The Liberal Democratic Party's General Council endorsed the party taskforce's interim report at an extraordinary meeting on Thursday. Prime Minister Kishida Fumio, who heads the taskforce, attended the meeting. Kishida said "the LDP must transform itself" and that it "must continue debate to restore public trust in politics and in the party."
What happened?
Three factions, including one Kishida formerly led, are suspected of failing to declare some revenue from faction fundraisers, and giving kickbacks to members. Ten people, including three lawmakers, are facing charges over the allegations.
Key points of discussions: How to make political funds transparent, and the future of party factions
In order to increase transparency, the interim report mandates external audits for the accounting reports of all factions and policy study groups. It says party rules will be revised so that lawmakers can be punished when their chief treasurers are arrested or indicted.
Individual lawmakers will also be required to put their political fund reports online and to accept payments for their fundraising parties through bank transfers.
The taskforce says the LDP will have serious discussions with other parties to swiftly carry out revisions of the political funds control law to make such funding more transparent.
Factions transforming into 'policy study groups'
But the report fails to propose concrete measures to revise the political funds control law, although it states that necessary legal steps will be taken promptly, through sincere debate with other parties.
It says that for the current factions to be transformed into true policy study groups, they must no longer exert influence on money matters and on the filling of Cabinet and other posts.
As specific measures to achieve this goal, the report says the factions and new policy study groups should be prohibited from providing twice-yearly payments to member lawmakers to support their political activities, and from holding fundraising parties.
It also says the factions and groups should not try to influence Cabinet or party post appointments or be involved in negotiations on such matters.
If any irregularities on political funds and other issues involving factions and groups come to light, it says the party will look into the matter and could call for the dissolution of the factions or groups in question, or the suspension of their activities for a certain period.
Behind the scenes
The first meeting of the taskforce opened on January 11 with comments by lawmakers who don't belong to any faction.
Former PM Suga is the taskforce's top adviser. He said the easiest way for the public to see how the party will respond to the problem is to dissolve the factions.
Lower House member Makihara Hideki, a member of the taskforce, said Suga set the direction of the discussions.
Makihara says he had imagined more than 70 percent of LDP members had been thinking that dissolving the factions would be too much, but Suga's comment changed the atmosphere.
He said "the former prime minister clearly saying the factions must be disbanded meant a great deal."
Aso Faction
On the other hand, LDP Vice President Aso Taro, who is also the taskforce's top adviser, expressed negative comments about dissolving the factions.
Lower House member Suzuki Keisuke, who belongs to the Aso faction, said factions discuss what topics they will take up so they are important for policy.
Lower House member Makishima Karen is another member of the Aso faction.
Makishima says the strong point of the Aso faction is that it can discuss foreign and security policy.
Suzuki says people may see factions as backroom groups interested only in money and cabinet posts but that is not true.
Suzuki says 'The improper handling of funds was the major problem. I don't think this problem should be overlooked by concentrating discussions on how the factions operated.'
Another member of the faction, Lower House member Yamada Kenji, says, ' Our faction is only discussing policies. I wonder why we have to be dissolved even though we haven't done anything wrong.'
Kishida's decision
Prime Minister Kishida made a move on January 18.
In the morning, Chief Cabinet Secretary Hayashi Yoshimasa of the Kishida faction was summoned to the prime minister's office.
Kishida is quoted as saying, "I want to set an example by dissolving the president's faction to regain public trust."
Hayashi responded on the spot saying, "Let's do it."
Kishida had already left his faction, but was still referred to as the "chairman." He called in senior members through the back door.
One official said he would abide by the chairman's decision.
Nikai faction
Attention was focused on the faction led by Nikai Toshihiro, known to have served as LDP Secretary-General for the longest period of time.
Nakasone Yasutaka, who acts as the Deputy Director of the LDP's Youth Division, is a member of the faction.
Earlier in January, he said, "it's not factions that are to blame" and "the issue of handling political funds and the existence of factions should not be discussed together."
However, the Nikai faction decided to dissolve on January 19. Nakasone was not present when the decision was made due to work responsibilities, and he could not hide his surprise that his faction's members agreed to dissolve the faction.
He said, "Dissolving the factions is one thing, but now they must come up with a new system to manage the LDP."
The LDP's Moriyama faction held an extraordinary meeting and decided to disband. It says that although none of its members or their associates face charges, the existence of factions itself is inviting public mistrust.
Faction chief Moriyama Hiroshi, the Chairperson of the General Council of LDP, says it was an excruciating decision, but all members of the faction made up their minds, believing that it was an important step to take, in order for the LDP to regain public trust.
Rift between the tops?
Observers say rifts have developed between Kishida and supporters of his government, such as Aso and Motegi Toshimitsu, the current Secretary-General of the LDP.
On the night Kishida announced the dissolution of his faction, Aso told him on the phone, 'Our faction has no issues. So I will not dissolve it.'
Motegi is also said to have voiced displeasure.
He is quoted as saying, "What is going on? If the president's faction disbands, it will make those that don't disband look bad and overly conservative."
A member of the Aso faction says the group will probably not support Kishida the way it used to.
But some sources say Kishida and Aso are still close, and that their trust in each other remains unchanged.
The LDP says factions will no longer influence money and personnel selection but questions remain as to whether the reforms can be carried out.
Four of the LDP's six factions say they will dissolve. The Aso faction and the Motegi faction are likely to remain.
Suzuki of the Aso faction said, 'We have to discuss what actually happened, and how a recurrence of the problems can be prevented. We must do in a thorough way.'
Makihara does not belong to a faction. He said, 'It's a problem that some factions have dissolved and others haven't. Governance without factions must be thoroughly discussed.'
Nakasone says the issue cannot be glossed over. He said, 'The LDP must create a system that moves politics forward, and that the public perceives as a fresh start for the LDP.'