Off a narrow corridor above a store selling Persian rugs in central Tokyo, a small office houses a private operation which won a tender in April to distribute more than $20 billion in government aid to businesses hit by the new coronavirus.
The agency, the Service Design Engineering Council, actually carried out only a fraction of that work, local media reported last month. Service Design was co-founded by Dentsu Group Inc., one of Japan's most influential companies. It passed hundreds of millions of dollars to administer the project back to Dentsu, an advertising and PR company with close ties to Prime Minister Shinzo Abe's ruling Liberal Democratic Party (LDP), government documents show.
Under the arrangement, Service Design won the contract to distribute the $20 billion, but actually took less than 1 percent of the total $718 million for managing the project and passed on most of the rest to Dentsu, which set up vetting procedures, websites and call centers, the companies and the Ministry of Economy, Trade and Industry (METI) said.
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