Japan: bribery scandal involving lawmakers and a Chinese company overshadows IR opening process

Over the past few weeks, a Chinese company has been under fire for giving bribes to at least six Japanese politicians. Such bribes would be illegal under the Political Fund Control Law, which bans donations from foreigners or foreign companies. 

As the casino-related bribery scandal continues to grow, last Monday, Mikio Shimoji became the first politician to acknowledge that he received money from an individual connected with 500.com, a Chinese company interested in operating a casino in Japan, as reported by The Diplomat. Shimoji is a member of the opposition Nippon Ishin party, and he submitted his resignation to the party on Tuesday, but the party rejected the letter, instead formally expelling him the next day. He is still debating whether to resign as a lower house member.

Shimoji’s admission lends credibility to the accusations directed against four other lawmakers suspected of receiving money from 500.com: Takeshi Iwaya, Masahisa Miyazaki, Hiroyuki Nakamura, and Toshimitsu Funahashi, all of whom belong to the ruling LDP (Liberal Democratic Party), the party of Prime Minister Shinzo Abe. As part of the same scandal, LDP politician Tsukasa Akimoto was arrested on Christmas Day on suspicion of receiving bribes from 500.com. He resigned from the LDP that very day, though he did not step down as a lower house member.

The Abe government on Tuesday created a commission to manage integrated resorts. The five-person commission in the Cabinet Office is meant to be an independent entity with a strong mandate, though this could also become the next target of bribes distributed by any foreign casino-operating company interested in getting an unfair advantage over its competition.

With the goal to open the first integrated resorts in 2022 or 2023, Abe’s vision, when this legislation first passed, was to use casinos as the cure to the post-Olympics “hangover” – the dip in economic activity that many host nations of the Olympics suffer. Since then, the casinos initiative has pressed forward under Abe’s leadership.

According to reporting by The Japan Times, most LDP and some opposition politicians think that this scandal will force Abe to hold off on conducting a snap election until after the Paralympics or Olympics — sometime between late July and early September. However, other opposition politicians think that the scandal will have the opposite effect: forcing Abe to hold a snap election in the near future to quiet critics and naysayers.

Abe has until October 2021 before the lower house members’ terms run up and he has to hold an election. When and whether he holds another snap election will be determined not only by how the current scandal unfolds, but also by his calculus of how to secure the votes and seats needed to achieve constitutional amendment, as he nears the end of his LDP presidency and, hence, Japanese premiership.