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Japan's Finance Minister Ousted Following Accusations of Bribery

By Sonni Efron
Los Angeles Times

Japanese Finance Minister Hiroshi Mitsuzuka resigned Tuesday, a day after prosecutors swooped into the powerful ministry to arrest two key officials for allegedly taking bribes from the banks they regulated.

Mitsuzuka quit under fierce pressure from a suddenly united opposition, which was poised to extract maximum political mileage from the exposure of corruption in the very agency that is charged with extricating Japan from its current financial troubles.

Tuesday began with a threat from opposition leaders to boycott the Parliament session that is supposed to be devoted to passing vital financial stabilization legislation, including a tax cut intended to revive the moribund Japanese economy. Next, prosecutors launched fresh raids on four banks accused of trying to buy off their Finance Ministry regulators with lavish meals, golf games and various other favors.

Within hours, Mitsuzuka's own Liberal Democratic Party realized that, politically speaking, a human sacrifice would be needed to quell the outrage before it threatened financial stability and the campaign for the upper-house parliamentary elections to be held in July.

By 6 p.m. Tuesday, Mitsuzuka - an LDP warhorse who has served as minister of transport, international trade and industry, and foreign affairs - was headed for Prime Minister Ryutaro Hashimoto's residence to resign.

"Hashimoto has chopped off the finance minister's head in order to save his own," said Eiichiro Suganuma, an editor at the Asahi newspaper. "However, his inner moat has been filled up with dirt. Now he's defenseless."

Mitsuzuka, Japanese media reported, will be replaced at least temporarily by Sohei Miyashita, another LDP veteran who was a Finance Ministry bureaucrat and then defense minister.

The Japanese stock and currency markets, which had been recovering from the turmoil in Asia and in the domestic financial sector, lost ground Tuesday.

But analysts said the markets will not pine for Mitsuzuka as long as the LDP can push through its financial stabilization package without him.