Word: recruit
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...nearly two years before going public, Ezoe and other Recruit officials commonly offered stock shares at about $20 to selected individuals, many of them in the Diet and the bureaucracy. Once the stock started trading on the open market and soared in value, many of the recipients sold their shares, reaping hefty profits. Frequently, the transactions were recorded in the names of aides or relatives...
Aides and relatives of Takeshita and his predecessor, former Prime Minister Yasuhiro Nakasone, are known to have purchased shares of Recruit Cosmos -- 12,000 and 29,000 respectively. Both men deny personal involvement. Those transactions, Takeshita declared last week, were "their personal dealings, not mine...
...this? In Japan distributing stock before a firm goes public is not illegal; in fact, many newly formed companies routinely ask banks and other firms to purchase a portion of their unlisted stock before the public sale to prevent market volatility once it is trading. But prosecutors in the Recruit case intend to prove that the offers in many cases constituted bribes in exchange for anticipated political and business favors. If the prosecutors find evidence of a political quid pro quo, recipients could be charged with accepting bribes...
While Takeshita maintains that he did not profit from stock deals, he did finally acknowledge receiving from Recruit sizable gifts in other forms. The Prime Minister conceded that in 1986 and 1987 the company donated $259,000 to his political organizations. He also admitted that Recruit bought more than $570,000 worth of tickets to two fund-raisers held for him in Tokyo and Iwate prefecture in May 1987. Such contributions are not illegal, but these may have exceeded legal limits imposed after the Tanaka scandal...
Reforming the system could take a very long time. More immediately, Takeshita is eager just to get the Recruit scandal behind him. For one thing, the Diet's opposition forces are holding hostage the nation's budget, which should have been in place April 1. They refuse to debate it until the L.D.P. agrees to allow Nakasone to testify under oath about his role in the Recruit affair. For another, Takeshita must set a date for elections to the Diet's upper house by Aug. 13, and in the poisonous atmosphere created by Recruit, the L.D.P.'s chances of winning...