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Japan DPJ's Ozawa to appear at ethics panel

TOKYO (Reuters) - Japanese political powerbroker Ichiro Ozawa told a news conference on Tuesday that he would appear at a parliamentary ethics panel over a funding scandal, in an about-face likely to ease a rift in the ruling party.

Japanese political powerbroker Ichiro Ozawa (C) attends a news conference in Tokyo December 28, 2010. REUTERS/Kyodo

The bickering in the ruling Democratic Party of Japan (DPJ) has distracted the government from addressing tough policy decisions and complicated prospects for passing laws in a divided parliament, including bills needed to implement the budget for the fiscal year from April 1.

Resolving the intraparty row would relieve Prime Minister Naoto Kan of one headache, but he has plenty more. Opposition parties have threatened to boycott parliamentary business when it resumes in January, unless Chief Cabinet Secretary Yoshito Sengoku and Transport Minister Sumio Mabuchi resign.

Both were targets of non-binding censure motions in the upper house for their handling of a territorial row with China.

Kan indicated on Monday that he was considering reshuffling his cabinet, but gave no clues as to what specific personnel changes he had in mind.

Ayako Sera, market strategist at Sumitomo Trust & Banking, said Ozawa’s decision to appear before the ethics panel was unlikely to erase market worries or send share prices higher.

“If his appearance does help to strengthen solidarity within the party, then it will help ease concerns about intraparty bickering and remove one negative factor for the stock market. But it won’t be a positive factor which will boost prices.”


In a sign the haggling might not be over, though, Ozawa said the earliest he would appear was at the start of a parliamentary session expected sometime in January, while Kan told reporters he wanted the former DPJ leader to attend the panel before that.

Ozawa’s change of heart came after DPJ executives had agreed on Monday to start procedures to have the panel summon him and Kan upped the pressure by hinting that he might try to force Ozawa out of the party if he refused.

Ozawa told the news conference he had changed his mind after the labour union that is the Democrats’ biggest support group strongly urged him and Kan to work together.

“I also feel very sorry about causing a lot of worries for the Japanese people and my friends. Taking all these things into account, I decided ... to appear voluntarily before the parliamentary ethics panel next year,” he said.

The strife in the DPJ has also helped to undermine support rates for Kan’s six-month-old government, fanning speculation he may become Japan’s latest short-lived leader.

A survey by the Nikkei business daily published on Monday showed only about one in four voters backed Kan’s administration, while dissatisfied voters rose five points to 65 percent.

Kan is Japan’s fifth premier since 2006.

Ozawa, 68, a veteran political strategist who once headed the DPJ, had previously refused to appear before the ethics panel over the scandal, in which he faces mandatory indictment over suspected misreporting by his political funds body.

He has denied any wrongdoing.

Kan seems to hope that forcing Ozawa to answer questions in parliament would help boost government support and improve his own chances of keeping his job.

Opposition parties also want Ozawa to explain the scandal, but Kyodo news agency said the biggest opposition group, the Liberal Democratic Party (LDP), would continue to press for him to give sworn testimony on the affair.

Lawmakers appearing at the ethics panel are not under oath.

And while persuading Ozawa to appear might help clear the way for cooperation on passing bills with the second-biggest opposition party, the New Komeito, that outcome is not assured.

“The New Komeito has already said that they are opposed to the budget bill,” said Tomoaki Iwai, political science professor at Nihon University. “If this were decided a little bit earlier, then it could have helped parliamentary operations, but at this stage, it is not very helpful.”

(Additional reporting by Chikako Mogi)

Reporting by Linda Sieg, Yoko Kubota, Kiyoshi Takenaka; Editing by Chris Gallagher and Andrew Marshall