The latest blow to Ozawa is a criminal investigation by the Tokyo prosecutor’s office of Ozawa’s support group, the Rikuzankai, for failure to report properly a 400 million yen donation that was used to purchase housing for Ozawa’s aides. Ishikawa Tomohiro, a former Ozawa secretary now serving as a member of the House of Representatives, may be indicted for his role in the scandal.

As perhaps a sign of the gravity of the situation, the Hatoyama government declined to comment. Unlike last year, when DPJ leaders joined Ozawa in questioning the motives of the prosecutor’s office, the Hatoyama government is taking a wait-and-see approach. For his part, Ozawa apologised to the Japanese people for the ‘misunderstanding’ and said that there was no criminal intent in the misreporting of the donation suspected to have come from the Kajima construction company.

Perhaps not coincidentally, Ozawa has begun a tour of the country in anticipation of July’s upper house election. Sankei and Yomiuri, which have enthusiastically cataloged Ozawa’s political interventions, have both reported that Ozawa is shifting to a ‘low posture’ and question whether it is a function of the deepening investigation or the approaching upper house election.

For that reason, there may be a silver lining to Ozawa’s being under investigation and increasingly away from Tokyo on the hustings. Namely with Ozawa preoccupied, the Hatoyama government may find it easier to dispel the notion that it is under Ozawa’s thumb and use the forthcoming Diet session to move its agenda instead of having to fend of accusations that Ozawa is the real ruler of the country. Meanwhile, the Ozawa scandal is also keeping the LDP from becoming a more effective opposition party, which is good for the DPJ if not for Japan. Like the Hatoyama scandal before it, the Ozawa scandal seems like an inviting target for the LDP, an easy way to attack the government without having to consider the party’s future. Yamamoto Ichita warns his party that the DPJ’s mistakes will not be sufficient for the LDP to regain the trust of the public, but I suspect that his warnings will go unheeded.

Of course, that is slight comfort compared to the risk that Ozawa could take the government’s support down with him. For now the government and the DPJ have little choice but to hope for the best.

Whatever the reality of Ozawa’s role in the policymaking process, he is casting his shadow over the Hatoyama government. Remarkably, the Faustian bargain the DPJ made with Ozawa to merge with his Liberal Party — a deal made when Hatoyama was last the president of the DPJ — continues to dog the DPJ. Ozawa was instrumental in positioning the party to unseat the LDP and take power, but only if it took on Ozawa’s baggage: his history as Tanaka Kakuei’s lieutenant and a leader of the LDP’s largest and most notorious faction, his secretiveness, his tendency to lunge for fleeting opportunities that backfire (cf. the breakdown of the 1993-1994 non-LDP coalition), and his tendency to speak a bit too freely for his own good. The DPJ, for better or worse, knew exactly what it was getting when it joined hands with Ozawa — and it has not been disappointed.

Regardless of how the investigation plays out, it may be time for Ozawa to leave, at least after the upper house election if he survives this latest scandal. As indispensable as he is on the campaign trail, he is hurting the government. If Ozawa is serious about wanting to change Japan for the better, he must ask himself whether the Hatoyama government would be better off with him in retirement — provided that the Tokyo prosecutor’s office does not determine the terms of Ozawa’s exit from politics.