JAPANESE MORNING PRESS HIGHLIGHTS 01//07

UNCLAS SECTION 01 OF 11 TOKYO 000774

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: JAPANESE MORNING PRESS HIGHLIGHTS 01//07


Index:

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule

Vice President Cheney's visit:
4) During Cheney visit, gap revealed in global strategies of US
5) Japan sounded out during Cheney visit about additional bilateral
cooperation, with pressure for more reconstruction aid to Iraq,
Afghanistan

Kyuma report:
6) After Vice President Cheney leaves Japan, Defense Minister Kyuma
says he has "self-reflected" on his criticism of US government
7) Kyuma admits he was "inconsiderate" when he called US launching
of Iraq war a "mistake"

Foreign aid:
8) Foreign Minister Aso hints at augmenting humanitarian aid,
including medical care, to Iraq
9) Japan to boost ODA to Africa to $1 billion by 2010

10) Abe stresses that his stance on abduction issue will not waver


Defense issues:
11) USAF top brass says temporary F-22 deployments to Kadena AIR
Base not a FORCE increase
12) Training area for US Navy carrier-based jets shifted to Iwakuni
narrowed down to Mageshima, an island in Kagoshima Prefecture
13) Government puts off plan to dispatch SDF to join
military-civilian assistance team in Afghanistan
14) Vice defense minister denies enormity of case of leaked secret
information to a national daily now under investigation

Political arena:
15) Prime Minister Abe orders another fallen postal rebel to be
reinstated into LDP and backed in the Upper House race
16) LDP finding it difficult to line up viable candidates to run in
the Upper House election
17) Minshuto's (Democratic Party of Japan) Naoto Kan accuses LDP
Secretary General Hidenao Nakagawa of registering home, office as a

SIPDIS
"foundation"

Articles:

1) TOP HEADLINES

Asahi:
Sanyo Electric suspected of window dressing its financial statement
for March 2004, underestimating 190 billion yen in losses:
Securities and Exchange Surveillance Commission now investigating

Mainichi:
Fujiya to dispose of all stocks, will recover products from
wholesalers and retailers

Yomiuri:
Most kidneys transplanted from sick people found to be improper:
Japan Society for Transplantation to ban practice in principle


TOKYO 00000774 002 OF 011

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 01//07

Nihon Keizai:
Compensation for buyers of defective homes: Sellers to be obliged to
have insurance policy; Purchasers to be protected in event of
developers going bankrupt, starting in fiscal 2009

Sankei:
"Baby box" at Kumamoto hospital to be approved: "It is not illegal,"
according to MLHW

Tokyo Shimbun:
Children's self-support facility shows two boys being taken by
police: Director stresses educational effects

Akahata:
350,000 households deprived of health insurance cards; 4.8 million
households fail to pay

2) EDITORIALS

Asahi:
(1) DPJ should tackle unified local elections in earnest
(2) Former crime syndicate head arrested: Protect companies from
underworld forces

Mainichi:
(1) Vice President Cheney visits Japan: We are concerned he did not
meet defense minister
(2) Misuzu Audit Corporation: Companies will go out of business if
they lose trust

Yomiuri:
(1) Defense secrets and press reports: We want to continue to value
the right to know
(2) Japan-US talks: Constant efforts vital in strengthening
alliance

Nihon Keizai:
(1) Meaning of stockholders meeting that rejected friendly takeover
(2) Make more efforts to help child-rearing

Sankei:
(1) We should not drop our guard, though statistics show increase in
population
(2) Distrust in auditing: Time for companies to change their
perception

Tokyo Shimbun:
(1) Assistance to Iraq: Is this vocal diplomacy?
(2) Mail delivery: Show us privatization procedures

Akahata:
(1) Bank of Japan hikes key interest rate: Change in basic economic
policy urged

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, February 22

NIHON KEIZAI (Page 2) (Full)
February 23, 2007

07:59

TOKYO 00000774 003 OF 011

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 01//07

Had breakfast with Nihon Keidanren Chairman Mitarai, Tokyo
University Professor Motoshige Ito, and others at a restaurant in
the Akasaka Prince Hotel.

09:45
Met Secretary General Nakagawa at party headquarters. Later,
attended a meeting of the campaign headquarters. Attended a ceremony
to put up the headquarters' signboard.

10:52
Attended a meeting of the Education Rebuilding Council at the
Kantei.

12:00
Met Deputy Chief Cabinet Secretary Shimomura.

14:00
Met Special Advisor Nemoto. Followed by Public Relations
Headquarters head Futada, and Public Relations Bureau Director
General Katayama. Later, met US Ambassador Schieffer.

15:02
Met Cabinet Intelligence Director Mitani. Met participants in the
national small retailers summit, with Lower House member Shiotani.

15:56
Met National Police Agency Director General Uruma.

17:43
Met Romanian Prime Minister Popescu Tariceanu, with Ambassador to
Rumania Tsushima.

18:42
Met Innovation Minister Takaichi, Cabinet Office Special Advisor
Kurokawa and others. Takaichi stayed behind.

19:13
Met Nippon Television Network Co. Board Meeting Chairman Ujiie and
other at the Hotel Seiyo Ginza.

21:23
Returned to his official residence.

4) Gap between Japanese and US global strategies exposed by Cheney
visit

ASAHI (Page 4) (Full)
February 23, 2007

Yoichi Kato, American Affairs Bureau director

After winding up his itinerary in Japan, United States Vice
President Dick Cheney left for Australia. The purpose of his visits
to these two countries is to convey Washington's appreciation to two
allies -- which share with the US the common values of freedom and
democracy -- for their cooperation in the prolonged US-led fight
against terrorism. The tour was also intended to demonstrate the
close cooperation that exists among the three countries. These
purposes have been achieved to some extent. But given its deepening
relations with the US, Japan is now faced with such questions as to
what extent it should of a world order.


TOKYO 00000774 004 OF 011

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 01//07

Cheney expressed his gratitude about Japan's contributions in Iraq
and Afghanistan when he met with Prime Minister Abe at his official
residence on the evening of Feb. 21. Prior to the meeting with Abe,
Cheney expressed "thanks to the Japanese people" in a speech he
delivered on the carrier Kitty Hawk at Yokosuka Navy Base. An
informed source on the Japan side opined, "I think Cheney had
already been informed of Britain's decision to pull its troops out
of Iraq."

Uncertainty briefly loomed over Japan-US relations due to remarks
critical of the Bush administration's Iraq policy by Defense
Minister Kyuma and Foreign Minister Aso. A source in the Japanese
government called the incident of criticism of the Bush
administration's Iraq policy "a short spat." Later, the Japanese
Embassy in Washington distributed to US officials copies of a note
specifying the prime minister's Diet reply, "I am determined to make
efforts to boost the relationship of trust between Japan and the
US." With such problems overcome, Cheney's trip was aimed at playing
up that Japan and the US are in accord on further boosting their
alliance.

As another feature in his tour, the importance of strengthening the
Japan-US alliance in the context of global order, going beyond "the
defense of Japan," was underscored.

Cheney said in his speech, "Japan and the US, great democratic
countries, are willing to perform their duties for the sake of the
world, even exposing themselves to danger." In response, the prime
minister told Cheney in their meeting, "The Japan-US alliance, in a
real sense, has grown into an alliance for Asia and the world."

The inclusion of overseas activities among the Self-Defense Force's
(SDF) main duties has also contributed to enhancing US expectations
of Japan.

With the deepening of the bilateral relationship of trust, Japan has
to consider how Japan should form a regional order and a world order
under the alliance with the US and whether Japan and the US are
falling in step with each other.

In the Middle East, the US is apparently trying to establish order
while giving priority to ensuring the security of Israel. But a
stable supply of oil from Arab oil producing states is vital for
Japan's interests. As it stands, there is a wide gap between the two
countries' global strategies.

Turning to global strategic goals, the US gives priority in this
order: (1) the war on terrorism; (2) nonproliferation of weapons of
mass destruction; and (3) response to a rising China. Meanwhile,
some observers list "rising China" as the highest priority task for
Japan.

Despite such differences, Japan has dispatched SDF troops to assist
the US-led fight against terrorism mainly in Iraq in an effort to
secure US support for Japan's stance toward North Korean and other
issues.

The Iraq war has bogged down. Some have begun to talk about a
possible war against Iran. Under such a situation, to what extent
will Japan offer support for the US as a tool to "manage the
alliance?" With the expansion of Japan's role and capability, the
limitation of this approach has begun to stand out.

TOKYO 00000774 005 OF 011

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 01//07


5) Cheney visit tests Japan's cooperation

MAINICHI (Page 2) (Abridged)
February 23, 2007

The recent visit to Japan of US Vice President Cheney reflected the
aim of the Bush administration that wants Japan to remain committed
to its assistance with Iraq's reconstruction. Ironically, however,
his visit to Japan happened to coincide with British Prime Minister
Blair's announcement of a plan to withdraw British troops from Iraq.
In his meeting with Cheney, Prime Minister Shinzo Abe vowed to
continue Japan's reconstruction assistance to Iraq. However, Japan's
role in Iraq is under a time-limited law for special measures. This
special measures law is due to expire in July. Japan will be tested
hard on how far to cooperate with the United States in Iraq.

Cheney met with Abe on Feb. 21 and thanked Abe for Japan's
contributions to the United States' efforts in Iraq and Afghanistan.
That day, Cheney visited the US naval base in Yokosuka, where he
delivered a speech. "After the terrorist attacks (of 2001),Japan
clarified that it would play an active role in the war on terror,"
Cheney emphasized there.

The Japanese government will introduce a bill to the Diet during its
current session to extend the Iraq Special Measures Law. The law is
likely to be extended for one year. However, there are now calls
again from within the government for a longer extension. Another
likely focus is the issue of participating in a US-led joint
military-civilian provincial reconstruction team (PRT). The United
States seems to be expecting Japan to cooperate in education, public
health, and other areas.

Japan, which has always worked with the United States on Iraq and
Afghanistan, is America's last ally, along with Australia. Cheney
chose Japan and Australia for his visits this time. This also shows
his expectations for the two countries.

"It's not a pullout but a reduction. I think the British government
made that decision on its own." With this, Abe stressed to reporters
yesterday that the announced plan to withdraw British troops is not
a pullout. Abe also said the government would like to make an
appropriate decision on its own over the issue of extending the
special measures law. In the meantime, some other US officials will
visit Japan. Deputy National Security Adviser Crouch is scheduled to
arrive in Japan on Feb. 26, and Deputy Secretary of State Negroponte
is slated to arrive in Japan on March 1. The United States is likely
to apply stronger pressure for Japan's role in Iraq.

(Masaya Oikawa, Washington; and Hitoshi Omae)

6) Kyuma has self-reflected on his remarks critical of US
government

YOMIURI (Page 4) (Full)
February 23, 2007

Defense Minister Fumio Kyuma made the following comment before the
Lower House Security Committee yesterday in connection with his
earlier remarks critical of the US government:

"Cabinet ministers must make remarks after calculating how they will

TOKYO 00000774 006 OF 011

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 01//07

reach other countries. There was a lack of consideration when I made
the remarks on the day (President Bush's) State of the Union Address
was released. I have self-reflected on it."

Touching on the fact that he did not meet US Vice President Dick
Cheney during his stay in Japan, the defense chief said: "There is a
difference in rank between the president and the vice president (and
I),so it didn't really bother me."

7) Kyuma: I "lacked consideration" in statement calling US launching
of Iraq war a "mistake"

ASAHI (Page 4) (Full)
February 23, 2007

Defense Minister Fumio Kyuma in the Lower House Security Affairs
Committee yesterday expressed words of self-reflection about his
statement that the US decision to launch a war in Iraq was a
mistake: "For me to have made such a statement on the day that
(President Bush) gave his State of the Union Address showed a lack
of consideration."

Kyuma then explained that at the time of the start of the Iraq war,
he held the following views: 1) He thought that Iraq had no nuclear
weapons; and 2) the war had started without any prescription for
afterward. He said he had self-reflected on his statement: "I told
myself that even if it is a personal view, I should be more careful,
and since I am in the cabinet, I should make statements that are in
proper accordance with the government's policy line."

8) Aso suggests humanitarian assistance to Iraq, including medical
care

TOKYO SHIMBUN (Page 2) (Full)
February 23, 2007

Before the Lower House Budget Committee yesterday, Foreign Minister
Taro Aso suggested the possibility of extending humanitarian
assistance -- other than sending troops -- to Iraq in the future,
saying, "I think there are some things Japan can do regarding
medical care, schools, and food."

The Okinawa Institute of Science and Technology discretionally
placed orders for equipment-related work worth 110 million yen in
total in January and February 2006. Touching on this fact, Okinawa
and Northern Territories Minister Sanae Takaichi indicated that the
government would give guidance to the institute, saying,
"Inappropriate (points) have come to light regarding the
administrative procedures."

9) Japan to provide ODA to Africa through international financial
agency: $1 billion through 2010; reduction in collection risk aimed
at

YOMIURI (Page 2) (Full)
February 23, 2007

The government yesterday decided to extend approximately 11.5
billion yen in loans to the African Development Bank (AFDB) as part
of its policy of increasing official development assistance (ODA) to
African nations. Under the plan, the AFDB will select small and
medium-sized businesses in African countries and extend

TOKYO 00000774 007 OF 011

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 01//07

low-interest-rate loans to them. The government has decided to
provide up to $1 billion (approximately 120 billion yen) in yen
loans through 2010 through the AFDB, including the disbursement
decided yesterday.

The government has previously extended loans to African nations in a
bilateral framework. However, since the Japan Bank for International
Cooperation (JBIC),which is in charge of the disbursement of funds
on the Japanese side, lacked information on the fiscal conditions of
recipient countries and the know-how to determine collection risks,
extended loans have sometimes became irrecoverable.

For this reason, the government has decided to aim at extending
loans in a prompt and efficient manner and reducing collection risks
through cooperation with the AFDB, which is versed in the economic
situations of African nations and whose fiscal condition is in good
shape.

China has come up with a major economic assistance plan targeting
such countries as Sudan as part of its resources diplomacy. Some,
therefore, take the view that Japan's face is not visible in the aid
it has decided to extend to Africa this time.

As assistance to Africa, Japan during a summit in 2005 pledged to
double yen loans, grant aid and debt forgiveness to about $1.68
billion (approximately 200 billion yen) through 2007. The decision
this time is also meant to speed up efforts to address the
international commitment.

10) Aiming to prevent further estrangement of public, Prime Minister
Abe stresses unwavering stance on resolving abduction issue

ASAHI (Page 4) (Excerpt)
February 23, 2007

Prime Minister Abe is making efforts to sweep away concerns that the
issue of Japanese abducted by North Korea is being abandoned. He
invited the families of abduction victims to his official residence,
the Kantei, and in his meeting with Vice President Cheney, he
stressed the importance of the abduction issue. On Feb. 25, he will
meet in Niigata City with five of the victims who were repatriated.
He will explain to them the situation at the six-party talks on
North Korea. He will stress his unwavering stance on resolving the
abduction issue, which can be called the "thread of life" that
sustains his administration. His aim is to stop further
estrangement of public opinion from his government.

11) F-22 deployment to Kadena not a reinforcement: US AIR FORCE
chief

MAINICHI (Page 2) (Full)
February 23, 2007

WASHINGTON-US AIR FORCE Chief of Staff Moseley, meeting the press on
Feb. 21, stated that the current temporary deployment of F-22 Raptor
stealth fighters to the US Kadena AIR Base in Okinawa Prefecture is
"not a sign of reinforcement (in US forces)." With this, Moseley
indicated that the F-22 deployment does not run counter to Okinawa's
call for mitigation.

12) Mageshima eyed for US military jet training


TOKYO 00000774 008 OF 011

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 01//07

ASAHI (Page 3) (Abridged)
Eve., February 22, 2007

Mageshima-an island belonging to Kagoshima Prefecture's Nishinoomote
City-is now on the list of candidate sites for US carrier-borne jet
fighters' touch-and-go training, government officials has revealed.
This training, or field carrier landing practice (FCLP),is
currently conducted at Iwojima, one of the Ogasawara Islands (Bonin
Islands),as a temporary site. However, Japan and the United States
decided at their intergovernmental talks in May last year over the
realignment of US forces to redeploy a carrier-based wing of fighter
jets from Atsugi Naval AIR Station in Kanagawa Prefecture to Iwakuni
Marine AIR Station in Yamaguchi Prefecture. On that occasion, the
Japanese and US governments agreed to select a permanent facility by
2009 for FCLP. The Defense Ministry has been looking for a new
candidate site.

According to government officials, the Defense Ministry considered
islands in the Inland Sea near Iwakuni, the Goto Islands, and
islands near Kyushu. The government is now looking into the
possibility of siting a new FCLP facility on Mageshima Island, which
is about 400 kilometers away from Iwakuni and is little inhabited,
the officials said. The government has yet to sound out the United
States, local governments, or landowners.

Mageshima is situated about 12 kilometers west of Tanegashima
Island, which is known as a rocket-launching site. The island-the
greater part of which is in the possession of a quarry owner-has a
landing strip for light airplanes to fly quarry workers for first
aid or other purposes.

FCLP is indispensable training for Atsugi-based carrier-borne
fighters. It has been a pending issue for years to secure a
permanent facility other than the Atsugi base due to the tremendous
noise of fighter jets in that training.

13) Government puts off plan to dispatch SDF personnel to
Afghanistan PRT

NIHON KEIZAI (Page 2) (Full)
February 23, 2007

The government decided yesterday to put off its plan to send
Self-Defense FORCE troops to a military-civilian provincial
reconstruction team (PRT) in Afghanistan to cooperate with the North
Atlantic Treaty Organization's (NATO) reconstruction activities in
the country. As a result, Japan's assistance will be confined to
humanitarian aid in such areas as education and health and medical
care through fund contributions to nongovernmental organizations
(NGOs). The government intends to convey its plan to NATO at the
administrative-level talks with the organization to be held in Tokyo
in early March and finalize specifics.

The plan to cooperate with NATO in Afghanistan came from Prime
Minister Shinzo Abe in January. In his talks with US Vice President
Dick Cheney on Feb. 21, Abe also indicated that the government was
considering extending cooperation to the PRT.

14) Vice defense minister denies statement of "second Nishiyama
case" regarding leaks of national defense secrets

YOMIURI (Page 2) (Full)

TOKYO 00000774 009 OF 011

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 01//07

February 23, 2007

Concerning the alleged leaks of the Defense Ministry's security
secrets, Vice Defense Minister Takemasa Moriya during a news

SIPDIS
conference yesterday said, "Some weekly magazines reported that I
have ordered a thorough investigation into the matter calling it
another Nishiyama case, but there is no such fact at all. The
Defense Ministry cannot take responsibility for articles written in
such a way." He thus denied the reports by the weekly magazines.

15) Prime Minister Abe instructs LDP Secretary General Nakagawa to
reinstate postal rebel Eto and endorse him as official candidate to
run in Upper House election

SANKEI (Page 5) (Excerpts)
February 23, 2007

The ruling Liberal Democratic Party (LDP) yesterday set up election
headquarters (headed by Prime Minister Shinzo Abe) for the House of
Councillors election in July. Ahead of this Abe directed LDP
Secretary General Hidenao Nakagawa to reinstate Seiichi Eto in the

SIPDIS
LDP, Eto was expelled from the LDP for opposing then Prime Minister
Junichiro Koizumi's bill to privatize Japan Post and then was
defeated in the House of Representative election in 2005. Abe also
instructed Nakagawa to endorse Eto as an official proportional
representation candidate to run in the July Upper House race. The
LDP will formally decide on this matter before the end of February.
Nakagawa was reluctant to let him rejoin the party since the cabinet
support rates have plunged, propelled by public disgruntlement with
the party's reinstatement of postal rebels. Abe, however, was
determined not to put off the decision

Eto will be the first among the postal rebels who lost their Lower
House seats to be reinstated in the LDP. Many LDP members, however,
are concerned about Abe's political stance and believe that Abe is
gradually discarding former Prime Minister Junichiro Koizumi's
reform drive. Abe's decision this time around will likely add
another factor of uncertainty to his management of his government.

Eto is a close friend of Abe since they were first elected to the
Diet at the same time. He is regarded as an advisor to the prime
minister regarding such issues as history and the social security
system. He parted company with Abe on the issue of the propriety of
postal privatization.

According to several sources, Eto has been looking for the
possibility of running for the Upper House race since the Abe
administration was inaugurated. He called on the LDP to let him
return, but Secretary General Nakagawa had turned down his request.
Nakagawa consulted the matter with Acting Secretary General Nobuteru
Ishihara and Election Strategy Headquarters Chief Yoshio Yatsu last
year and they decided not to reinstate him in the party.

16) LDP finds it difficult to field candidates for electoral
districts and proportional representation segment in Upper House
election

YOMIURI (Page 5) (Full)
February 23, 2007

The ruling Liberal Democratic Party (LDP) is having trouble fielding
candidates for the House of Councillors election in July.

TOKYO 00000774 010 OF 011

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 01//07


The LDP has picked so far 29 proportional representation candidates,
though it aims to field 35. One of the reasons the LDP is having a
hard time is that major support organizations for the party have yet
to decide on their own candidates. The support bodies include the
Military Pension National Association and the Japanese Council of
Senior Citizens Welfare Service, which have supported Kiyoko Ono,
the former National Public Safety Commission chairman who will
retire from the Diet under the retirement system.

Eita Yashiro, a postal rebel who was defeated in the previous House
of Representative election, is eager to run as a proportional
representation candidate in the July Upper House race. The LDP
leadership, however, has not made any decision on this matter. The
party has looked into the possibility of fielding well-known
celebrities such as singer Hiromi Go, but it has fielded no
celebrities as its candidates.

The LDP has fielded no constituency candidates for four prefectures.
The expectation is that it will decide on a candidate for Yamagata
Prefecture (one up for reelection) before the end of this month. It
has decided to advertise for candidates for Fukushima Prefecture
(one up for grabs) and Yamanashi Prefecture (one up for grabs). The
party decided to recommend Takao Fujii, a postal rebel, as a
candidate for Gifu Prefecture (two up for grabs),but incumbent
Upper House member Tsuyako Ono, whom the LDP had planned to endorse
as its candidate, reacted strongly. So the party's decision to
recommend Fujii is left hanging. Regarding multiple-seat
constituency candidates, coordination on a second candidate is
hitting rocky ground.

Although the party has endorsed former Justice Minister Takao
Jinnouchi as the candidate for Saga Prefecture, some in the party
are now calling for replacing Jinnouchi. A senor LDP Upper House
caucus member said: "There are few single-seat constituencies that
our candidates will definitely win."

17) Minshuto's Kan: LDP Secretary General Nakagawa's home located in
foundation compound

MAINICHI (Page 5) (Full)
February 23, 2007

Naoto Kan, acting president of the main opposition party, Minshuto
(Democratic Party of Japan),pointed out at a press conference
yesterday that Liberal Democratic Party (LDP) Secretary General
Hidenao Nakagawa's home and his support group office in
Higashi-Hiroshima City are located in the compound of a private
foundation, which Nakagawa heads. Kan said: "A foundation should not
be used for individual lawmaker's support organization. I wonder how
he handles the inheritance tax issue." He indicated that he would
pursue this matter.

The foundation called "Kodo Kaikan" (in Higashi-Hiroshima City) was
established in 1961 with the money contributed by Nakagawa's
father-in-law. Nakagawa's home and his support group are in the
building owned by the foundation. They pay the rent.

Nakagawa told reporters at LDP headquarters: "We have been inspected
by the prefecture. The (rent paid for my home and office) is not
illegal."


TOKYO 00000774 011 OF 011

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 01//07

DONOVAN