Japan’s NHK struggles to shake off fraud scandal

Public outraged at misuse of their monthly fees

TOKYO — It was a troubled Christmas for Japan’s pubcaster the Japan Broadcasting Corp., better known as NHK.

The Tokyo District Public Prosecutors Office finally indicted former chief producer Katsumi Isono on Dec. 25 for conspiring to defraud NHK out of ¥2.7 million ($26,000). Isono was fired by NHK in late July when the case came to light.

According to the indictment, he and production company head Hisayuki Uehara conspired to get NHK to pay the money to Uehara’s firm for seven program scripts in 2001. Uehara funneled back cash to Isono’s bank account.

A four-month probe has found that around $400,000 might have ended up in Isono’s bank accounts over several years.Probe revealed further irregularities at NHK, including staffers stealing fees that viewers pay to receive NHK, and falsifying expenses for fictitious business trips.

Scandal has shaken the public’s faith in the normally stolid pubcaster, whish is looked upon as a leader in propriety and, in some ways, the voice of the government. In return, it collects monthly fees ranging from $13.50 to $24 (depending on terrestrial or satellite use) from Japan’s 49 million TV households and enjoys priority when new broadcasting laws are enacted.

NHK prexy Katsuji Ebisawa publicly apologized in a special program that aired Dec. 19 on NHK, something the pubcaster’s 8,500-strong workers union had demanded.

NHK will restructure the accounting system to stop more fraud, and top management took pay cuts to atone for the scandal. But Ebisawa stopped short of resigning, something the union also had demanded.

What’s more important: Some 115,000 households refused to pay the TV subscription to protest NHK’s misdemeanor, chipping away at NHK’s mammoth $7 billion budget.

Officially, withholding is illegal, but as this has never happened before, there is no enforcement process.

Some voices in the private TV industry can’t conceal their glee.

“It’s about time they come down from their lofty pedestal,” says one exec at a private network who refuses to be named — after all, NHK is still the No. 1 power in Japanese broadcasting.

Meanwhile, surveys and comments from the public paint an ambivalent picture. Most are outraged at the misuse of their monthly fees. But the fact that NHK’s two terrestrial and two satellite channels are advertising-free is a big draw, especially among older viewers who make up more and more of Japan’s rapidly aging population.

Whether closer public scrutiny and the accounting restructuring will fundamentally change NHK remains to be seen.

“NHK thinks of itself as an absolute elite, and so do its employees,” an editor of a TV magazine says. “It’s hard to change that.”

But NHK must tread carefully.

Although nobody talks openly about it, news leaks last year indicate that Ebisawa is working on privatization.

As he is a friend of Japanese Prime Minister Junichiro Koizumi, who has made the privatization of government assets his main political goal, it would make sense.

Especially in the wake of all those scandals.