A funding scandal dogging the No. 2 in Japan's main ruling party could lessen its chance of winning a mid-year election, raising the risk of policy stalemate as the government confronts a weak economy and deep structural problems. Prosecutors searched Democratic Party of Japan (DPJ) Secretary-General Ichiro Ozawa's funding group and general contractor Kajima Corp over the scandal Wednesday, adding to the woes of Prime Minister Yukio Hatoyama's four-month-old government. Media reports about the scandal are likely to further erode voter backing for the Democrats as the opposition turn up the heat in a session of Parliament from Monday, where the government aims to pass an extra budget for this fiscal year to prop up the economy and a record $1 trillion budget for the year from April. A combative Ozawa has denied any intent to break the law and Hatoyama said again Friday he should keep the No. 2 post, where he plays a key role not only in election strategizing but in getting laws through Parliament and resolving policy tangles. Analysts said Ozawa was unlikely to step down unless prosecutors could make a case for his arrest, a move that would probably be difficult, time-consuming and controversial. But they agreed the Democrats would suffer a blow if Ozawa were sidelined before the poll for Parliament's upper house. “If Hatoyama had to resign, the DPJ would still not lose the election,” said Naoto Nonaka, an expert on comparative politics at Gakushuin University. “But if Ozawa had to step down, there would be confusion. Who would manage parliamentary affairs? The ruling parties would lose the ability to set policy direction and it is possible that the budgets might not be enacted. That is the biggest risk,” he added. Doubts about Hatoyama's ability to make tough decisions have already eroded the government's ratings to about 50 percent from early highs above 70 percent. Recent polls show support has leveled off, but the widening scandal could revive the slide. The Democrats' problems, however, look more likely to bolster the fortunes of minor opposition parties than of those of the ousted Liberal Democratic Party, struggling after an election thrashing that ended more than 50 years of almost unbroken rule. “I think it (the scandal) can do a fair amount of damage. The bad publicity that the DPJ will receive in the media ... will feed the impression among the public that it is dubious,” said Sophia University political science professor Koichi Nakano. That doesn't necessarily mean that voters will support the LDP, but it might push up the ‘Your Party' and potentially might make it difficult for the DPJ to get an outright majority. The “Your Party” is a small group of reformist lawmakers who broke away from the LDP last year ahead of the August election. The Democrats have a huge majority in Parliament's powerful lower house, but need to win outright control of the upper chamber to reduce dependence on two small coalition parties that often take different stances on economic and foreign policies. An outright loss by the ruling bloc would create a potential policy deadlock, since the upper chamber can delay legislation. A spokeswoman for the Tokyo prosecutors' office declined to comment on the probe, including media reports that Ozawa has been asked to come in voluntarily for questioning over the affair. Ozawa has presented the Democrats with a dilemma ever since his small Liberal Party merged with them in 2003, since they rely on his skills even as his image puts their popularity at risk. But some analysts said the party might prove mature enough to manage without him. “Lacking an ultimate commander would be a blow but I don't think it would necessarily be crippling,” Sophia University's Nakano said. “Power is a very strong glue and the DPJ is more than just Ozawa, in spite of what a lot of people tend to think.” A protege of former LDP kingpin Kakuei Tanaka, considered by many the father of Japan's modern pork-barrel politics, Ozawa left the party in 1993 and has spent the years since working to oust his ex-colleagues. He took over as Democratic Party leader in 2006 but stepped down last May after a former aide was charged with accepting illegal corporate donations.
