Prosecutors on Tuesday searched the offices of two major ruling Liberal Democratic Party factions over a political fundraising scandal, in a further blow to Prime Minister Fumio Kishida's administration.

The Tokyo District Public Prosecutors Office's special investigation squad started searches of the biggest LDP faction, once led by the late Prime Minister Shinzo Abe, and another led by former LDP Secretary General Toshihiro Nikai.

They are seeking to build cases against accountants working for the factions, deeming they failed to declare on behalf of the groups hundreds of millions of yen in fundraising party revenue in political funding reports to create secret slush funds. Some of the money was funneled back to lawmakers, sources familiar with the matter said.

Officials from the Tokyo District Public Prosecutors Office's special investigation squad enter the building in Tokyo that houses Seiwaken, the largest faction in the ruling Liberal Democratic Party, to conduct a search on Dec. 19, 2023. (Kyodo) 

The accountants have admitted to not reporting the income in political funds statements when they were questioned on a voluntary basis, according to the sources.

The slush funds are believed to have amounted to about 500 million yen ($3.5 million) over a five-year period through 2022 for the Abe faction and also over 100 million yen for the Nikai group, they said.

In an attempt to mitigate the impact of the scandal on his government, Kishida, who heads the LDP, last week replaced all four ministers belonging to the most powerful faction, including Hirokazu Matsuno, then chief Cabinet secretary and his right-hand man.

But the support rate for Kishida's Cabinet plummeted to a fresh low of 22.3 percent in the latest survey by Kyodo News on Sunday, well below 30 percent, which is widely regarded as perilous for an administration.

At a party executive meeting on Tuesday, Kishida said the LDP will "take necessary steps to regain public trust."

LDP Diet affairs chief Tsuyoshi Takagi, secretary general of the Abe faction, told reporters the group took the situation "gravely" and will cooperate with the investigation.

Nikai struck a similar tone, saying in a statement his faction will respond to the authorities' requests to get to the bottom of the issue.

Opposition parties stepped up criticism against the LDP, with Kenta Izumi, chief of the main opposition Constitutional Democratic Party of Japan, describing the probes into multiple factions as "abnormal" and "unprecedented."

Akira Koike, head of the secretariat of the Japanese Communist Party, said the case will likely become "one of the biggest scandals involving the entire LDP."

The scandal surfaced following a criminal complaint alleging five LDP factions underreported revenue from political fundraising parties. The fourth largest, which Kishida led until earlier this month, is among the five.

LDP factions have traditionally set quotas for lawmakers on the sale of party tickets, usually priced at 20,000 yen. In some groups, if targets are surpassed, the extra funds have been passed back to them as a type of commission.

Dozens of lawmakers from the 99-member Abe group are suspected of receiving money, including Matsuno and former economy minister Yasutoshi Nishimura, with some allegedly taking more than 40 million yen.

Both the Abe and Nikai factions failed to report the extra funds lawmakers collected as income in the groups' political funding reports, according to the sources.

In addition, in the Abe faction, called Seiwaken, or the Seiwa policy study group, those funds passed back to lawmakers have not been logged as expenditure, and its lawmakers also have not reported receiving the money.

Meanwhile, the Nikai group, called Shisuikai, and its members have declared the reimbursed funds as expenditure and income, respectively, the sources said.

Questioning of Abe faction lawmakers has already begun on a voluntary basis.

The Political Funds Control Act requires an accountant to submit a report on income and expenditure, and failure to report can result in imprisonment for up to five years or a fine of up to 1 million yen.

Lawmakers could also be accused of committing a crime, such as in cases where they are thought to have colluded with the accountant responsible.

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