Ex-MOF Exec Sagawa Escapes Indictment over Moritomo Scandal

June 1, 2018

Osaka, May 31 (Jiji Press)--The Osaka District Public Prosecutors Office said Thursday that it has decided not to indict former Ministry of Finance official Nobuhisa Sagawa over the falsification of documents on the controversial state land sale to Moritomo Gakuen.

The prosecutors also decided not to indict other former and current officials who faced allegations of inflicting financial damage on the state through the huge discount sale.

Over the transaction and the document falsification, a total of 38 people faced criminal complaints. The office decided not to establish a criminal case against any of them.

A university professor, a civil group and others who had submitted criminal complaints against Sagawa, 60, and others are expected to appeal against the decisions to a prosecution inquest committee.

In March, Sagawa resigned as commissioner of the National Tax Agency to take the blame for creating confusion in the Diet over the matter. The MOF later admitted the document falsification.

After the land deal came to light in February last year, the ministry manipulated more than 300 sections in 14 sets of related documents, including descriptions of its negotiations with Moritomo Gakuen and those referring to Prime Minister Shinzo Abe's wife, Akie, by name.

The MOF's Financial Bureau is believed to have instructed the falsification to make the sections in question consistent with remarks Sagawa made over the land deal at parliamentary meetings. Sagawa was director-general of the bureau when the tampering took place.

By questioning Sagawa and MOF officials involved in the alteration on a voluntary basis, the Osaka prosecutors office's special investigation team found that many parts of the documents were doctored.

But the team has found it difficult to indict them, as key parts in the documents, such as those on the terms of the land sale contract, were not altered, and it therefore cannot be said that the essence of the papers changed substantially from the original documents, according to informed sources.

The land plot in the city of Toyonaka, Osaka Prefecture, western Japan, was sold to Moritomo Gakuen in June 2016 for 134 million yen, after 820 million yen in costs to remove waste buried at the site was deducted from the appraisal value of the land.

Moritomo Gakuen planned to establish an elementary school on the land but gave up the project in March last year, after coming under fire over the land deal. The prime minister's wife was once appointed honorary principal of the school.

Former Moritomo Gakuen chief Yasunori Kagoike, 65, and his wife have been indicted for allegedly cheating the national, prefectural and municipal governments out of subsidies, including for the once-planned school.

Among those who escaped indictment is Sagawa's predecessor, Hidenori Sakota, who was director-general of the Financial Bureau when the land sale negotiations were held between the ministry's Kinki Local Finance Bureau and Moritomo Gakuen.

After interviewing officials of an excavation company and analyzing relevant materials, the prosecutors concluded that the waste removal costs cannot be judged to have been excessively boosted, the sources said.

The MOF officials included in the land contract a special provision aimed at preventing a situation in which Moritomo Gakuen would seek damages from the state in case of a delay in opening the elementary school due to the waste removal work.

Against this background, the prosecutors believe it difficult to prove that the officials deliberately caused financial damage to the state, the sources said. Jiji Press