Proposals by the ruling Liberal Democratic Party's reform panel, which chose not to recommend an end to the controversial faction system, are unlikely to restore public faith that was undermined by a major ongoing slush fund scandal involving the interparty blocs.

Political pundits say the LDP, led by Prime Minister Fumio Kishida, should announce a thorough independent investigation into the high-profile affair that prompted prosecutors to arrest and indict lawmakers, in a bid to restore the public's trust in politics.

Kishida's recent decision to dissolve the faction he headed, meanwhile, has strained relations with former Prime Minister Taro Aso, who leads the second-largest group within the LDP, possibly eroding the premier's political base in the party, they said.

The LDP, which has been in power for much of the time since 1955, has come under heavy pressure amid allegations that some of its factions failed to report revenue from fundraising parties over many years, accumulating hundreds of millions of yen in slush funds.

Prime Minister Fumio Kishida (C) speaks during a meeting of the Liberal Democratic Party's political reform panel at the LDP headquarters in Tokyo on Jan. 23, 2024. (Kyodo) 

Earlier this month, a number of accountants and lawmakers from some factions of the LDP, including Kishida's group, were indicted on suspicion of failing to report funds in violation of the political funds control law.

Despite the seriousness of the allegations, and the fact that high-profile lawmakers admitted to benefiting from the slush funds, none have yet faced criminal charges.

LDP factions originally were established as a means for groups of lawmakers to collaborate in hopes of elevating their leader to party president, the position typically held by the prime minister.

While factions have played a role in preparing candidates for higher roles, they have also earned a negative reputation for distributing funds to members for use in election campaigning and promoting their preferred candidates into key government and party positions.

The interim report compiled by the party's political reform panel, led by Kishida, pledged a departure from the faction structure associated with murky dealings, but stopped short of urging the disbandment of them altogether.

Many in the public believe that conventional factions are unlikely to cease to exist, as history has shown they have been dissolved and reorganized multiple times in the past, the pundits said.

In 1977, the LDP decided to disband factions as mistrust in politics grew due to the Lockheed bribery scandal, which led to the arrest of former Prime Minister Kakuei Tanaka. The next year, however, factions were effectively revived ahead of the party's presidential race.

In 1994, after the party lost power for the first time the previous year, the LDP's reform headquarters proposed the dissolution of factions and the end of their role in distributing political funds and influencing appointments.

Although LDP factions went on to close their offices, they resumed activities the following year in preparation for the party's leadership election. In 1999, the reform headquarters endorsed the effective revival of factions and instead described them as "policy groups."

The next LDP presidential election is scheduled to be held in September. Reflecting on the LDP's history of banning and reincarnating its factions, a party heavyweight said, "It feels like deja vu."

The fourth-biggest faction that Kishida led until December has been disbanded, while the largest group, formerly headed by the slain Prime Minister Shinzo Abe, and two others have followed suit. Aso appears committed to keeping the second-largest faction he leads intact.

Katsuya Okada, secretary general of the leading opposition Constitutional Democratic Party of Japan, lambasted Kishida's indecisiveness, saying he expects LDP factions to "be revived in a few years."

Commentators have been critical of the LDP for seeking to avoid scrutiny about the accumulation and use of undeclared money by shifting blame onto the factions. The ploy, they say, has taken focus away from the issue of political fundraising and the influence of money in politics.

Hiroshi Shiratori, a political science professor at Hosei University, said the LDP should be investigated by an independent organization, adding, "What should be addressed is its money-oriented political activities" under which several lawmakers have been arrested.

There are LDP lawmakers who have called for the revision of the political funds control law which is often criticized for having loopholes that enable politicians to maintain slush funds.

Kishida's abrupt announcement to dissolve his faction created further fallout, the pundits said, with the decision seemingly irking Aso who is regarded as a "kingmaker."

Kishida, perceived as a reformer, has apologized multiple times to Aso since last week for not conveying the plan in advance, sources close to the prime minister said. But Aso may be unsatisfied with the appearance that he has been sidelined in the decision-making process.

An LDP member with experience serving in a key party post said Kishida's decision to kill off his faction would put an end to his close collaboration with Aso, warning that the administration may now "lose its way."

Related coverage:

LDP OKs proposals to allow factions to continue as policy groups

Ex-LDP member Tanigawa resigns as lawmaker amid funds scandal

Japan PM Kishida vows to reshape LDP by moving away from faction system