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Monday, January 31, 2011

Japan kingpin Ozawa charged in funding scandal


TOKYO (Reuters) – Japanese ruling party powerbroker Ichiro Ozawa was charged on Monday over a funding scandal, adding to Prime Minister Naoto Kan's woes as he struggles to survive in the face of a divided parliament and sagging support.

Ozawa's indictment will give fresh ammunition to opposition parties who control parliament's upper house and are refusing to join multiparty talks on tax reform to curb Japan's huge debt and opposing the government-sponsored budget for the year from April.

The opposition is instead trying to force Kan either to resign or call a snap election for the powerful lower chamber.

"We want him (Ozawa) to explain in his own words. We want him to testify in parliament," Nobuteru Ishihara, secretary-general of the main opposition Liberal Democratic Party (LDP), told reporters.

Ozawa, a seasoned political strategist who once headed the ruling Democratic Party of Japan (DPJ), faced mandatory indictment over suspected misreporting by his political funds body after a lay judicial panel decided last year that he must be charged.

Ozawa, 68, reiterated that he was innocent and told reporters he had no intention of leaving the party or parliament.

"I have done nothing to be ashamed of, and will make clear my innocence in court," Ozawa said. "In order to realize policies that put the people's livelihood first, I want to make efforts sincerely as a Democratic Party lawmaker."

Ozawa and his backers maintain that his indictment differs from past cases in which prosecutors decided to file charges themselves after evaluating the evidence. Prosecutors twice decided not to charge him due to lack of evidence.

Ozawa's prosecution could widen a split in the DPJ and further distract Kan and his government from making decisions on deep-seated policy problems as it seeks ways to pass bills in a divided parliament and bolster a weak economy.

The scandal has helped drag down voter support for the government to about 30 percent and caused a split in the DPJ over Ozawa's fate, after Kan hinted that he should leave the DPJ and even resign his seat in parliament once he was indicted.

SEEKING VOTES

Kan and DPJ executives will now have to decide how to respond to Ozawa's indictment, including whether to try to issue a warning that he should leave the party.

"It is very regrettable that a lawmaker who belongs to the party, and especially one who headed the party as well as served as secretary-general, has been indicted," said Katsuya Okada, the DPJ's secretary-general.

Kan echoed that, adding that how to handle the matter would be discussed by DPJ executives led by Okada.

Attempting to push out Ozawa would further fray party unity just as the government is seeking opposition help to pass laws to implement a record $1 trillion budget for the year from April 1.

One option to pass the budget bills is to seek votes from tiny former coalition partner the Social Democrats to obtain the two-thirds majority in parliament's powerful lower house needed to override the opposition-controlled upper chamber.

But if Ozawa and some of his backers leave the DPJ, getting the required numbers would be harder.

"I think the backup option of securing a two-thirds majority is something they'd be stupid to lose, given that negotiations with the opposition (in the upper house) are not going very well," said Sophia University professor Koichi Nakano.

"But you need party unity for that purpose."

Ozawa has indicated that he has no intention of leaving the DPJ or resigning his seat in parliament.

Ozawa left the then-ruling LDP in 1993 with about 40 lawmakers, sparking a chain reaction that briefly pushed the party from power. Analysts say that with his influence waning, it is unclear how many of his backers would follow him into the opposition. (Additional reporting by Linda Sieg and Yoko Kubota; Editing by Robert Birsel)

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