DPJ'S HATOYAMA EXPLAINS DPJ VIEWS ON ELECTIONS,

C O N F I D E N T I A L SECTION 01 OF 04 TOKYO 004887

SIPDIS

SIPDIS

DEPT. PLEASE PASS TO USTR/MBEEMAN

E.O. 12958: DECL: 2017/10/17
TAGS: PGOV PREL JA
SUBJECT: DPJ'S HATOYAMA EXPLAINS DPJ VIEWS ON ELECTIONS,
DIET, ISAF


Classified By: Ambassador J. Thomas Schieffer for reasons 1.4 (b,d)

Summary and Comment
--------------


1. (C) Democratic Party of Japan (DPJ) Secretary General
Yukio Hatoyama gave his views on the July Upper House
election, DPJ preparations for the next general election, the
DPJ's handling of the current Diet session, and the new
anti-terrorism legislation to an audience of journalists,
businessmen, and diplomats on October 15. He also discussed
the timing of the Lower House dissolution, the reinvigoration
of Japan, and the DPJ's proposal to participate in the
International Security Assistance Force (ISAF) in
Afghanistan.


2. (C) Hatoyama spoke candidly about the DPJ's successful
takeover of the Upper House, acknowledging that LDP failings
had helped but crediting DPJ head Ichiro Ozawa with a
masterful plan to campaign hard in the regions. Hatoyama
confirmed his hope that a Lower House election will take
place after the budget is passed in April 2008 and that the
DPJ might negotiate for the election in exchange for passing
budget implementation legislation. He failed to answer some
of the tough questions raised by the audience such as how
Japan could participate in ISAF without violating the
Constitution. He also alluded to but did not fully explain a
DPJ proposal to raise the consumption tax gradually over 40
years as a flexible source of funding for the government.
End Summary and Comment.

Upper House Election Win ...
--------------


3. (C) DPJ Secretary General Yukio Hatoyama spoke before a
large audience at the Yomiuri International Economic Society
lunch on October 15. He began with a discussion of the DPJ's
success in the July Upper House election, noting that the
opposition party had increased its number of seats in every
election after learning an important lesson from the crushing
defeat the DPJ suffered in the 2005 Lower House election.
That lesson was that "youth must be balanced with
experience," which resulted in the emergence of Ichiro Ozawa
as the DPJ's party leader. Ozawa's leadership has allowed
the DPJ to cast aside its image of disunity and has brought
members together with the message "we must win (the next
general election)." Hatoyama added that the DPJ must win to
survive.

... Thanks to Abe and Ozawa
--------------


4. (C) Hatoyama admitted candidly that the DPJ's victory in
July had been helped by the scandals and inappropriate
comments made by former Prime Minister Shinzo Abe's cabinet
ministers and others connected to his administration.
Hatoyama said politics and money were the two main issues
that brought down the previous cabinet. During election
campaigning, Abe wrongly claimed that the public welcomed his
"so-called structural reform," said Hatoyama. The DPJ
meanwhile had a natural, easy-to-understand message that
focused on three core policies: the pension issue,
agricultural reform and child benefits. Hatoyama described
Ozawa as an "election god" and revealed that during the
campaigning Ozawa instructed DPJ Deputy President Naoto Kan
and Hatoyama to visit only urban centers while Ozawa visited
mostly rural areas and skillfully made use of the reporters
who accompanied him.

General Election Preparation Underway

TOKYO 00004887 002 OF 004


--------------


5. (C) Hatoyama declared that the DPJ's most important goal
in the next Lower House election is to win over 151 seats out
of the 300 total. "Winning is the only remedy for
everything," he said. So far, the DPJ has over 200
candidates for the single seat districts and needs about 100
more to fill all the districts. The DPJ does not feel
compelled to establish candidates in every district, however,
since that would dilute the party's resources and power.
Hatoyama said it is much more important to have strong
candidates in the more than 151 single-seat districts the DPJ
can surely win. He thought the DPJ could easily fill another
40-50 districts and then would consider cooperating with
other opposition parties such as the People's New Party and
the New Party Japan for the remaining districts. Without
being specific, Hatoyama implied that the DPJ would have
trouble coordinating with the Social Democratic Party (SDP)
because placing DPJ candidates in SDP strongholds would
threaten SDP proportional votes and weaken the SDP party
after the election.

DPJ-JCP Coalition Unlikely
--------------


6. (C) As for the new Japanese Communist Party (JCP) policy
not to field candidates in all 300 single-seat districts,
Hatoyama commented it was probably due to the JCP's financial
difficulties. Hatoyama thought cooperating with the JCP
would be very difficult, saying that it would put the DPJ's
true value into question, although he did not completely rule
out the possibility of such cooperation.

DPJ Feeling Its Oats in Diet
--------------


7. (C) Prime Minister Yasuo Fukuda hopes to have close
consultations with the opposition in the current Diet
session, but Hatoyama labeled this a "clinch" strategy that
would not benefit the opposition and is therefore
unacceptable. However, politics is for the people, so the
DPJ may choose to consult with the ruling coalition on some
issues. The DPJ proposal on the issue of politics and money
might be one example where the coalition is willing to make
concessions, he said, and revealed that a senior LDP member
had told Hatoyama that the LDP is willing to accept the
entire DPJ proposal. Both parties agree that any political
expenditure of more than one yen must have receipts attached,
but the DPJ proposal, he explained, calls for making all
political expenditures transparent while the coalition wishes
to limit the extent to which the information is made public.
Nevertheless, Hatoyama said the current Diet session needs to
enact a bill and the DPJ might be willing to compromise in
order to avoid betraying the public's expectations.

Appreciation Lacking in Afghan Re-fueling
--------------


8. (C) Hatoyama attempted to clear up any misunderstanding
that the DPJ opposed the new anti-terrorism legislation for
the sake of opposing it. He explained that he had visited
Afghanistan twice and met Afghan President Karzai. Karzai
expressed his appreciation for Japan's contribution to the
Disarmament, Demobilization, Reintegration (DDR) effort, but
made no mention of Japan's refueling contribution. (Note:
Kenji Isezaki, former head of Japan's DDR effort, claimed
Karzai was unaware of Japan's refueling mission until
September 2003 and that most Afghans are similarly
uninformed. End Note.) Hatoyama compared Japan's OEF
contribution to the first Gulf War, which he claimed also

TOKYO 00004887 003 OF 004


went unappreciated by the Kuwaiti government.

Held Out for Diet Approval after 9/11
--------------


9. (C) Hatoyama acknowledged the 9/11 attack had been a great
shock to Japan and should never be repeated. As head of the
DPJ at the time, Hatoyama had negotiated with then-Prime
Minister Koizumi and his cabinet on the eradication of
terrorism. Hatoyama had given his blessing on the bill with
the condition that it have prior Diet approval, but Koizumi
rejected the idea, forcing the DPJ to oppose the final
legislation. Six years later, with the benefit of time,
Hatoyama said the UN has not clearly stipulated or approved
the Indian Ocean operation and this is the main reason the
DPJ opposes it. In addition, Hatoyama argued that it is
questionable whether the current fight against terrorism is
working and he pointed out that the number of terrorist
activities is increasing sharply. Wars between countries
come to an end, but with terrorists, supported by their
families and friends, the chain of hatred never ends, he said.

Supports ISAF Participation ...
--------------


10. (C) Hatoyama called for Japan to participate in security
maintenance in Afghanistan or ISAF's provincial
reconstruction teams, which have the UN's backing. Hatoyama
admitted that Japan's activities would be restricted by the
Constitution's Article 9, but said that the DPJ would come up
with detailed plans, including Japan's participation in ISAF,
around October 17 or 18. Hatoyama was uncertain whether the
DPJ would compile the ideas into a bill because that requires
internal party discussion.


11. (C) Hatoyama later clarified that the DPJ has not yet
decided whether the Ground Self-Defense Forces (GSDF) should
participate in ISAF. He acknowledged that GSDF participation
would stir up the most controversy but remained an option.
He also said that the DPJ needed to further discuss how Japan
could join multilateral forces rather than only UN military
forces.

... And Defends Ozawa's Hard Line
--------------


12. (C) Hatoyama said Ozawa's call for politicians to leave
the party if they do not support ISAF participation is an
overstatement at a time when DPJ leaders are trying to unite
the party, but he argued that it comes from Ozawa's strong
intention to keep the promises made in the DPJ's election
manifesto. Hatoyama added that it is only natural for
members of a party to have differing opinions, but once a
final decision is made, members should follow it and make
efforts to implement the decision. Hatoyama also commented
that the DPJ would introduce as many bills as possible in
line with the party's manifesto.


13. (C) Hatoyama concluded that the most important task is to
eradicate terrorism, and the key to that is the eradication
of poverty. It is only natural for Japanese public opinion
to be split over the anti-terrorism
legislation but he hopes the DPJ's counter-proposal will
provide the public with food for thought and help them judge
which is better.

Pass the Budget and Dissolve the Lower House
--------------


14. (C) Hatoyama argued that PM Fukuda must not introduce his

TOKYO 00004887 004 OF 004


own manifesto without an election because former PM Abe's
manifesto was voted down in the July election. Hatoyama
thought that Fukuda would dissolve the Lower House in April
after the budget passed because this timing is the most
easily understood by the public. Even if the budget passes
the Diet, other budget-related bills cannot pass without
Upper House approval, which will prevent budget
implementation from going smoothly.


15. (C) During the Q&A session, Hatoyama admitted that the
DPJ would insist on the dissolution of the Lower House in
exchange for budget passage. He thought budget passage would
come first in order to avoid public criticism. Hatoyama said
that the anti-terrorism bill was no longer the trigger for
dissolving the Lower House that it had been while PM Abe was
in power. He also admitted that PM Fukuda might wait to call
a snap election until it gives the ruling coalition the best
possible advantage in maintaining its Lower House majority.

Plans for Reinvigorating Japan
--------------


16. (C) Hatoyama concluded with a discussion of the DPJ's
goal to promote a region-led reinvigoration of Japan. He
argued in favor of the regional block system and a devolution
of power from the central government to the regions.
Problems should be solved locally and Tokyo's intervention
should only occur when necessary, he insisted, adding that
the process of minimizing national intervention should
coincide with the reduction in the number of bureaucrats and
Diet members. Hatoyama promised that the DPJ would continue
to advance policies to completely change Japanese government.

LDP's Mishandling of the Pension Issue
--------------


17. (C) Hatoyama called the Fukuda cabinet's handling of the
pension issue insufficient. The number of participants in
the national pension plan is decreasing, which proves the
pension system is collapsing, he argued. The pension system
must be supported by the consumption tax, he added, but there
was still no need for a consumption tax increase at this time.

40-Year Plan for Consumption Tax
--------------


18. (C) During Q&A Hatoyama repeated that the DPJ has no
plans to increase the consumption tax as a way to raise funds
for their proposals. Instead, the DPJ would propose a
40-year transition period during which the consumption tax
would rise gradually in accordance with fiscal needs. In
addition, the DPJ wants to cut subsidies and eliminate public
corporations. He said that the DPJ is in the middle of
examining the value of each special public corporation to
identify which could be abolished or privatized.
SCHIEFFER