Japanese Prosecutors Move to Conclude Recruit Probe

JAPANESE prosecutors are moving to wrap up their months-long investigation into the massive Recruit Company corruption scandal, which has shaken the Japanese political scene. On Wednesday, prosecutors took in two politicians for formal questioning, a step expected to lead to an indictment soon, probably by the end of this week. The two men, leading ruling party politician Takao Fujinami and opposition parliamentarian Katsuya Ikeda, are the first politicians to face charges in the Recruit case.

The ruling Liberal Democratic Party (LDP) hopes that the conclusion to the investigation will ease the political crisis in Japan. But opposition leaders have already signaled their intention to press for more heads to roll, particularly that of former Prime Minister Yasuhiro Nakasone.

Since Prime Minister Noboru Takeshita announced his decision to resign last month, the ruling conservative party has struggled to reverse its slide. But the party's continuing troubles are evident in the failure to find an untainted successor to Mr. Takeshita.

The party is trying to turn the tide of public opinion with a package of reforms aimed at curbing political corruption. The party commission on reform is likely to release its plans by the end of this week.

The prosecutors' arrests are likely to step up pressure on top LDP leaders named in the scandal to resign their posts. Opposition party officials expressed unhappiness with the failure of the prosecution to bring to trial those senior leaders, many of whom have been exposed for receiving gifts of stock from the Recruit Company.

``The real meaning of the Recruit scandal is the corruption of the Nakasone Cabinet and the Takeshita Cabinet,'' Socialist Party Secretary General Tsuruo Yamaguchi declared in a statement issued Wednesday. He called on the prosecutors to pursue further investigation of Mr. Nakasone and Mr. Takeshita.

Recruit illicit funds were dispensed during Nakasone's government. Like other public officials, Nakasone reaped guaranteed profits from the sale of 29,000 pre-flotation shares in a real estate subsidiary of the company after the firm went public. The opposition parties have consistently demanded Nakasone's appearance before the parliament as a sworn witness to answer questions about his involvement. Until this week, Nakasone has refused.

But Nakasone indicated earlier this week that he would consent to testify. The conclusion of the prosecutors' work, and their apparent inability to find sufficient evidence to indict Nakasone, now make that decision to testify more palatable.

According to informed sources, Tokyo District Chief Prosecutor Yusuke Yoshinaga, the tough-minded lawyer leading the Recruit probe, is determined to indict Nakasone. He intends to present a public case against him, and 12 other top politicians implicated in the scandal, to the parliament next week.

Early next week the Justice Ministry will probably present a formal report of their investigation to the Diet (parliament). Informed sources say the report will name names of those whom the prosecution suspects but could not indict. The prosecutors' difficulty is in proving that Recruit Company received concrete favors in return for their largess.

In the case of Nakasone, the most fruitful line of investigation had reportedly focused on a computer deal between Recruit and NTT, the national telephone company, in which NTT purchased supercomputers from the United States and leased them to Recruit. Nakasone reportedly urged the purchase to respond to US pressure to increase supercomputer sales to Japan.

Mr. Fujinami is considered by many to be a surrogate for Nakasone. He is a senior member of Nakasone's faction in the party and served as chief Cabinet secretary during his administration. He is believed to have assisted Recruit in revising regulations affecting its employment business, as well as arranging for Recruit founder Hiromasa Ezoe to sit on a prestigious government tax- reform commission.

According to press reports, Fujinami made a profit of 26 million yen ($200,000) from Recruit stocks and received an additional 61 million yen ($450,000) yen in donations.

Mr. Ikeda, who resigned his seat in the parliament on Tuesday, is a member of the opposition Komeito (Clean Government Party). He received 5,000 Recruit shares and reportedly acted in parliament to influence legislation on employment recruiters. The Komeito has been shaken by another scandal which forced its chairman to step down on Wednesday.

Aside from the two politicians, the special investigative unit of the Tokyo prosecutors' office has so far arrested 13 persons, including Recruit chairman Hiromasa Ezoe, the head of the national telephone company, and several senior government bureaucrats, charging them with bribery and related crimes.