Photo/IllutrationNobuhisa Sagawa, center, former director-general of the Finance Ministry’s Financial Bureau, leaves the Diet on March 27 after giving testimony as a sworn witness in the Lower House Budget Committee. (Asahi Shimbun file photo)

The Osaka District Public Prosecutors Office decided not to indict Finance Ministry officials for altering their approved documents on the sale of state-owned land to school operator Moritomo Gakuen.

The officials include Nobuhisa Sagawa, 60, former director-general of the ministry’s Financial Bureau, officials of the office said on May 31.

Prosecutors of the office’s Special Investigation Department also decided not to indict ministry officials who are accused of breach of trust concerning the heavily discounted sale of the land in Toyonaka, Osaka Prefecture, to Moritomo Gakuen in 2016, they added.

The ministry had admitted that its officials altered 14 official documents about the transaction after the sale of the state-owned land to the Osaka-based school operator came to light in February 2017.

It had also said the alteration was made to maintain consistency with remarks made by Sagawa and other officials in the Diet.

In the alteration, the ministry’s officials deleted the name of Prime Minister Shinzo Abe’s wife, Akie, names of politicians and descriptions such as “the special nature of this case.”

The prosecutors have apparently decided that the deleted descriptions were only part of the documents and that the core portions, such as sales price and date, were retained.

Meanwhile, when the ministry sold the land to Moritomo Gakuen in June 2016, it discounted garbage removal costs of 819 million yen (about $7.5 million) and other small expenses from the land’s appraised value of 956 million yen, and sold it for 134 million yen.

Because of the sharp discount, some ministry officials have been accused of breach of trust for inflicting financial damage on the state. The officials include Hidenori Sakota, 58, who was the director-general of the Financial Bureau at the time of negotiations for the sale.

In November 2017, the Board of Audit released its own estimate that showed that the volume of garbage estimated by the ministry could be lowered by up to 70 percent, and said that the rationale for the deep discount was insufficient.

However, the prosecutors apparently decided that the ministry officials had believed that a certain volume of garbage actually existed in the ground, and that it cannot be said that their garbage removal calculation had exceeded their discretion.

Moritomo Gakuen planned to open an elementary school on the land. If the opening was delayed due to the garbage removal, however, the school operator could have filed a damage compensation lawsuit against the government.

In such a circumstance, when the ministry concluded a contract with Moritomo Gakuen on the sale of the land, it incorporated into the contract a special agreement that made it impossible for Moritomo Gakuen to file a lawsuit in the future.

The prosecutors also placed importance on the special agreement. They decided that with the special agreement, the ministry officials tried to guard against any financial loss the government could incur in the future.

Based on the judgments, the prosecutors apparently concluded that it is difficult to prove that ministry officials intentionally inflicted financial damage on the state.

Meanwhile, the ministry decided on May 31 that it will announce the results of its internal investigation into the alteration of the official documents early next week. At that time, it will impose disciplinary measures on its present or former officials, including Sagawa, who were involved.

Finance Minister Taro Aso, who came under heavy criticism from the opposition parties during the scandal, is expected to remain in his post.