Opposition lawmakers grilled Prime Minister Yukio Hatoyama in parliament on Friday over a brewing funding scandal as prosecutors prepared to question a senior party leader over the issue this weekend.
The scandal is the second within a year to dog veteran power-broker Ichiro Ozawa, who is credited with engineering his party’s landslide victory last August, unseating the conservatives who ruled Japan for most of the last 50 years.
Prosecutors last week arrested three of his aides, including one who is now a ruling lawmaker, and are set to question Mr. Ozawa on Saturday.
Mr. Ozawa denies any wrongdoing and has called the allegation politically motivated. He has vowed to stay on as secretary-general, the No. 2 post in the Democratic Party of Japan.
He first refused to talk with prosecutors at a voluntary questioning before making a compromise amid criticism from in and outside his party for lack of an explanation.
The scandal isn’t seen as immediately threatening to bring down the Hatoyama government. But last week’s arrests and the questioning of Mr. Ozawa dealt a fresh blow to the Democrats ahead of this summer’s upper house elections. The vote is widely seen as a key test of public confidence in the new government that has seen its approval ratings steadily slide since the August election.
Mr. Hatoyama is also stung by his government’s indecisiveness over a relocation of key U.S. Marine base on the southern island of Okinawa, raising concerns its handling is hurting Japan’s relations with its top ally.
Japan’s government in 1996 agreed with the U.S. to move the base to another location on the island. Moving the base off Okinawa was one of Mr. Hatoyama’s key campaign promises, and he is now struggling to find a solution accepted by both Japanese voters and Washington.
Mr. Ozawa resigned as party leader in March last year over a separate corporate donation scandal - also involving his political funds organization - months before the party’s election victory that sent Mr. Hatoyama to his post as prime minister in September.
Opposition lawmaker Seiken Akamine demanded parliament summon Mr. Ozawa to testify over the latest scandal, citing allegations that part of the money was dubious donations from construction companies.
“Prime minister, you should exercise more leadership and open a parliamentary investigation and urge (Ozawa) to provide full explanation,” Mr. Akamine said.
Mr. Hatoyama asked for calm. “(Ozawa) said he is clean, and I want to trust him,” he said. “I think we should just calmly wait,” and see what happens at Saturday’s questioning.
Prosecutors took 36-year-old Democratic lawmaker Tomohiro Ishikawa into custody on January 15. The former clerical aide to Mr. Ozawa was arrested on suspicion he and two other aides falsified accounting records of Mr. Ozawa’s key political funding organization.
The three men are suspected of violating political funding laws over the origin of about 400 million yen ($4 million) in funds.
The latest media polls, taken the weekend after the arrests, saw Mr. Hatoyama’s government approval rating slip another 10 points to just above 40 percent. The rating had already plunged from a high of 70 percent soon after he took office.
The polls also showed about 70 percent of respondents demanded Mr. Ozawa step down as party executive.