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Takeshita Says He Will Not Resign Because of Stock Scandal

January 25, 1989

TOKYO (AP) _ Prime Minister Noboru Takeshita said Wednesday he won’t be driven from office by a stock-trading scandal that has forced three Cabinet ministers to resign, and will try to restore public trust in government.

Opposition leaders have demanded Takeshita’s removal since Ken Harada, the Economic Planning Agency director, resigned Tuesday because of links to the Recruit Co. conglomerate, the company involved.

Harada was appointed a month ago in a Cabinet realignment intended to quiet complaints about the scandal, and had been chosen to lead an investigation of financial connections between Recruit and politicians.

Earlier this month, Takeshita declared his new Cabinet free of taint from the scandal, in which politicians and others were offered advance shares in a Recruit subsidiary and made huge profits when the stock went public.

Takeshita said in a television interview Wednesday the Harada resignation ″reinforces my feeling that we need to do something. We must make efforts to dispel public distrust in government and in the party.″

At a meeting with Japanese reporters, he said demands for his resignation were ″a matter for me to judge.″

News reports said Harada received monthly political donations of about $80 from Recruit for 14 years until the end of 1987, well after the stock-trading scandal was revealed.

Recruit-Cosmos, the subsidiary, sold unlisted shares to more than 150 influential politicians, journalists and businessmen.

Although the transactions were not illegal, the deal aroused suspicions of bribery and influence-peddling. The result was a public outcry over fund- raising practices and the traditional coziness between Japanese businessmen and politicians.

Harada, 69, was chosen for the new Cabinet the prime minister appointed Dec. 27 in an attempt to restore the image of his government and his party, the conservative Liberal Democrats.

He said Tuesday, in resigning, that Recruit had not sought favors from him and he had done nothing wrong. Koichiro Aino, also 69, was appointed to replace him.

Justice Minister Takashi Hasegawa resigned after only three days in office when it was disclosed that he continued receiving donations from Recruit after the stock deal was exposed.

Kiichi Miyazawa, the finance minister, quit in December after repeatedly changing his story about an aide’s purchase of shares in his name.

Takeshita told Japanese reporters Wednesday that opposition calls for him to resign were ″a matter for me to judge.″

The Japan Socialist Party, the largest opposition group, adopted a resolution at its annual convention Wednesday demanding parliamentary elections.

″We’re pretty sick of all this,″ Takako Doi, the party chairwoman, said in a television interview.

Several ranking current and former bureaucrats also have been linked to Recruit.

Kunio Takaishi, former deputy education minister, and Takashi Kato, former deputy labor minister, bought shares in Recruit-Cosmos. Takaishi was forced to abandon his quest for a seat in Parliament and prosecutors have questioned Kato several times.

Yoshiro Okai, the current deputy, and Masayuki Nomiyama, director of the Labor Standards Bureau, acknowledged accepting dinners and golf trips from Recruit. Labor Ministry officials both would quit at the end of the month, but described the resignations as routine and unrelated to the scandal.

The ministry monitors and sets guidelines for the personnel and employment- information fields, Recruit’s main business, and prosecutors are investigating the possibility of bribery.

Since the scandal began last June, Takeshita has pledged to clean up government, most recently saying in his New Year’s speech he would seek to revise election laws and rules for political donations.

Asked Wednesday how he would erase public distrust, he said: ″I will solve (problems) one by one.″

The prime minister is scheduled to visit Washington next week to meet with President Bush.

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