Japan’s Ruling Party Now Must Share Business Support : Politics: With the fragmented Liberal Democrats no longer assured of control, corporations are ready to give to opposition groups in July 18 election.

TOKYO â€”  Business leaders, the major prop of the ruling Liberal Democratic Party, began Friday to hedge their bets against next month’s expected defeat of the party that has governed Japan for 38 years.

“With nearly 40 years of control by one party, it is only natural that stagnation has emerged in politics,� Takeshi Mizuno, chairman of Nikkeiren (Federation of Employers Assns.), told former Finance Minister Tsutomu Hata, 57, who bolted the ruling party and set up an opposition group, the New Birth Party, on Wednesday.

Hata paid “social calls� on Nikkeiren and three other major business federations Friday. Although he did not ask for donations for the July 18 election, his visits spurred calls for expanding political contributions to include opposition parties, such as his group.

After Hata left, Mizuno told reporters that the practice of corporations making political donations exclusively to the Liberal Democrats has come to an end.

Osamu Uno, chairman of the Kansai Federation of Economic Organizations, said the logic of supporting only the conservative Liberal Democratic Party to maintain a market economy had disappeared with the end of the Cold War and the emergence of opposition parties that support a free economy.

“Businessmen can’t help but make contributions to both the Liberal Democrats and opposition groups that support a market economy,� he said.

Japan’s large banks also were reportedly planning to reduce their financial help to the Liberal Democrats. Mass media reported that they had offered the conservatives $95.2 million, or only half the $190.4 million in loans that the ruling party sought for the campaign. For the election three years ago, banks lent the party $142.8 million.

Even though the Keidanren (Federation of Economic Organizations), Japan’s most important business organization, has declared its intention to continue contributing only to the Liberal Democrats, one of its executives predicted defeat for the ruling party.

After the election, “they may not be the majority party but they will be the No. 1 party,� Managing Director Masaya Miyoshi said in explaining Keidanren’s decision. He predicted that the party would head a post-election coalition.

Meanwhile, the Liberal Democrats took another step to move away from their leader, Prime Minister Kiichi Miyazawa.

After he dropped political reforms that he had repeatedly pledged to enact, Miyazawa lost a vote of no confidence June 18 and was forced to call a snap election.

Seiroku Kajiyama, the party’s secretary general, took the unusual step of naming three popular second-echelon politicians, each from a different faction of the party, to conduct nationwide campaigning for the July 18 election, a job previously assumed by the prime minister alone.

Miyazawa earlier was asked to stay away from an ongoing campaign for a Tokyo city assembly election that will be held Sunday.

Chief Cabinet Secretary Yohei Kono, 56, a leader of Miyazawa’s faction; Shintaro Ishihara, 60, a nationalistic leader of the Hiroshi Mitsuzuka group, and Ryutaro Hashimoto, 55, an executive of Keizo Obuchi’s followers, were asked to campaign for candidates without regard to factional membership. All three hope to assume the party leadership.

Meanwhile, Michio Watanabe, 69, who resigned as foreign minister in April because of an illness reported to be cancer, announced that he would run for party president. The position has been a prerequisite to becoming prime minister. Miyazawa’s term as party president expires at the end of September, but a convention to choose a new leader could be moved up if the 73-year-old leader resigns.

Although reform-minded former Prime Minister Toshiki Kaifu, 62, also has emerged as a potential successor, Watanabe was the first Liberal Democrat to declare openly that he would seek Miyazawa’s party post.

In another development, Kajiyama, the Liberal Democratic Party secretary general, announced that the party is so far endorsing only 276 candidates--34 fewer than ever before. He said the final number is expected to exceed 280. But even that many candidates would be fewer than the 286 winners in the last election three years ago.

Defections have driven the conservatives’ holdings in the lower house, which elects the prime minister, down to 228, or 28 short of a majority.

Kajiyama said the party would campaign by contending, as always, that only the Liberal Democrats are capable of running the government and ensuring stability.

Prominently absent from the ranks of endorsed candidates was former Prime Minister Noboru Takeshita, 69, whose dealings with gangsters and involvement in two scandals have wounded him politically. Takeshita is expected to win easily as an unaffiliated candidate.