April 3, 2001 A Japan Nuclear Cycle Development Institute official calls the 25.4-billion slush fund a necessary evil.

The government-funded Japan Nuclear Cycle Development Institute (JNC) amassed a slush fund of at least 25.4 billion yen over the past five years, The Asahi Shimbun has learned.

The fund has been in existence for at least 20 years, sources said.

The slush fund was used to pay salaries of extra employees hired for large projects in which central government funds were insufficient.

Isamu Sasaya, a JNC director, said the fund was a necessary evil.

``We felt it was our prerogative under the government-approved budget,'' Sasaya said. ``But it was not entirely acceptable behavior under a strict interpretation of the budget.''

He added, ``We will review the special expense fund with an eye to eliminating it altogether.''

According to sources, JNC officials systematically siphoned about 5 percent from each expense category of the budget for JNC's operating division to create the fund.

The assembled slush fund, known as the ``internal adjustment expenses,'' was under the control of the accounting department.

Fund figures were approximately 5.15 billion yen in fiscal 1996, about 6.17 billion yen in fiscal 1997, about 6.13 billion yen in fiscal 1998, about 4.1 billion yen in fiscal 1999 and about 3.9 billion yen in fiscal 2000.

JNC kept an extra accounting book to handle the fund's finances. Other books were kept to be presented to government inspectors.

The second secret book contained the actual amounts placed into the internal adjustment expense fund.

The money amassed in fiscal 1999 was used for travel and clerical expenses (about 3.06 billion yen), personnel expenses (850 million yen) and assistance to local governments cooperating with JNC projects (186 million yen), according to sources.

The central government paid the JNC about 23 billion yen to its administrative division to pay the salaries of 2,676 employees. It could only afford to pay the salaries of 2,537 workers with the money.

The salaries of the remaining workers were paid with from the secret fund.

Money taken from the operating division may have also been used inappropriately for the administrative division, in violation of a regulation against moving funds.

In fiscal 2000, the operating division budget came to 125.7 billion yen. The administrative division budget was about 39.9 billion yen.

The JNC, which receives its entire budget from the government, resorted to hidden funds to pay the salaries of the extra workers needed for projects, because the central government had limited its outlays for these purposes. ``Under the strict circumstances of a limited staff and budget, we created the fund to cover administrative expenses,'' Sasaya said.

Toru Nakahara, head of the Ministry of Education, Culture, Sports, Science and Technology section that oversees the JNC, said the ministry would look into the matter of the secret fund.

The JNC was created from a restructuring of the Power Reactor and Nuclear Fuel Development Corp. (Donen) in October 1998, following several accidents, including a December 1995 sodium leak at the Monju fast-breeder nuclear reactor in Tsuruga, Fukui Prefecture.

In March 1997 a fire and explosion rocked Donen's nuclear fuel reprocessing plant in Tokai, Ibaraki Prefecture.

Copyright 2001 Asahi Shimbun. All rights reserved. No reproduction or republication without written permission.