Saturday, December 01, 2007

Golfing freebies handicap Japanese defense procurement

Guambat has noticed that the same procurement abuses seem to pop up all over the globe, and this one is pretty much run of the mill. What makes it interesting is the different angles the story is viewed from, depending on the national source of the news.

The US Bloomberg report of this instant rort goes something as follows:
Former Japanese Vice Minister Is Arrested for Bribery

Japanese prosecutors arrested former Vice Defense Minister Takemasa Moriya on suspicion he accepted bribes in return for awarding contracts to a defense company....

Moriya, 63, was arrested on suspicion he accepted bribes from Motonobu Miyazaki, a former executive of defense contractor Yamada Corp. who was today charged with embezzlement. Moriya has admitted going on golf trips, paid for by Yamada Corp., which violated defense ministry ethical rules.

Moriya and his wife Sachiko Moriya accepted golf trips worth 3.89 million yen ($36,000) at courses in Hokkaido from Miyazaki as rewards for "carrying out favors" on Yamada's behalf for the procurement and delivery of defense equipment, the prosecution statement said.

Moriya told lawmakers last month Finance Minister Fukushiro Nukaga also met Miyazaki for dinner, prompting the opposition- controlled upper house to summon the minister, who denies the meeting took place, for questioning under oath next month.

"I want to make it clear that I didn't go to the dinner," Nukaga told reporters after the arrest, reiterating his denial of Moriya's claim.

Nukuga, who was appointed in August, quit the post of director of the former Defense Agency in 1998 because of a scandal over procurement overcharging. In January 2001, he resigned as state minister in charge of economic and fiscal policy for his involvement in a money scandal.

OK, pretty ordinary type of graft, neh? Just a homegrown, garden variety Japanese enterprise as reported by US Bloomberg.

But the story takes on a larger multinational context in Japanese reporting:
Moriya 'met with GE exec' / Meeting allegedly held over procurement of ship's engines

Former Administrative Vice Defense Minister Takemasa Moriya, currently under arrest for allegedly accepting bribes, has suggested that Motonobu Miyazaki--a former executive of defense contractor Yamada Corp.--arranged a meeting with an executive of General Electric Co. in connection with the procurement of engines for a Maritime Self-Defense Force destroyer....

GE is one of the contenders for the engine supply contract.

The meeting was held in December last year after Miyazaki, who also has been arrested, left Yamada in June last year and established Nihon Mirise Corp. the following September. Around that time, Miyazaki was trying to make Nihon Mirise a sales agent of GE. After the meeting, Moriya indicated to his subordinates that he favored GE as the engine supplier.

According to sources, Miyazaki began encouraging Moriya to use engines manufactured by GE--with which Yamada had an agency agreement--for the new destroyer several years ago before he left Yamada.

However, from the start, the MSDF had a preference for Rolls-Royce engines.

Moriya began making remarks suggesting that GE engines were favored, telling his subordinates that the MSDF should not stick with the Rolls-Royce engines.

The next generation 5,000-ton-class destroyer is to replace a vessel that is to be decommissioned in fiscal 2011. The plan was given shape in early fiscal 2006. The vessel's procurement was formally decided in this fiscal year's budget and is priced at about 75 billion yen. It will feature four engines, each of which costs about 1.5 billion yen.

The MSDF has opposed the GE engines due to concerns over performance issues and it has yet to be decided which maker's engines will be procured.

Prosecutors suspect that Moriya attempted to offer Miyazaki favorable treatment in connection with the engine deal, due to the frequent perks he received from Miyazaki.

'I should have behaved better'

So des neh.


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