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