Identifier
Created
Classification
Origin
09TOKYO497
2009-03-04 22:44:00
UNCLASSIFIED
Embassy Tokyo
Cable title:  

DAILY SUMMARY OF JAPANESE PRESS 03/04/09

Tags:  OIIP KMDR KPAO PGOV PINR ECON ELAB JA 
pdf how-to read a cable
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UNCLAS SECTION 01 OF 17 TOKYO 000497 

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 03/04/09

INDEX:

(1) Ozawa says political donations handled in accordance with the
law, criticizes prosecutors, denies he will resign post (Yomiuri)

(2) Corporate donations aimed to receive orders for construction of
dams, former Nishimatsu Construction Co. tells investigator: Hopes
pinned on DPJ President Ozawa's power of influence (Asahi)

(3) Ozawa's secretary arrested; Ruling camp regards Ozawa's
responsibility as serious; Easing of parties' adverse situation
expected; Speculation about early election (Yomiuri)

(4) Nishimura Construction made "backdoor" political donations,
taking DJP President Ozawa's strong-arm politics into consideration
(Tokyo Shimbun)

(5) Head clerk of "Ozawa kingdom" commands major construction firms
in Iwate (Asahi)

(6) Anatomy of the DPJ (Part 1): Danger of having a "Prime Minister
Ozawa" exposed (Sankei)

(7) Anatomy of DPJ (Part 2): Party without a policy platform
(Sankei)

(8) Aso takes firm stance on territorial row (Sankei)

(9) DPJ's shadow cabinet implies opposition to Guam pact (Okinawa
Times)

(10) Sankei-FNN poll on Aso cabinet, political parties (Sankei)

ARTICLES:

(1) Ozawa says political donations handled in accordance with the
law, criticizes prosecutors, denies he will resign post

YOMIURI (Page
UNCLAS SECTION 01 OF 17 TOKYO 000497

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 03/04/09

INDEX:

(1) Ozawa says political donations handled in accordance with the
law, criticizes prosecutors, denies he will resign post (Yomiuri)

(2) Corporate donations aimed to receive orders for construction of
dams, former Nishimatsu Construction Co. tells investigator: Hopes
pinned on DPJ President Ozawa's power of influence (Asahi)

(3) Ozawa's secretary arrested; Ruling camp regards Ozawa's
responsibility as serious; Easing of parties' adverse situation
expected; Speculation about early election (Yomiuri)

(4) Nishimura Construction made "backdoor" political donations,
taking DJP President Ozawa's strong-arm politics into consideration
(Tokyo Shimbun)

(5) Head clerk of "Ozawa kingdom" commands major construction firms
in Iwate (Asahi)

(6) Anatomy of the DPJ (Part 1): Danger of having a "Prime Minister
Ozawa" exposed (Sankei)

(7) Anatomy of DPJ (Part 2): Party without a policy platform
(Sankei)

(8) Aso takes firm stance on territorial row (Sankei)

(9) DPJ's shadow cabinet implies opposition to Guam pact (Okinawa
Times)

(10) Sankei-FNN poll on Aso cabinet, political parties (Sankei)

ARTICLES:

(1) Ozawa says political donations handled in accordance with the
law, criticizes prosecutors, denies he will resign post

YOMIURI (Page 1) (Excerpts)
Eve., March 4, 2009

In a press conference this morning at party headquarters, Democratic
Party of Japan (DPJ) Ichiro Ozawa denied completely the charges (of
illegal political donations from a construction firm),saying, "It
is true that we received the contributions, but they were handled in
accordance with the law and reported (under the Political Funds
Control Law).
He harshly criticized the Tokyo Prosecutors Office's raid (of his

political organization's office) as "unjust use of national
authority." He denied that he would resign his post, saying, "I
myself am completely innocent, and I am not thinking about doing
such."

Ozawa's press conference lasted for approximately 40 minutes. Ozawa
at the start repeatedly criticized the Tokyo District Prosecutor's
investigative methods with such statements as, "At a time when a
Lower House election is being rumored, their carrying out an unusual
raid is an unjust use of national authority politically and
legally." He took a stance of all-out belligerence against the
prosecutors. Regarding his secretary's arrest, he criticized: "There
is absolutely no precedent in this kind of issue for an arrest and a
raid to be carried out. It threatens our democracy."

TOKYO 00000497 002 OF 017



As to whether there was recognition that the political donation from
the political organizations actually came from Nishimatsu
Construction, Ozawa explained: "If it were recognized that it was a
corporate contribution from Nishimatsu Construction, there would not
have been a problem if it were received at the party's branch
office. The person in charge at our funds control organization from
the start recognized it as a contribution from a political
organization, and so it was recorded and reported as such." He also
said: "If it were true that my private secretary had provided favors
for the other side, I would accept the investigation easily. But
neither I nor my secretary did any such thing. There is no point at
all where the Political Funds Control Law was violated."

Regarding the handling of the political contribution, he explained:
"I never check one by one the donations. After I receive a complete
report (from the private secretary),I approve it."

(2) Corporate donations aimed to receive orders for construction of
dams, former Nishimatsu Construction Co. tells investigator: Hopes
pinned on DPJ President Ozawa's power of influence

ASAHI (Top Play) (Excerpts)
Evening, March 4, 2009

The Asahi Shimbun has learned through a related source that former
President Mikio Kunisawa (70) of Nishimatsu Construction Co., a
second-tier general construction contractor, who was arrested on
suspicion of violating the Political Funds Control Law in an illegal
corporate donations case involving Rikuzan-kai, Democratic Party of
Japan (DPJ) President Ichiro Ozawa, and others, told investigators
that the aim of donations made to the Ichiro Ozawa's side was to
receive orders for the construction of dams.

As a matter of fact, Nishimatsu Construction in 2006 received an
order for the construction of portions of dams in Iwate Prefecture
sponsored by the Ministry of Land, Infrastructure and Transport for
about 10 billion yen. The company took the receiving of the order as
a result of the donations.

Determining that there is strong suspicion of Nishimatsu
Construction having continued donations to the Ozawa's side in the
hope of having Ozawa give accommodation to it so that it can receive
orders for large-size public works, such as the construction of dams
in the Tohoku Region, the investigation department will likely press
ahead with investigations into whether Takanori Okubo (47),the
first state-funded secretary of Ozawa and treasurer of Rikuzan-kai,
arrested in suspicion of violating the Political Funds Control Law,
such as falsifying reports, was involved in the company receiving
the orders.

According to the investigation, Nishimatsu Construction Co. used
political organizations headed by its former employees -- the New
Political Issue Study Group, set up in 1995 and disbanded in 2006,
and the Future Industry Study Group, set up in 1998 and disbanded in
2006 -- as dummy organizations to hide the name of the company, when
it made donations to Rikuzan-kai. The Political Funds Control Law
bans donations from being made under the name of a different person
or corporate donations to persons other than political parties.
Okubo is suspected of recording false information in the company's
political funds payments reports between 2003 and 2006, stating that
the donations were made by the two political organizations, while

TOKYO 00000497 003 OF 017


knowing that they were actually political funds donations (totaling
21 million yen) made by Nishimatsu Construction.

(3) Ozawa's secretary arrested; Ruling camp regards Ozawa's
responsibility as serious; Easing of parties' adverse situation
expected; Speculation about early election

YOMIURI (Page 4) (Abridged slightly)
March 4, 2009

The first state-funded secretary to Ichiro Ozawa, president of the
major opposition Democratic Party of Japan (DPJ),has been arrested
on suspicion of violating the Political Funds Control Law in
connection with donations from Nishimatsu Construction Co., a
second-tier general contractor. The ruling parties are set to pursue
Ozawa's accountability, while keeping an eye on how the situation
develops for the time being. The event has given rise to hopes for
an easing of the adverse conditions the cabinet of Prime Minister
Taro Aso has been facing. On the other hand, some lawmakers are
concerned about the possible spillover effect, with an increase in
public distrust of politics. The arrest of the secretary is likely
to affect Diet deliberations and the timing for dissolving the House
of Representatives for a snap general election, as well.

Liberal Democratic Party (LDP) Secretary General Hiroyuki Hosoda had
this to say to reporters at party headquarters yesterday: "I believe
that the facts will be brought to light by investigative authorities
and that they are certain that they can file charges against (the
secretary)." Internal Affairs and Communications Minister Kunio
Hatoyama said at the Prime Minister's Office: "Unless one is clean,
one has no right to criticize others." Former Chief Cabinet
Secretary Nobutaka Machimura noted in Tokyo: "Public distrust must
not be increased. Mr. Ozawa's responsibility is serious." Machimura
also brushed aside the DPJ's conspiracy theory as ridiculous.

New Komeito Secretary Kazuo Kitagawa took this view in the Diet
building: "It is an terribly serious matter that a state-paid
secretary has been arrested. We will keep an eye on how Mr. Ozawa
demonstrates his accountability and on the opinions in the DPJ."

The Aso cabinet is struggling with dwindling popularity due to the
prime minister's flip-flops regarding the cash handout program and
other issues. Meanwhile, the DPJ has been outpacing the LDP in some
opinion polls. The arrest of Ozawa's secretary has brought new hope
to the LDP, with a former cabinet minister saying: "It's like the
first rain after a long drought. We have lost so many points, but we
can catch our breath now." Another senior LDP lawmaker said: "It's
long-awaited good news. I would like to see the media cover Ozawa
(scandal) extensively."

Whether the incident can help buoy up the Aso administration is
uncertain. Former Secretary General Koichi Kato, former Health,
Labor and Welfare Minister Jiro Kawasaki and others met in Tokyo
last night in which they agreed that although political distrust
will deepen, the cabinet's support ratings will not increase. It has
become clear that several LDP lawmakers have also received donations
from the political organizations that have been used fronts for
corporate donations. Given this, there is concern in the LDP that
the party might become enmeshed in the Nishimatsu scandal.

Regarding the political timetable that lies ahead, some take the
view that the DPJ will become less confrontational and Diet

TOKYO 00000497 004 OF 017


deliberations on the fiscal 2009 budget and related bills will
proceed smoothly.

About the timing for calling the next Lower House election, there
are those who think (the scandal) will have no impact, as seen in an
Aso aide's explanation: "An early election would give rise to
speculation that the investigations (into Ozawa's secretary) were
plotted by the government. The election will not occur until after a
fiscal 2009 supplementary budget is enacted." Some are also
mentioning the possibility of Aso calling an early election by
taking advantage of the tumultuous situation in the DPJ.


The prime minister told reporters last night: "We are now discussing
economic stimulus measures. That's all we are doing. The time for
Lower House dissolution has nothing to do with that."

Resignations of lawmakers following arrests of secretaries

There were cases in which lawmakers gave up their Diet seats or left
their parties to take responsibility after their secretaries were
arrested.

Koichi Kato left the LDP in March 2002 following the arrest of his
office representative on suspicion of tax evasion. He was forced to
resign as a Diet legislator in April 2002. In May 2005, then LDP
Upper House member Yutaka Inoue was forced to resign as a lawmaker
after his policy secretary was arrested (in April) on suspicion of
obstructing a competitive bidding for a public works project.

In the event a person in charge of accounts of a lawmaker's camp
gets a prison term for buying votes during campaigning, the lawmaker
in question loses his Diet seat under the Public Offices Election
Law's guilt-by-association clause.

In the 2005 Lower House election, Masanori Goto's secretary was
arrested on suspicion of violating the Public Offices Election Law.
In the 2007 Upper House election, the chief accountant of Yutaka
Kobayashi's camp was also arrested on suspicion of violating the
same law. The two lawmakers were forced to give up their seats as
the guilt-by-association clause was likely to be applied.

(4) Nishimura Construction made "backdoor" political donations,
taking DJP President Ozawa's strong-arm politics into consideration

TOKYO SHIMBUN (Page 26) (Full)
March 4, 2009

Revealing the reason that Nishimatsu Construction Co. has continued
to donate large amounts of money to the Ichiro Ozawa's side, an
executive of the company noted: "All general construction
contractors are making political donations. If our company alone did
not do so, our business would have been in trouble. We donated money
to avoid such trouble."

According to the company's political funds payments report, the "New
Political Issues Study Group" and the "Future Industry Study Group,"
both dummy political organizations, annually donated 1-5 million yen
to the Democratic Party of Japan's (DPJ) Iwate branch, the National
Council on Reform, the now defunct Liberal Party's political funds
management body and the DPJ Iwate Chapter, as well as to the
Rikuzan-kai, President Ozawa's political funds management body.

TOKYO 00000497 005 OF 017


Shoei Real Estate, a subsidy of Nishimatsu Construction Co., has
also made political contributions along with those two
organizations.

Nishimatsu Construction's political funds donations to the Ozawa's
side topped 90 million yen between 2000 and 2006 alone. The company
also donated 12 million yen to former Finance Minister Koji Omi and
5 million yen to former Prime Minister Yoshiro Mori. However, these
amounts are not as large as the sum donated to the Ozawa's side.

Nishimatsu Construction received approximately 5.842 billion yen
worth of orders related to the construction of Hanamaki Airport
sponsored by Iwate Prefecture, Ozawa's home district, in 2002 and

2003. In 2003, it received an order for the construction of tunnels
worth 2.6145 billion yen. However, these amounts are not necessarily
outstanding, compared with the amounts of orders other general
construction contractors received.

An executive of Nishimatsu Construction said, "Mr. Ozawa's influence
in Iwate is enormous. However, our company's aim was not so much our
hoping that he would help us win contracts for specific works but to
prevent our work from being obstructed. The executive said that the
company has continued to make political contributions, taking into
consideration Ozawa's strong influence on the construction industry
as a whole, something he has been exercising since he was a member
the Liberal Democratic Party (LDP).

A source connected with another second-tier general construction
contractor alleged: "The Ozawa office assigned to each general
construction contractor the amount of donations it wants to receive
from it. The companies had no choice but to make donations in a
lock-step manner so as to avoid bullying.

Employees become member of political organizations; Membership fees
compensated with bonuses; Executives recruited members from among
those recommended by personnel department

An employee of Nishimatsu Construction, who became a member of the
company's political organization, said: "I was told to cooperate
with the political organization the company has set up. I paid a
membership fee for the sake of the company."

Financial resources for donations to the Ozawa's side are presumably
membership fees for the political organizations paid by company
employees and sales of fund-raising parties. The company has
compensated those fees shouldered by the employees by adding the
amounts to their bonuses. It is thus clear that those donations
were, in fact, illegal corporate donations.

According to a source connected with Nishimatsu Construction, the
personnel department picked employees whose business performance was
competent. Executives and former employees persuaded them to join
those political organizations. The membership fee was 60,000 yen
each. Some employees had their spouses become members.

Former President Mikio Kunisawa (70) has reportedly devised a
channel using a political organization in order to continue
donations to the Ozawa's side as well as to the other politicians'
side, after a ban placed on political donations to individual
politicians.

Both political organizations have been gaining income close to 2

TOKYO 00000497 006 OF 017


million yen every year. The actual number of guests to those parties
has been only around 10. Main members of those parties were
Nishimatsu Construction and persons connected with those political
organizations.

When Nishimatsu Construction bought tickets, it distributed part of
them to its political organizations to keep a low profile. Akifumi
Okazaki (67),former administrative department manager, who is also
under arrest, and former employees who are serving as the
representatives of the political organizations, allegedly conferred
on the recipients of donations and such amounts.

(5) Head clerk of "Ozawa kingdom" commands major construction firms
in Iwate

ASAHI (Page 35) (Abridged)
March 4, 2009

The investigation by the special investigation department of the
Tokyo District Public Prosecutors Office over illegal donations by
Nishimatsu Construction Co. has now extended even to the political
world. Prosecutors arrested yesterday Takanori Okubo, the first
state-funded secretary of Democratic Party of Japan (DPJ) President
Ichiro Ozawa, on suspicion of receiving illegal political donations.
The arrest was made at a time when the DPJ is aiming to seize
political power through the next House of Representatives election.
Okubo reportedly is the closest aide to Ozawa and exerted great
influence over public works projects in Iwate Prefecture, from which
Ozawa comes.

The Asahi Shimbun obtained a leading major construction company's
"top secret data," in which the name of Okubo is mentioned quite
often. His role described in it is largely different from the figure
of Okubo taking charge of administrative work in the Tohoku
District, mainly in Iwate Prefecture, in preparation for the next
general election.

The data details the contents of activities by the company in the
entire Tohoku district around 2001 to win government contracts.
There is a part titled, "prefectural hospitals - from the Morioka
branch office head." It is written in it that "Ozawa has a desire to
foster Mr. Okubo," and "talk about business with Mr. Okubo. It would
be better not to speak of other matters, except for greetings."

The data in another part records a conversation held between a
company executive and a Iwate prefectural assembly member affiliated
with Ozawa (at that time),introducing these paragraphs:

"Lay the groundwork through Mr. Okubo (secretary to party head
Ozawa) first. Wait for his instruction."

"The branch office head should ask secretary Okubo to enable an
appropriate executive and the branch manager to meet directly with
Mr. Ozawa to ask for his favor."

"Mr. Ozawa must accept the proposal for a meeting arranged by
secretary Okubo."

Another major construction company official said:

"Requests for act of attribution, petitions ... what Mr. Okubo said
had the most powerful clout. Ozawa followed what Mr. Okubo said. He

TOKYO 00000497 007 OF 017


was indisputably the head clerk of Mr. Ozawa. ... Major construction
companies were seeing the intentions of persons linked to the Ozawa
office greatly reflected in choosing winners for contracts in
large-scale public works projects to be carried out in three
prefectures in the northern Tohoku District, including Akita and
Aomori."

A construction company official said: "The Ozawa kingdom has control
over projects in Iwate Prefecture. Even the Liberal Democratic Party
cannot compete." The Ozawa office was having enormous sway over not
only construction firms in Iwate Prefecture but even the Tohoku
branch offices of leading construction firms based in Sendai since
Ozawa belonged to the LDP.

Even after Ozawa seceded from the LDP, there were cases in which
construction companies asked secretary Okubo and others to act as a
go-between to be able to contact the Ozawa office. In explaining why
such a situation continued, a former executive of a construction
company said: "Construction companies are aware that in the central
and prefectural governments, there are still officials who greatly
respect the intentions of the Ozawa office, though he now leads an
opposition party."

Okubo comes from Kamaishi City. After graduating from a high school
in the city, he became a Kamaishi municipal assembly member. He ran
in the mayoral election in 1999 but was defeated. Later, Okubo
became a secretary to Ozawa. A local assembly member described him
as a type who hollers threats, taking advantage of Mr. Ozawa's
authority. Okubo reportedly established close ties particularly with
Nishimatsu Construction Co. among many construction companies in the
district.

Junior member voices concern about "the DPJ is no different"

"Ozawa children" who plan to file their candidacy in the next Lower
House election have been upset by the news of the arrest of Ozawa's
secretary.

"The arrest at this juncture might have been plotted to 'dump
Ozawa'," said Lower House member Kazumi Ota. In response to Ozawa's
suggestion, she will run in the Fukushima No.2 constituency for the
next general election, though his electoral district is Chiba No. 7
district. Asked about how she thinks the arrest will affect the
election, she replied: "That will nothing but my personal fight."

Kei Otani, who will run in the Osaka No. 15 constituency in the next
election for the first time, voiced concern, "A gloomy image (of the
DPJ) might be left in the back of voters' minds. Unaffiliated voters
could not go to vote or would vote for the LDP, based on a judgment
that 'the DPJ is no different'. I think it (the arrest) will be
disadvantage to us in the next election."

Takako Ebata will stand for the next election from the Tokyo No. 10
district as a DPJ rival candidate against former Defense Minister
Yuriko Koike of the LDP. Tokyo assembly member Tsuyoshi Izumiya, who
serves as deputy head of Ebata's election office, said: "The next
election will be a tougher one." Izumiya will also run for the Tokyo
Metropolitan assembly election on July 12.

A veteran Tokyo assembly member of the LDP hopefully stated: "Amid
growing criticism of the Aso administration over a series of
blunders, the arrest will likely develop into our enemy's mistake. A

TOKYO 00000497 008 OF 017


general election might be held earlier, or a favorable wind might
also blow for the LDP in the July Tokyo Metropolitan Assembly
election."

(6) Anatomy of the DPJ (Part 1): Danger of having a "Prime Minister
Ozawa" exposed

SANKEI (Pages 1 and 3) (Abridged)
March 2, 2009

Settling abduction issue with money

In early February, a meeting took place in Tokyo between Democratic
Party of Japan (DPJ) lawmakers and their supporters. In it,
President Ichiro Ozawa said: "The abduction issue will not be
resolved no matter what (Japan) tells North Korea. There is no other
option but to take lots of money (to North Korea) and ask it to
return some abductees to Japan."

Hearing this comment, the participants were petrified. Of course,
they were ordered not to ever mention Ozawa's radical statement to
settle with money the issue of North Korea's crimes that had
trampled on the human rights of Japanese citizens and Japan's
sovereignty.

A dangerous side of Ozawa's foreign and defense policies has begun
to come to light.

On Feb. 24, Ozawa told reporters, "The U.S. 7th Fleet is sufficient
in terms of American presence in the Far East," causing a stir. The
comment can be taken to signify his orientation toward Japan
increasing its defense power, based on an "equal" Japan-U.S.
alliance. But apparently in defense of Ozawa, his aide described the
comment as an attempt to invigorate the security debate. Another DPJ
official criticized the remark, saying, "They were shallow words
with no regard for the future."

In the People's New Party (PNP) convention on Jan. 18, party head
Tamisuke Watanuki said, "The general public has anxieties about the
DPJ." Now that the helm of government is within the DPJ's reach,
Ozawa's abrupt reference to his stock argument has caused schisms to
grow in the opposition camp.

What is Ozawa's vision of his administration?

Given the Aso cabinet's plummeting support ratings, speculation is
growing that the DPJ will garner a single-party majority (241 seats)
in the next House of Representatives election. But Ozawa cannot opt
for a single-party administration because the DPJ, which does not
have a simple majority in the House of Councillors (122 seats),will
have to continue cooperating, at least until next summer, with the
Social Democratic Party (SDP) and independents, in addition to the
PNP and the New Party Nippon, with which the DPJ has formed a joint
parliamentary group.

On Feb. 20, PNP Deputy Representative Shizuka Kamei called on Ozawa
at his Tokyo office. There, Kamei gave this advice to Ozawa: "No
matter how many seats the DPJ wins in the next Lower House election,
your party will be outnumbered by the Liberal Democratic Party
unless you form a coalition with the PNP and the SDP." Ozawa
replied, "I know." He also indicated that the drafting of a joint
manifesto (campaign pledges) by three opposition parties should wait

TOKYO 00000497 009 OF 017


until the election gets closer.

Forming a coalition government will not be easy. For example, there
is huge gap with the SDP over basic policies on the Constitution and
security affairs. A good example was the DPJ's failure to decide on
its stance to sending SDF vessels to waters off Somalia due to the
SDP's opposition.

DPJ conservative members are alarmed at the SDP, with one saying,
"The SDP which no longer includes the right wing of the former Japan
Socialist Party is hard to deal with."

The PNP led by such critics as Watanuki and Kamei is also a tough
bunch.

In his speech on Feb. 23, DPJ Vice President Katsuya Okada said:
"Once we win a working majority in next year's Upper House election,
full-fledged DPJ politics will start from there." The comment was
apparently intended to apply pressure on the SDP and the PNP.

Lessons from the Hosokawa coalition administration

Last August, Ozawa dined at a French restaurant at a hotel near
Tokyo Station with former Chief Cabinet Secretary Masayoshi
Takemura. The two had parted ways during the coalition
administration of Prime Minister Morihiro Hosokawa. Ozawa with a
glass of wine in his hand asked: "Why did Mr. Hosokawa quit just
eight months after becoming prime minister?"

Takemura simply said, "I don't know."

Ozawa wanted to learn of Hosokawa's "true intention" from Takemura,
who had served as Hosokawa's chief cabinet secretary, according to
an Ozawa aide.

Ozawa's stock argument is that an administration will become stable
after compiling two initial budgets and that if a new administration
is sustained for three years, the LDP and the bureaucracy-led
cabinet system will collapse.

Ozawa has often explained this logic to his aides. It is clear that
in facing the upcoming make-or-break political battle, Ozawa wants
to draw on lessons learned from the Hosokawa administration, which
was short-lived, even after putting an end to the LDP's single-party
rule.

DPJ administration only as stepping stone to disbandment of LDP

"Mr. Ozawa seems to have been given a free hand in shaping the
framework of a (DPJ) administration," a person close to Ozawa noted.
A mid-level DPJ member took this view: "The DPJ is using the face of
Ozawa, who is strong in elections, and Ozawa is capitalizing on the
DPJ's numerical superiority."

Those around Ozawa see Lenin's two-stage revolution in Ozawa's
strategy. One said: "Ozawa appears to regard a change of
administration after the next Lower House election as the first
stage and the possible simultaneous elections next summer for both
chambers as the second stage."

A mid-level DPJ lawmaker said: "Launching a DPJ administration might
only be a stepping stone for Ozawa, whose ultimate political goal is

TOKYO 00000497 010 OF 017


to see the LDP disband."

Lawmakers on their toes

Ozawa held a meeting with Rengo (Japanese Trade Union Confederation)
executives in Hiroshima last December. In the session, Ozawa said
spiritedly: "Finance Ministry officials are quick-eyed. Many
ministry officials have come to see me recently." Not only the
Finance Ministry but also the Economy, Trade and Industry Ministry
and the Foreign Ministry are moving closer to DPJ executives in
order to ready themselves for a change of government.

In the Kasumigaseki government district, there is alarm at the
prospect of an Ozawa administration, because Ozawa advocates sending
over 100 lawmakers to fill posts in the government, his aim being to
create a politician-led decision-making system. At the same time,
some bureaucrats think the DPJ will be easy to deal with. A Finance
Ministry official is hopeful that given junior and mid-level DPJ
lawmakers' high level of understanding, there will be an increase in
the number of policy specialists who can work amicably with the
bureaucracy.

It is a fact, however, that the DPJ lacks useful players. A senior
DPJ lawmaker representing the TOKAI region reportedly made the
following comment at a recent supporters' meeting, "Mr. Ozawa told
me that I can pick any post I like." Carried away by the atmosphere
of pending government change, many DPJ members are becoming
restless.

Ozawa has a plan to unveil a "list of cabinet ministers," including
many private-sector individuals, immediately after the Lower House
is dissolved. "I believe one of the candidates for an economic
portfolio gave an informal consent to accepting the post last fall,"
a DPJ officer said.

Poor-health rumor persistent

Ozawa explicitly said, "It is natural for the head of the party that
won an election to become prime minister." Even so, rumor still has
it that Ozawa will not become prime minister.

Since he was hospitalized after a heart attack in 1991, Ozawa has
been intent on maintaining his good health. He is particularly
conscious of his diet and takes an early morning walk for about 30
minutes, takes a nap for about two hours every day, and consumes
only a moderate amount of alcohol daily, according to an Ozawa
aide.

Cloister government Ozawa's true aim?

In addition to his ill-health rumor, Ozawa hates being fettered by
the Diet. There were 11 Lower House plenary sessions between Jan. 5
and Feb. 28. Ozawa did not attend four of them. He did not take the
interpellation podium after the prime minister's policy speech.

An Ozawa aide said: "It's impossible for Mr. Ozawa to sit for seven
long hours in a budget committee session. He really wants to avoid
any painful post and run the government from behind the scenes." In
fact, Ozawa himself once said: "My role will be over once the kind
of politics is realized that can enroot parliamentary democracy in
Japan and stabilize the people's livelihood."


TOKYO 00000497 011 OF 017


Cardiovascular specialist Kiyoshi Taira commented: "In view of his
dietary restrictions, there might be the risk of a heart attack. If
so, his serving as prime minister, which is an extremely demanding
job, would be difficult."

Some in the DPJ have begun mentioning the option of someone other
than the president serving as the prime minister. "Destroying the
LDP is Mr. Ozawa's top priority, so I don't think he is attached to
becoming premier," a mid-level member noted.

(7) Anatomy of DPJ (Part 2): Party without a policy platform

SANKEI (Page 3) (Full)
March 3, 2009

In late October last year, Democratic Party of Japan's (DPJ) Policy
Research Council Chairman Masayuki Naoshima approached fellow party
member Akihisa Nagashima, a junior lawmaker in the House of
Representatives member, and asked him: "What was that supposed to
mean?" Several days before, Nagashima had proposed to Prime Minister
Taro Aso in a meeting of the Lower House antiterrorism special
committee a plan to dispatch Maritime Self-Defense Force (MSDF)
vessels to waters off Somalia to guard commercial freighters from
possible attacks by pirates. Naoshima asked him for his real
intention, out of concern that the plan could pave the way to
Japan's dispatch of the SDF overseas.

The incident reminded Nagashima that the DPJ is a party that is
composed of lawmakers with different views about security and other
key policies that bear on the very heart of the nation's interests.

The government and the ruling camp, which had jumped at Nagashima's
proposal, decided to dispatch MSDF vessels to Somalia without a
hitch.

Minimum common items

Like-minded politicians from the former Social Democratic Party and
the New Party Sakigake (Pioneers) formed the Democratic Party of
Japan in 1996. The party then merged with the Good Governance Party,
the Democratic Reform League, and other opposition parties in 1998.
The party was further strengthened by joining forces with the
Liberal Party (Jiyuto),led by Ichiro Ozawa, in 2003.

The DPJ has never worked out its policy platform, a basic paper that
specifies the ideals and goals the party should pursue.

In preparation for forming a new party by merging their parties in
1998, Yukio Edano of the DPJ, Katsuya Okada of the Good Governance
Party, and Tatsuo Kawabata of the Shinto Yuai (New Fraternity Party)
were coordinating views on basic policies. But when Edano suggested
giving up the effort of preparing a platform, no other members
raised objections. As a result, the DPJ set only basic principles as
"minimum common items," as said by a party member.

The DPJ made a start, in hopes of becoming a corner of the two major
parties to counter the Liberal Democratic Party (LDP),in other
words, a "project political party" in a sense. Given this, the DPJ
has set aside basis policies on which views are divided in the
party, such as the Constitution, education, national security, and
diplomacy.


TOKYO 00000497 012 OF 017


What ideal image of the nation has the DPJ envisioned as a political
party that could assume political in the next general election? In
its assessment of basic principles, too, the party writes no more
than this: "As a member of the global community, the DPJ is
determined to establish international relations in the fraternal
spirit of self-reliance and mutual coexistence, and thereby restore
the world's trust in Japan."

A mid-ranking party member said: "Party members do not share the
same ideas. The party was not formed based on policies, so I don't
know where it is going. It would be better not to compile a policy
platform."

Is this a second SDP?

As a result of there being no policy platform, the party's specific
policies are inconsistent. In its "Policy Index 2008," the party
listed such policy measures as establishing a life-imprisonment
charge, giving local suffrage for permanent foreign residents, and
creating a relief center for those suffering from human-rights
violations. Seeing this list, a conservative party member cynically
said: "This index looks like it was drawn up by a second Social
Democratic Party."

How easily Ozawa changes his policy stance is also to be noted. In
the book he authored and issued in 1993 with the title, Nihon Kaizo
Keikaku (Reform plan for Japan),Ozawa called for policies in favor
of deregulation, self-accountability, and a small government. He
also suggested raising the consumption tax rate to 10 PERCENT , in
preparation for facing a society with fewer children, and spending
the extra income for social welfare purposes.

In recent years, though, emphasizing that priority should be given
to the people's livelihoods, Ozawa has come up with policies giving
consideration to the socially weak, such measures as keeping the
current 5 PERCENT tax rate unchanged and creating a subsidy system
for individual farmers. Blowing away his past stock arguments, he
has advocated pork-barrel policy measures.

On the diplomatic front, Ozawa stressed in the 1993 book: "Japan and
the United States have very different aspects, including history,
race, language, and culture; they fought in sheer desperation and
have been bound by solid ties since the end of the fight. The
U.S.-Japan Security Treaty is the basis for the solid ties." But he
has turned against the U.S.-led war on terror, and recently said:
"The U.S. Navy's 7th Fleet alone is sufficient to maintain the U.S.
military presence in the Far East region."

"Public pledge is a plaster"

When the Liberal Party, then headed by Ozawa, formed a coalition
with the LDP in 1999, the LDP told Ozawa beforehand that the party
would not be able to accept his party's security policy. Ozawa
easily accepted the LDP's suggestion, according to informed
sources.

An LDP member who once assumed a cabinet post and worked together
with Ozawa when they belonged to Shinshinto (New Frontier Party),
said: "Ozawa's buzzwords were, 'a public pledge is like a plaster.
If a pledge is replaced, it will become more effective'." Shizuka
Kamei, deputy president of the People's New Party, also said,
"Policies are something like candies for Mr. Ozawa."

TOKYO 00000497 013 OF 017



A mid-ranking DPJ member grumbled: "The DPJ is not a political party
but a group that wants to win an election. Policies seem to take
second place for Mr. Ozawa. If our party takes over the reins of
government under a once-in-a-century global recession, the situation
might be such that the people would be handing Ozawa a blank check."


(8) Aso takes firm stance on territorial row

SANKEI (Page 5) (Full)
March 4, 2009

Prime Minister Taro Aso met with Russian President Medvedev on Feb.

18. On that occasion, Aso strongly reminded Medvedev of the
territorial row over the Russian-held four islands off Japan's
northernmost main island of Hokkaido, sources revealed yesterday,
quoting Aso as telling Medvedev: "If we cannot see any specific
progress in the peace treaty talks (to reach a final settlement of
the territorial row),we cannot build a partnership with Russia in
the Asia-Pacific region as you propose." Medvedev nodded and
answered that he would consider it, according to the sources.

After meeting with Medvedev, Aso stressed the significance of the
meeting. "We have taken an important step forward to build a
strategic relationship with Russia in the Asia-Pacific region," Aso
told reporters. This comment can be taken as indicating that Aso
felt something positive to a certain degree from Medvedev's
response.

In recent years, Russia has sought to step up cooperation in such
areas as development in the Far East and East Siberia and energy
issues. Specifically, Medvedev, in a meeting with Aso in November
last year, showed his willingness to make efforts for a solution to
the territorial issue, saying, "I am not thinking of leaving this
issue to the next generation for a solution."

In the meeting this time as well, Medvedev advocated negotiating the
territorial issue under a "new original, unconventional approach."
Aso asked Medvedev in the meeting to come up with an appropriate
answer on the territorial issue before the next meeting. The
government is paying close attention to future progress in Russia.

However, there is also a severe view, albeit the waltz of words
between Japan and Russia. A senior Foreign Ministry official said,
"Russia's basic stance has not taken even a inch from the
Japan-Soviet joint declaration of 1956, which specified returning
the Habomai group of islets and Shikotan Island."

(9) DPJ's shadow cabinet implies opposition to Guam pact

OKINAWA TIMES (Page 2) (Full)
March 4, 2009

The Japanese and U.S. governments recently signed an agreement on
the planned relocation of U.S. Marines in Okinawa to Guam, and the
signed agreement is now before the Diet for its approval. In this
regard, Keiichiro Asao, a House of Councillors member of the leading
opposition Democratic Party of Japan (Minshuto) and defense minister
in the DPJ's shadow cabinet, implied yesterday that the DPJ would
vote against the Guam relocation pact. "If we are going to review
the agreement (after a change of government),we cannot approve of

TOKYO 00000497 014 OF 017


it for now," Asao said.

DPJ Okinawa Prefectural Federation Representative Shokichi Kina and
Secretary General Yasuhiro Aragaki yesterday met with Asao and then
met with DPJ Secretary General Yukio Hatoyama and Yoshio Hachiro,
foreign minister in the DPJ's shadow cabinet, and asked the DPJ
leadership to oppose the Guam relocation pact in the Diet.

Hatoyama pointed to problems about the Japanese government's
spending on the Guam relocation but did not make any in-depth
remarks about whether the DPJ will vote for or against the Guam
pact.

Hachiro said, "If the agreement passes the House of Representatives,
we will not be bound up to this when there is a change of
government." So saying, he did not specify any clear-cut policy
course.

The DPJ yesterday held a meeting of its foreign affairs and defense
division, during which the party's lawmakers received a briefing
from the Foreign Ministry on the Guam pact for the first time. One
of the DPJ lawmakers asked there, "Why was only the package (of
plans to relocate Futenma airfield and move Okinawa-based U.S.
Marines to Guam) extracted from the entire realignment of U.S.
forces in Japan and incorporated in the agreement?" There was no
clear-cut answer from the Foreign Ministry. "There is no sufficient
account," one said. Another said, "We cannot approve of it as is."

(10) Sankei-FNN poll on Aso cabinet, political parties

SANKEI (Page 5) (Full)
February 24, 2009

Questions & Answers

(Note) Figures shown in percentage. Figures in parentheses denote
findings from a previous Sankei-FNN survey conducted Jan. 10-11.

Q: Do you support the Aso cabinet?

Yes 11.4 (18.2)
No 80.2 (71.4)
Don't know (D/K),etc. 8.4 (10.4)

Q: Which political party do you support?

Liberal Democratic Party (LDP) 21.9 (23.4)
Democratic Party of Japan (DPJ or Minshuto) 25.9 (26.6)
New Komeito (NK) 3.7 (4.9)
Japanese Communist Party (JCP) 4.2 (2.9)
Social Democratic Party (SDP or Shaminto) 1.2 (1.3)
People's New Party (PNP or Kokumin Shinto) 0.5 (0.5)
Reform Club (RC or Kaikaku Kurabu) 0.1 (0.2)
New Party Nippon (NPN or Shinto Nippon) 0.1 (0.1)
Other political parties 1.3 (1.2)
None 37.8 (37.7)
D/K, etc. 3.3 (1.2

Q: Do you appreciate Prime Minister Aso and his cabinet on the
following points?

Prime Minister Aso's leadership

TOKYO 00000497 015 OF 017


Yes 7.0 (10.1)
No 87.5 (85.1)
D/K, etc. 5.5 (4.8)

Economic policy
Yes 10.3 (12.0)
No 82.1 (80.3)
D/K, etc. 7.6 (7.7)

Foreign policy
Yes 19.0 (19.5)
No 61.5 (59.3)
D/K, etc. 19.5 (21.2)

Civil service reform
Yes 13.8 (---)
No 66.2 (---)
D/K, etc. 20.0 (---)

Finance Minister Nakagawa's resignation
Yes 26.5 (---)
No 66.6 (---)
D/K, etc. 6.9 (---)

Q: What do you want the Aso government to do?
Consumer policy, including food safety 5.5 (5.6)
Social security, including healthcare and pensions 24.3 (24.4)
North Korea problem 2.2 (4.0)
Northern territories 1.5 (---)
Tax reform, including consumption tax 4.3 (4.5)
Global warming 2.3 (1.6)
Review the government's wasteful spending 23.8 (22.7)
Economic stimulus measures 26.2 (24.9)
Review postal privatization 2.3 (---)
D/K, etc. 7.6 (5.7)

Q: Do you appreciate what government and ruling party leaders have
said and done under the Aso cabinet?

Finance Minister Nakagawa's resignation to take responsibility for
his fiasco in a press conference
Yes 35.8
No 60.3
D/K, etc. 3.9

Q: How do you evaluate the Koizumi cabinet's structural reform?

Totally appreciate 3.0
Generally appreciate 41.2
Don't appreciate very much 38.1
Don't appreciate at all 15.5
D/K, etc. 2.2

Q: What do you think about the government-introduced package of
legislative measures related to the second supplementary budget for
fiscal 2008, including a plan to hand out cash benefits to
individual households?

Are you going to receive the cash benefit if it is determined?
Yes 87.1 (84.8)
No 9.5 (11.4)
D/K, etc. 3.4 (3.8)

TOKYO 00000497 016 OF 017



Do you think Prime Minister Aso should also receive the cash benefit
if it is determined?
Yes 46.8 (---)
No 39.9 (---)
D/K, etc. 13.3 (---)

Q: Who do you think is most appropriate now for Japan's prime
minister among the following politicians in the ruling and
opposition parties?

Taro Aso 3.4 (5.9)
Shigeru Ishiba 4.3 (---)
Nobuteru Ishihara 6.2 (5.1)
Yuriko Koike 3.8 (4.3)
Junichiro Koizumi 7.9 (9.9)
Seiko Noda 0.8 (---)
Kunio Hatoyama 1.3 (---)
Yoichi Masuzoe 5.4 (5.5)
Kaoru Yosano 6.8 (2.6)
Other ruling party lawmakers 2.2 (1.9)
Yoshimi Watanabe 5.1 (8.3)
Ichiro Ozawa 13.4 (13.2)
Naoto Kan 3.2 (4.8)
Yukio Hatoyama 2.2 (1.9)
Other opposition party lawmakers 3.1 (2.9)
None 26.1 (25.7)
D/K, etc. 4.8 (4.2)

Q: When comparing Prime Minister Aso and DPJ President Ozawa, who do
you think is trustworthier?

Prime Minister Aso 23.6 (33.4)
DPJ President Ozawa 43.8 (44.8)
D/K, etc. 32.6 (21.8)

Q: When comparing Prime Minister Aso and DPJ President Ozawa, who do
you think is better in terms of policies?

Prime Minister Aso 19.9 (24.4)
DPJ President Ozawa 45.2 (50.5)
D/K, etc. 34.9 (25.1)

Q: What do you think about calls from within the LDP for replacing
Prime Minister Aso before the next election for the House of
Representatives?

Prime Minister Aso should step down before the House of
Representatives election and the new prime minister should dissolve
the Diet for a general election 36.6
Prime Minister Aso should dissolve the Diet for a general election,
and the prime minister should be elected after that 57.9
D/K, etc. 5.5

Q: Do you now feel you are affected by the job uncertainty?

Yes 53.2 (37.8)
No 41.8 (60.8)
D/K, etc. 5.0 (1.4)

Q: Do you have expectations for the U.S. Obama administration?


TOKYO 00000497 017 OF 017


Yes 81.2
No 10.9
D/K, etc. 7.9

Q: Prime Minister Aso's first term as LDP president is up until this
fall. How long do you think the Aso cabinet will continue?

He will be replaced before the next election for the House of
Representatives 44.3 (25.7)
He will be replaced after the House of Representatives election 34.9
(47.4)
He will be replaced upon his term's expiry 16.2 (20.1)
It will continue even after this fall 2.2 (5.0)
D/K, etc. 2.4 (1.8)

Q: The House of Representatives' current term is up until this fall.
When do you think the next election is appropriate for the House of
Representatives?

Right away 25.2
During the first half of this year after the budget's passage
through the Diet 54.8
Upon the current term's expiry or during the latter half of this
year 16.0
D/K, etc. 4.0

Q: Which political party would you like to vote for in the next
election for the House of Representatives in your proportional
representation bloc?

LDP 25.8 (29.0)
DPJ 42.9 (41.5)
NK 4.9 (5.5)
JCP 5.2 (4.6)
SDP 1.8 (1.6)
PNP 1.2 (1.2)
RC 0.1 (0.0)
NPN 0.0 (0.2)
Other political parties 6.5 (7.4)
D/K, etc. 11.6 (9.0)

Q: What do you think is the desirable form of government after the
next election for the House of Representatives?

LDP-led coalition government 17.7
DPJ-led coalition government 35.4
LDP-DPJ grand coalition 40.6
D/K, etc. 6.3

Polling methodology: The survey was conducted Feb. 21-22 by the
Sankei Shimbun and Fuji News Network (FNN) over the telephone on a
computer-aided random digit dialing (RDD) basis. For the survey, a
total of 1,000 persons were sampled from among men and women, aged
20 and over, across the nation.

ZUMWALT