Magazine accuses Caesars of making “illegal donations” to politicians

Title page of Shukan Bunshun article shows lawmaker Takeshi Iwaya at MGM's Bellagio.

Japan’s largest weekly news magazine by circulation, Shukan Bunshun, has published an article accusing Caesars Entertainment of engaging in a practice which they contend effectively amounts to the bribery of Japanese politicians, but which Caesars argues is an accepted and legal practice.

The substance of the allegation is that an advisor to Caesars Entertainment bought tickets to politicians’ social gatherings, which is a common fundraising method for national political campaigns in Japan.

The fact that the Caesars advisor, whom AGB identifies as Jun Okawa, purchased such tickets for many years is not in doubt. The dispute is over whether or not there is anything wrong with this practice.

Japan’s Political Funds Control Law prohibits donations to politicians by foreign citizens or companies, but the purchase of tickets to politicians’ social gatherings is not covered by the law.

Jan Jones Blackhurst, executive vice-president of public policy and corporate responsibility at Caesars Entertainment, responds to the Shukan Bunshun article as follows: “The recent Bunshun article, as it relates to Caesars Entertainment, focuses on the long-standing and legal practice in Japan of buying tickets to political fundraising events. We believe that the purchases of such tickets by our consultant over many years were made in accordance with the laws of Japan and other jurisdictions, as well as in accordance with our own robust compliance policies and procedures.”

Likewise, Deputy Chief Cabinet Secretary Yasutoshi Nishimura, who is one of the politicians whose parties Okawa attended, asserted in Diet testimony on Thursday that this did not constitute any violation of the law and should not be viewed as a problem.

The counterargument in the Shukan Bunshun article is offered by Kobe Gakuin University Professor Hiroshi Kamiwaki, a regular scourge of the Abe administration, who contends that the gist of the Political Funds Control Law is that purchasing party tickets and political donations are essentially the same, and that the use of lobbyists by a foreign company to offer funding to a politician, even if it cannot strictly be said to be illegal, raises moral questions.

Shukan Bunshun also claims that US government authorities are gathering information about the matter as a possible violation of the Foreign Corrupt Practices Act of 1977. An additional possible legal problem, the magazine contends, is that Caesars was carrying out these activities while its main operating unit, Caesars Entertainment Operating Company, was under Chapter 11 bankruptcy proceedings in the United States.

Fifteen Japanese politicians are known to have received political funding in this manner from the Caesars advisor between 2014 and 2016, including Deputy Prime Minister and Finance Minister Taro Aso, Minister of Internal Affairs Seiko Noda, the head of the ruling party’s largest faction, Hiroyuki Hosoda, and the aforementioned Deputy Chief Cabinet Secretary Yasutoshi Nishimura.

In most cases, these ticket purchases seem to have amounted to only several hundred dollars of funding each, but Takeshi Iwaya, who has spearheaded efforts to legalize casino gambling, allegedly received at least 740,000 yen (about US$6,600) from Okawa’s purchase of party tickets over several years.

The Shukan Bunshun article suggests that Caesars may not be alone, specifically pointing to MGM Resorts and its consultant firm GR Japan. The article states that the firm’s president and CEO, Jakob Edberg, is also known to attend politicians’ social gatherings for which the fundraising tickets are purchased.

Indeed, although Caesars Entertainment was the main target of the Shukan Bunshun article, it is likely that other international IR operators have engaged in the same practice.

The magazine’s article comes in the context of fierce criticism from opposition forces that wish to prevent the enactment of the IR Implementation Bill, including a variety of accusations that foreign companies, especially in the United States, are using political pressure to shape Japanese government policies towards the acceptance of casino gambling.