JAPANESE MORNING PRESS HIGHLIGHTS 12/28/06

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E.O. 12958: N/A TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 12/28/06 Index: 1) Top headlines 2) Editorials 3) Prime Minister's daily schedule 4) JDA chief orders consideration be given to changing Futenma-relocation plan, including revision of the V-shaped runway at alternate site 5) Foreign minister of Japan, ROK agree to strengthen cooperation on restarting six-party talks on North Korea 6) First round of meetings ends for joint Japan-China study group on history Sata flap: 7) Administrative Reform Minister Sata quits over fund scandal; Watanabe immediately picked as successor 8) Reform minister Sata's resignation over money scandal another big blow for the ABE administration, with opposition camp demanding he quit the Diet, too 9) Reform minister Sata in resignation statement avoids mention of 78 million yen in unaccounted political funds 10) Sata quits, citing 'inappropriate" action, but expert concludes that the reform minister completely broke the law 11) Opposition camp vows to go on the offensive in January when new Diet opens 12) Successor body to the Regulatory Reform Council already named Articles: 1) TOP HEADLINES Asahi, Mainichi, Yomiuri, Sankei & Tokyo Shimbun: State Minister in Charge of Administrative Reform Sata resigns to take responsibility for improper bookkeeping for political funds; Yoshimi Watanabe picked as successor assume Nihon Keizai: Survey of 100 presidents: 35% think economic growth "will continue for one or more years"; 26% say, "Growth rate will slow down," expressing concern about consumer spending Akahata: Government aims to submit to the ordinary Diet session a bill aimed at introducing a system of no pay for overtime (white-collar exemption) 2) EDITORIALS Asahi: (1) Sata's resignation as state minister for administrative reform: A reward-oriented appointment now comes back to haunt the prime minister (2) New chair of the government's tax panel: How will he regain public trust? Mainichi: (1) Resignation of Sata: Prime minister's responsibility for appointing him questioned TOKYO 00007163 002 OF 008 (2) Kosai-led tax panel: No delay allowed in radical reform debate Yomiuri: (1) Resignation of Sata: Rebuild the system to produce results (2) Poisoned wine incident is a challenge to the lay judge system Nihon Keizai: (1) Japan needs to achieve primary balance as quickly as possible (2) Resignation deals a blow to ABE administration Sankei: (1) Sata's resignation a good opportunity for change (2) Kosai-led tax panel: A proper tax system should be rebuilt Tokyo Shimbun: (1) Chain of resignations reveals weakness of the administration (2) Reform of working hours: Now is not the time Akahata: Sata's resignation: ABE cabinet's "code of conduct" now questioned 3) Prime Minister's Official Residence (Kantei) Prime Minister's schedule, Dec. 27 NIHON KEIZAI (Page 2) (Full) December 28, 2006 09:01 Recorded for the government's Internet TV "Live Talk at Kantei." 10:01 Met South Korean Foreign Affairs and Trade Minister Song Min Soon, with Asian and Oceanian Affairs Bureau Director General Sasae. Followed by Finance Minister Omi. Later met Foreign Vice Minister Yachi. 10:55 Met Deputy Foreign Minister Yabunaka, European Affairs Bureau Director General Harada, and Economic Bureau Director General Ishikawa, with Deputy Chief Cabinet Secretary Suzuki and Assistant Deputy Chief Cabinet Secretary Ando. 13:15 Visited Tok Bearing Co. to make a tour in its plant. Later, met President Hiroshi Yoshikawa and others, with Deputy Chief Cabinet Secretary Shimomura. SIPDIS 13:58 Arrived at Jujo Ginza shopping street, with New Komeito President Ota and Shimomura. 15:35 Met at Kantei with Chief Cabinet Secretary Shiozaki, and deputy chief cabinet secretaries Shimomura, Suzuki, and Matoba. 17:03 Visited the Imperial Palace for an informal representation. 18:25 Arrived at Kantei. TOKYO 00007163 003 OF 008 19:10 Met Shiozaki, Shimomura, Suzuki, Matoba, and Special Advisor Seko. 20:07 Returned to his official residence. 4) JDA chief instructs that consideration be given to revising government plan for Futenma relocation, including revision of V-shaped runway YOMIURI (Page 2) (Full) December 28, 2006 It was learned yesterday that Defense Agency (JDA) Director General Kyuma has instructed administrative officials to study the possibility of revising the government's plan to relocate the US Marine Corps' Futenma Air Station (Ginowan City, Okinawa Prefecture) to the shoreline of Camp Schwab (Nago City). According to a senior official in JDA, Director General Kyuma said: "It would be good if the views of the local communities and the US forces would match. How about not dislocating the weed bed (where dugongs feed)? The runway could be something other than V-shaped, as well." Upon receiving his instruction, JDA is thinking of considering such revisions as placing the alternate facility dozens of meters more toward the sea than the government plan's location, and revising the actual plan that now calls for a V-shaped double runway. Okinawa Governor Hirokazu Nakaima, attending the meeting of the joint council of central government and prefectural representatives on Dec. 25, reiterated his stance that he could not accept the government's plan as it stands now. On hearing this, JDA apparently started to consider the possibility of revising the government plan, aiming at reaching agreement with the prefecture and local communities. There are some in JDA who are negative about changing the plan, so it is unclear at this point of the future of the study. 5) Japan, South Korea will strengthen cooperation on six-party talks; Visiting South Korean Foreign Minister Song meets with Prime Minister Abe, other Japanese leaders SANKEI (Page 2) (Full) December 28, 2006 Prime Minister SHINZO ABE yesterday met at the Prime Minister's Official Residence with visiting South Korean Minister of Foreign Affairs and Trade Song Min Song. During the talks, ABE referred to the six-party talks on North Korea's nuclear issue and stated, "I'd like to join hands so as to produce practical results." The two agreed to step up cooperation in order to restart the multilateral talks. Song stated, "We on the part of the South Korean government has a good understanding of Japan's abduction issue." Abe welcomed Song's choice of Japan as his first overseas destination after assuming office as foreign minister early this month. On relations with South Korea, ABE confirmed he would aim to build a future-oriented relationship as agreed on during the Japan-South Korea summit talks in October, noting: "I hope to see (both countries) further develop bilateral ties with a future-oriented approach." Afterwards, Foreign Minister Taro Aso, as well, met with Song at the TOKYO 00007163 004 OF 008 Foreign Ministry's Iikura Guest House. On the six-party talks, Aso criticized North Korea's response this way: "It's regrettable that North Korea brought up the financial sanctions issue and refused to join the talks." The two foreign ministers confirmed that both countries would work together to steadily implement the joint statement released in September 2005 by the six-party talks. Prior to this meeting, the two exchanged instruments of ratification on the Treaty on Mutual Legal Assistance in Criminal Matters. 6) Japan, China to release results of joint history study in 2008 NIHON KEIZAI (Page 2) (Full) December 28, 2006 Katsuhiko Iino, Beijing Japan and China wrapped up two days of talks in Beijing of the joint history study group that is charged with narrowing the perception gap between the two countries on history from an academic standpoint. The group concluded by deciding to aim for releasing the results of the study in 2008. The chair of the Japanese team, Shinichi Kitaoka, a professor at the University of Tokyo, commented favorably about the sessions at a press conference afterward: "The meetings were held in a serious, frank, and friendly atmosphere. We made a good start." The first round of meetings confirmed the policy line of holding the next round of the plenary session in March 2007, the third in December 2007, and the fourth in June 2008. It also decided to hold two subcommittee meetings on "ancient, medieval and modern history" and "contemporary history" on a timely basis. On the focal issue of "contemporary history," discussions will be held on "the prewar period," "the period from the Manchurian Incident to the end of WWII"; and "the 60 years after WWII," respectively. Kitaoka, however, commented that "nothing has yet been decided" about what form the final conclusions would take. 7) Administrative Reform Minister Sata resigns to take responsibility for inappropriate accounting of political contributions SANKEI (Top Play) (Full) December 28, 2006 Genichiro Sata, 54, state minister in charge of regulatory reform, local revitalization and administrative reform, held a press conference last night at the Cabinet Office, in which he announced his resignation after admitting one of his political support organizations engaged in inappropriate accounting of reported political funds. Prime Minister SHINZO ABE accepted his resignation and then decided to appoint Senior Vice Cabinet Office Minister Yoshimi Watanabe, 54, to be Sata's replacement. Watanabe's appointment will be officially announced today. ABE made a quick decision in a bid to avoid adverse effects on deliberations at the regular Diet session to be convened in January and on next summer's House of Councillors election. However, the resignation of Sata, who was in charge of reform of the public servant system, just three months after assuming office, has given a severe blow to the ABE administration. In his press conference yesterday, Sata said: "I sincerely apologize TOKYO 00007163 005 OF 008 for causing public misunderstanding and distrust due to media allegations about my political support organization." Although he stressed that the political funds reports did not include alleged expenses for an office that did not exist and political activities not carried out, he admitted that expenses for another political group were posted in the reports. He then stated: "I decided to step down from the post in order to keep the scandal from affecting deliberations on the fiscal 2007 state budget at the regular Diet session next year. I have no intention to give up my Diet seat." The political support organization in question was created in 1990 and disbanded last month. It had an office in a Tokyo building for which there was no record of a lease. The support group submitted to the government political fund reports from 1990 to 2000 claiming 78 million yen for utilities and rent. Since the scandal came up soon after the resignation of Tax Commission Chairman Masaaki Honma, who also was appointed by the prime minister, the government has suffered serious political damage. Opposition parties, including Minshuto (Democratic Party of Japan),intend to pursue Abe's responsibility for appointing the two. A senior New Komeito member expressed concern, saying, "The public support rate may drop even more." Sata is now serving in his sixth term in the Lower House after being elected for the first time in 1990 from the former Gunma No. 1 constituency. He belongs to the Tsushima faction in the LDP. He obtained a cabinet post for the first time after having served in such posts as senior vice minister of the Ministry of Internal Affairs and Communications, chief deputy secretary general of the LDP, Lower House Steering Committee chairman. Yoshimi Watanabe, Sata's successor, is the oldest son of late Michio Watanabe, one-time foreign minister. He is now serving in his fourth term in the Diet after being elected in 1996. He served in such party posts as director of the Land, Infrastructure and Transport Division and chief of secretariat of the Tax Research Commission. 8) Resignation of Administrative Reform Minister Sata gives unexpected blow to ABE government SANKEI (Page 3) (Excerpts) December 28, 2006 The ABE administration, which pledged to create a "beautiful country," is now suffering a serious setback in the resignation of Administrative Reform Minister Genichiro Sata just three months after assuming his post. There is no doubt that Prime Minister Shinzo ABE did not expect Sata would step down over the scandal involving money. Opposition parties will inevitably go on the offensive at the regular Diet session with an eye on next summer's Upper House election. Different from the resignation of Tax Commission Chairman Masaaki Honma, however, ABE approved of Sata's resignation only three days after the scandal was brought to light in an attempt to remove a worrisome issue in the government. Minshuto to call on Sata to resign from the Diet Opposition parties regard Sata's resignation as only natural. Minshuto (Democratic Party of Japan) plans to demand the resignation TOKYO 00007163 006 OF 008 of Sata from the Diet, in addition to the opening of closed-hearing sessions of the Lower House Budget Committee during Diet recess. Minshuto Secretary General Yukio Hatoyama told reporters yesterday: "Just stepping down from the cabinet post is not enough. The prime minister must explain to the public after thoroughly investigating the scandal. This is what the prime minister must do at a minimum." 9) Sata stops short of mentioning revenue sources for 78 million yen MAINICHI (Page 3) (Abridged) December 28, 2006 It has been reported that a political organization under State Minister for Administrative Reform and Regional Revitalization Sata submitted political funds reports that recorded about 78 million yen in rent and utilities between 1990 and 2000 for offices for which it actually had no lease with the building operators. According to a government journal, Sata's political research group was established in 1990, when Sata was elected as a member of the House of Representatives for the first time. It set up an office in the Tokyo branch of Sata Construction Co., based in Maebashi and managed by his father. It claimed about 78 million yen for office rent and utilities during the period from 1990 to 2000. The group submitted a notice of dissolution this October. In a press conference yesterday, Sata said that the group held lecture meetings (in the Tokyo Branch),and he said, "The group paid office rent and utilities properly." But he stopped short of mentioning where the money came from. 10) Minister Sata quits in scandal over political funds ASAHI (Page 31) (Excerpts) December 28, 2006 Genichiro Sata, state minister for administrative reform and regional revitalization, was forced to resign from his post following the discovery of his political organization's inappropriate accounting records. In a press conference yesterday, Sata said, "There were no fictitious office expenses," but when asked for a specific explanation, he only replied, "I cannot reveal everything." Commentaries By Yasunobu Iwai, Nihon University professor: It is fully a crime Although he said, "There were no fictitious expenses," entering falsified expenses in income and expenditure reports is fully a crime. If such an act goes unchallenged, the political fund reporting system will become meaningless. The matter is not settled just by his resigning, for Sata, as a politician, is still held accountable. Politicians must examine their political fund reports on their own responsibility. There may be many politicians who are interested in income but lax about examining expenditures. One idea might be to have all political fund reports be listed on the Internet, so that the public would have the opportunity to scrutinize them. It is also TOKYO 00007163 007 OF 008 necessary for all receipts to be attached to the reports. By Takashi Uesugi, former secretary of a Lower House member and journalist: Prime Minister's was too lax in his perception The resignation of Sata came quickly, probably stemming from a desire to minimize damage (to the government). But the prime minister holds a heavy responsibility for appointing someone with a problem. The Koizumi administration lasted for five years and a half, but there was no one who resigned over a scandal, because that administration had checked before appointing them to see if candidates were involved in any scandal. Mr. ABE followed Mr. Koizumi's method of trying to win over to his views one person at a time, but his aides probably had no capability to check. Prime Minister ABE also was too lax in his perception, I think. The first regular Diet session will be held next month. The case may adversely effect deliberations on the budget. 11) Opposition parties to toughen attack following the resignation of Administrative Reform Minister Sata, summoning him as a Diet witness when the regular session opens early next month MAINICHI (Page 5) (Excerpt) December 28, 2006 It was very painful for the ABE administration that Administrative Reform Minister Genichiro Sata was driven to resign over allegations of improper accounting of political funds by his support organization. Although Prime Minister SHINZO ABE aimed to quickly assuage the situation by settling the issue before the end of the year, the opposition parties, with next year's unified local elections and the Upper House election in mind, plan to strengthen their attack stance against the ABE government in the regular Diet session that opens early in the year. It appears that the outlook for the regular Diet session, which will deliberate the initial fiscal 2007 budget draft, the prime minister's first such experience, is likely to be tumultuous from the start. 12) Government selects members for successor panel to regulatory reform conference ASAHI (Page 4) (Full) December 28, 2006 The government decided yesterday to install 15 members, including Matsui Securities Co. President Michio Matsui, to the successor panel to the Regulatory Reform and Privatization Promotion Council, chaired by Nippon Yusen K.K. Chairman Takao Kusakari. The council is to expire at the end of March next year. The picked as members those who are eager to push ahead with regulatory reforms and also gave consideration to the need to promote the ABE administration's key policy measures, such as local revitalization. After the new panel is inaugurated in January, new members will be officially appointed. The government plans to integrate its Office of Trade Ombudsman (OTO) into the panel, because of overlapped themes for discussion at both committees. The government has so far come up with its three-month plan in March, but the new group will finalize its first report around June next year in order to reflect TOKYO 00007163 008 OF 008 discussions there in the report. Prime Minister ABE said in a cabinet ministerial meeting on Dec. 26: "The government will boldly scrap those regulations standing in the way of economic recovery, but there are some rules that are necessary to ensure the security of the people's livelihood. I hope those well versed in local circumstances will join (the new panel)." Some personnel selections reflect Prime Minister Abe's policy identity, like the selections of the president of a housing equipment manufacturer based in Shimonoseki, Yamaguchi Prefecture, and a standing director of a NPO Corporation supporting construction firms' advancement to the farm business. The new panel will include eight members of the current council, including Kusakari, who is scheduled to serve as chairman. DONOVAN