A former Foreign Ministry logistics chief arrested on suspicion of swindling the government out of 42 million yen in discretionary state funds has denied the fraud charge, saying officials at the Prime Minister's Official Residence tacitly approved of his conduct, police sources said Monday.
Katsutoshi Matsuo, 55, arrested Saturday for allegedly pocketing the money from 1997 to 1999 by padding hotel expenses for three overseas trips involving two prime ministers, also told investigators he claimed inflated expenses to compensate for deficits incurred by expenses other than hotel charges, the sources said.
However, senior officials at the Prime Minister's Official Residence who reimbursed Matsuo for the travel expenses told investigators they were not aware that he padded the expenses. Police are examining the Cabinet Secretariat's accounting practices for the secret funds, the sources said.