LDP to Propose Diet Members Certify Fund Reports; Other changes to the law on the control of political funds have also been watched

The ruling Liberal Democratic Party plans to include a clause in its draft proposals to amend the Political Funds Control Act that would require Diet members to certify that they have confirmed the contents of their political funds reports, sources said.

The LDP also plans to consider subjecting the income data in the political fund reports of Diet members’ political organizations to third-party audits. Under current law, only expenses included in the reports are subject to third-party audits.

The party’s draft proposals also include requiring lawmakers to deposit to the national treasury the amount they unconscionably failed to include in their political fund reports.

The LDP was expected to formulate all its draft proposals on Tuesday.

The proposed certification requirement is intended to indicate that party lawmakers have confirmed on their own that the contents of their reports are legally appropriate, with the aim of, among other things, clarifying their responsibility for omissions and false reporting.

The LDP plans to work on the details, but the party is considering imposing fines on lawmakers who do not adequately vet the contents of their reports, in cases where their accounting staff are criminally charged for omissions or other matters.

Currently, third-party audits are only applied to expenditures in the political funds reports prepared by political organizations involving Diet members, such as fund management organizations and branches of political parties. The LDP plans to expand the audit system to include revenue.

In alleged law violations involving LDP factions, the practice of treating factions’ kickbacks as hidden funds without disclosing them in their political fund reports came into the spotlight. The party therefore wants to prevent a recurrence by also keeping an eye on incomes in the reports.

The LDP was expected to hold a working-level meeting at its political reform headquarters on Tuesday, attended by all party lawmakers, in an effort to consolidate views on the party’s own draft proposals.

“The problem of malicious and deliberately false reports cannot be wiped away by simply ‘changing the contents of the reports later,’” LDP Secretary General Toshimitsu Motegi said at a news conference on Monday. “We would like to continue discussions about seizing the funds in question and depositing them into the national treasury.”