The controversy erupted on Wednesday after reports emerged that the ruling party had distributed 20 million yen ($131,000) to local party branches headed by candidates without official LDP endorsement, matching the amount given to branches of endorsed candidates.
"We provided funds to local branches, not individual candidates. I feel outrage about the timing of the reporting," Ishiba said during a campaign speech in Hiroshima.
The revelation comes at a critical moment for Ishiba, who dissolved the lower house shortly after becoming premier on Oct. 1, with recent polls suggesting the LDP-Komeito coalition might lose their parliamentary majority.
The opposition has seized on the issue, with the Constitutional Democratic Party leader Yoshihiko Noda criticizing the LDP's handling of candidates implicated in the slush fund scandal, which involves underreported income from fundraising events.
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