Inside the Shadowy Scheme That Drained ¥400 Million From Rural Governments

“Hyena” Consultants Who Preyed on a Town of 8,000 People

Local revitalization projects that make use of the corporate version of the hometown tax donation system in tiny municipalities that nobody pays attention to are exceptionally good money laundering.

Ignorant and ineffective marginal town halls suffering from financial hardship and staff shortages due to depopulation, and hyena consultants who exploit national systems to siphon public funds from these weak municipalities. Depopulation Business (Shueisha Shinsho), which exposes corruption in public–private partnerships, has been drawing strong reactions since its publication in July 2025.

The author is Isao Yokoyama (37), a reporter for the regional newspaper Kahoku Shimpo, headquartered in Sendai City, Miyagi Prefecture. Based on facts that Yokoyama revealed in the Kahoku Shimpo morning edition between November 2022 and December 2024, the book adds investigations and reporting processes that were not published in the paper and was newly written for this volume.

Since regional revitalization began in 2014, municipalities that completely outsource the drafting of comprehensive plans to consultants have seen rampant exploitation of subsidies by unscrupulous consultants. What exactly was the depopulation business scheme uncovered by Yokoyama? We spoke with him.

The stage is Kunimi Town in Fukushima Prefecture, with a population of about 8,000. In September 2022, the town council approved a leasing project to develop and manufacture 12 high-standard ambulances capable of providing life-saving treatment inside the vehicle and lease them to neighboring municipalities. The project was to be funded by 432 million yen donated through the corporate hometown tax system by an anonymous company (later revealed to be three affiliated companies including a major IT firm).

At the time, Yokoyama was working at the Fukushima Bureau of Kahoku Shimpo. While conducting separate reporting related to Kunimi Town, he learned about the ambulance leasing project from the town council meeting minutes.

“Purchasing as many as 12 high-standard ambulances and leasing them to other municipalities instead of using them in their own town. On top of that, this project was positioned as part of a public–private consortium, funded by corporate hometown tax donations from companies involved in the consortium, and the town decided to pay project fees to the company that proposed how to use those donations. According to the meeting minutes, the mayor gave this explanation even before the budget had been approved.

From a common-sense perspective, it was strange. I instinctively thought I should look into it.” (Yokoyama, quotations below likewise)

That December, Kunimi Town outsourced the ambulance leasing project to One Table Inc., a stockpiled-food venture and regional revitalization consulting firm based in Tagajo City, Miyagi Prefecture.

“A Miyagi-based company being involved in a project run by a Fukushima municipality made it relevant for Kahoku Shimpo, which is headquartered in Sendai. I started by researching what kind of company One Table was, then formed hypotheses based on fragmentary information gathered from our past article database and administrative documents.

Since verification is necessary before publishing an article, I carefully read public information, organized events chronologically, contacted people involved in the project, and drew out information. I spent just under two months on this painstaking work.”

Through this steady reporting, Yokoyama uncovered the following facts:

Only One Table participated in the proposal-based competitive bidding for the ambulance leasing project. Prior to that, One Table had already been entrusted with serving as the secretariat for Kunimi Town’s public–private consortium and had even proposed the ambulance leasing project to the town.

Furthermore, One Table had entered into a business partnership with an ambulance venture company. That venture was a subsidiary of a major IT company that had made the corporate hometown tax donation to Kunimi Town. Eight months before Kunimi Town publicly solicited contractors for the project, One Table had already placed an order—funded by the donated money—for the manufacture of the high-standard ambulances. It later became clear that the company had also been involved in drafting the specifications to ensure the ambulance venture would win the contract.

Under the corporate hometown tax system, up to 90% of the donation amount can be deducted from corporate taxes.

In Kunimi Town’s project, the major IT company not only received tax deductions but also earned substantial profits through contracts awarded to its subsidiary ambulance venture.

Based on the facts uncovered through reporting, suspicions emerged regarding kickback of donations, tax avoidance, and possible collusion between the municipality and consultants as well as preferential treatment.

“Our way of doing things is to donate money to a town, let it hold the funds, and then make money by operating them.” This was One Table’s method, revealed through recorded audio. The “Bellring” shown in the diagram is an ambulance venture company (image provided by Kahoku Shimpo).

Disposing of all administrative documents

Meanwhile, Kunimi Town also terminated all contracts with One Table and decided to cancel the ambulance project. Just two weeks earlier, at the town council, the mayor had insisted, “We’re trying to do something admirable for the town” and “There’s no reason for the newspapers to keep talking about Kunimi,” yet he immediately reversed course.

“I’m just a reporter. The only thing I can do is write articles. I trusted that readers would agree, and consistently wrote that it’s wrong to neglect local autonomy, which is the foundation of democracy,” Yokoyama said.

However, the Kunimi Town officials themselves seemed to have no sense of being neglected. They outsourced rural revitalization entirely to a consultant, allowed public-private partnership projects that didn’t benefit the townspeople, and paid no heed to the waste of public funds. The limit town hall (a term coined by reporter Yokoyama) that had fallen into thoughtlessness and governance failure may actually be the bigger problem.

“That’s the biggest issue. The president of One Table took responsibility and resigned. But in the town hall, neither the mayor nor the senior staff took any responsibility. They were the ones who let One Table do as it pleased, and they’ve lost awareness that they’re handling public funds. I thought, ‘This is outrageous.’”

The Kunimi mayor explained to the town council that the purpose of promoting the public-private partnership project was “What Kunimi needs most is to collaborate with companies to promote Kunimi and raise the town’s name value.” Did he truly believe that would benefit the townspeople? What did the mayor actually want for the town?

“He probably just wanted to create an achievement with a high-profile project. They didn’t even prepare a project plan or conduct a demand survey for the ambulance lease. I can’t imagine they seriously intended to carry out the project.”

It was also shocking that Kunimi Town officials had discarded all related documents and emails.

“I don’t think the governance failure and lack of compliance awareness among Kunimi Town staff began at that time. It’s been an ongoing issue.”

The town council also failed to serve as a check on the administration.

“The council that approved the public-private consortium project certainly bears some responsibility. But it would be harsh to blame them too strictly. With no one stepping up as a councilor and limited interest from residents in town issues, is it fair to say that only the councilors are at fault? The core of the problem lies elsewhere.

The councilors themselves reflected on having overlooked the problem. That’s why they established a Hyakujo Committee and summoned witnesses. The fact that Kunimi Town had disposed of all administrative documents, including emails and materials provided to companies, was revealed because the Hyakujo Committee pursued the issue.”

The committee also clarified that town staff had provided pre-approval materials to One Table, that such actions constituted favoritism, and that the ambulance project was effectively a discretionary contract that had not gone through a fair public bidding process.

In the mayoral election held on November 10, 2024, following the end of his term, the incumbent mayor faced the harsh judgment of the townspeople and lost. Unusually for a local government leader, he ended his mayoral career after a single four-year term.

On November 22 of the same year, the Cabinet Office’s Local Revitalization Promotion Bureau revoked Kunimi Town’s “Regional Revitalization Plan” certification. At the time, the Minister in charge stated that the revocation was based on the judgment that “the town provided favors in exchange for donations.”

The Ironic Outcome: Regional Revitalization Becomes a Hotbed for Depopulation Business

From FY2025, the government required that when municipalities use corporate furusato nozei donations to carry out projects, the names of donating companies must, in principle, be made public. This may have introduced a certain degree of transparency into the corporate furusato nozei system.

However, as long as municipalities without a clear sense of responsibility outsource their region’s future entirely to consultants, and consultants seek to siphon government grants and subsidies from local areas, depopulation business will not disappear.

As for the government, it disregards the realities of local areas, selects ineffective project plans for grant distribution, and does not verify the outcomes.

“I think it’s true that the government just hands out grants and doesn’t check anything. But then, why do they need to hand them out at all? Because of Tokyo-centric concentration.

Ever since I was in elementary school, we’ve been told that the concentration of population in Tokyo causes depopulation in local areas and drains regional vitality. The government knew this but did nothing. Leaving Tokyo-centric concentration unaddressed has brought various distortions to local governance. That’s what I think.”

Regional revitalization, which claims to correct Tokyo-centric concentration, made the formulation of a local comprehensive strategy a condition for receiving grants. But for municipalities lacking staff with expertise or analytical skills, preparing the high-level plans the government demands is a high hurdle. As a result, a structure emerged where policy planning is outsourced entirely to private consultants.

Ironically, regional revitalization—intended to correct Tokyo’s overconcentration—has become a breeding ground for depopulation business, which profits from depopulation.

Incidentally, the 12 high-spec ambulances left without a purpose due to Kunimi Town’s lease project cancellation were apparently donated free of charge to municipalities that requested them.

▼Isao Yokoyama – Reporter, Kahoku Shimpo editorial department. Born 1988 in Aomori Prefecture. Assigned to the Fukushima Bureau from April 2021 to March 2024. In 2025, his series of reports on suspected reflow of corporate furusato nozei donations earned the Japan Federation of Newspaper Workers’ Union Journalism Award, and his book Depopulation Business (Shueisha Shinsho) won the Kikuchi Kan Prize.