Japan 'Shadow Shogun' says charges aimed at his destruction

Japan's most controversial politician has pleaded not guilty to charges of violating fund-raising laws that could dent the veteran lawmaker's clout, regardless of the outcome of the trial.

Ichiro Ozawa, 69, who has played a pivotal political role for four decades, most recently as powerbroker in the ruling Democratic Party of Japan, said the charges appeared aimed at destroying him "politically and socially".

The trial, which comes after three former aides were found guilty last week of fund-raising law violations, follows a series of political setbacks that suggest Ozawa's still considerable influence is diminishing.

The man credited by many for orchestrating the Democrats' historic victory in the 2009 election lost a party leadership race in 2010 to then-prime minister Naoto Kan and in June failed in his attempt to oust Kan in a no-confidence vote.

Finally, a candidate backed by Ozawa to succeed Kan was defeated by Yoshihiko Noda, a favourite of Ozawa's critics.

Political analysts say it may be too early to write off the pugnacious Ozawa as a spent force and Noda's appointments of Ozawa allies in cabinet and party posts attest to that.

In entering his not guilty plea, Ozawa, whose mastery of backroom deals earned him nicknames of "Prince of Darkness" and "Shadow Shogun", stayed true to his fighting style.

"The charges are based on a statement obtained in an inappropriate investigation and this trial should be terminated at once," he told a panel of three judges.

"One can presume this is aimed at destroying me socially and politically. This is a clear abuse of state power."

Regardless of the trial's outcome, analysts say his influence will continue to wane as a result of generational shift within his party and public distaste for old-style shadowy politics he symbolises.

The trial, expected to conclude in April, centres on charges that a body handling his political funds misreported flows linked to a 2004 land deal and that Ozawa was aware of that.

He has denied wrongdoing and prosecutors had originally decided not to charge him due to lack of evidence, but that was overturned by a judicial panel of ordinary citizens, prompting an indictment in January.

If found guilty, Ozawa faces up to five years in jail or fines of up to ¥1 million yen ($NZ16,950).

"If found guilty, he would naturally find his influence weakening markedly. His intra-party group would start dissolving, although it would not collapse right away," said Tomoaki Iwai, political science professor at Nihon University.

"Would his influence strengthen if found not guilty? I don't think that would be much of a help for him... He just will not be able to stop his power from dissipating."

That might be good news for Noda's Democratic Party, where Ozawa has been a divisive force, but a blow for those who think his talent for challenging the status quo is just what Japan needs to snap out of its prolonged stagnation.

A former heavyweight in the conservative Liberal Democratic Party (LDP), Ozawa left the then ruling party in 1993 and for nearly two decades tried to build a viable alternative to the LDP, which had ruled nearly non-stop for more than 50 years.

Ozawa finally looked poised for the premiership in 2009 but had to quit as the Democrats' leader over the funding scandal just a month before the party's landslide win in parliamentary election.

He continued to wield significant influence, often criticising the party leadership for detracting from campaign pledges in efforts to secure opposition cooperation in a divided parliament.

Ozawa's fading power would help Noda avoid infighting that plagued his predecessors and allow him to pursue policies such as tax increases to fund swelling social security costs and help rebuild from the March 11 earthquake, analysts say.

"Many in Ozawa's group are opposing the tax hikes and campaign pledge revisions that the Democratic Party is planning to make," said Nobuhiro Hiwatari, political science professor at the University of Tokyo.

"But with Ozawa's power weakening, party leadership won't be threatened every time they act."

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