JAPANESE GOVERNMENT ENTRUSTED OVER 100 CONTRACTS TO DENTSU AID ED NON-PROFIT GROUPS

The Japanese government has conferred more than 100 contracts over the last decade upon two non-profit groups set up by Dentsu Inc. An analysis of government data by Reuters concluded. This, some opposition lawmakers say clandestinely hid the role of the advertising titan in securing public funds.

The contracts, which spanned managing tourism-promotion projects to distributing coronavirus relief funds, were to the tune of at least $1.6 billion, according to public disclosures by Government ministries and data provided by those ministries to Japan’s parliament which has failed to be reported.

Dentsu Inc. acknowledged a part of $1.2 billion of that amount as a subcontractor to the two non-profit groups as per government records. Many of the contracts were bestowed in non-competitive bids.

Dentsu is in close links with Prime Minister Yoshihide Suga’s ruling Liberal Democratic Party. It is a subsidiary of Dentsu Group Inc, one of Japan’s most revered companies.

Dentsu taking recourse to non-profit groups to win public contracts first came to light in May. This was when local media ascertained that the advertising company had used one of the two non-profits, called Service Design Engineering Council, to win a government contract worth $700 million; the reason being to distribute more than $20 billion in state aid to businesses hit financially by the new coronavirus.

Opposition law-instaters have protested against the government’s award of the controversial coronavirus aid contract to the non-profit.

The bone of contention is whether Dentsu used non-profit groups to prevent scrutiny of its involvement in lucrative government contracts. Furthermore, whether the additional layer of red-tapism caused by subcontracting work to Dentsu could be termed a waste of taxpayers’ money.

In retaliation to Reuters’ questions, Dentsu replied it was a co-founding member of the two non-profits. It refused to remark on the number or value of contracts the non-profits won.

Dentsu said that the Non-Profit group it used to earn the coronavirus aid contract was the most apt way to bid for the project under by-laws established by Japan’s Ministry of Economy, Trade and Industry (METI), which awarded the contract. Dentsu said it could not vie for the project directly because its accounting department determined its balance sheet would be negatively hurt.

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