Recruit scandal

TheRecruit scandal(リクルート sự kiện,Rikurūto jiken)was aninsider tradingand corruption scandal that forced many prominent Japanese politicians to resign in 1988.

Recruitis a human resources and classifieds company based in Tokyo.Its chairman,Hiromasa Ezoe,offered a number of shares in a Recruit subsidiary, Cosmos, to business leaders and senior politicians shortly before Cosmos went public in 1986. Following the public offering, Cosmos's share price skyrocketed, and the individuals involved in the scheme saw average profits of ¥66 million each.

Although only seventeen members of theDietwere involved in the insider trading, another thirty were later found to have received special favors from Recruit.

Among the politicians involved in the scandal were Prime MinisterNoboru Takeshita,former Prime MinisterYasuhiro Nakasone,and Chief Cabinet SecretaryTakao Fujinami.In addition to members of theLDPgovernment, leaders of theKomeito,Democratic Party of Japan,andJapan Socialist Partywere also found to be involved. As a result, Takeshita's cabinet was forced to resign, although some of its members returned to political prominence later (including future prime ministersKiichi MiyazawaandKeizō Obuchi).

The chairmen ofNTT,theYomiuri Shimbun,and theNihon Keizai Shimbunwere also involved in the scandal.

Despite the breadth of the Recruit Scandal across party lines, the LDP was hurt most significantly by the scandal. It is often said to be one of the main causes ofMorihiro Hosokawa's opposition party victory in1993,which briefly interrupted the LDP's otherwise continuous reign over Japan.

See also

• Government-business relations in Japan
• Political funding in Japan