JAPANESE MORNING PRESS HIGHLIGHTS 03//09

UNCLAS SECTION 01 OF 12 TOKYO 000520 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 03//09 Index: Okinawa problem: 1) Prime Minister Aso, Okinawa Governor Nakaima agree in meeting on early resolution of Futenma relocation issue (Nikkei) 2) Governor Nakaima presses premier to move Futenma relocation site to waters off Henoko but Aso avoids direct answer (Mainichi) Opinion polls: 3) Kyodo poll: 61 PERCENT of public want Democratic Party of Japan (DPJ) President Ozawa to resign post; 78 PERCENT unconvinced by his explanation of donation scandal (Tokyo Shimbun) 4) Mainichi poll: 57 PERCENT say Ozawa should resign post; Seven-point drop in DPJ support rate; Aso cabinet support rate rises five points to 16 PERCENT (Mainichi) 5) Asahi poll: 57 PERCENT of public want Ozawa to step down (Asahi) 6) Yomiuri poll: 53 PERCENT say Ozawa should resign; 80 PERCENT not convinced by his explanation of the political donation scandal (Yomiuri) 7) Survey of DPJ prefectural chapters finds 10 wanting Ozawa to resign as party head (Nikkei) Political agenda: 8) DPJ members distancing themselves from Ozawa as prosecutors' pursue case against his top aide for accepting illegal political donations (Yomiuri) 9) Some DPJ members openly calling for Ozawa to step down from his post (Asahi) 10) Prosecutors, turning attention to LDP, plan to question Nikai side on political donations from shady construction company (Asahi) 11) Papers to be served against Nikai side by Tokyo prosecutors in connection with donations from crooked construction company Nishimatsu (Mainichi) 12) Nishimatsu Construction in return for donations to Ozawa side and Nikai side expected to land a choice airport construction project (Sankei) 13) Deputy Chief Cabinet Secretary Uruma fingered as the source of high-level leak claiming police would not prosecute LDP members in donation scandal (Mainichi) 14) While Ozawa is on the hot seat, his aide arrested for accepting illegal donations, senior party figures like Okada, are traveling abroad (Mainichi) Articles: �00A;1) In meeting with Nakaima, Aso expresses intent to quickly settle Futenma relocation issue NIKKEI (Page 2) (Full) March 8, 2009 Prime Minister Taro Aso visited Okinawa on March 7 for the first time after assuming office as part of his nationwide campaign tour for the next Lower House election. After laying a wreath at the national cemetery for the war dead in Itoman, Aso held talks with Governor Hirokazu Nakaima at a Naha hotel. Regarding the planned relocation of the U.S. Marine Corps' Futenma Air Station, Nakaima reiterated his request to move the relocation spot specified in the Japan-U.S. force realignment roadmap into the sea. In response, Aso TOKYO 00000520 002 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//09 expressed his intention to resolve the issue as quickly as possible. After the meeting with Nakaima, the prime minister told reporters about the Futenma issue: "How to strike a balance between the local requests and the roadmap is a major challenge." Ahead of his talks with Nakaima, Aso met with victims of the accidental detonation of an unexploded shell in January in Itoman and delivered a speech at a meeting held by the Liberal Democratic Party Okinawa prefectural federation. However, he called off his initial plans to tour U.S. bases, such as Futenma Air Station. 2) Governor Nakaima calls for moving the base relocation site to offshore area; Aso stops short of concrete response MAINICHI (Page 4) (Full) March 8, 2009 Teruhisa Mimori, Kazuya Hanawa Prime Minister Taro Aso on March 7 visited Okinawa for the first time after assuming office. In the prefecture, the prime minister held talks with Governor Hirokazu Nakaima at a Naha hotel to discuss, among other matters, the issues of U.S. bases and unexploded shells (dropped on the prefecture during World War II). On the planned relocation of the U.S. Marine Corps' Futenma Air Station to the coastal area of Camp Schwab in Nago, Okinawa has been calling for moving the location into the sea. In his talks with Aso, Nakaima reiterated his call for moving the site further into the sea, saying, "I would like to see the matter settled at an early date." Aso simply replied: "The matter is under discussion by the Alternate Facility Council (between the government and Okinawa),and I will endeavor to reach an early settlement." In the wake of the detonation of an unexploded shell in Itoman in January, Nakaima also renewed his call for new legislation requiring the state to probe unexploded shells and pay compensation to victims. After his meeting with Nakaima, Aso told reporters: "A probe will help reduce the rate (of detonations of duds). Since it will cost money, we would like to consider a variety of measures, such as a fund." The visit to Okinawa is part of Aso's nationwide campaign tour with an eye on the next Lower House election. 3) Poll: 61 PERCENT urge Ozawa to quit TOKYO SHIMBUN (Top play) (Full) March 9, 2009 In a recent telephone-based nationwide public opinion survey conducted by Kyodo News on March 7-8, a total of 61.1 PERCENT answered that it would be better for Democratic Party of Japan (Minshuto) President Ichiro Ozawa to resign as DPJ president over Nishimatsu Construction Co.'s huge illicit political donations to his fund-managing body, with 28.9 PERCENT backing him. Ozawa has clarified his intent to stay on. Respondents were also asked if they thought Ozawa's account in the wake of his state-funded secretary's arrest was convincing. To this question, 78.4 PERCENT answered "no," with 12.4 PERCENT saying "yes." The Aso cabinet's support rate was 16.0 PERCENT , a slight increase of 2.6 points from the TOKYO 00000520 003 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//09 last survey taken Feb. 17-18. The nonsupport rate was 70.8 PERCENT . The public showed a severe view of "politics and money," and the poll results were severe for the DPJ that was on a rising note. Meanwhile, the poll also showed no increase in the public expectations of the Aso cabinet. Prime Minister Taro Aso will likely face difficulties in running his government. In the poll, respondents were asked how long they thought it would be desirable to remain in office. In response to this question, a total of 82.5 PERCENT called for Aso to step down sometime after the current Diet session ends, broken down into 26.8 PERCENT insisting that he should quit right away, 32.3 PERCENT saying "until the budget for fiscal 2009 passes the Diet," and 23.4 PERCENT saying "until around June when the current ordinary Diet session ends." Respondents were also asked when they would like the House of Representatives to be dissolved for a general election. To this question, 26.7 PERCENT answered "right away," with 45.6 PERCENT saying "around June when the current ordinary Diet session ends" and 21.2 PERCENT saying "upon the current term's expiry in September." When asked about the desirable form of coalition government, the proportion of those in favor of a DPJ-led coalition government dropped 9.9 points from the last survey but was 43.5 PERCENT , which is higher than 31.5 PERCENT for an LDP-led coalition government. In the survey, respondents were further asked who they thought would be more appropriate for prime minister between Prime Minister Aso and DPJ President Ozawa. In this popularity ranking, Aso stood at 25.6 PERCENT , up 5.2 points from the last survey. Ozawa dropped 12.8 points but was at 33.6 PERCENT , standing above Aso. In the breakdown of public support for political parties, the LDP scored 28.6 PERCENT , with the DPJ at 27.4 PERCENT . The LDP ranked top for the first time since the survey taken December last year. In public preference for proportional representation in the election for the House of Representatives, however, the DPJ was at 33.9 PERCENT , with the LDP at 26.7 PERCENT . 4) Poll: 57 PERCENT urge Ozawa to quit MAINICHI (Top play) (Full) March 8, 2009 In the wake of prosecutors' investigations into a political funds scandal involving Democratic Party of Japan (Minshuto) President Ichiro Ozawa's fund-managing body, the Mainichi Shimbun conducted a telephone-based spot nationwide public opinion survey on March 6-7. In the survey, respondents were asked if they thought Ozawa should resign as DPJ president, 57 PERCENT answered "yes," with 33 PERCENT saying "no." When asked if Ozawa's account on the incident was convincing, "yes" accounted for 12 PERCENT , with "no" reaching 79 PERCENT . In the breakdown of public support for political parties, the DPJ dropped 7 points from the last survey in February to 22 PERCENT , the same as the ruling Liberal Democratic Party's support rate, which rose 2 points. For the DPJ, the poll results are severe. TOKYO 00000520 004 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//09 "Who do you think is more appropriate for prime minister between Prime Minister Aso and DPJ President Ozawa?" In this public preference for premiership, Ozawa tallied only 13 PERCENT , plunging 12 points, about half of where he stood in the last survey. Aso rose 2 points to 10 PERCENT . However, the answer, "Neither is appropriate," accounted for 73 PERCENT , up 12 points. This same question has been asked since the Aso cabinet came into office last September. At first, Aso scored 42 PERCENT , with Ozawa at 19 PERCENT . However, Ozawa topped Aso in December last year due to the premier's flip-flops. In the last survey, Ozawa expanded his lead over Aso to 17 points. But in the latest survey, the gap narrowed to 3 points. The public also was asked which party, the LDP or the DPJ, would they like to see win in the next election for the House of Representatives. The LDP rose in public preference for parties by 7 points to 29 PERCENT , while the DPJ dropped 11 points to 40 PERCENT . Respondents were further asked which political party they would vote for in their proportional representation blocs if an election were to be held now for the House of Representatives. In the breakdown of answers to this question, the LDP lost 2 points from the survey taken in December last year to reach 20 PERCENT , but the DPJ likewise dropped, this time by 8 points, to 28 PERCENT . The DPJ was still above the LDP in the breakdown of public answers to these two questions, but the gap has narrowed. Respondents were asked if they would consider the incident this time when casting their votes in the next election for the House of Representatives. Those who responded "yes" accounted for 43 PERCENT , while those who said "no" totaled 51 PERCENT . The figures can be taken as indicating that those who answered "yes" are distancing themselves from the DPJ. Cabinet support at 16 PERCENT "When do you think the House of Representatives should be dissolved for a general election?" To this question, "Around April after the budget for fiscal 2009 is passed" topped all other answers at 33 PERCENT , followed by "right away" at 30 PERCENT , "there's no need for an election until the current term ends" at 18 PERCENT , and "around this summer" at 11 PERCENT . Meanwhile, the public approval rating for the Aso cabinet was 16 PERCENT , up 5 points from the last survey. The disapproval rating was 66 PERCENT , down 7 points. The Aso cabinet's support rate rose for the first time since its inauguration, but it remains low. 5) Poll: 57 PERCENT urge Ozawa to resign ASAHI (Top play) (Abridged) March 9, 2009 The Asahi Shimbun conducted a telephone-based spot nationwide public opinion survey on March 7-8, in which respondents took a severe view of Democratic Party of Japan (Minshuto) President Ozawa over Nishimatsu Construction Co.'s illicit political donations to his fund-managing body. In the survey, 77 PERCENT answered that his account of the incident was "unconvincing," and 57 PERCENT answered that it would be better for him to resign as DPJ president. Respondents were also asked which political party they would vote for in their proportional representation blocs if they were to vote TOKYO 00000520 005 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//09 now. In this public preference of political parties, the DPJ was at 36 PERCENT , down from 42 PERCENT in the last survey taken Feb. 19-20. The ruling Liberal Democratic Party was at 24 PERCENT (22 PERCENT in the last survey). The rate of public support for the Aso cabinet was 14 PERCENT (13 PERCENT in the last survey),remaining extremely low with no signs of rebounding. The nonsupport rate was 70 PERCENT (75 PERCENT in the last survey). In the public preference of political parties for proportional representation, the LDP declined with the Aso cabinet coming into office. However, the DPJ has been on the rise from November last year. This time, the DPJ dropped to 36 PERCENT . Even so, the figure is at the same level as in December last year. The DPJ is still considerably above the LDP. Respondents were also asked if they would like the current LDP-led coalition government to be continued or if they would otherwise like it to be replaced with a DPJ-led coalition government. In response to this question, 24 PERCENT chose the LDP-led coalition, with 45 PERCENT preferring a DPJ-led coalition. In the breakdown of public support for political parties, the LDP stood at 22 PERCENT (25 PERCENT in the last survey),with the DPJ at 22 PERCENT (26 PERCENT in the last survey). Both the LDP and the DPJ were down, with the proportion of those with no particular party affiliation reaching 49 PERCENT (43 PERCENT in the last survey). Q: Is DPJ President Ozawa's account convincing? Yes 12 PERCENT No 77 PERCENT Q: Do you think it would be better for Mr. Ozawa to remain as DPJ president? Yes 26 PERCENT No 57 PERCENT Support for the Aso cabinet (Figures in parentheses denote the results of the last survey) Yes 14 PERCENT (13 PERCENT ) No 70 PERCENT (75 PERCENT ) Support for political parties (ditto) LDP 22 PERCENT (25 PERCENT ) DPJ 22 PERCENT (26 PERCENT ) Preference for proportional representation LDP 24 PERCENT (22 PERCENT ) DPJ 36 PERCENT (42 PERCENT ) More appropriate for prime minister Aso 22 PERCENT (19 PERCENT ) Ozawa 32 PERCENT (45 PERCENT ) 6) Yomiuri poll: 53 PERCENT want DPJ President Ozawa to resign over the Nishimatsu scandal, with 80 PERCENT unconvinced by his explanation; Aso Cabinet support rate declines to 17 PERCENT YOMIURI (Top play) (Excerpts) March 9, 2009 A Yomiuri Shimbun nationwide poll (carried out March 6-8 by TOKYO 00000520 006 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//09 telephone) has revealed that in connection with the violation of the Political Funds Control Law by Rikuzankai, the political funds management organization of Democratic Party of Japan (DPJ) President Ozawa, 53 PERCENT of the public think that Ozawa should resign, greatly exceeding the 36 PERCENT who felt he should stay on in his post. The public support rate for the DPJ fell 4.5 points from the previous survey to 23.8 PERCENT . But the support rate for the cabinet of Prime Minister Aso continued to fall, dropping from 19.7 PERCENT last time to 17.4 PERCENT this time. The support rate for the ruling Liberal Democratic Party (LDP) also dropped, from 26.8 PERCENT in the last survey to 24.1 PERCENT . The views of the electorate toward Ozawa's DPJ have turned severe, but the government and ruling parties have not been able to take advantage of this change in fortune. In connection with the donation incident, Ozawa said: "The donations were properly handled. I did not do anything wrong." Asked about this, only 12 PERCENT found his explanation "convincing," while 81 PERCENT said they were "unconvinced." Even limited to DPJ supporters, those who found his explanation unconvincing reached 66 PERCENT . And on his future course of action, 37 PERCENT of DPJ supporters thought he should resign. On the question of which leader, Prime Minister Aso or DPJ President Ozawa, was more appropriate to be prime minister, the number who chose Ozawa dropped from 40 PERCENT last time to 35 PERCENT in the current survey. There was a slight up tick for Aso from 24 PERCENT to 26 PERCENT , but this time as well it was below the level of Ozawa, despite his course action being questioned. Those who answered that they could not pick either reached 38 PERCENT , so the most frequently chosen response among voters was that neither was desirable. As for party support, last time, the DPJ was favored more than the LDP, but this time, the DPJ plummeted, allowing the LDP to edge out the other party slightly. There was a sudden increase in unaffiliated voters, from 35.7 PERCENT last time to 42.6 PERCENT this time. 7) Nikkei survey: 10 DPJ prefectural chapters think Ozawa should resign if his secretary is indicted; 70 PERCENT say the scandal will have impact on Lower House election; Okada most popular as possible Ozawa successor NIKKEI (Page 2) (Abridged) March 7, 2009 In the wake of the arrest of the first state-paid secretary of Democratic Party of Japan (DPJ) President Ichiro Ozawa, Nikkei conducted on March 6 a survey of heads of DPJ prefectural chapters regarding the ongoing scandal. In the survey, almost all respondents expressed their support for the option of Ozawa staying on in office. At the same time, some 70 percent indicated that the scandal would have an impact on the next House of Representatives election. Ten prefectural federations replied that if the secretary was indicted, Ozawa should resign from his post. The view favoring his resignation might gain more ground in the party. Secretaries general and others of the 47 DPJ federations were asked questions via written form or over the telephone. Their personal views were also asked. TOKYO 00000520 007 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//09 The results showed that 45 chapters supported Ozawa's continuing in office, with no one calling for a change of the party president. This reflects their trust in Ozawa's explanation that he has done nothing wrong and their fear that Ozawa's resignation would deal an immeasurable blow to the party, for he has been vigorously spearheading the party's campaign for the next election. At the same time, 11 chapters said that even if Ozawa's first secretary Okubo was indicted, Ozawa should stay in office, while 10 indicated that he should resign. As reasons for his resignation, Kagawa said because he has caused trouble for the party and Saga indicated that because he would be forced to take responsibility. A total of 33 prefectures predicted that the scandal would have an impact on the next Lower House election, with four pointing to a significant effect and 29 to a certain degree. Kyoto said that public trust in the DPJ has been undermined, and Nagano indicated that the damaged party image would have adverse effects on new candidates. Okayama said: "There is an argument on what to do with the campaign posters of President Ozawa standing side by side with the candidates." Finding it increasingly difficult to conduct election campaigns under Ozawa as party representative, severe views are spreading in the party. In response to a question asking who should replace Ozawa if he should resign, seven prefectures, including Nagasaki, named Katsuya Okada, citing his dedicated nationwide political tours after his resignation as party president in 2005. Five prefectures expressed their preference for Deputy President Naoto Kan, and three prefectures for Secretary General Yukio Hatoyama. Kan and Hatoyama are believed to have been picked to minimize the tumult in the party, but they might be pressed to take collective responsibility. 8) DPJ members speeding up their distancing themselves from Ozawa, with Secretary Hatoyama touching on possibility of him resigning YOMIURI (Page 1) (Excerpts) March 9, 2009 In connection with the violation of the Political Funds Control Law by the political funds management organization of Democratic Party of Japan (DPJ) President Ozawa, the Yomiuri Shimbun learned from a nationwide opinion poll on March 8 that there is a rising view calling for Ozawa's resignation. In the party, this has been matched by a increasing trend of lawmakers distancing themselves from him. Appearing yesterday on an NHK television talk show, DPJ Secretary General Yukio Hatoyama said: "I have no intention of saying that the question of his course of action will not come up," indicating his perception that depending on the result of investigation, the resignation of Ozawa from his post was conceivable. Further, regarding Ozawa's explanation of the investigation, Hatoyama said, "I don't think the people believe that he has fulfilled his accountability." Until now Hatoyama had strongly denied the possibility of Ozawa resigning, but with concern rising in the party about the impact on the next Lower House election, it seems that he has clearly taking a stance that gives consideration to public opinion. 9) Some DPJ lawmakers want Ozawa to resign voluntarily TOKYO 00000520 008 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//09 ASAHI (Page 1) (Full) March 9, 2009 With a majority of respondents in a poll wanted Ichiro Ozawa to step down as president of the main opposition Democratic Party of Japan (DPJ),the view is gaining ground in the DPJ that Ozawa's resignation will be unavoidable. Although Ozawa has denied the possibility of his resignation at present, calls for Ozawa's voluntary resignation are now being heard in the party in order to prevent a drive to remove Ozawa from the presidency from intensifying. The focus is now on when Ozawa will make a decision on what course of action he will take. Appearing on an NHK talk show yesterday, DPJ Secretary General Yukio Hatoyama pointed out: "I don't say that calls for Ozawa's resignation will not rise. If new facts are unveiled, a new development might arise." He indicated that the DPJ would support Ozawa, believing in his explanations, but new developments in the investigation would have an impact on Ozawa's course of action. DPJ members, who once returned to their home constituencies, have said that Ozawa should step down. Even a lawmaker close to Ozawa expressed a sense of crisis, saying: "Many voters have said that the DPJ should replace Ozawa as quickly as possible. If not, the DPJ will suffer." Since Ozawa said that he had no intention to step down, but he would make a decision after the investigations were concluded, many party members are now paying attention to when Ozawa makes a decision. DPJ members predict that Ozawa would step down if his secretary was indicted or if new facts that will lead to more allegations come out. 10) Prosecutors to question Nikai side over Nishimatsu scandal ASAHI (Page 1) (Full) March 9, 2009 In connection with a case violating the Political Funds Control Law, involving the dummy political groups of Nishimatsu Construction Corp, which allegedly denoted huge political funds to Democratic Party of Japan (DPJ) President Ichiro Ozawa's political fund management organization, the special investigation squad of the Tokyo Public Prosecutors Office appears to have decided to take testimony on a voluntary base from the office officials of Economy, Trade and Industry Minister Toshiro Nikai, whose fundraising party tickets were bought by the Nishimatsu-linked political bodies. Prosecutors will likely ask the office officials for explanations about whether they were aware that the money paid to party tickets came from Nishimatsu, while confirming the flow of political funds to Nikai. In order to conceal its name, Nishimatsu donated money to lawmakers through two political groups: Shin Seiji Mondai Kenkyu Kai and Mirai Sangyo Kenkyu Kai, headed by former company officials, both of which were disbanded in 2006. According to their reports on political funds for 2004, 2005 and 2006, the two political groups bought Nikai's political raising party tickets worth totaling 8.38 million yen. The 8.38 million yen is the second largest amount, following TOKYO 00000520 009 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//09 that given to Ozawa, in the political funds that the Nishimatsu-related political groups donated to lawmakers. Nikai decided on March 5 to return all the money paid to the party tickets. Regarding the relationship between the two political groups and Nishimatsu, Nikai said: "I did not know it at all. Although I learned it from media reports, I realize that I just can't say I was not aware of it." 11) Prosecutors to establish case against Nikai this week over illegal donations from Nishimatsu MAINICHI (Top Play) (Full) March 9, 2009 In connection with a case of illegal donations made to lawmakers by Nishimatsu Construction Co., a second-tier general contractor based in Minato Ward, Tokyo, former Nishimatsu President Mikio Kunisawa, who was arrested on suspicion of violating the Political Funds Control Law, had directly asked the office of Economy, Trade and Industry Minister Toshihiro Nikai about the amount of donations the company would make, according informed sources. Kunisawa reportedly has told the special investigation squad of the Tokyo District Public Prosecutors Office: "I handed cash to the Nikai side once or twice a year." Prosecutors seem to have decided to establish a case early this week against responsible members of the Nikai office on suspicion of violating the said law. Nishimatsu assigned its senior members to the task of negotiating with each of the politicians in the ruling or opposition camp who are influential in dealing with public works projects. Through visits to their offices or while dining with them, the executives received requests on the size of donations and the number of party tickets the company should buy. According to a company member, the predecessor of former President Kunisawa had been in charge of contacting the Nikai office. In part because Kunisawa graduated from Chuo University, from which Nikai also graduated, Kunisawa took over that duty. Kunisawa was placing importance particularly to relations with Nikai, according to the company member. Two dummy political bodies of Nishimatsu purchased party tickets worth approximately 8.3 million yen for the Nikai faction's political group, the New Wave, between 2004 and 2006. This amount is the second largest, following the 14 million yen in donations to Democratic Party of Japan President Ichiro Ozawa's fund-management group, Rikuzan-kai. Prosecutors are paying attention particularly to the company's ties with Nikai. In a House of Councillors Budget Committee meeting on March 6, Nikai, while admitting he was acquainted with Kunisawa, said: "I believe the money received has been properly handled." Asked if he had met the representatives of the two dummy groups, he replied: "I do not remember having met them." 12) Nishimatsu made contributions to Ozawa, Nikai in anticipation of receiving orders for airport construction SANKEI (Top Play) (Excerpts) March 9, 2009 TOKYO 00000520 010 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//09 A former executive of Nishimatsu Construction Co., in questioning by the special investigation squad of the Tokyo District Public Prosecutors Office, has confessed that the company's illegal donations to Democratic Party of Japan (DPJ) President Ichiro Ozawa's fund-management organization, Rikuzan-kai, stemmed from a desire to receive orders in airport-construction projects, according to investigators. Nishimatsu received orders in projects related to Hanamaki Airport in Iwate Prefecture, Ozawa's electoral district. Economy, Trade and Industry Minister Toshihiro Nikai is also known as an influential lawmaker lobbying for the interests of the domestic transport industry. Spending on Ozawa and Nikai through donations or purchasing party tickets was prominent. Prosecutors now suspect that Nishimatsu was aiming at grabbing rights for the airport. Forcible investigation of Nikai side to start possibly early this week The investigation squad is expected to raid the offices of Nikai's political groups early this week on suspicion of violating the Political Funds Control Law. According to data of Iwate, Nishimatsu received orders in projects related to Hanamaki Airport ordered by the Iwate prefectural government. Nishimatsu formed a joint venture with Kajima Corp. and another in 2002. The joint venture won orders worth about 5 billion yen for preparatory work to construct taxi ways and to extend the runway. The venture later received orders worth approximately 1.5 billion yen in 2003 in five projects related to the airport. No competitive bid was held in these five cases. According to Nishimatsu employees, the company made nearly 200 million yen to Ozawa during 12 years, followed by 8.38 million yen, the largest amount paid out among those to Liberal Democratic Party members, to Nikai between 2004 and 2006. According to investigators, an office of Nikai in Wakayama Prefecture allegedly received about 3 million yen from Nishimatsu annually under the name of its employee. 13) Fearing negative impact on Diet deliberations, some in ruling party calling for replacing Deputy Chief Cabinet Secretary Uruma after his controversial remark, "LDP won't be prosecuted" MAINCHI (Page 2) (Full) March 9, 2009 Chief Cabinet Secretary Takeo Kawamura yesterday identified Deputy Chief Cabinet Secretary Iwao Uruma as the high-level government official who had made a controversial remark (that the prosecutors would not pursue the Liberal Democratic Party in investigating the political donations scandal involving Nishimatsu Construction Co.). Kawamura's aim is to put an end as early as possible to the controversy before the main opposition Democratic Party of Japan (DPJ) pursues it at the House of Councillors Budget Committee. However, calls for replacing Uruma are now being heard even from within the ruling parties, while the DPJ and other opposition parties are escalating their criticism. Prime Minister Taro Aso may be forced to make a tough decision (on whether to retain Uruma or not. Aso decided on March 7 in his talks with Kawamura to make public the TOKYO 00000520 011 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//09 high-level government official as Uruma. The two also confirmed that if the DPJ called for Diet testimony by Uruma, the government would accept the call. The Prime Minister's Office (Kantei) side views that they would be able to overcome the matter by giving explanations that the remark was a general view that would have no impact on the investigation by prosecutors. The former practice was to appoint former officials of the Health and Welfare Ministry and the now defunct Home Affairs Ministry as deputy chief cabinet secretaries in the hope of using their skills in coordinating views between the government and central government agencies. Aso appointed Uruma, a former chief of the National Police Agency, because he trusts him, so he wants to avoid having to fire him. DPJ Secretary General Yukio Hatoyama yesterday told reporters: "It is serious thing for a former NPA chief, who is now a deputy chief cabinet secretary, to have made such a remark." He indicated he would pursue the issue, noting: "I think a conversation might have been held between the cabinet official and prosecutors. It is said that the remark was made as a general perception, but such a view does not come from ordinary conversations." Some in the government and ruling coalition have said that Uruma should be replaced before the issue has a negative impact on deliberations in the Upper House Budget Committee. A senior ruling coalition member commented: "I think the prime minister should sack him on March 9. If so, he will be respected for making a quick decision." The reason calls to replace Uruma are coming from the government and ruling camp is that some are questioning his capability as a top bureaucrat. One Aso aide said: "Uruma has not fully carried out his, so he should be immediately replaced." Uruma intends to explain his remark today in a regular press conference. Whether the move to dismiss him will grow all depend on what he says. 14) Okada, another senior DPJ members to set off for Asia; Some members voice concern about leaving Japan at this juncture MAINICHI (Page 5) (Full) March 7, 2009 Democratic Party of Japan (DPJ) deputy presidents Katsuya Okada and Seiji Maehara will leave Japan tomorrow for three Southeast Asian countries to meet key government officials and business leaders, including Singapore's Prime Minister Lee Hsien Loong. Following the arrest of his first state-funded secretary, President Ichiro Ozawa will again explain the details of the case during a regular party executive meeting on the 10th, but Okada and Maehara will not be there. Okada is seen as a likely candidate to succeed Ozawa, but he will leave for the Asian countries as scheduled, despite the current severe circumstances his party is in. Seeing his decision to travel anyway, some party members praised Okada for always being "serious-minded," but others voiced concern about his being away from Japan at this juncture. TOKYO 00000520 012 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//09 ZUMWALT