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UPDATE4: Ex-DPJ leader Ozawa acquitted over political funds scandal.

TOKYO, April 26 Kyodo


Former Democratic Party of Japan leader Ichiro Ozawa was found not guilty of false political funds reporting on Thursday, a decision likely to revive his political prospects but add more uncertainty to the ongoing tax-hike debate facing the DPJ-led government.

Presiding Judge Fumio Daizen of the Tokyo District Court said in a ruling that while Ozawa's former aides falsified funds reports for his political funds management body Rikuzankai, the 69-year-old veteran lawmaker did not have a hand in the act, denying he conspired with them.

The ruling was the first involving a politician facing charges following the decision by an independent judicial panel of citizens that indictment was warranted, after prosecutors decided not to indict the suspect.

There could now be calls for reexamining a three-year-old prosecutorial system that has given citizens the authority to decide whether a person should face charges as the latest ruling represents the second not-guilty verdict handed down under the system.

The ruling comes at a critical time for Prime Minister Yoshihiko Noda as his government struggles to secure support not just from opposition parties but also from within the ruling DPJ for its plan to raise the nation's consumption tax rate. Ozawa and his cohorts, who make up the largest intraparty group, are strongly opposed to the tax proposal.

The trial focused on whether Ozawa collaborated with aides in making false entries in funds reports in connection with a 2004 land purchase deal.

The court said circumstantial evidence shows Ozawa had been briefed on and acknowledged plans to put off disclosing the deal and not to disclose the presence of the 400 million yen provided by him in connection with it.

But ''because he was not expecting false reports to be filed, reasonable doubt remains about him intentionally committing'' false reporting, Daizen said.

The court still cast doubt on Ozawa's argument that he never saw the funds reports.

In a statement after the ruling, Ozawa, who was never detained before or after his indictment, said, ''The ruling is in line with my argument that I did not conspire in the false reporting. I want to pay my respects to the court for its sound judgment and fairness.''

The lawyers who served as prosecutors and sought a three-year prison term against Ozawa expressed disappointment with the ruling, with one of them saying they will consider whether to appeal.

The ruling said a 2004 funds report for Rikuzankai did not list 400 million yen provided by Ozawa for the land purchase, but the same amount of money taken out in a bank loan was instead listed in the report.

Tomohiro Ishikawa, 38, one of the then aides to Ozawa who is now a House of Representatives member, did not list Ozawa's 400 million yen in the funds report to avoid questioning from the press over the source of the money and subsequent harm to Ozawa's political standing, the ruling said.

Daizen also said 34-year-old Mitsutomo Ikeda, who was also an aide to Ozawa, listed in a 2005 funds report roughly 350 million yen used to purchase the land, which should have been registered in the 2004 report.

Giving the first judicial judgment on the validity of the decisions made by a citizens' panel to force indictment, the ruling said Ozawa's indictment was valid.

But the court criticized prosecutors, who supplied the panel with their evidence to help it examine the case, saying they worked hard to obtain statements from suspects that would buttress a story cooked up by them.

Ozawa, whose party membership has been suspended following his indictment in January 2011, maintained his innocence throughout the trial.

A statement made by Ishikawa during questioning that ostensibly showed Ozawa had been briefed on the false reporting and acknowledged the reporting was rejected as evidence by the court, which raised doubts about the legality of the questioning. That left the court with few pieces of evidence directly linking Ozawa to the alleged violation of the Political Funds Control Law.

Lawyers appointed by the court to act as prosecutors said Ozawa's aides would not have filed false reports without his instruction or acknowledgement.

Ozawa's three former aides were found guilty of the false funds reporting at the Tokyo court last September and have since appealed to a higher court.

After Thursday's ruling, Noda told reporters he ''will accept it as a judicial decision,'' while his deputy, Chief Cabinet Secretary Osamu Fujimura, said he thinks Ozawa fulfilled his responsibility in explaining himself over the matter in the course of the trial.

Fujimura added that the government remains committed to pushing sale-tax legislation through parliament for its swift enactment, which is opposed by Ozawa but seen by many market participants as a sign of the country's commitment to reducing its huge public debt.

DPJ Secretary General Azuma Koshiishi said the party will begin taking steps in May to unfreeze Ozawa's party membership, which would open the way for Ozawa to renew his attempt to return to the top party post, while the opposition demanded Ozawa be summoned to parliament for questioning.

During the trial, lawyers for Ozawa argued that the decision by the citizens' panel to force indictment was invalid because it was based on an investigative report that turned out to be fabricated by a prosecutor.

Ozawa, who is widely credited with engineering the DPJ's landslide victory in the August 2009 general election, was indicted after the panel overturned earlier decisions by prosecutors not to indict him due to lack of evidence.
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Publication:Japan Policy & Politics
Date:Apr 30, 2012
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