The passage explains that Kakuei Tanaka was disgraced after being charged with accepting bribes for the sale of Lockheed aircraft to Japan.
This scandal, along with health issues, led to his political downfall and allowed Noboru Takeshita to take over most of his faction’s following.
Option (a) — relates to Nakasone’s failure to pass the indirect tax bill, not Tanaka’s downfall.
Option (b) — incorrect; Tanaka’s resignation was not due to any term-limit rule.
Option (d) — horse-trading refers to factional bargaining, but this was not the cause of his resignation.
Thus, (c) is correct.