Japan Inc. Hits the Campaign Trail

During the five years he spent as chief Washington representative for trading giant Itochu Corp. from 1987 to 1992, Takeshi Kondo was probably the U.S. capital's most plugged-in Japanese, aside from the ambassador. "When I used to visit Washington, he was the most powerful at getting me introductions," says Koji Omi, now principal deputy director-general of Japan's ruling Liberal-Democratic Party.

Today, 60-year-old Kondo is contemplating a change in careers: He's running on the LDP ticket for a seat in the upper house election in July. In Japan's murky legislative world, Kondo may be the most interesting fledgling politician in the country. That's because he's the Japan Inc. candidate. And his candidacy could prove the forerunner of a new LDP strategy to hold on to power. Says Kondo: "To change Japanese politics, we need to change the LDP. And the LDP wants me to run because it wants to change itself."

Here's what's happening. With LDP Prime Minister Yoshiro Mori about to resign, Japan's ruling party is in complete disarray. It expects to get creamed in the upper house elections. But Kondo, a novice at electoral politics, stands a good chance of winning his national seat: He has the open backing of Japan's four biggest business groups, including the all-powerful Keidanren (Federation of Economic Organizations). In fact, Kondo is the Keidanren's hand-picked candidate, and the organization is set to use all its muscle to get him elected. "Keidanren companies have 4 million employees, and we'll ask them to understand Kondo's policies and character," says Kiyoshi Tanaka, director of the Keidanren's Social Affairs Bureau.

The Keidanren's open involvement is a marked change in how corporate Japan approaches politics. Big Business has long backed the LDP, but from behind the scenes, either by funneling contributions to LDP coffers, encouraging managers to vote, or organizing "study groups"--lobbying organizations that linked executives with bureaucrats and politicians. Corporate Japan rarely got involved in choosing candidates: That was better left to the LDP machine.

But these are desperate times for the LDP. What Mikio Aoki, the LDP upper house head, wants to do is limit the damage as much as possible and start fielding candidates who have a credible chance of winning in future elections. So Aoki has hit on the strategy of expanding the number of interest groups with which the party seeks to field candidates for the proportional, national seats that make up 40% of the upper house's 252 seats. Traditionally, the LDP has looked to the sports and entertainment worlds, bureaucrats, doctors' associations, academics, and the like. Joining hands with Big Business in this way is new.

Aoki and other LDP top dogs figure that if Big Business stakes its reputation on getting its own candidates elected, it will move heaven and earth to get out the vote from their organizations' rank and file. "Kondo's candidacy is a test of business support for the LDP," explains Ikuo Kabashima, a political science professor at the University of Tokyo. Business groups could potentially commit millions of votes to candidates. And with voter disaffection at an all-time high, Big Business may stand a better chance of rousing voters for the LDP than the LDP itself.

DIRECT VOICE. As for Kondo, business is hoping that having a prominent ex-executive in the Diet will give it a more direct voice in pending legislation on corporate governance, shareholder-rights suits, and stock options. "Until about 10 years ago, we went through the bureaucrats," says the Keidanren's Tanaka. "As they lost power, we had to go to politicians. But not many understand economics." So the group needs its own guy in the Diet.

The voluble Kondo needs about 1 million votes to get elected. Big Business employs well over 14 million people: About 50% belong to middle management or above. Kondo, the author of numerous books and articles and a popular speaker, dreams of amassing up to 5 million votes from this pool. And under the new election rules--also cooked up by the LDP--any votes he doesn't need can be given to other nationwide LDP candidates. A smashing victory could encourage the Keidanren to get even more committed to the campaign trail. "If I collect 5 million votes, maybe business will run five candidates next time," says Kondo.

There's even a chance Kondo and other future Keidanren candidates could speak up for the kind of sensible policies the LDP's hacks have shunned. If elected, Kondo promises to push for deregulation, tax reform, governmental streamlining, and a rethinking of public-works spending and social security--the sort of steps Japan's reformers have increasingly called for. A Big Business candidate who stumps for serious change? Maybe Japan's politics are finally looking different. By Robert Neff in Tokyo

The Good Business Issue
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