DAILY SUMMARY OF JAPANESE PRESS 12/12/07

UNCLAS SECTION 01 OF 12 TOKYO 005530 SIPDIS SIPDIS DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; SECDEF FOR JCS-J-5/JAPAN, DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. E.O. 12958: N/A TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 12/12/07 Index: (1) Sympathy budget for U.S. forces stationed in Japan to be cut by 250 million yen in utilities costs; Status quo just about maintained out of consideration for the U.S. (Yomiuri) (2) "Sympathy budget" sounds discourteous (Sankei) (3) Nakaima puzzled by stalled Futenma relocation plan, saying, " I thought it would be settled in three, four months"; Government, Okinawa still at odds over V-shaped plan (Asahi) (4) Japan, U.S. agree on alternative location for Naha military port (Okinawa Times) (5) Prime minister determined to extend Diet session until January to readopt refueling bill in Lower House (Asahi) (6) High price for Irresponsible pledge on pension records (Mainichi) (7) Nippon Keidanren adrift in effort to keep right distance from politics; Moves to approach DPJ also seen (part 1) (Asahi) ARTICLES: (1) Sympathy budget for U.S. forces stationed in Japan to be cut by 250 million yen in utilities costs; Status quo just about maintained out of consideration for the U.S. YOMIURI (Page 1) (Full) Eve., December 12, 2007 The Japanese and U.S. governments today are heading toward an agreement on a just about maintaining the status quo in the amount of Japan's host nation support for the U.S. forces stationed in Japan under a special measures agreement related to Japan's share of the cost (sympathy budget). The current agreement expires at the end of next March. However, final coordination is still underway to cut funding of utilities costs by 250 million yen. The outlook is that before the end of the day Foreign Minister Koumura and U.S. Ambassador to Japan Schieffer will meet and seal the agreement. The sympathy budget that is based on the special measures agreement totals 140.9 billion yen. Although the Japanese government has been seeking a large-scale cut, it reached a decision to maintain almost the status quo, which was the U.S. strong desire. The agreement is expected to be extended for three years. In response to the Japanese government's request for a reduction, the U.S. would not take a stance of going along with it, citing such factors as the war costs in Iraq and Afghanistan. With the expiration of the antiterrorism special measures law on Nov. 1, the Maritime Self-Defense Force's refueling mission in the Indian Ocean was halted. At this stage, with the government unable to determine when the new antiterrorism bill will be passed, the judgment was made that the burden borne by the U.S. (for stationing its forces in Japan) should not be increased. Moreover, concern is piling up about the bilateral relationship, given such other issues as the importing of American beef into TOKYO 00005530 002 OF 012 Japan. A senior Defense Ministry official stated: "The current environment does not allow Japan to negotiate at its own pace. We have no choice but to give consideration to the United States." On the other hand, negotiations between the Japanese government and the labor union representing Japanese employees on U.S. bases have bogged down over cuts in their pay and allowances. (2) "Sympathy budget" sounds discourteous SANKEI (Page 13) (Full) December 7, 2007 Dr. Masashi Nishihara, president, Research Institute for Peace and Security (RIPS) Prime Minister Fukuda visited the United States Nov. 15 and stayed there for only 26 hours. The prime minister, who is said to be pro-China, made his diplomatic debut in the United States. It was appropriate. However, Prime Minister Fukuda is the leader of Japan, which is the world's second largest economic power. He should have exchanged views with President Bush in their meeting about trends in international politics, such as the situations in the Middle East, Southwest Asia, and the western part of Eurasia, the future of the Korean Peninsula, and strategy toward China. The summit meeting of the Japanese and U.S. leaders this time was in the lowest gear since the Japan-U.S. partnership declaration of 1992. This is an apparent setback for the alliance between Japan and the United States. Indeed, the timing of Prime Minister Fukuda's visit to the United States was bad, since the new antiterrorism bill was left pending in the Diet. Accordingly, the prime minister's U.S. visit under such circumstances was not seen by President Bush as the coming of a friend. The visit thus symbolizes the current situation that Japan and the United States find themselves facing: having no time for each other in order to work together on the big-picture issues, distrustful of each other on a number of issues, and seeing the bilateral alliance in retreat. The primary issue, needless to say, is the impact of Japan's halting the Maritime Self-Defense Force's (MSDF) refueling activities in the Indian Ocean. This means Japan is giving up its political influence in the international community. Moreover, the withdrawal has made the United States wonder if Japan is truly a reliable ally. Second, the government is about to review its procurement of equipment for the Self-Defense Forces in connection with former Administrative Vice Defense Minister Moriya's arrest on suspicion of receiving bribes. The process will likely delay regular SDF procurement substantially. Furthermore, it looks like the Finance Ministry is already applying great pressure on the Defense Ministry to cut its budget. The United States fears that these developments may weaken bilateral defense cooperation. The third issue is the conflict of interests over the government's initial plan to relocate the U.S. Marine Corps' Futenma Air Station to an alternate facility along the coast of the Henoko district also in Okinawa Prefecture. Once such a conflict of defense interests becomes entangled with collusive-minded politicians, bureaucrats, and businesses, it will complicate the start of the construction of TOKYO 00005530 003 OF 012 the new replacement facility for Futenma airfield. Moreover, it could delay the relocation of 8,000 Marines from Okinawa to Guam. The fourth issue is the Japanese government's move to slash host-nation support (HNS) for U.S. forces stationed in Japan. Here, too, the U.S. is dissatisfied. On the occasion of the prime minister's recent visit to the United States, Secretary of Defense Gates referred to this issue and asked Japan to do its best to resolve it. The United States is spending an enormous amount of money from its defense budget in Iraq and Afghanistan. Meanwhile, Japan, an ally of the United States, wants to cut 10 billion yen in its HNS budget for the USFJ. This appears irresponsible and insensitive in the eyes of the United States. The fifth problem is the impact of the leakage of classified information. An incident took place this January when an MSDF member took home data about an Aegis-equipped ship without permission. The leaked data was under the category of defense secrets. In late November, a warship of China's navy visited Japan as part of defense exchanges between Japan and China. On that occasion, Japan planned to invite the Chinese warship's crew to tour an Aegis ship. However, the U.S. military reportedly filed a protest with the MSDF for fear of intelligence leakage. Japan cancelled the plan. This also exemplifies the United States' distrust of Japan. It is an extremely serious matter of concern to the alliance. The sixth issue is the mutual distrust that is growing between Japan and the United States over the denuclearization of North Korea and abductions of Japanese by North Korean agents. Rumors are flying that the U.S. Department of State will delist North Korea as a state that sponsors terrorism late this year or early next year. President Bush told Prime Minister Fukuda, "We will never (TN: sic) forget the abduction issue." However, many of the Japanese people cannot take him at his word. There is one more matter of concern to many Japanese: that the United States in the end may tolerate North Korea's possession of nuclear weapons, opting for diplomatic normalization instead, and that the United States may even allow the Korean Peninsula's reunification with nuclear weapons. The seventh and last issue is the U.S. House of Representatives' adoption in July of a resolution denouncing Japan over the comfort-women issue. This caused doubts to arise among the Japanese public about the House of Representatives being insensitive to Japan as a U.S. ally. Regrettably, the U.S. government also failed to make efforts to stop the resolution. From the Japanese perspective, there is concern about why is the United States doing this to its ally. The Japan-U.S. alliance has been set back to this extent. I wonder how seriously the government and the Democratic Party of Japan (Minshuto) are taking it. There are things Japan should do in the meantime. The DPJ should cooperate to enact the new antiterror legislation at an early date and behave as a responsible political party. The Defense Ministry should prevent defense secrets from being leaked. The cabinet should push forward the plan of the ABE administration to allow Japan to participate in collective self-defense. Government officials, lawmakers, and the media should avoid using words that are discourteous to the United States, such as "omoiyari yosan" (literally "sympathy budget" to refer to Japan's host nation support TOKYO 00005530 004 OF 012 for USFJ). An alliance between one country and another needs fine-grained consideration and preparedness like growing a bonsai through both countries' efforts. Both countries need to maintain the spirit of protecting their alliance. (3) Nakaima puzzled by stalled Futenma relocation plan, saying, " I thought it would be settled in three, four months"; Government, Okinawa still at odds over V-shaped plan ASAHI (Page 2) (Abridged) December 11, 2007 The planned relocation of the U.S. Marine Corps' Futenma Air Station has been stalled for over the last 11 years since Tokyo and Washington reached a dramatic agreement in April 1996 to return the airfield to Japan. The government, which believes the best plan is the one to build a V-shaped pair of runways, as was agreed upon with the United States in May 2006, remains at odds with Okinawa, which wants the planned runways to be moved further towards the sea. Nevertheless, there have been signs of concessions following the establishment of the Fukuda administration advocating a dialogue and the departure from the Ministry of Defense of Administrative Vice-Defense Minister Takemasa Moriya, who led the government's hard-line policy course. Is there a solution to the relocation issue that can satisfy Okinawa led by Governor Hirokazu Nakaima, Japan, and the United States? Ahead of his first anniversary in office on Dec. 10, Governor Nakaima gave a press interview on Dec. 7, in which he was visibly perplexed about the deadlocked Futenma issue: "The government has been more insistent on implementing what was agreed upon between Tokyo and Washington than I had expected, turning a deaf ear to our opinions. A year has passed, and the government has begun showing a willingness to heed our voices. I thought that the matter would be settled in three, four months, but I was wrong." Nakaima, who was endorsed by the LDP and New Komeito in the gubernatorial race in November 2006, explicitly said that he "cannot support" the government's plan to build a V-shaped runways at Henoko Cape in Nago, pledging to press the government for a review. The V-shaped plan was devised so that the envisioned flight paths would not pass over residential areas when flying blind in poor visibility during bad weather. Nakaima is adamantly demanding that the planned runways be moved as far off the shore as possible, saying that their location is too close to residential areas and will cause much noise. The government, on the other hand, adheres to the current plan because a removal to toward the sea would: (1) require more landfill that would have an adverse effect on marine habitat, and (2) makes it difficult to prevent anti-base activities. The Futenma relocation consultative council to discuss the relocation issue had not met (until November) since January this year. The atmosphere changed in September this year when the Fukuda administration was launched. Prime Minister Fukuda emphasizing the need for a humble approach and talks began searching for a TOKYO 00005530 005 OF 012 settlement line on the Futenma issue in dealing with Okinawa. The first Fukuda-Nakaima meeting took place on October 31 at the Prime Minister's Official Residence (Kantei). Fukuda also made it clear that he would give consideration to views in Okinawa, telling the press corps: "I am fully aware of the hardships Okinawa residents have experienced as well as the huge burden on Okinawa. We would like to hold talks by taking Okinawa's views into account as much as possible." Fukuda was involved in the Futenma relocation issue as chief cabinet secretary under the Koizumi administration. The government adopted SIPDIS the current plan in May 2006 after Fukuda resigned as chief cabinet secretary. A government official noted: "Former Prime Minister SIPDIS Koizumi who decided on the government plan was uncompromising, saying, 'The runways must not move even an inch.' Mr. Fukuda is not fixated on the plan." In addition, hardliners who regard talks with Okinawa as meaningless have vanished from the inner circles of the government. It was Moriya and Koizumi's secretary Isao Iijima that nailed down the government plan without prior consultations with local authorities. Iijima has retired from politics, and Moriya is under arrest for taking bribes. Prime Minister Fukuda has played up the Kantei-led system by upgrading the presidency of the Futenma consultative council from the defense minister and Okinawa minister to the chief cabinet secretary, while listening to views of the defense policy clique in SIPDIS the Diet. The Futenma council met in early November for the first time in 10 months. It is possible to find common ground on removing the planned runways further out to sea? Nakaima proposed a two-stage relocation formula in November. The first stage is designed to move the construction location within the scope permitted under a prefectural ordinance (55 meters at a time) in compliance with local wishes so that MOD does not have to redo the environmental impact assessment procedures that started without the concurrence of Okinawa. The second phase is to move the location further offshore in the assessment process in accordance with the governor's view. "We have played all the cards we have. It's now the central government's turn to play," a senior Okinawa official said. Local business leader Eiji Chinen who supports Nakaima took this view: "The governor does not think the runways can move hundreds of meters. I think an agreement can be reached on a number in excess of the three digits (100 meters). I'm hopeful that the matter will be settled with a political decision by the government." However, it is unclear how far the government can respond since the talks also involve the negotiations with the U.S. The United States remains determined to reject a call for making changes to the plan, with Secretary of Defense Robert Gates saying, "Allowing changes to (the plan) might end up destroying the entire (U.S. force transformation plan)." A senior government official also said, "A slight change such as moving the runways by dozens of meters would be permissible," adding, "But this can be done only once. Otherwise, the United States would not respond." TOKYO 00005530 006 OF 012 A sense of distrust between the government and Okinawa is also a major barrier. "Okinawa's interest does not lie in the runways but in how much money it can get," a senior MOD official noted. Meanwhile, an Okinawa official said: "Although the Kantei and the Cabinet Office appear to be trying to settle the matter in one way or another, MOD seems only trying to push ahead with the current plan." There are limits to the government's plan to implement the current plan. In order to build the alternative base after the two and a half years of the environmental assessment, landfill will be necessary, which requires the governor's authorization. Nakaima told his aides: "The government has done what it pleases without listening to local views. Even if it says, 'We want to build (the runways) as the next step,' I will naturally say 'no.' Cabinet ministers change constantly. I will be the only one in office three, four years from now." (4) Japan, U.S. agree on alternative location for Naha military port OKINAWA TIMES (Page 2) (Abridged) December 12, 2007 TOKYO-The Japanese and U.S. governments held a meeting of their joint committee yesterday to discuss the planned relocation of the U.S. military's Naha Port Facility (military port) to a site off the Makiminato Service Area (Camp Kinser). In the meeting, the two governments agreed on specifics, such as the location, shape, and size of prepositioning and other alternative facilities to be additionally built. The Japanese government will enter into full-fledged coordination with the U.S. government on a blueprint to lay out the location of facilities, including a prepositioning site. (5) Prime minister determined to extend Diet session until January to readopt refueling bill in Lower House ASAHI (Page 2) (Abridged slightly) December 12, 2007 The government and ruling parties have decided to extend the current Diet session until January despite the danger of its resulting in Lower House dissolution for a snap general election. The decision reflects Prime Minister Fukuda's strong resolve. Unless the government enacts the new refueling bill, it would lose the credibility at home and abroad, forcing the Fukuda administration to face a rocky road ahead. Aware of the prime minister's acute sense of crisis, the Liberal Democratic Party (LDP) leadership made strenuous efforts to set the stage for re-extending the Diet session to allow the Lower House to readopt the bill, successfully persuading the New Komeito, which was reluctant to extend the session out of fear of Lower House dissolution. Prime Minister Fukuda held a meeting last night with New Komeito Chief Representative Akihiro Ota. Ahead of the meeting, Fukuda said TOKYO 00005530 007 OF 012 to reporters in a strong tone: "Are you saying that the legislation can clear the Diet in the next session but not this session. Then why did we bother to extend the current session?" Fukuda was responding to a question, "You are intent on enacting the bill during the current Diet session. Do you think you can win public support?" Just a week earlier, on the night of Dec. 4, Fukuda dined at the Fukudaya Japanese restaurant with U.S. Ambassador to Japan Thomas Schieffer, his predecessor Howard Baker, and former Finance Minister Masajuro Shiokawa. Touching on the Maritime Self-Defense Force's refueling operation in the Indian Ocean, Schieffer said to Fukuda: "I would definitely like Japanese people to understand that this is international cooperation." In response, Fukuda said: "We will do it at any cost." Shiokawa reportedly thought that the prime minister has already made up his mind. The continuation of the refueling operation has not always been Fukuda's top priority since taking office in September, however. Given the fact that former Prime Minister SHINZO ABE resigned after indicating that he would stake his job on the extension of the Antiterrorism Special Measures Law, evidence suggest that Fukuda did not think the matter should be the focus of the political situation. Throughout the LDP presidential race, he "sealed off" criticism of the major opposition Democratic Party of Japan (DPJ or Minshuto), which adamantly opposed extending the refueling operation. In his inaugural press conference, Fukuda also highlighted the need to continue the refueling operation, while expressing his desire for talks with the opposition bloc. A turning point came from his meetings with Ozawa on Oct. 30 and Nov. 2. The DPJ's flat rejection of his proposal for a grand coalition to bring stability to the administration forced the prime minister to clash with the largest opposition party over leadership. "Not even a single bill has passed the Diet over the last month since my cabinet was launched." Fukuda often so complained to his aides before and after his meetings with Ozawa. "He was visibly frustrated and under a lot of pressure as the country's top leader," an aide explained. The approach of his first foreign trips as prime minister to the United States and Singapore to attend an international conference in mid-November seems to have affected his frame of mind as well. A senior government official explained the prime minister's mentality this way: "If the government fails to make decisions under the divided Diet, the prime minister would be underestimated by other countries. Foreign leaders would be discouraged to have frank talks with the prime minister." Fukuda told President George W. Bush that he would make utmost efforts for an early enactment of the refueling bill -- a more modest expression than such words as "international commitment" and "staking the job" that were used by Abe. That was the moment Fukuda cut off his retreat both domestically and internationally. TOKYO 00005530 008 OF 012 The presence of the New Komeito that feared early Lower House dissolution was the biggest challenge for Fukuda, who has decided to extend the Diet session until January in order to use a two-third Lower House override vote. LDP Diet Affairs Committee Chairman Tadamori Oshima held talks with his New Komeito counterpart Yoshio Urushibara in the Diet building on Dec. 7. Oshima proposed a lengthy Diet extension with the aim of applying the 60-day rule to determine the opposition camp's possible filibustering strategy as a rejection of the bill. After the meeting with Oshima, Urushibara voiced his reluctance to substantially extend the session by pointing out the danger of the Ministry of Defense (MOD) scandal escalating. The New Komeito's fear of the future course of the MOD scandal was fueled by former Vice-Defense Minister Takemasa Moriya's Nov. 15 testimony that some lawmakers had been present at a dinner party (in December 2006). If deliberations on the refueling bill reach a dead end in an extended session, that could trigger Lower House dissolution, as was warned by Ozawa. Early Lower House dissolution is the last thing the New Komeito wants, whose largest support base, Soka Gakkai, is exhausted from the nationwide local elections and the Upper House election this year. Since the ruling camp-backed candidate was defeated in the Nov. 18 mayoral race of Osaka, the New Komeito's bastion, the party has been urged by Soka Gakkai to delay Lower House dissolution long as possible. Around that time, New Komeito executives began objecting to re-extending the Diet session and readopting the bill. On Nov. 27, Land and Transport Minister Fuyushiba said to a close LDP executive: "We are absolutely opposed to using a two-third overriding vote." A sense of alarm was evident in the New Komeito executive meeting on Nov. 29, the day after Moriya was arrested, with one saying, "Lower House dissolution might follow a re-extension of the Diet session." Party Representative Ota also held his own fundraising party in Tokyo that day in which he said: "I have repeatedly insisted that the next general election should wait until next fall or later." An LDP executive has taken all those developments as the New Komeito's willingness to re-extend the session as long as the Lower House is not dissolved. In December, Oshima began officially telling the New Komeito that chances are slim for early Lower House dissolution. The New Komeito tried to fathom the LDP's real intention. On Dec. 10, the day before his meeting with Fukuda, Ota called on LDP Election Committee Chairman Makoto Koga and General Council Chairman Toshihiro Nikai in succession and confirmed that there would be no early dissolution. Ota then made up his mind to accept a re-extension. Then on Dec. 11, the Fukuda-Ota meeting took place. A person close to Fukuda noted: "We did not discuss the Fukuda-Ozawa meeting with the New Komeito in advance. It has become a trauma for the New Komeito. It is important to forge relations of trust between the top leaders (of the LDP and New Komeito). After the Fukuda-Ota meeting that lasted half an hour longer than schedule, another person close to Fukuda also said: "Although it lasted a bit longer, the meeting went well." TOKYO 00005530 009 OF 012 After the meeting, the press asked Ota if relations of trust with the prime minister have been strengthened. In response, Ota said: "The answer is 'yes.' We were able to discuss a variety of topics frankly. That was good." The prime minister is set to railroad (the refueling bill) through the Diet in the current session in cooperation with the New Komeito. An additional clash with the DPJ is expected over the budget bill and related bills in next year's ordinary Diet session. How long the prime minister can aggressively run his administration remains to be seen. (6) High price for Irresponsible pledge on pension records MAINICHI (Page 3) (Excerpts) December 12, 2007 The Social Insurance Agency (SIA) yesterday announced the results of its investigation (estimated figures) that clarified an impossibility to keep the government's promise to identify by the end of March all holders of 50.95 million accounts that remain unidentified. The SIA says that it is difficult to identify holders of about 40 PERCENT of them and that 9.45 million accounts or about 20 PERCENT are particularly difficult cases. The government is eagerly trying to ward off criticism over the investigation results, but former Prime Minister SHINZO ABE said in his House of Councillors election campaign: "The government will complete the identification process, down to the last person and last yen." Health, Labor and Welfare Minister Yoichi Masuzoe has also explained: "This determination will not change even if the cabinet is changed." Hard to trace unidentified records caused by errors in data input The SIA has been verifying 50.95 million unidentified pension accounts on a computer-based system using registered names, gender, and date of birth on about 130 million records. The agency has judged it necessary to make more efforts to trace 19.75 million records and has classified these records into four groups: (1) People believed to have died; (2) people whose names were improperly recorded due to errors in converting names from kanji into kana letters on the agency's kanji-kana conversion software; (3) people whose family names have changed due to marriage or other reasons; and (4) people whose name were mistakenly input into the SIA's online system during the computerized process, and those who registered false names. The SIA is developing software to dissolve unidentified cases caused by misreading or inputting erroneous gender or birth of date. So it is expected to trace a number of records classified in the first three groups. But identification of those classified in the group 4 is considered particularly difficult. The SIA began to enter handwriting pension records into the online form in 1974, and the work completed in 15 years. In this process, there were cases in which names were mistakenly input into the online system. There may also be those who registered false names for tax purposes. Pension mess may be Achilles heel of government TOKYO 00005530 010 OF 012 The pension record-keeping fiasco cropped up as one of the main campaign issues for the July House of Councillors election. Former Prime Minister ABE repeatedly emphasized in his election campaign: "The government will pay every last yen to the very last person," making it his administration's pledge, in effect. Health, Labor and Welfare Masuzoe echoed Abe, and Prime Minister Yasuo Fukuda also took over the public commitment from Abe. Chief Cabinet Secretary Nobutaka Machimura said: "We used a simplified expression (that everything within the current fiscal year) because it was during the Upper House election campaign" against the backdrop of the Democratic Party of Japan (DPJ) ratcheting up pressure on the ruling camp over the pension problem. Prime Minister Fukuda told reporters yesterday: "We must tackle the issue with determination to identify all of the unidentified policyholders," adding: "You will understand, won't you?" The SIA unofficially continued to explain: "Most of the 50 million holders of unidentified records are people who have already received their benefits or those who died." This explanation was found to be a groundless lie. It was also found that only 15.5 million cases (30.4 PERCENT ) have already been settled. A senior Liberal Democratic Party member angrily said: "The SIA deceived us." The government also promised to complete the process of tracing 50 million cases by March of next year. But the investigation results were already announced yesterday. Regarding this, a senior ruling party member said, apparently with an eye on a possible dissolution of the House of Representatives next year: "If the people were informed next March that (it would be impossible to identify all of the unconfirmed policy holders),they would be more shocked." This remark implies a desire to ease the current adverse wind against the ruling camp. LDP Secretary General Bunmei Ibuki explained: "(The government's pledge) meant that all of the 50 million records will be checked (by the end of March)." It is now certain, though, that a large number of unidentified pension records will be left unconfirmed as of the end of March, so this issue may be the Achilles heel of the government. (7) Nippon Keidanren adrift in effort to keep right distance from politics; Moves to approach DPJ also seen (part 1) ASAHI (Page 12) (Slightly abridged) December 12, 2007 An informal top-level meeting between the Liberal Democratic Party (LDP) and the Japan Business Federation (Nippon Keidanren) was held at a Tokyo hotel early in the morning in early October soon after the inauguration of the Fukuda Cabinet. A senior official of Japan Business Federation during the meeting explained the mechanism of the organization's policy assessment system, which it introduced in ¶2004. When he said, "We might raise the ratings of policies of the Democratic Party of Japan (DPJ or Minshuto),if they are good." General Council Chairman Toshihiro Nikai lashed out at him, noting, "Why do you say such a thing, when we are being hit the hardest since the founding of the party." In response to the statement, which could be taken as the organization having changed a party to support, Secretary General TOKYO 00005530 011 OF 012 Bunmei Ibuki drove the point home to that Nippon Keidanren official, "The DPJ's policies are like a promissory note that are not endorsed with a fund program. I hope Nippon Keidanren will assess policies, by comparing our policies with DPJ policies in an appropriate manner bearing such an aspect in mind." The meeting, permeated with an awkward atmosphere, ended with Nippon Keidanren Chairman Fujio Mitarai pledging that the organization would support the policy-oriented stance of the LDP and cooperate with it. Nippon Keidanren's policy assessment serves as a yardstick when companies make political donations. It is Keidanren's report card rating political parties. It rates each political party's policy themes on an A-to-E scale. As a result, political parties that won high grades receive a large amount of donations. The results of assessment are released between late September and early October every year. However, the ratings for this year were released as late as Nov. 12. The one-month delay in the release of its assessment is ascribable to the impact of the Upper House election in late June. DPJ's election pledges included many policy proposals that were not acceptable to Nippon Keidanren, such as the introduction of an environment tax, for instance. However, the DPJ leaped ahead beyond imagination in the election, allowing the opposition camp to hold a majority in the Upper House. As a result, it has become impossible for Nippon Keidanren to see policies they want realized, if the DPJ opposes them. The Nippon Keidanren Political Measures Committee in late August held a meeting to decide on a general framework for policy assessment. Many senior officials asked questions, such as whether the LDP's reform line would not step back or how the LDP is going to deal with the DPJ. With no conclusion reached at a meeting of the chairman and the vice chairman in September, either, the panel decided to reach a judgment, after determining the DPJ's approach in the extraordinary Diet session. Many Nippon Keidanren members reportedly took the position to give the DPJ slightly higher scores than the previous year. The statement made by that senior Nippon Keidanren officer appeared to have reflected such an atmosphere. According to the policy assessment Nippon Keidanren released in November, the DPJ did not get an A as usual. Six items were given lower grades. A record number of four items were rated D, which is in essence the lowest grade, in contrast with the LDP, whose policies received nine A's like the previous year. Commenting on this result, Chairman Mitarai stressed that the result is based on an objective judgment. He said, "We avoided to the limit rating the parties on purpose, based on a political judgment." However, the DPJ's response was harsh. Policy Research Committee Chairman Masayuki Naoshima complained, "We map out policies seriously. To be honest, I want to ask why are the ratings of our policies so low." Another DPJ lawmaker categorically said, "We have no intention whatsoever of selling policies for money." The DPJ is agitating Nippon Keidanren by various means. TOKYO 00005530 012 OF 012 In relation to the falsified subcontract scandal involving an illegal work arrangement, the DPJ was geared up to demand in cooperation with other opposition parties the summoning of Chairman Mitarai to the Diet as a witness. One DPJ lawmaker even warned a senior Nippon Keidanren officer, "If you give the DPJ a grade of E, I will not see you any more." Nippon Keidanren has repeatedly called on DPJ President Ichiro Ozawa to hold a top-level meeting. Ozawa is quoted as having intention to respond to the call. However, no schedule has yet been set, with Ozawa insisting that it would not be possible to do so until the Diet situation quiets down. Mitarai has inherited Nippon Keidanren's close relationship with the government, which his predecessor established with the Koizumi administration. When former Prime Minister ABE made three foreign trips, more than 100 business leaders, including Mitarai, accompanied ABE on each trip. They were in step with the government regarding policies other than economic policies, such a constitutional revision. The DPJ is seeking the continuation of honeymoon-like relationship with the government even after the resignation of Abe. The DPJ has now tremendous political power as the no. one party in the Upper house. Nippon Keidanren is forced to walk a tightrope, sandwiched between the motives of the two major political parties. SCHIEFFER