Pension fiasco fallout proves Koizumi right-hand man's undoing Fukuda resigns from Cabinet By REIJI YOSHIDA

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The Japan Times, May 8, 2004

Chief Cabinet Secretary Yasuo Fukuda shocked the political arena Friday by stepping down for mishandling the issue of public pension premiums that some Cabinet members — including himself — failed to pay.

"I'm deeply ashamed of having led people to lose their trust in politics," the prime minister's right-hand man said at the end of a regular morning news conference.

Deputy Chief Cabinet Secretary Hiroyuki Hosoda was named Fukuda's successor.

"Now that the three parties (two-party ruling bloc and main opposition force) have agreed on how to handle (the government-sponsored) pension reform bills (being debated in the Diet), I'd like to resign as chief Cabinet secretary," Fukuda said.

The Liberal Democratic Party, its coalition partner New Komeito and the Democratic Party of Japan reached an accord Thursday on pension reform that paves the way for the contentious bills to clear the House of Representatives as early as next week

Fukuda, the top government spokesman, initially refused to disclose his payment records for the obligatory, maintaining they contained private information

Lawmakers and Cabinet ministers are categorized as self-employed, and Fukuda's stance drew harsh public criticism amid the rise in the number of people who refuse to pay the mandatory for the National Pension System scheme, which covers the self-employed.

The government-sponsored pension reform bills would see pension premiums raised every year until 2017, with benefits gradually being reduced.

But critics argue that the bills lack the structural changes needed to stem the hollowing-out of the National Pension System.

News conferences in which Fukuda spoke on the pension premiums issue were repeatedly aired by TV stations, denting public trust in the pension reform bills as well as in the administration of Prime Minister Junichiro Koizumi

Speaking to reporters later in the day, Koizumi said he was surprised by Fukuda's announcement, calling him an "indispensable" component of his government.

Koizumi said Fukuda informed him of his decision Thursday night. According to Koizumi, Fukuda said he decided to resign to settle the premium issue as the pension reform bills enter a key stage in Diet deliberations.

Fukuda's resignation sent shock waves through Nagata-cho, Japan's political center. One of Koizumi's closest allies, he was widely viewed as being the key formulator of Japan's foreign policy, including matters pertaining to North Korea.

Fukuda has previously been dubbed the "shadow foreign minister" and "shadow Defense Agency director general" due to his influence over the Foreign Ministry and staff at the Prime Minister's Official Residence.

The 67-year-old Fukuda is probably the best-known member of the Cabinet. He appears on TV almost daily as he holds regular news conferences twice a day on weekdays.

"Mr. Fukuda has been the central pillar of the Koizumi Cabinet," LDP Secretary General Shinzo Abe told reporters after rushing to the Prime Minister's Official Residence to meet Koizumi and Fukuda in the morning in a vain effort to persuade Fukuda to remain at his post.

By last week, seven Cabinet ministers, including Fukuda, as well as the former and current heads of the DPJ, admitted they had failed to pay the obligatory premiums for varying periods of time.

Fukuda acknowledged that he failed to pay the premiums from February 1990 to September 1992 and between August and December 1995.

In an interview that appeared in the latest issue of the weekly magazine Shukan Bunshun, which hit newsstands Friday, he also admitted he failed to pay premiums for five years and eight months between 1976 and 1986.

New Komeito President Takenori Kanzaki was quick to play down the impact of Fukuda's resignation.

"Fukuda stepped down as a representative of all Cabinet ministers (who had not paid). He took responsibility for the whole Cabinet," Kanzaki said. "So the other ministers do not need to resign."

The ruling bloc used the disclosure issue as a bargaining chip in talks with the opposition to help get the pension bills through the Lower House.

The ruling camp demanded the DPJ disclose the premium payment records of its "shadow Cabinet" members should the actual Cabinet ministers do so.

The DPJ accepted the proposal, which led to revelations that party leader Naoto Kan had skipped payments at one time. The flip side was that this also forced four Cabinet ministers, including Fukuda, to disclose their own misdeeds.

Fukuda was appointed chief Cabinet secretary in December 2000 by then Prime Minister Yoshiro Mori, and became the longest-serving chief Cabinet secretary on April 8.

Fukuda has survived four Cabinet reshuffles, including one conducted by Koizumi when he assumed office in April 2001.

The eldest son of the late Prime Minister Takeo Fukuda, he was first elected to the Lower House in 1990.

With Hosoda moving up to replace Fukuda, his post will be filled by LDP Lower House lawmaker Seiken Sugiura.

"This personnel shuffle comes at a time when the government needs to get important bills passed without delay, and I will do my best," Hosoda told reporters late Friday afternoon.

He said he hopes to restore public trust in the pension system through Diet deliberations on the bills and by reforming the nation's social security system based on Thursday's tripartite agreement, which includes calls for the establishment of a panel to study more comprehensive changes.

Shukan ST: Sept. 14, 2004

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