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Chubu's slush fund to buy politicians' support

 July 21, 2014

 

Chubu Electric used slush fund for political donation to former Aichi governor

 

http://ajw.asahi.com/article/behind_news/social_affairs/AJ201407210047 

 

slush-fund.jpg

 

THE ASAHI SHIMBUN


A former director of Chubu Electric Power Co. told The Asahi Shimbun that it paid a total of 30 million yen ($296,000) from a slush fund to four gubernatorial candidates starting the 1980s and ending in the 2000s.


Aichi Prefecture’s former governor Masaaki Kanda has acknowledged he received a political donation from Chubu Electric, one of several regional utility monopolies.


Kanda, who served as Aichi governor for three terms between 1999 and 2011, admitted that he received funds from the company on at least one occasion in 1999.


Nagoya-based Chubu Electric is suspected of raising 250 million yen in off-the-book funding to buy support from politicians for nuclear power and other utility-related concerns.


The individual said he provided 3 million yen in 1999 and 5 million yen in 2003 to Kanda at his residence shortly before the start of his election campaigns.


Each time the executive said he made an appointment to meet Kanda before visiting his home and handing over cash directly to him.


Although Kanda admitted he received funds from Chubu Electric, he could not recall whether he received money in 2003. The former governor added that officials from the utility never asked him for anything in exchange.


“I remember that I received money once at the time of my first election, but I don’t clearly recall whether I received (money) or not at the time of my second election,” Kanda said. “I certainly did not provide favors to Chubu Electric, and they did not ask me for any favors, either.”


Kanda was a member of a Chubu Electric’s panel on utility policies that was comprised of locally influential people.

“Aichi’s governor was a member of the panel, so he was of special importance to us compared with governors of other prefectures,” the executive said.


For the 5 million yen it paid to the governor in 2003, the utility had five major construction companies contribute 1 million yen each. The executive said he told Kanda the names of the contractors.


To raise 250 million yen for the slush fund, the utility padded the amount it charged for orders that it placed to these companies, the executive said. His revelation raises the possibility that the utility used revenue paid by electricity consumers to buy the support of politicians for utility-related projects.


The executive said that Chubu Electric also paid money from the secret fund to candidates in three other gubernatorial elections during the same time frame beginning in the 1980s.


Each time, the company handed between 2 million yen and 5 million yen to relatives of the candidates or executives on their campaign teams. It some instances, a candidate’s side approached Chubu Electric for a monetary contribution, the executive said.


While prefectural governors have no legal authority in the decision-making process over the construction, operation and decommissioning of nuclear power plants, the safety agreements required between power companies and local governments oblige the utilities to gain the approval of prefectural and local governments before they can construct new reactors or restart those that have been idled.


“If we alienate prefectural governors, it will cause us many problems in promoting the utility’s projects,” said the executive.


A spokesman for Chubu Electric said the company has no record relating to the executive’s allegations.


The gubernatorial candidates from the other prefectures and former executives from their campaign teams said they are not aware of the alleged monetary handover or they have no memory of it.


(This article was written by Hiroo Sunaoshi and Hiroyoshi Itabashi.)

 


 

July 20, 2014

Chubu Electric built 250 million yen slush fund to win over politicians

http://ajw.asahi.com/article/behind_news/politics/AJ201407200021

 

THE ASAHI SHIMBUN

 


A former director of Chubu Electric Power Co. said the regional utility had its contractors pony up 250 million yen ($2.46 million) over 20 years for a secret fund to buy the support of politicians for nuclear power and other utility-related concerns.


The former executive told The Asahi Shimbun that Chubu Electric padded the amount of orders that it placed to these companies for nuclear power-related projects in exchange for their cooperation with the slush fund.


His revelation points to the possibility that the utility may have used part of the revenues paid by users on their electricity bills to cover the inflated costs of the projects. Under the Electric Utilities Industry Law, a power company can recover all the costs of generating power such as building nuclear power plants and their upkeep as well as distributing electricity by including them in electricity rates.


The man said the secret funds were used to promote nuclear power generation and the electric power business in the prefectures that the Nagoya-based Chubu Electric serves--Aichi, Gifu, Mie, Nagano as well as part of Shizuoka Prefecture.


He decided to reveal the existence of the slush fund following the nuclear disaster at the Fukushima No. 1 nuclear power plant, which unfolded in March 2011 when the powerful Great East Japan Earthquake and tsunami struck the plant.


In connection with a secret fund, the statute of limitations has apparently expired in filing potential criminal charges.


An official at Chubu Electric's publicity section denied the existence of a slush fund to The Asahi Shimbun, saying, “We are not aware that such facts existed.”


The former executive said, “Only a limited number of officials at Chubu Electric are aware of what I had handled.”


The companies that he claimed were involved in the slush funds did not officially confirm or deny his allegations.


According to the former executive, the utility began receiving funding from a manufacturer of electronics components in Nagoya and two leading general contractors in 1985.


The general contractors continued the practice until 1995, paying 10-15 million yen together annually.

The manufacturer contributed 10-20 million yen a year until 2004.


The man also said another large construction company paid 100 million yen and 40 million yen on separate occasions to Chubu Electric in 1993.


He received these funds personally and handled them without entering them in accounting records.

The money was “handy” since it did not exist on paper. Without receipts, it left no clues as to its source.


“I knew that managing such money violates the tax laws,” he said.


He distributed some of the funds to governors up for re-election in the jurisdiction Chubu Electric serves and senior officials with their election campaign offices.


The money was given at the governors’ homes, hotel lobbies or elsewhere after he called them in advance to “support them with what they can use at their discretion.”


“It costs a lot of money to run in an election,” he said. “They appreciated the funds, which they could use as they desired. Many of the governors had trouble raising campaign funds, unlike Diet members.”


In return for their cooperation in raising the questionable money, he asked a senior official at the utility’s supplies division, which oversees placing orders for projects, to “inflate the price of orders” for the companies or “let them take part in the projects.”


The former executive was referring to work related to the No. 5 reactor of the Hamaoka plant and other sites.


A former senior official with the Nagoya branch of one of the general contractors confirmed that his company contributed to the off-the-books fund.


“We began providing money around 1970,” he said.


The former official said that his company was willing to comply with the utility’s request to pay into the slush fund.


“That Chubu Electric asked for cooperation (in building the slush fund) is evidence that it trusts our company,” he said. “There was no reason for us to refuse it."


Chubu Electric's only nuclear plant, the Hamaoka plant in Shizuoka Prefecture, was taken offline in May 2011, two months after the triple meltdown at the Fukushima No. 1 plant at the urging of then Prime Minister Naoto Kan.


The Hamaoka plant, which began operation in 1976, is widely considered the most vulnerable in the nation since it sits in the presumed hypocentral area of a huge quake that is expected to strike the Tokai region within decades.


The Chubu executive's disclosure followed The Asahi Shimbun’s report that Tokyo Electric Power Co. requested a construction company to buy land from its secret fund for a spent nuclear fuel storage facility in Aomori Prefecture. The contractor later received a verbal promise from TEPCO for lucrative contracts.


(This article was written by Hiroo Sunaoshi, Hiroyoshi Itabashi and senior staff writer Takashi Ichida.)

 

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