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Split of LDP Faction Signals End of an Era In Japanese Politics

But reform of system likely to come slowly despite public outrage over money scandal

FOR more than a decade, one formidable faction in Japan's Liberal Democratic Party (LDP) has dominated politics, relying on large business "donations," payoffs to opponents, and mobsters.

"Ethics does not put a roof over one's head," the former faction chief, Shin Kanemaru, once said, before he was forced to resign last week in a money scandal.

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That 109-member faction split yesterday, unable to unite under a new leader. Thus ended the reign that shaped policies during Japan's emergence as a global economic superpower.

"Japan has had a first-rate economy with third-rate politics," says Tsutomo Hata, leader of the break-away group in the faction, which, ironically, now vows to rid the LDP of all factional politics. "Mr. Kanemaru got caught by a political system that requires huge amounts of money," he says. "If we don't change that system soon, our politics will also end up making our economy third-rate."

Ever since the LDP took power in 1955, it has been divided between factions led by bosses who funneled corporate money into multi-seat election campaigns and horse-traded over who would become prime minister.

Reform of the election system, however, appears a long way off, despite the faction's split. The scandal that snared Kanemaru and triggered the divide has not played itself out yet. Known as Sagawa, the scandal involved Kanemaru accepting $4 million from Tokyo Sagawa Kyubin, a now-defunct trucking firm.

OPPOSITION parties plan to use today's opening of parliament to question Kanemaru and Noboru Takeshita, the former prime minister ousted in the last big scandal in 1989 and a former co-ruler of the now-divided faction. Their testimony could reveal how many other LDP members were caught up in Sagawa.

Also today, Japan's top prosecutors will meet to try to resume their probe into Sagawa after being hit with severe public criticism for their lenient treatment of Kanemaru. The faction chief was fined only $1,650, and the prosecutors never questioned him on how he divvied up the money to about 60 other politicians.

"We must decide whether to make all the party's finances public," says LDP member Yohei Kono, in a sign of the party's attempts to counter public outrage.

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Public approval of Prime Minister Kiichi Miyazawa, who was installed by the Kanemaru faction a year ago, is at the second-lowest rating since such polls were first taken in 1947, according to the Mainichi newspaper. The lowest approval rating was 9 percent in 1989, when Mr. Takeshita resigned in the stocks-for-favors Recruit scandal.

In the past, when the LDP was weak and opposition parties were on the attack, the ruling party merely threatened to hold an election for the lower house, something it could win easily. But now, public wrath over Sagawa has emboldened Makoto Tanabe, leader of the largest opposition party, to welcome an election.

Mr. Miyazawa, head of a small LDP faction, has had to find new allies among other factions after the break up of the Kanemaru wing. Power in the party is now spread thinly among the six factions, and Mr. Hata's new wing, co-ruled by Kanemaru prot Ichiro Ozawa, could become a threat to the prime minister.

Both Hata and Mr. Ozawa represent a more youthful political style that has attracted younger LDP members. The other half of the split faction is headed by Keizo Obuchi, a mild-mannered Takeshita prot who is older than Hata and Ozawa.

Debate in parliament over Sagawa is likely to delay passage of a special budget designed to boost the economy. Also, a weakened LDP may not be able to respond to foreign calls for Japan to open its rice market as world trade talks near an end.

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