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Japan Finance Officials Arrested

January 26, 1998

TOKYO (AP) _ Prosecutors arrested two officials of Japan’s powerful Finance Ministry on Monday on suspicion of accepting bribes from banks in exchange for tips on ministry inspections, prosecutors said.

Koiichi Miyagawa, 52, and Toshimi Taniuchi, 48, allegedly accepted bribes from a number of major Japanese banks, a spokesman for the Tokyo Prosecutor’s Office said, speaking on condition of anonymity.

The official declined to discuss details, but national broadcaster NHK reported that Miyagawa, the ministry’s chief inspector, is suspected receiving dinners and golf outings worth $20,800 from Asahi Bank and Dai-ichi Bank between 1993 and 1997.

Taniuchi, an assistant chief in the inspection department, allegedly accepted bribes worth up to $17,600 from Sanwa Bank and Hokkaido Takushoku Bank between 1994 and 1997.

The Finance Ministry periodically conducts surprise inspections of financial institutions, and the arrested officials are suspected of having revealed the timing and details of the visits, the Asahi newspaper reported.

The inspections are meant to ensure that banks and securities houses keep their books in order.

Many financial institutions have a team of ``MOF watchers″ whose responsibilities include wining and dining government officials, the Asahi said.

Finance Minister Hiroshi Mitsuzuka expressed outrage after the arrests.

``I am speechless,″ he told reporters. ``If there was any misconduct, I will take strict action.″

The Finance Ministry is widely considered the most powerful ministry in Japan’s bureaucracy. But its prestige has waned in recent years as banks and other financial institutions under its supervision have begun to buckle under mountains of debt and a string of scandals.

Last week, prosecutors raided the offices of Japan’s highway authority and Nomura Securities Co. to investigate bribery charges involving wining and dining to win a bond deal. The raid followed the arrests of Nomura executives and a director of the quasi-governmental Japan Public Highway Corp. on bribery charges.

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