Japan stirs controversy with huge COVID-19 aid contract for ad giant Dentsu

Jul 28, 2020 | News On Japan

Jul 28, 2020 (channelnewsasia.com) - Off a narrow corridor above a store selling Persian rugs in central Tokyo, a small office houses a private operation that won a tender in April to distribute more than US$20 billion in government aid to businesses hit by the coronavirus.

The agency, the Service Design Engineering Council, actually carried out only a fraction of that work, local media reported last month. Service Design was co-founded by Dentsu Group, one of Japan's most influential companies.

It passed hundreds of millions of dollars to administer the project back to Dentsu, an advertising and PR company with close ties to Prime Minister Shinzo Abe's ruling Liberal Democratic Party (LDP), government documents show.

Under the arrangement, Service Design won the contract to distribute the US$20 billion, but actually took less than 1 per cent of the total US$718 million for managing the project and passed on most of the rest to Dentsu, which set up vetting procedures, websites and call centres, the companies and the Ministry of Economy, Trade and Industry (METI) said.

Dentsu, in turn, subcontracted the work again through its subsidiaries. The ministry has said that there were five tiers of subcontractors and at least 63 companies involved. Officials have disclosed the names of only 14 of those; the government has not fully accounted for contracts worth at least US$247 million, about one-third of the total.

The arrangement led to confusion and delays for small business owners. Members of parliament have questioned how taxpayers' money was spent during a national emergency.

Controversy over the contract - one of the largest that Japan has outsourced from its pandemic budget - is widening for Abe's government, already facing a fall in public support over its handling of the pandemic.

Questions are mounting from opposition politicians about the government's links to Dentsu, a publicly listed company. At issue is whether Service Design helped shield Dentsu's leading role from scrutiny. The government and Dentsu have come under fire in the past for their close ties.

Typhoons No. 28 and 29 Bring High Waves to Japan's Pacific Coast

Two typhoons moving across the Pacific southeast of Japan are expected to remain well away from the Japanese mainland, but powerful swells could bring rough seas to a wide stretch of the country's Pacific coastline throughout the three-day holiday weekend, according to forecasts updated at 3 a.m. on October 10.

Cyberattacks Spread Across Japan

A series of cyberattacks has disrupted business operations and exposed millions of customer records across Japan, with a ransomware attack on a cloud service provider affecting 495 companies and local governments nationwide, while convenience store operator Lawson has disclosed a separate breach involving more than 2.15 million personal information records.

Japan's First 360-Degree Projection Mapping Opens in Osaka

Japan's first 360-degree projection mapping show will open at the Osaka City Museum of Fine Arts on October 10, transforming the historic building into an immersive world of light, music, and seasonal imagery, with organizers hoping the attraction will also help stimulate the city's nighttime economy.

Tokyo University Professor Wins Nobel Prize in Chemistry

Tokyo University of Science professor emeritus Kenzo Soai has been awarded this year's Nobel Prize in Chemistry together with French chemist Henri B. Kagan for discoveries that transformed scientists' understanding of how chemical reactions can favor one of two mirror-image forms of a molecule.

US Military Halts All Okinawa Operations for 48 Hours

The US military suspended activities by all forces stationed in Okinawa for 48 hours from noon on October 7, an unusual measure following the arrest of a US Marine in connection with a robbery and murder case that has renewed scrutiny of crimes involving American service members.

MEDIA CHANNELS

MORE Society NEWS

Most Sightings of Fugitive Yoichi Hatta Reported in Kanto

Police in Oita Prefecture have revealed that the Kanto region accounts for the largest number of reported sightings of Yoichi Hatta, a fugitive wanted in connection with a fatal hit-and-run incident in Beppu in 2022, with authorities preparing to distribute new wanted posters nationwide from November as the search enters its fifth year.