Demise of Factions Boosts Prime Minister Kishida’s Prospects, Clouding LDP Outlook

On April 28, the ruling Liberal Democratic Party lost three lower house seats in as many by-elections, to the benefit of its biggest rival, the left-leaning Constitutional Democratic Party of Japan. In the Nagasaki no. 3 and Tokyo no. 15 districts, the scandal-tainted LDP gave in without a fight, opting to focus on defending its seat in Shimane no. 1 district, which it had held ever since the single-seat constituency’s first election in 1996. But in a stinging rebuke, the voters of that conservative stronghold rejected the LDP candidate in favor of the CDPJ’s Kamei Akiko. The driving force behind this electoral shift is public outrage over the political funding scandal, which exploded at the end 0f 2023 following a wave of reports that leading LDP factions had failed to disclose millions of yen in revenue from fundraising parties.

In an April public opinion survey by national broadcaster NHK, a mere 23% of respondents expressed support for the cabinet of Prime Minister Kishida Fumio, marking the sixth straight month of sub-30% approval ratings. Within the LDP, however, structural changes triggered by the scandal have had the paradoxical effect of strengthening Kishida’s hold on the party’s top spot. How has this curious situation come about, and what are its implications for Japanese politics in the months ahead?

The Scandal

Political funding irregularities by several key LDP factions were first exposed in November 2022 by Shimbun Akahata, published by the Japanese Communist Party. In a major scoop, the newspaper’s Sunday edition on November 6 reported that in the three years from 2018 to 2020, five LDP factions had failed to disclose more than ¥24 million in proceeds from the sale of fundraising party tickets. On the basis of the report, Kamiwaki Hiroshi, a law professor at Kobe Gakuin University, filed a criminal complaint for suspected violations of the Political Funds Control Act, which mandates disclosure of such revenue.

Scrutiny initially centered on two groups. One was the Seiwa Seisaku Kenkyūkai, or Seiwakai, popularly dubbed the Abe faction after former Prime Minister Abe Shinzō (who headed the group from 2021 to his death in 2022). The other was the Nikai faction, led by then LDP Secretary General Nikai Toshihiro. By December, a full-blown scandal was brewing amid reports that the Abe faction had made a practice of rewarding faction members who exceeded their ticket-selling quotas by funneling the surplus into personal slush funds. Needless to say, these faction outlays were also kept off the books. Before long, allegations also surfaced that six senior officers of the Abe faction, including then Chief Cabinet Secretary Matsuno Hirokazu (a key figure in Kishida’s government), had received millions in kickbacks without disclosing them in their political finance reports.

Also implicated in the scandal were the Kōchikai, or Kishida faction (under Prime Minister Kishida Fumio); the Motegi faction (under former Foreign Minister Motegi Toshimitsu); and the Shikōkai, or Asō faction (under former Prime Minister Asō Tarō).

The Response

On December 19, the Tokyo District Public Prosecutors Office began raiding LDP faction offices, launching a month-long investigation. The prosecutors concluded that between 2018 and 2022, the Abe faction had failed to disclose some ¥675 million in revenues from ticket sales, and that the same amount had gone unreported as political spending. The money funneled into the Nikai faction’s slush funds was valued at ¥264 million, while that faction’s undisclosed expenditures were put at ¥116 million. The Kishida faction allegedly failed to report income totaling ¥30 million between 2018 and 2020. Charges were filed against three LDP Diet members and their secretaries, along with the treasurers of the Abe, Nikai, and Kishida factions and Nikai’s secretary, but no faction leaders or senior officers were indicted.

On February 2 this year, the LDP launched its own internal “investigation” by questioning 82 Diet members affiliated with the Abe and Nikai factions and 9 local party officials. The report issued by the panel on February 15 concluded that a total of ¥579 million had gone unreported between 2018 and 2022.

The internal probe did nothing to defuse the controversy. Amid mounting public pressure for a more rigorous accounting, the Ethics Committees in the lower and upper houses were convened between the end of February and the middle of March, with the prime minister and top officers of the Abe faction in attendance. Yet their inquiries shed no light on the decision making behind the kickback scheme or why the Abe faction continued the dubious practice even after Abe himself ordered it halted in April 2022.

Last Man Standing?

On April 4, the LDP announced disciplinary action against 39 politicians implicated in the scandal. The harshest punishment, a recommendation for expulsion from the party, was meted out to Shionoya Ryū, erstwhile chair of the Abe faction, and former Minister of Economy, Trade, and Industry Seko Hiroshige, previously secretary general of the faction’s upper house caucus. Former Education Minister Shimomura Hirofumi, who co-led the faction, and former Economy, Trade, and Industry Minister Nishimura Yasutoshi, faction secretary general from October 2021 to August 2022, had their party memberships suspended for one year, while Takagi Tsuyoshi, the group’s most recent secretary general, was handed a six-month suspension. Among rank-and-file faction members, only those whose undisclosed kickbacks totaled more than ¥5 million were subject to punishment.

From the standpoint of Japanese politics, however, the most consequential outcome of the scandal to date has been the dissolution of the LDP’s factions. On January 19, Kishida announced the disbandment of his own group, the Kōchikai. Similar announcements by the leaders of the Abe and Nikai factions came later that day, and the small faction of Moriyama Hiroshi followed suit on January 25, although it faced no indictments in the scandal. On April 17, LDP Secretary General Motegi Toshimitsu, one of two holdouts, formally agreed to dissolve his faction as well, leaving only the group headed by former Prime Minister Asō Tarō to plod stubbornly on.

Prime Minister Kishida’s voter approval ratings were already languishing before the scandal broke, and his popularity took another hit amid widespread dissatisfaction over his cabinet’s sluggish response. Paradoxically, however, the collapse of the LDP’s factions has strengthened Kishida’s hand within the party by stripping his rivals of their numerical and organizational strength, leaving the prime minister’s authority essentially unchallenged.

To fully appreciate the significance of the LDP factions’ dissolution, we need to view it in a larger historical context.

The Factions Before and After 1994

From its very beginnings in 1955, the LDP was organized into discrete factions that functioned as competing quasi-parties in their own right and limited the centralized power of the prime minister. The system of “medium-sized” multiseat constituencies in the House of Representatives allowed the LDP to field multiple candidates in a district and opened the race to “independents” with no official party endorsement. This limited the prime minister’s role in the selection of candidates and made it difficult for him to bring the factions to heel.

During this period, the factions’ influence severely restricted the prime minister’s discretion in appointing key personnel. The standard practice was to allocate cabinet positions to each faction according to their strength so as to secure their cooperation with the government’s agenda; individual appointments followed the faction leaders’ recommendations as well. The LDP factions also raked in huge amounts of money, primarily in the form of corporate donations.

The system came under growing criticism in the 1980s and early 1990s amid a string of scandals that undermined the public’s trust in the ruling party. In 1993, an anti-LDP coalition took the reins under Prime Minister Hosokawa Morihiro, who promised far-reaching political reforms. Under legislation passed in 1994, a new election system was adopted, replacing the multiseat lower house districts with a combination of single-member constituencies and proportional representation. Other legislation tightened the regulations governing political finance.

The new electoral system reversed the relationship between the factions and the prime minister. With only one seat per district, each party was obliged to field a single candidate, and independents had little hope of winning. Under these circumstances, the party endorsement was critical. This gave the LDP’s central leadership, above all the LDP president, leverage over the factions. Meanwhile, tighter restrictions on political donations substantially limited the flow of funds into the factions’ coffers.

Decline and Fall of the Factions

As the factions’ clout declined, prime ministers had more discretion in the appointment of cabinet ministers. Prime Minister Koizumi Jun’ichirō (2001–6) would not even allow the factions to submit recommendations. Prime Minister Abe Shinzō (2006–7 and 2012–20) tapped mostly unaffiliated LDP politicians or members of his own faction for key appointments.

In the years between 1955 and 1994, LDP presidential races were almost always battles among faction leaders, and each faction invariably voted as a unified bloc. In the wake of the 1994 reforms, this factional solidarity began to break down. In the July 1998 LDP election, Obuchi Keizō, leader of his own faction, ran against a faction member, Kajiyama Seiroku. In the September 2009 election, Abe ran against the Seiwakai’s leader at the time, Machimura Nobutaka. In the 2008 election, the Seiwakai was split, with some members supporting LDP Secretary General Asō Tarō and others endorsing former Defense Minister Koike Yuriko. In 2020, the Asō faction announced its endorsement of two candidates, former Foreign Minister Kishida and former Foreign Minister Kōno Tarō (then the government’s COVID vaccination czar).

Seen in this context, the dissolution of the factions might be viewed as the culmination of a long-term decline. But no one expected such a rapid demise.

Although weakened by the reforms of the 1990s, the factions had continued to play an important role in the ruling party. While strong leaders like Koizumi and Abe could stand their ground, others, such as Kishida, were often obliged to accommodate other factions’ demands. Now, all but one of those warring groups has disbanded. Moreover, any vestiges of the powerful Seiwakai have been neutralized by the punishment meted out to its senior officers. As a result, Kishida’s position within the LDP is stronger than it has ever been.

Kishida’s Choice

All of this has made it quite difficult to predict how political developments will unfold. Perhaps the biggest question occupying Japanese analysts and observers is the outcome of the coming LDP leadership election, scheduled for sometime in September.

One might expect Kishida to bow out of the race for party president, given his persistently low public approval ratings and their potential impact on the LDP’s performance in the next general election, to be held no later than October 31, 2025. It was not so long ago that flagging public support forced Kishida’s predecessor, Prime Minister Suga Yoshihide, to abandon hopes for a second term. But whether Kishida will succumb to such pressure remains to be seen.

When Suga stepped down, he was making way for several promising candidates, including Kishida himself, the head of a major faction. To be sure, several politicians have been mentioned as possible successors to Kishida, including Kōno Tarō, former foreign minister and current minister for digital transformation; Takaichi Sanae, minister for economic security; and Foreign Minister Kamikawa Yōko. But it is unclear whether any of them have the ability to rally the support of a substantial bloc of LDP Diet members. Even in the post-1994 era, the factions imposed some order and discipline on members of the sprawling LDP. Now the vast and diverse party lacks even that degree of cohesion.

With no unifying figure to challenge him, Kishida might decide he has a chance for reelection, and he might be right. The conventional wisdom in political science is that those in power will strive to hold onto that position as long as possible.

But the Diet members also want to keep their jobs, and without a change in leadership, the LDP could be in trouble in the next general election. The results of recent public opinion polls suggest that Japanese voters are deeply unhappy with both the LDP and the Kishida administration over their handling of the scandal. In a March survey by the daily Asahi Shimbun, a full 90% of respondents agreed that the explanations by faction officers were inadequate. In an April Yomiuri Shimbun poll, 69% of respondents expressed dissatisfaction with the LDP’s disciplinary measures, and 64% thought it improper that Kishida had escaped punishment.

Once a government has lost the people’s confidence, that trust is very difficult to rebuild. In such cases, the prime minister almost always steps down as leader of the ruling party to make way for a more popular successor. But the unusually wide disconnect between Kishida’s status among ordinary voters and his position of power within the party makes it almost impossible to predict how the political landscape will evolve over the coming months. Watch this space . . .

(Originally published in Japanese. Banner photo: Prime Minister Kishida Fumio fields questions from the press at the Prime Minister’s Official Residence on April 30, 2024. © Jiji.)