Mayor denies money from construction firms was a bribe

TOKYO -- The mayor of one of Japan's largest cities admitting receiving $943,000 from four construction companies but denied it was a bribe in return for fixing government contracts, prosecution sources said Wednesday.

Mayor Toru Ishii of Sendai and eight others arrested Tuesday on suspicion of bribery have all acknowledged giving and receiving money, the sources told the Kyodo News Service.


But Ishii and construction company officials denied bribery to secure favors related to a public works project in 1992 ordered by the municipal government of the northeastern city, the 12th largest in Japan.

The arrests came only five days before the start of campaigning Sunday for the July 18 general election for the powerful House of Representatives.

The governing Liberal Democratic Party is expected to lose its 38- year single-party rule in the polls with the electorate outraged over a spate of political scandals and Prime Minister Kiichi Miyazawa's failure to fulfill his promise of passing political reform legislation.

Among those arrested were six senior executives of Shimizu Corp., Japan's largest general contractor, Hazama Corp., Nishimatsu Construction Co. and Mitsui Construction Co.

Industry officials said they were braced for heightened U.S. pressure to reform Japan's bidding system.


'This may be seen as proof of U.S. criticism of Japan's system of awarding public works contracts,' an official said.

Those arrested included Hazama Chairman Shigeru Honda, President Akira Kagami, and senior Managing Director Kenichi Takahashi. The others were Koji Ueno, Yasushi Kitsukawa and Akira Narushima, vice presidents of Shimizu, Nishimatsu and Mitsui Construction, respectively.

The sources told Kyodo Ishii received the money in cash around April 16, 1992. Prosecutors have reportedly seized about $660,000.

Mitsui Construction allegedly paid the mayor $94,300 while the three other companies allegedly each paid $283,000, the sources said.

The prefectural governments of Osaka and Fukuoka said they will suspend the four firms from bidding for their public works projects.

The scandal came amid U.S. pressure to introduce an open bidding system by scrapping designated bidding, in which national and local governments determine which companies get a chance to bid for a project.

Washington has charged the system discriminates against foreign companies and is the cause of bid-rigging with firms paying money to politicians to influence selection.

Ishii, supported by the LDP and several opposition parties, was elected to his third, four-year term as mayor last November.


The arrests reportedly stemmed from an investigation into the tax evasion case against Shin Kanemaru, the disgraced former vice president of the LDP who goes on trial July 22 for tax evasion.

Kanemaru, the former party kingmaker who steered several men into the premiership, quit politics last year after admitting he received an illegal contribution.

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