Japan Sand in a Well-Oiled Machine

By Scott MacLeod

Prime Minister Noboru Takeshita persevered for months, but last week his determination to weather the burgeoning Recruit scandal gave out. The meticulous planner and quintessential clubman of Japanese politics surprised his country by abruptly announcing that he would quit his post "to regain the trust of the people." Yet his departure had been a long time coming, as pressure built for months over what the Japanese call kinken-seiji, or money politics, the well-oiled system by which the nation's leaders attain power.

The Prime Minister clung to his job until a weekend news story reported that Ihei Aoki, his right-hand man, had received a 50 million-yen ($347,222) loan from the Recruit Co. two years ago that apparently found its way into the Takeshita campaign chest. The disclosure flatly contradicted the version of events that Takeshita had laid out before the Japanese Diet in early April. Two days after the Aoki story broke, Takeshita came to the conclusion that he could not keep his job; public disapproval was so strong that his government's popularity rating had plummeted to a mortifying 3.6%. "I have decided to step down," Takeshita told his countrymen, "to take responsibility for the spread of political distrust."

The Prime Minister's attempt to invest his disgrace with honor was overshadowed only a few hours later by the news -- long anticipated by many Japanese -- that one of the key players had committed suicide. Aoki, 58, Takeshita's closest political aide for 30 years, slashed his wrist, neck and foot with a razor blade, then hanged himself with a necktie. As the man who had handled Takeshita's political finances, some newspaper commentators speculated, Aoki may have taken his life to shield the Prime Minister from possible criminal prosecution. But Aoki may simply have been following a long- standing Japanese tradition in which a servant accepts blame for his master's downfall by killing himself.

The dramatic turns in the Recruit scandal, which grew over the past ten months into Japan's worst since World War II, left the nation's politics in chaos. Japanese were anxiously asking, What next? First the Liberal Democratic Party must find a new Prime Minister untainted by the scandal. Japan is likely to face months of weak leadership and political uncertainty. That could have consequences as far away as Washington, where a host of trade and defense disputes have yet to be resolved. One of the thorniest was on the way to being settled last week, however, when President Bush approved a controversial deal with Tokyo for production of the new FSX jet fighter once Japan promised to safeguard American jobs and technology. But Congress may still reject the agreement.

The Japanese must also decide whether to turn an unsavory scandal into an opportunity to reform their money-greased political system. That may prove the biggest challenge. Takeshita fell victim to his success at mastering the sometimes seamy rules of the system. In common with other party leaders, Takeshita indirectly received shares of cut-rate stock in Recruit, an aggressive information and real estate conglomerate. In all, Takeshita received more than $1 million in campaign contributions, stocks and secret loans from the company. The money went not to a personal account but to fund campaigns and pay staff salaries.

Not much of what Takeshita did was necessarily illegal. But the endless disclosures of wide-scale political financing bordering on corruption eventually shocked a nation that had come to think of itself as a modern, democratic superpower. "The L.D.P. must change," said Hiroko Yoshida, 27, a * department-store clerk. "It can no longer stay as it is after this scandal." Takeshita, who was also in trouble for imposing a consumption tax, was blamed for exposing the dirty side of the nation's politics, then failing to correct it.

The question is whether anyone else will -- or can. The system's defects are rooted in the fact that one party, facing an ineffective opposition, has held power for 34 straight years. But the Liberal Democrats boast a spectacular record for peace and prosperity during those years, and no one knows whether Japan's irate electorate will force the party into lasting reform.

In the short term, the L.D.P. will be preoccupied with designating a new Prime Minister. Takeshita promised to resign when the Diet enacted a 1989 budget, now one month overdue. In a departing act of bravado, Takeshita defied the Diet's tradition of consensus to push the budget through the lower house without the participation of the opposition parties. They had refused to take part until former Prime Minister Yasuhiro Nakasone, in office when the most flagrant abuses occurred, testified about his role. The budget will probably become law in 30 days, and Takeshita will step down.

Who will succeed him? The leading Mr. Clean is Masayoshi Ito, 75, an elder statesman of the L.D.P. with a reputation for integrity. Among the five bickering factions that make up the L.D.P., he is the consensus choice, at least as a caretaker. But Ito, who is in poor health, has expressed his reluctance to take over, saying a "younger man" ought to get the job. Party insiders contend that Ito fears he will not be given sufficient independence. Already, a back-room struggle is under way as Takeshita and his supporters maneuver to ensure that they will continue to pull the strings. To pick someone other than a senior politician like Ito would be nothing short of revolutionary.

L.D.P. leaders are jittery about the prospect of losing their majority in the upper house after elections that must take place by mid-August. Retaining control of the lower house in elections to be held no later than the summer of 1990 is even more important, since that body appoints the Prime Minister. "By that time, we will have political reform," said an L.D.P. leader. "The public sentiment will not be as vehement as it is now." As usual, the L.D.P. seems more interested in keeping itself in power than cleaning up Japan's corruption-prone politics.

With reporting by Barry Hillenbrand and Kumiko Makihara/Tokyo