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Prosecutors Confirm Investigation Into Possible New Scandal

January 17, 1992

TOKYO (AP) _ Prosecutors said today they were investigating whether a trucking company made questionable payments to politicians, in a case that many believe could blow up into a major scandal.

Meamwhile, rumors linking some of the nation’s most powerful politicians to Sagawa Kyubin, a mob-tainted trucking company that purportedly distributed millions of dollars to buy influence, have been flourishing in Nagatacho - Japan’s Capitol Hill - and the Tokyo stock market.

The rumors have been dampening the stock market, traders claim. The Nikkei stock average today finished at its lowest level since Oct. 1, 1990.

A senior official at the Tokyo District Prosecutors Office, who spoke on condition of anonymity, said prosecutors have been investigating Sagawa Kyubin for several months but had not yet determined whether crimes were committed.

The official said prosecutors were looking into allegations of illegal transfers of ″massive amounts of money,″ the official said. The transfers included loan guarantees that Sagawa Kyubin reportedly provided for about 40 companies.

″We are not hesitant to file charges against politicians as long as we can prove the payments are bribery. We are trying to figure out whether or not it is criminal,″ said the official, speaking on condition of anonymity.

Many political commentators believe the case could prove more damaging to Japan’s political hierarchy than the Recruit influence-buying scandal of 1989, which toppled then-prime minister Noboru Takeshita and others including Prime Minister Kiichi Miyazawa, then finance minister.

In a separate case, prosecutors on Monday arrested Fumio Abe, a former Cabinet minister who had been a former key aide to Miyazawa.

Abe allegedly took bribes worth about $634,000 and used his influence as director-general of the Hokkaido Development Agency to help steel-frame maker Kyowa Corp. win construction contracts.

The 69-year-old lawmaker has reportedly denied the allegations, and Miyazawa has dismissed reports that some of the money went to Miyazawa’s campaign for prime minister.

In the Sagawa Kyubin case, two local newspapers, the Nagoya Times and the Tokyo Times, ran front-page reports Thursday alleging the company made massive payments to many senior politicians.

The Nagoya Times published a list of politicians and amounts of money they purportedly received from Sagawa Kyubin. It said the information was obtained from ″public security″ sources.

Journalists at the far more influential and powerful nationally circulated newspapers say they have similar lists but are refraining from publishing them because the reliability of the information is unclear.

Aides at the offices of politicians listed in the report denied the allegations. Sagawa Kyubin spokesman Ryuichi Nishiyama, reached by telephone at the company’s Kyoto headquarters, said he could not comment on the reports because they were only rumors.

However, former Sagawa Kyubin chairman Kiyoshi Sagawa, who left the company for health reasons in early 1991, told interviewers at the private television network Tokyo Broadcasting System that he was aware payments had been made to politicians.

Japanese politicians rely heavily on corporate contributions for their campaigns. In addition to anti-bribery laws, there are reporting requirements as well as limits on the amount of money that companies can contribute.

Sagawa Kyubin, Japan’s second-largest trucking company, has sought the government’s assistance in numerous acquisitions and to enable it to bypass labor laws, the Asahi Journal weekly magazine reported.

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