PUBLIC OPINION TURNS AGAINST OZAWA, DPJ OVER FUNDS

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 000526

SIPDIS

E.O. 12958: DECL: 03/08/2018
TAGS: PGOV ECON JA
SUBJECT: PUBLIC OPINION TURNS AGAINST OZAWA, DPJ OVER FUNDS
SCANDAL

REF: TOKYO 490

Classified By: Acting DCM Ron Post, reasons 1.4(b),(d).


1. (C) Summary: Public opinion is quickly turning against
DPJ leader Ichiro Ozawa, as additional information on his
possible complicity in illegal dealings with Nishimatsu
Construction emerges in the press. As many as 61 percent of
respondents to four recent media polls indicated that Ozawa
should resign immediately, with an even greater number
expressing dissatisfaction over his explanation to date.
This decline in popular support for the opposition leader and
his party has allowed PM Aso and his ruling LDP to rebound
very slightly in some polls. DPJ members and local chapters
continue to back Ozawa publicly, but are increasingly
cautious. Initial LDP concerns that the inquiry could spread
to ruling party lawmakers, on the other hand, appear to have
eased for the moment. End Summary.

Support for Ozawa, DPJ Drops; Modest Gains for Aso, LDP
-------------- --------------


2. (C) Between 53 and 61 percent of the Japanese public
believes opposition Democratic Party of Japan (DPJ) President
Ichiro Ozawa should resign from his party's leadership
position over allegations of financial misconduct, according
to the results of four major media surveys conducted March
6-8. An even higher percentage -- as many as 80 percent of
respondents -- called on Ozawa to better explain his ties to
scandal-tainted Nishimatsu Construction. Editorials across
the political spectrum have similarly criticized Ozawa for
his inadequate attempts to confront the charges, and are
predicting dire political consequences for both Ozawa and the
DPJ should the allegations prove true.


3. (C) Support for the DPJ has dropped by as many as seven
points since the story broke on March 3, according to the
surveys. At least some portion of that support has shifted
to the LDP in nearly every poll, but the bulk of the former
DPJ supporters have moved into the unaffiliated category.
The cabinet support rate rose for the first time since Prime
Minister Taro Aso took office in late September 2008,
according to several of the polls, with a concomitant
decrease in non-support. A sizeable drop in Ozawa's own
personal popularity, coupled with a much smaller increase for
Prime Minister Taro Aso, has also narrowed the gap between
the two leaders, although more than two-thirds of respondents
now believe neither is appropriate to serve as Prime
Minister.

DPJ Still Backs Ozawa, but Fears New Revelations
-------------- ---


4. (C) Secretary General Yukio Hatoyama broached for the
first time publicly on March 8 the possibility that Ozawa
could eventually be pressured step down over the issue, "if
new facts become available." Otherwise, party leaders
continue to insist that Ozawa will stay, despite frequent
press reports of "unnamed DPJ sources" calling on Ozawa to
resign in order to avoid any negative impact on the party's
chances in the next Lower House election. Surveys of the 47
DPJ prefectural chapters by the Yomiuri and the Nikkei found
approximately 70 percent of local party executives convinced
that the incident will have an impact on the outcome of the
next Lower House election. Ten local executives in the
Nikkei survey noted that Ozawa should resign if and when
political secretary Takanori Okubo, arrested March 3, is
indicted. The overwhelming majority in both surveys, however,
indicated that Ozawa should remain in his position pending
further developments.


5. (C) former DPJ President Katsuya Okada, cited most
frequently by the press and Embassy contacts as the likely
successor to Ozawa, announced March 7 that he will follow
through on plans to travel with another former party leader,

TOKYO 00000526 002 OF 002


Seiji Maehara, on a three-nation swing through Southeast
Asia. Opinions are reportedly divided in the DPJ over those
who see Okada's trip as "serious-minded" and those who
question his decision to be absent from a March 10 party
executive meeting.


6. (C) Embassy political contacts are not in a position to
assess the truth of the charges, but insist that the
Prosecutor General has a reputation for playing by the rules
and would never have moved on Ozawa's secretary without a
rock-solid case. In the end, they expect the final amount of
any illegal donations to run much higher than the initial
estimates noted in last week's press accounts. One Komeito
Diet member noted that Ozawa had "inherited" Nishimatsu from
his mentor, former LDP Secretary General Shin Kanemaru back
in the early 1990s, and had been amassing illegal
contributions for years. A DPJ contact with ties to the
construction industry acknowledged that a "second-tier"
company like Nishimatsu would have had every reason to prime
Ozawa for new business in northern Japan.


7. (C) One LDP insider described the Ozawa case as "probably
the last great LDP scandal," drawing parallels between Ozawa
and Kanemaru. Kanemaru was arrested just after the budget
passage in 1993 for a minor violation of the Securities and
Exchange Act. The prosecutors had firm evidence of much
greater wrong, but chose to leak information slowly to the
press until they uncovered the full extent of his ill-gotten
gains. Ozawa fought hard with prosecutors and survived that
time, our contact mused, but the fight is about Ozawa himself
this time, and he might not survive. She suggested that the
suicide of a political secretary to Nagano Governor Jun Murai
two weeks ago could be additional evidence of serious
wrong-doing. Murai was known to have ties to both Ozawa and
Nishimatsu, and his secretary had been questioned intensively
by prosecutors for a week before he hanged himself.

LDP Breathes a Sigh of Relief, for the Moment
--------------


8. (C) For the moment, at least, fears that the inquiry could
spread to the LDP appear to have abated. Several LDP
lawmakers, including former Prime Minister Yoshiro Mori, have
promised to return donations in the USD 20,000-30,000 range.
More media attention has been focused on Minister of Economy,
Trade, and Industry Toshihiro Nikai, who admitted to selling
the equivalent of roughly USD 80,000 in tickets to
fund-raising events for his small LDP faction from
Nishimatsu-related organizations between 2004 and 2006. The
Nikai group is reportedly the second-largest recipient of
funds from Nishimatsu-related organizations after Ozawa.
Mori, Nikai, and the other LDP lawmakers have denied,
however, that the donations were improper, and Embassy Diet
contacts are inclined to believe that if the prosecutors
planned to go after these other recipients, they would have
done so immediately, to avoid the destruction of evidence.


9. (C) LDP leaders, fearing their own party's vulnerability
on campaign finance issues, remain cautious in taking on
Ozawa over the merits of the funding scandal, preferring to
focus on his claims that the investigation is a result of a
political conspiracy on the part of the ruling coalition.
The DPJ has been frustrated in its attempts to make political
hay out of remarks by a "senior administration official"
March 5 to the effect that prosecutors would not file charges
against LDP lawmakers with possible ties to Nishimatsu.
Chief Cabinet Secertary Takeo Kawamura revealed Deputy Chief
Cabinet Secretary Iwao Uruma as the source of the "quite
inappropriate" remark on March 8, but characterized the
comment as a statement of his own personal view, as opposed
to some sort of "order" to prosecutors. Uruma, a former
chief of the National Police Agency, told the Diet March 9
that his remarks had been "misdirected."
ZUMWALT