Second Koizumi ally quits scandal-hit party

Koichi Kato announced his resignation over a tax evasion scandal involving his former chief fund-raising aid

TOKYO, Japan -- Another ally of Japanese Prime Minister Junichiro has been forced to qut the ruling party over allegations of corruption, inflicting another blow to the administration's sagging credibility.

Liberal Democratic Party (LDP) faction leader Koichi Kato is expected to formalize his resignation from the party during a meeting with the party's ethics committee Monday.

Kato has been accused of receiving kickbacks from companies in return for political favors over three years beginning in 1988.

He has also been under pressure since his former aide Saburo Sato was arrested earlier this month for allegedly evading 100 million yen ($775,000) in income tax.

In a news conference in Tokyo earlier Monday, Kato denied any wrongdoing but said he was quitting the party to take responsibility for his failure to supervise Sato.

"We mustn't allow trust in the LDP to be hurt even one more day," Kato was quoted by the Associated Press news agency as saying.

However, he refused to give up his seat in Parliament, which irritated opposition lawmakers.

"He shouldn't be leaving the LDP because he caused trouble to the party; he should resign as a lawmaker for causing trouble to the people," said Yukio Hatoyama, leader of the main opposition Democratic Party told AP.

On Friday, fellow LDP lawmaker Muneo Suzuki announced his resignation from the party following a national outcry over his excessive influence over the foreign ministry.

Opposition parties decided Monday to prosecute Suzuki on charges of perjury after he lied during a sworn testimony in Parliament this month that he profited financially from his power over the Foreign Ministry.

Close ally

Kato was LDP secretary general from 1995 to 1997, after serving as chief cabinet secretary and defense agency chief.

He had a close partnership with Koizumi and LDP secretary-general Taku Yamasaki for several years, and they aimed to rejuvenate the party by weaning it away from traditional backroom politics that had seen its popularity slump.

The three were so close they were dubbed as the "YKK" trio. Of the three, Kato had been deemed the most likely to become Japan's leader.

But his political career waned after he led an aborted campaign to oust the deeply unpopular Prime Minister Yoshiro Mori in 2000.

Koizumi did not back Kato's revolt and eventually won the prime minister's job in April last year.

Mired in scandal

The slew of controversy hurled against Koizumi's allies is now threatening to undermine his ability to implement his reform agenda of ridding Japan's massive public debt and reducing the government's heavy hand in the stagnant economy.

Observers say Koizumi has failed to show the sort of leadership sought by voters fed up with the LDP's legacy of corruption.

His support ratings have fallen to well below 50 percent from as high as 90 percent when he first took office.

Koizumi's popularity first took a nosedive following his dismissal of controversial Foreign Minister Makiko Tanaka over a dispute with Suzuki and ministry bureaucrats.

Japan's top spokesman, Yasuo Fukuda, acknowledged that the Suzuki affair was taking its toll and that Kato's troubles were damaging for the party as a whole.

However, he brushed aside criticism that Koizumi was too laid back.

"The prime minister doesn't have to get involved in everything. The party is taking appropriate action, so he is leaving it to them," he told the Associated Press.