Transport ministry needs to recheck its checks
Another bid-rigging case involving officials at the Construction and Transport Ministry has bubbled to the surface. The ministry needs to seriously reflect on the preventive measures it has taken following previous scandals.
Suspecting that ministry officials were involved in bid-rigging practices related to official vehicle services for the ministry's Hokkaido Regional Development Bureau, the Fair Trade Commission issued the ministry with a remedial action under a law that forbids collusive bidding by government officials.
The FTC issued the order, citing a violation of the Antimonopoly Law, to stop bid-rigging practices by 10 companies that had won contracts for official vehicle services for the ministry's Hokkaido Regional Development Bureau and eight other regional bureaus, slapping the firms with a total of about 2.6 billion yen in penalties.
Former ministry officials who landed lucrative posts at these private companies are said to be involved in bid-rigging concerning contracts of the Hokkaido Regional Development Bureau and five regional bureaus.
Collusive bid-rigging practices by government officials have occurred repeatedly at the Construction and Transport Ministry. Not only is it the only ministry that has been ordered to take remedial action, it is also the second time it has been ordered to do so, the first coming after a bid-rigging scandal concerning floodgate construction projects in 2007.
In 2008, the then director general of the ministry's Hokkaido Bureau was arrested on suspicion of interfering with a public tender by preadjusting the prices on bids for improvement work on the Ishikarigawa river during his time as a department chief of the ministry's Hokkaido Regional Development Bureau. He was convicted on the charges.
Behind all of this lies the collusion and cozy ties of former bureaucrats who work for private companies after leaving the ministry. A pattern forms in which current ministry officials leak information on public biddings and award orders to companies at which their former superiors and colleagues now work.
In this latest bid-rigging story, more than 50 former ministry officials took on jobs at the three companies that were awarded most of the orders.
The 2008 bid-rigging case involving the head of the ministry's Hokkaido Bureau was partly aimed at ensuring that bureaucrats would have lucrative jobs when they enter the private sector. However, the Sapporo District Court in its verdict criticized this as a selfish motive based on the institution's flawed logic.
Outside oversight a good start
In response to the 2007 bid-rigging scandal concerning floodgate projects and the 2008 scandal of the Hokkaido Bureau chief, the Construction and Transport Ministry on both occasions compiled reports through committees that included outside experts examining the cases. The committees proposed reviews of bid contract methods and the nature of reemployment for retired ministry officials, as well as a strengthening of compliance.
The committee said in a report submitted at the end of April that the management of ministry staff, including any reemployment at private companies, should be handled in an integrated manner by the development administration department of the Hokkaido Regional Development Bureau.
The report aims to prevent senior officials at each operating division, such as rivers and ports and harbors projects, from engaging in bid-rigging in an attempt to secure jobs in private companies after retirement.
However, in the bid-rigging related to ministerial vehicle services, it was the chief and deputy chief of the development administration department of the Hokkaido Regional Development Bureau who relayed bidding information to former bureaucrats working at private companies.
The ministry again set up a committee to examine this case. However, there also needs to be a look into past preventive measures.
Ensuring the efficacy of preventative measures is crucial. Just this month, the Hokkaido Regional Development Bureau appointed an FTC official for the newly created post of bid contract inspector. This move--the hiring of an outside expert--is one of the ways to help ensure the strength of the inspection department.
With the move to decentralize administrative power, the review of branch ministerial offices, including regional development bureaus, has become an important task. The current situation in which these matters lie beyond the reach of local assemblies and residents should be changed.
(From The Yomiuri Shimbun, June 26, 2009)