Japan stirs controversy with huge COVID aid contract for ad giant Dentsu via saitomri juminism
Takenobu Tonegawa, 41, who owns a video production firm, cycles as he works his part-time job as Uber Eats delivery person amid the coronavirus disease outbreak, in Tokyo, Japan July 16, 2020. Picture taken July 16, 2020. REUTERS/Issei Kato
The arrangement led to confusion and delays for small business owners. Members of parliament have questioned how taxpayers’ money was spent during a national emergency. The ministry declined to disclose the full list of companies involved because of a clause in Japan’s disclosure law. If revealing information about a company could harm the firm’s competitive position, it said, it is not obliged to disclose it.Opposition politicians blame the subcontracting for administrative costs rising to what one of them, Masayuki Aoyama, said was roughly 30 times more than a similar programme for private individuals that was handled by local governments.
The economy ministry said that as of July 20, it had received 2.9 million applications from small businesses and distributed funds to 2.67 million; Service Design said that for the most part, funds are being paid out roughly two weeks after an application is received. “To begin with, we did not think that it was possible for one company to handle a public project of this level,” the company said in a statement to Reuters on July 21.
More recently Dentsu, which started as a news agency, has made sports marketing a centrepiece of its business. It served as a marketing agent for Tokyo’s bid to host the 2020 Olympics, for which it helped Japan raise a record $3.1 billion in domestic sponsorship. The tournament has been postponed for a year due to the pandemic.
“I don’t blame the outsourcing itself, but if they run this system with taxpayers’ money, they should’ve operated it better,” he said.Pictured on national TV as a sparsely furnished office where a handful of employees type at laptops under fluorescent lights, Service Design oversees the entirety of the small business aid project. It coordinates with companies and liaises with the ministry, METI’s Tanaka said.
The non-profit passed most of the contract to Dentsu, which in turn handed down the work. The largest portion of the subsequent contract went to Dentsu Live, an event production company that is wholly owned by Dentsu, according to the ministry. Dentsu Live further outsourced the work, Service Design said.
Dentsu told journalists in June it didn’t become the primary contractor for the aid project because it believed Service Design had the necessary track record, and felt recipients of the payouts may be confused if they saw Dentsu was involved in the payments.
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