful lower house by itself

for at least another three years. Japan's political situation is

fluid, and anything can happen. Whatever changes occur in Japan,

they will be healthy ones. Even the new LDP president Yohei Kono

admits that political change can carry desirable effects which

the LDP could not muster under its long reign due to the vested

interests of the iron triangle of the business-political-

bureaucratic links. And what kind of changes Japan will

experience depends on the interest and enthusiasm of Japanese

voters in politics.

Tomohito Shinoda is Washington Representative of Taro Kimura Inc.

He is nearing the completion of a book on the Japanese prime

minister, titled Struggle to Lead Japan.

On August 5, Japan witnessed the establishment of Morihiro

Hosokawa's non-LDP party government, an unprecedented event since

the Liberal Democratic Party took over power 38 years ago. The new

government's top priority is politica1 reform. It was this issue

that toppled the previous administration and forced a general

election. Japan's political turmoil seems to evolve around the

issue of political reform. However, it is actually the product of

inner-party fighting within the LDP.

It all started with the death of former LDP Secretary General

Shintaro Abe in May l991. His death left his faction--an

intra-party group that works to achieve the premiership for its

leader--in a state of confusion as to who would succeed him as

leader. The largest faction in the LDP, led by former Prime

Minister Noboru Takeshita, intervened in the leadership selection

process. Many members of the Abe faction were upset by this

interference, and went against the Takeshita faction's preference

by choosing former Foreign Minister Hiroshi Mitsuzuka. This shook

the status-quo within tbe ruling party. The solid coalition between

the Takeshita and Abe factions broke down, leading to an LDP

break-up two years later.

In Japanese Politics, it is often said, "The number is power." The

magic number was the equivalent of one quarter of the LDP members.

As long as the LDP has more than a half of the total lower house

members, it remains the ruling party. If a coalition of factions is

larger than a majority of all LDP diet members, the coalition can

be the mainstream within the party: It can have decisive power over

the selection of the prime minister and the execution of major

policies. The faction which holds a majority within the coalition

controls the coalition, thus the party, and therefore the

government. By this rule of "a majority of a majority," a faction

with over a quarter of the LDP members could demonstrate strong

influence in the political scene.

The largest faction, led by Takeshita and previously by former

Prime Minister Kakuei Tanaka, had long been influential within the

party because other factions constantly sought its favor in order

to benefit from the large membership count. Receiving support from

this faction was crucial for potential candidates to achieve the

premiership and for any prime minister to execute major policies.

At its peak the Tanaka faction was comprised of more than one-third

of the LDP diet members, and the subsequent Takeshita faction,

until its break-up, maintained more than a quarter.

Under the Toshiki Kaifu Administration (1989-91), the Takeshita's

faction dominated the political scene enjoying a solid coalition

with the Abe and Komoto factions. Toshio Komoto was indebted to the

Takeshita faction, strong in the transportation policy area, for

rescuing Komoto's own company, Sanko Kisen Shipping which had gone

bankrupt. Shintaro Abe was loyal to the coalition with Takeshita,

knowing that the same coalition would choose him to the premiership

in the near future. With the loss of support from the Abe faction,

that faction could not sustain party control, tied up only with the

smallest Komoto faction. The three other factions began publicly

calling for the resignation of Kaifu.

On September 301991, political reform bills on which Prime Minister

Kaifu "staked his cabinet's life" died. Although Kaifu expressed

his desire to dissolve the lower house to force a general election,

his action was blocked by the Takeshita faction. Kaifu's weakness

was underscored, and the anti-Kaifu campaign within the LDP

accelerated. The Takeshita faction knew that it could no longer

maintain party control by supporting the Kaifu Administration, and

withdrew its support for Prime Minister Kaifu. Powerless, Kaifu had

no choice but to resign.

Once Kaifu's resignation became a matter of fact, all three

possible candidates asked for support from the dominant Takeshita

faction. Former LDP Secretary General Ichiro Ozawa, a young leader

of the faction only 49 years old at that time, called meetings with

the three candidates to his private office. This was rather a

humiliating experience for the three who were older and more senior

politicians. Miyazawa, swallowing his widely-known pride, begged

Ozawa with a forced smile for his support, calling him "Great

Secretary General." The Takeshita faction subsequently picked

Miyazawa who, in turn, promised to delegate the power over party

affairs to Takeshita's faction. The Takeshita faction managed to

form another dominant intra-party coalition with the obedient

Miyazawa faction.

Miyazawa had to accept the Takeshita faction's strong influence

over the formation of his first cabinet. Six members of

Takeshita's faction were appointed to cabinet posts, while the

Miyazawa faction had to settle for only two. Miyazawa could not

even control the post of Chief Cabinet Secretary, which serves as

the prime minister's right-hand man. The influence of the Takeshita

faction in LDP politics was dominant throughout the first year of

the Miyazawa Administration. Virtually all important policy

decisions required the approval of the Takeshita faction.

The dominance of the Takeshita faction, however, did not last much

longer. Last October its co-leader, Shin Kanemaru was forced to

retire from the political scene due to his involvement with the

Tokyo Sagawa Kyubin which had made fraudulent loans to firms

allegedly affiliated with a Japanese mafia group. The other

co-leader, Noboru Takeshita was also in trouble with his own

scandal of a possible connection with a Japanese mafia group, and

could no longer control the faction. There arose a power struggle

for leadership within the faction. As a result, the Takeshita

faction began to fragment into two groups--one led by Keizo Obuchi

and the other by Tsutomu Hata and Ichiro Ozawa.

Last December when the split within the Takeshita faction became

obvious, Prime Minister Miyazawa reshuMed the cabinet. This time

Miyazawa, without the influence of the Takeshita faction, freely

chose cabinet members. He appointed Yohei Kono to the Chief Cabinet

Secretary--the appointment previously blocked by the Takeshita

faction. Miyazawa publicly displayed the power shift by selecting

a member of the Ozawa group to the cabinet against Ozawa's will.

Furthermore, Miyazawa chose Seiroku Kajiyama, a member of the

Obuchi group who changed from a close buddy of Ozawa to the leader

of anti-Ozawa movement, to the powerful position of the LDP

secretary general. These acts threw the humiliation suffered by

Miyazawa at the formation of his first Cabinet back in the face of

Ozawa.

With Miyazawa's demonstration of his anti-Ozawa stance, all the

other factions allied with Miyazawa to contain the political

influence of Ichiro Ozawa. Ozawa and Hata, now cornered, began

openly calling for political reform. For them political reform,

which would change the political environment, was the only possible

way to crush the anti-Ozawa alliance within the LDP. Ironically,

further revelation of the scandal of Ozawa's former mentor, Shin

Kanemaru, strengthened public support for political reform, and

thus provided stronger backing for Ozawa's call. Strong reformists

in the group, such as former Director General of the Environmental

Agency Kazuo Aichi, publicly expressed their determination to leave

the party if Prime Minister Miyazawa did not see political reform

through. An assistant to Aichi privately told me that many junior

members of the group saw that they would have a better chance of

getting re-elected if they left the party. For many in the group,

the break-off from the ruling party was for their survival rather

than for political reform.

The break-off of the Hata faction was a serious threat since it

meant that the LDP would lose a majority in the lower house. While

it is very difficult to tell how seriously Prime Minister Miyazawa

and LDP Secretary General Kajiyama took the threat, Kajiyama

convinced Miyazawa to block Ozawa's initiative by making a party

decision to pursue the original LDP-proposed political reform

bills; bills which could never pass the Diet. As a result, the

opposition parties submitted a non- confidence resolution against

the Miyazawa Cabinet. The Hata group joined them to pass the

resolution, and left the LDP to establish a new party, the Renewal

Party.

Timing was crucial for the Hata group. The general election had to

take place before the trial of Shin Kanemaru which started on July

22. Once the details of Kanemaru's deeds were exposed, their close

association with Kanemaru might have devastated public support for

their group. The Hata group with their break-off from the ruling

party successfully shifted public attention away from the Kanemaru

trial to political reorganization. Issues for the July 18 election

focused on political reform which the Hata group pursued, and the

reformist image won Hata's new party 55 seats, up from 36. The

power struggle within the party, disguised as a policy split, drove

the LDP to lose a majority in the lower house.

The death of Abe created a chain of unexpected events, which

ultimately led to the establishment of a new government, breaking

political stalemate in Japan. Despite the actual cause, Japan's

political changes are real. Real political debates are taking place

everyday for the first time in a long time. Political parties are

trying to persuade voters across the nation, rather than please

their client special interest groups and constituents. Outspoken

politicians have gained public support, while traditional political

insiders who mainly acted behind the scenes have lost their stage.

In order to emphasize the change, the coalition government has

chosen Hosokawa as their leader over Tsutomu Hata who would have

provided an image of old LDP politics.

Of course, this was not the only reason for Hosokawa's rise to the

premiership. It was easier for the coalition government to maintain

its unity with Hosokawa as a leader. Some members of the Japan

Socialist Party, the weakest link of the coalition, were openly

opposed to the selection of the other strong candidate, Hata. More

importantly, there would be no future for the non-LDP coalition

government if Hata, with his impressive portfolio, were chosen as

the premier and then failed in political reform. Picking Hosokawa

provides a possible second chance for a coalition government even

if Hosokawa fails--Hata would emerge as the back up leader to form

a new government.

Political changes are so drastic that it is difficult to imagine

Japan going back to the old rigid political system which developed

under the long-reign of the LDP. It is unlikely for the LDP to

regain the majority in the powerful lower house by itself for at

least another three years. Japan's political situation is fluid,

and anything can happen. Whatever changes occur in Japan, they will

be healthy ones. Even the new LDP president Yohei Kono admits that

political change can carry desirable effects which the LDP could

not muster under its long reign due to the vested interests of the

iron triangle of the business-political- bureaucratic links. And

what kind of changes Japan will experience depends on the interest

and enthusiasm of Japanese voters in politics.

Tomohito Shinoda is Washington Representative of Taro Kimura Inc.

He is nearing the completion of a book on the Japanese prime

minister, titled Struggle to Lead Japan.