Public prosecutors Tuesday arrested the mayor of Shimotsuma, Ibaraki Prefecture, on suspicion of obstructing a public works tender by leaking information concerning a bid won by Toda Corp.
Tokyo prosecutors arrested Hiroshi Yamanaka, 61, on suspicion of leaking the city's target price for the construction of a city library to Gyosai Toshi Kaihatsu Kenkyujo, a Tokyo consulting firm, which then passed the information on to the contractor in 1999.
Prosecutors also arrested five others on the same charges Tuesday and began searching Toda Corp.'s headquarters in Tokyo, and Yamanaka's home in Shimotsuma.
Toda Corp. asked Mitsuo Ozaki, a 56-year-old executive at the consulting firm, to get the information from the mayor, the sources said. Toda Corp. paid 16 million yen to the consulting firm after winning the tender.
Prosecutors are expected to investigate whether the mayor also received money via the consulting firm for passing on the information.
In August 1999, a joint venture including Toda Corp. and local construction companies won the bid for the library construction at 1.15 billion yen.
Toda Corp. paid Ozaki's consulting firm 8 million yen in August and another 8 million yen in September after the contract was approved by the city assembly.
In interviews with Kyodo News, Yamanaka admitted that he knew Ozaki but denied providing the information, saying they have not met for at least three years.
Mayor Yoshishiro Kimura of Ishioka, Ibaraki Prefecture, and five others were also arrested on suspicion of receiving money in connection with the bid won by Hitachi Ltd.
Ozaki, who was once secretary to House of Representatives member Michihiko Kano from the Democratic Party of Japan, was arrested in January on suspicion of being involved in a similar bid-rigging scheme in Ishioka.