Minister orders “intensified” investigation into KHI’s black money funds

Defense Minister Minoru Kihara has ordered a special investigation into the alleged use of slush funds by Kawasaki Heavy Industries Ltd. to purchase goods for the crew members of Maritime Self-Defense Force submarines.

These slush funds were reportedly created by KHI soliciting subcontractors to participate in fictitious transactions and then bundling payments to the subcontractors.

“It is only natural that we must strictly implement our budget plans and not allow anything that could arouse mistrust or suspicion among the public,” Kihara said at a press conference on July 5. “We will strictly address the situation based on the facts that have come to light.”

In response to the revelations of the scandal, the MSDF set up a general accident investigation committee, but Kihara stressed that the ministry “needs to further strengthen its investigation system.”

“We will conduct a special defence review of the relationship between the personnel and the other contracting party and the adequacy of the contract,” he said.

The defense’s special investigation is being conducted independently by the Inspector General’s Office of Legal Compliance, which is headed by a former prosecutor.

In addition to merchandise, KHI is said to have also used the slush funds to obtain gift vouchers for numerous crew members of the submarine and to provide them with food and drinks.

It is believed that the practice involved both high-ranking MSDF officers and ordinary crew members.