Jun Okumura describes the scandal in painstaking detail here.
Asō Tarō naturally singled out Hatoyama for criticism, calling on the DPJ leader to provide a clearer explanation for what happened. This scandal, however, will not be the gift to the LDP that the Ozawa scandal was, which, after all, undermined the DPJ’s promise that regime change would signify a dramatic change from LDP rule — covering up questionable contributions from a construction company being all too typical of business as usual under the LDP. Instead, the Hatoyama scandal looks like business of usual for all politicians under the current political financing system, the creative accounting that all political support groups appear to be both within the law and in the black. (With the added twist of the role played by Hatoyama’s personal fortune in covering up for shortfalls.)
In hindsight, we should not be surprised that, given Hatoyama’s wealth, the line between his personal funds and his political organization was blurred. But it’s hard to get too worked up over a political funds scandal, not when the political funds control law appears to be honored more in the breach than in the observance.
I’d like to think that upon taking office the DPJ could fix the political financing system — which because it gives individual politicians a considerable degree of independence from their parties has certainly undermined the cohesiveness of the LDP — but it may be beyond reform. Short of banning kōenkai outright, which would be impossible and, beyond that, presumably unconstitutional, any reform at this point would be mere tinkering to refine the ability of authorities to uncover egregious abuses of the system.
What the government should do, however, is bring Japanese political activities into the twenty-first century. Make it easier for individuals to contribute to politicians, enable politicians to make more use of the Internet, a scalable method of reaching supporters and providing information compared with the labor-intensive and costly method of disseminating an endless stream of paper. It should also — as Ozawa has argued — lift the restriction on door-to-door campaigning, which is cheaper than distributing material.
If the DPJ and other parties are serious about political reform, they ought to lower the barriers to entry in Japanese politics, making it easier for outsiders, candidates without the “three ban“, to enter politics. Doing so won’t spell the end of corruption, but it would make it possible for candidates to be successful even without the cozy relationships with donors that lead to corruption.