Japanese digital agency’s beginnings marred by decline in Suga’s influence

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TOKYO – When the New Context conference kicked off in Tokyo on August 11, it almost looked like an official curtain-raiser for Japan’s new digital agency, Prime Minister Yoshihide Suga’s proposed solution to the bureaucratic inefficiencies exposed by the pandemic of COVID-19.

Three ministers: digital reform chief Takuya Hirai, who led preparations for the agency’s launch; Taro Kono, the man of administrative and regulatory reform; and Environment Minister Shinjiro Koizumi attended the event hosted by Digital Garage, a publicly traded internet company, as speakers.

Hirai and Kono participated in a panel discussion on the digitization of government chaired by Joichi “Joi” Ito, co-founder of Digital Garage and former director of the Media Lab at the Massachusetts Institute of Technology.

Ito’s name emerged as the government scouted for candidates to lead the Digital Agency, which was last minute preparing for its official start on September 1. On August 5, Japanese media began reporting that the Suga cabinet was about to appoint Ito as deputy minister of digital.

Ito’s presence on stage with Japanese ministers and other influential guests such as Taiwanese Minister of Digital Audrey Tang and Kathy Matsui, former chief strategist of Goldman Sachs in Japan and founding partner of a new venture capital focused on ESG, suggested it had been cleared by Tokyo scrutiny. .

Then on August 18, media reports, apparently based on leaks of people within the prime minister’s office, unanimously said the cabinet had dropped Ito as an unelected leadership candidate on higher of the digital agency.

The hesitation over choosing the head of the digital agency showed Suga’s decline in political capital. This weakness led him to decide not to run for a second term as leader of the ruling Liberal Democratic Party, which means a new prime minister is on the way and leaves the new agency’s leadership term in office. suspense.

Digital Reform Minister Takuya Hirai, center, and Taro Kono, Administrative Reform Minister, second from left, participated in a panel discussion chaired by Joichi Ito, left, former director of the Media Lab of the Massachusetts Institute of Technology. (Courtesy of Digital Garage)

While the government ignored all media reports, which began in early August, the media coverage was negative, focusing on how Ito had resigned from MIT two years earlier and the Media Lab’s significant attempts to cover up donations from Jeffrey Epstein, a deceased victimized sex offender. in his prison cell in August 2019.

Their articles generally accused a two-year-old US news article claiming that Ito and MIT conspired to withhold donations from Epstein, although the allegations were later proven inaccurate by the official MIT investigative report.

The independent investigative report, commissioned by MIT from law firm Goodwin Procter LLP and submitted in January 2020, dismissed earlier media claims that Ito and MIT executives were aware of the seriousness of the crimes. of Epstein and had conspired to conceal Epstein’s donation from the Media Lab.

Showing extensive email exchanges and testimony, the report concluded that it was the university’s decision, not Ito’s, to anonymize Epstein’s donations, and the purpose of anonymity. was not to hide them from the public but to prevent Epstein from publicizing these gifts to improve his reputation.

Additionally, the report confirmed that college officials and Ito were aware of Epstein’s prior criminal record in mid-2013, when college officials authorized acceptance of Epstein’s anonymous donation. . But it also proved that they were not yet aware of the true nature of the crimes he had committed at that time. The criminal record they admitted in 2013 was that Epstein had served 13 months in prison, between 2008 and 2009, for soliciting an underage girl for the purpose of prostitution for felony.

It was only after the Miami Herald released a series of investigative reports in November 2018 that Ito and MIT recognized the seriousness of Epstein’s crimes, the Goodwin report showed. The Herald articles revealed, with ample evidence, that he had repeatedly trafficked underage girls into prostitution and sexual abuse for years. After that, MIT never accepted a donation from Epstein and Ito cut ties with him.

It was also the Herald reports that prompted the United States Federal Bureau of Investigation to re-launch an investigation into Epstein, which ultimately led the FBI to arrest and prosecute him on new, more serious charges in July 2019. .

Epstein, who would have been a billionaire, used philanthropic activities to make connections with very influential people. He frequently hosted parties with famous guests at his New York mansion and estates elsewhere, which functions as a circle of approval from himself and guests such as Bill Gates and Larry Summers.

Ito also met powerful people at Epstein’s gatherings and asked other influencers for their opinions on Epstein. Most funds encourage Ito to accept his research.

Ito responded to our request for comment with an e-mail response: “Hearing many esteemed people supporting Epstein and through direct conversation with him, I came to think he was rehabilitated. appeared that his offenses before his prosecution in 2008 had been much, much worse than his funds made, I realized I had made a huge. I really, deeply regret having cultivated him as a Media Lab donor and for allowing him to invest in my venture capital funds, ”Ito wrote in mid-August.

On August 21, Hirai complained in a live online broadcast that no media had asked Hirai to confirm the prospect of signing Ito. Asked about Ito’s qualifications, he said, “I think he’s a brilliant person. Japan should make the most of their knowledge in digital transformation efforts.”

Hirai’s comments suggested he tried to recruit Ito, but a decision was made by other cabinet members not to appoint him. Sources told Nikkei that there was a group of high-ranking politicians and bureaucrats trying to undermine Hirai’s control over the digital agency. Ito was seen in the bureaucracy as a potentially radical reformer who would ally closely with Hirai.

With Suga’s approval ratings dropping, further controversy was the last thing the PM wanted. The government ended up appointing Yoko Ishikura, professor emeritus of business administration at Hitotsubashi University, as deputy minister of digital on September 1. Although not a tech savvy, Ishikura is known for her vast knowledge of business management and her well-rounded character.

After this about-face in executive recruitment, the Digital Agency opened on September 1 and Hirai was appointed its new prime minister.

The agency faces a huge backlog of tasks. The list includes overhaul of laws and regulations that have hampered the digitization of everything from driver’s license renewals to tax returns and private sector contracts. Over 1,000 IT systems scattered across the public sector in ministries and local governments also need to be modernized and connected.

To meet these challenges, the government transferred 300 civil servants from existing ministries and hired 200 engineers and consultants from the private sector.

Despite high public expectations for a quick start to digital campaigns in Japan, political turmoil within the LDP has kept the new agency on the starting line. In a surprise announcement on September 3, Suga said he would not run for a second term as head of the PLD in this month’s party election, turning himself and Hirai into lame ducks.

The winner of the election will lead the PLD, and if the party obtains a majority in the lower house general election likely to be held in November, he will become the next prime minister.

Depending on these election results, Hirai could be replaced as digital minister. If this happens, other positions held by lawmakers at the Digital Agency may be replaced, along with the senior official and other unelected officials.

This puts Ishikura and the elite bureaucrats transferred from other government departments to the Digital Agency in a difficult position. As they come under public pressure to move forward with swift reforms, any important decision they make can be overturned by the new administration. This dilemma has a lot in the agency in a pattern of waiting.

The digital agency needs strong leadership to bring together a team of people from diverse backgrounds, set political priorities, and then lead the whole team to a unified goal.

However, this cannot happen until a new cabinet is formed after the election. “Everything is provisional until the general election is over,” said a person close to senior officials at the Digital Agency.

Japan Digital Agency: The new agency, tasked with bringing the country’s paper government offices into the 21st century, was officially launched on September 1. © Kyodo

Some of the digital agency’s new hires in the private sector said they were confused in their new roles because they were not given clear assignments. Some bureaucrats who transferred to the agency from other ministries reportedly shouted at their former colleagues in the private sector to “guess” their tasks for themselves.

Meanwhile, the government announced on September 7 that Ito was part of a new panel of experts tasked with advising on the agency’s policy priorities and action plan. Other members include Japanese tech CEOs such as Kentaro Kawabe, chairman of Z Holdings, the parent company of Yahoo! Japan and Line Messenger app, and Hiroshi Mikitani, founder and CEO of Rakuten, Japan’s largest e-commerce company.

The panel, called the Digital Society Design Conference, will likely have a major influence on how the digital agency works.

The political turmoil engulfing the agency may have a silver lining, giving its staff more time to strategize, discuss their priorities and how they can achieve their goals. A slow start is not always a bad thing.


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