Friday, July 25, 2008Kyodo News
Naoki Akiyama, an influential player in political and defense circles, was arrested Thursday on suspicion of tax evasion for allegedly hiding more than ¥200 million in consulting fees received from defense equipment manufacturers.
The Tokyo District Public Prosecutor's Office plans to charge Akiyama, 58, executive director of the Japan-U.S. Center for Peace and Cultural Exchange, a Tokyo-based organization related to the Foreign Ministry, with violating the Income Tax Law.
Akiyama's alleged tax dodge surfaced during prosecutors' investigations into Yamada Corp., a defense equipment trading house that became embroiled in a bribery scandal involving its former executive, Motonobu Miyazaki, and former Vice Defense Minister Takemasa Moriya, investigative sources said.
Akiyama is known to be well-connected to politicians and defense contractors both in Japan and the U.S.
The prosecutors will step up their investigation into Yamada and other defense equipment makers to clarify the flow of funds involving defense interests, the sources said.
The center allegedly received more than ¥400 million in consultant fees between 2004 and 2006 from Yamada International Corp., Yamada's U.S. affiliate, and other major defense equipment firms.
The prosecutors believe Yamada provided the funds to Akiyama in connection with its efforts to maintain sales agency contracts with U.S. defense equipment makers and contracts to dispose of poison gas shells left by the former Imperial Japanese Army at a port in Fukuoka Prefecture.
Akiyama denied evading taxes when he gave unsworn testimony before an Upper House committee in January.
But prosecutors have determined that a large chunk of the ¥400 million (minus expenses) should count as Akiyama's personal income. He allegedly hid about ¥230 million of the sum between 2003 and 2005 by transferring it to bank accounts under his control in the United States, thereby avoiding ¥74 million in taxes, the sources said.
The ¥400 million was paid to three entities, including Add-Back International Corp., a Los Angeles-based company in which Akiyama serves as adviser, but the prosecutors have determined that the money effectively went to Akiyama himself because the three bodies do not have substantial operations in the U.S., the sources said.
The Japan-U.S. Center for Peace and Cultural Exchange was ostensibly established to promote cultural understanding between Japan and the United States, and its main duties include sponsoring seminars on security issues. Many Diet members close to the defense industry have served as its head.
Fumio Kyuma, a former defense minister who is a director of the center, said after Akiyama's arrest that prosecutors are probably investigating how Akiyama spent the money he obtained and if it will lead to further scandals.
Kyuma, a senior lawmaker in the ruling Liberal Democratic Party, denied that Akiyama's money had been passed on to himself, adding that he does not believe any other politician received money from him.
Opposition leaders meanwhile said they will look into whether lawmakers were involved in the questionable practices related to defense interests.
Yukio Hatoyama, secretary general of the Democratic Party of Japan, told reporters he expects Akiyama's arrest and the investigation will "uncover the collusion between defense contractors and lawmakers involved in defense affairs."
Miyazaki and Moriya have been charged with bribery in connection with defense equipment procurement from overseas.
Posts
