News

Naoki Akiyama (Mainichi)

A high-ranking official at a Japan-U.S. cultural exchange organization has denied evading around 99 million yen in tax on income he gained under the guise of consulting fees from defense contractors.

In his first hearing at the Tokyo District Court Monday, Naoki Akiyama, 60, senior managing director of the Japan-U.S. Center for Peace and Cultural Exchange, pleaded not guilty to violating the Income Tax Law.

"The income was gained by corporations (which provided consulting services), and were not my personal earnings," Akiyama told the court.

Akiyama is under indictment for concealing approximately 314 million yen in income from 2003 to 2006 and evading about 99 million yen in income tax on it.

In the opening statement, prosecutors explained how the defendant allegedly disguised money he received from defense contractors as consulting fees to corporations linked to him.

The Japan-U.S. Center had been commissioned by the Land, Infrastructure, Transport and Tourism Ministry and the Defense Agency to conduct feasibility studies on chemical weapons disposal projects in Fukuoka and Kanagawa prefectures. Akiyama overstated the capabilities of three defense contractors -- Yamada Corp., Kobe Steel Ltd. and Hitachi Ltd. -- in a report submitted to the ministry and the agency to help them win contracts, according to the opening statement.

In return, Yamada, Kobe Steel and Hitachi paid about 2.12 million dollars (about 191 million yen), 545,000 dollars (49 million yen) and 35,000 dollars (3 million yen) in consulting fees to three U.S. corporations connected to Akiyama, prosecutors allege.

Noting that the three corporations were dummy organizations and the consultation contracts were bogus, the Tokyo District Public Prosecutors Office asserted that they were paid as rewards to Akiyama personally.

A defense lawyer argued that the three corporations signed consulting contracts with Yamada, Kobe Steel and Hitachi and were actually conducting business, noting that they submitted reports on defense information to the contractors.

However, Akiyama pleaded guilty to forging evidence submitted to a separate civil trial.

Former Defense Minister Fumio Kyuma is expected to appear at a later hearing as a witness for the defendant.