VZCZCXRO4439
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #1096/01 0610152
ZNR UUUUU ZZH
P 020152Z MAR 06
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 9218
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/COMUSJAPAN YOKOTA AB JA//J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/COMPATWING ONE KAMI SEYA JA
RUEHNH/AMCONSUL NAHA 7528
RUEHFK/AMCONSUL FUKUOKA 4891
RUEHOK/AMCONSUL OSAKA KOBE 7991
RUEHNAG/AMCONSUL NAGOYA 4937
RUEHKSO/AMCONSUL SAPPORO 6082
RUEHBJ/AMEMBASSY BEIJING 0874
RUEHUL/AMEMBASSY SEOUL 7069
RUCNDT/USMISSION USUN NEW YORK 9088

UNCLAS SECTION 01 OF 11 TOKYO 001096 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; 
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST 
DIVISION; TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS 
OFFICE; SECDEF FOR JCS-J-5/JAPAN, 
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA 
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY 
ADVISOR; CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. 
 
E.O. 12958: N/A 
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03/02/06 
 
 
Index: 
 
1)   Top headlines 
2)   Editorials 
3)   Prime Minister's daily schedule 
 
Visit of Iran's foreign minister: 
4)   Foreign Minister Mottaki in interview is unbending on Iran's 
  plan to continue uranium enrichment 
5)   In interview comments, Mottaki seeks to constrain Japan from 
cooperating on sanctions against Iran 
 
6)   Money laundering game: North Korea may be washing its dirty 
  money in another China bank account 
 
7)   Japan, seeing "forward-looking relations" slipping away, 
  reacts sharply to ROK president's latest critical speech 
 
8)   China in upcoming talks with Japan may float new proposal 
  for resolving E. China Sea gas development stalemate 
 
9)   Poll of high school kids in US, Japan, China, South Korea 
  finds only one in four in China, ROK like Japan 
 
Defense and security issues: 
10)  SDF timetable for withdrawal from Iraq may slip as 
  escalating religious clashes in country threaten stability of 
  Iraqi government 
11)  Town near Iwakuni base would accept Atsugi fighters 
conditions on a local economic package 
12)  JDA finds more information leaks from the SDF 
 
13)  Fiscal 2006 budget bill passes the Lower House 
 
Minshuto in turmoil: 
14)  Local Minshuto organizations want Nagata to quit Diet seat 
  for fake e-mail fiasco 
15)  Minshuto head Maehara suddenly finding himself isolated in 
the party 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
JAL unveils new management lineup, revealing victory of rebels in 
internal strife 
 
Mainichi: 
Poll of governors: 27 favor introduction of regional system 
(reorganization of prefectures into larger regional blocs with 
devolution of central government power), but many opposed to 
zoning examples 
 
Yomiuri: 
Personnel transfer across ministries and agencies, promotion of 
5% decrease in public servants will be specified in 
administrative reform promotion legislation 
 
Nihon Keizai: 
Firms shifting to long-term perspective on fund-raising plans, 
envisioning discontinuation of easy money policy 
 
TOKYO 00001096  002 OF 011 
 
 
 
Sankei: 
North Korea transfers its bank accounts to China, perhaps aiming 
to dodge pursuit of money laundering 
 
Tokyo Shimbun: 
Minshuto (Democratic Party of Japan) members of Tokyo 
Metropolitan Assembly demand lawmaker Nagata's resignation, 
reflecting discontent from local chapter members 
 
2) EDITORIALS 
 
Asahi: 
(1)  Secret diplomatic fund: Ruling should be taken seriously 
(2)  ODA reform: Efficiency is a long way away 
 
Mainichi: 
(1)  Ruling on discretionary diplomatic fund: General rule for 
disclosure necessary 
(2)  Review of specially designated industries: No public benefit 
 
Yomiuri: 
(1)  Report on regional system (reorganization of prefectures 
into larger regional blocs with devolution of central government 
power): Basis for discussion prepared now 
(2)  Philippines: Political turmoil not calmed with iron hand 
 
Nihon Keizai: 
(1)  JAL needs to bring its management back on track swiftly 
(2) District court ruling chides Foreign Ministry for its 
practice of handling everything as confidential 
 
Sankei: 
(1)  Ruling on secret diplomatic fund: Outlays for vague reasons 
not permitted 
(2)  Regional system: Institutional design necessary for self- 
reliant local governments 
 
Tokyo Shimbun: 
(1)  Replacement of JAL president: New management lineup urged to 
make a fresh start quickly 
(2)  Secret diplomatic fund: More information should be disclosed 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, March 1 
 
NIHON KEIZAI (Page 2) (Full) 
March 2, 2006 
 
10:36 
Signed a get-well book for the hospitalized Prince Mikasa at the 
prince's residence in Motoakasaka. 
 
10:46 
Returned to Kantei. 
 
11:30 
Met Cabinet Office Vice Minister Erikawa and Decoration Bureau 
Director General Katsuno. 
 
12:39 
 
TOKYO 00001096  003 OF 011 
 
 
Met Education Minister Kosaka. 
 
14:01 
Met LDP Secretary General Takebe, followed by National Police 
Agency Secretariat Chief Ando, Justice Ministry Correction Bureau 
Director General Onuki, and Japan Coast Guard Vice Commandant 
Hirata. 
 
15:52 
Met Diet Affairs Committee Chairman Hosoda, Diet Affairs 
Committee Principal Director Murata, and Lower House Rules and 
Administration Committee Chairman Sata. 
 
16:32 
Met Administrative Reform Minister Chuma, Administrative Reform 
Promotion General Secretary Matsuda, and others. 
 
17:02 
Hagi Mayor Nomura in the presence of Chief Cabinet Secretary Abe, 
followed by Internal Affairs and Communications Minister 
Takenaka. 
 
19:03 
Offered condolences for the death of former Agriculture Minister 
Mutsuki Kato at the minister's residence. 
 
19:30 
Returned to his residence. 
 
4) Iranian foreign minister indicates plan to continue uranium 
enrichment activities for research purposes in the nation 
 
ASAHI (Page 3) (Full) 
March 2, 2006 
 
Responding to an interview with the Asahi Shimbun yesterday, 
visiting Iranian Foreign Minister Manouchehr Mottaki said that 
Iran would continue small-scale uranium-enrichment activities for 
research purposes within the nation even if it accepts a Russia 
proposal. Prior to the regular board meeting of the International 
Atomic Energy Agency (IAEA) starting on March 6, Mottaki thus 
underscored that Iran has the right to use nuclear materials for 
peaceful purposes. An array of difficulties are foreseen in 
negotiations on Iran's nuclear issue. 
 
Foreign Minister Mottaki emphatically said: "The right to have 
nuclear techniques should be recognized." The Russia proposal has 
drawn attention as measures to break the impasse on the issue by 
shifting Iran's enrichment activities to Russia. Mottaki, though, 
commented that "Iran will continue in the nation even under any 
circumstances" such small-scale enrichment activities as those 
resumed in February in a laboratory. 
 
Russia and Iran started the fourth round of talks on March 1. 
Here, too, heated negotiations are expected because the Russia 
proposal is premised on a plan for Iran to completely freeze its 
enrichment activities in the nation. Mottaki said: "The focus in 
the talks is on where activities should be moved and how long." 
It has been reported that commercial-based enrichment activities 
to extract nuclear fuel will be subjected to the transfer plan." 
 
As for the period of transfer, a Russian newspaper reported: 
 
TOKYO 00001096  004 OF 011 
 
 
"Iran hopes for two years or less," but Mottaki said: "We have 
asked that the period should be as short as possible." He 
indicated that enrichment activities for commercial purposes 
should be returned to Iran in the end. 
 
Regarding the international community's concern that Iran might 
use nuclear materials for military purposes, Mottaki commented: 
"There is no place in Iran's defense policy for nuclear weapons 
to exist," adding: "We are ready to accept inspections based on 
IAEA rules." 
 
5) Iran's foreign minister seeks to check Japan's cooperation in 
imposing nuclear-related sanctions 
 
NIHON KEIZAI (Page 1) (Full) 
March 2, 2006 
 
Iran's Foreign Minister Mottaki, who is now visiting Japan, gave 
an interview in Tokyo yesterday to this newspaper in which he 
stressed, "Friendly relations is the basis for economic 
cooperation," referring indirectly to that country's nuclear 
development issue. The foreign minister's remark may be taken as 
trying to constrain Japan from cooperating with possible 
sanctions against Iran that the US is considering, and as a hint 
that if Japan joints such sanctions, there would be a possibility 
that Iran would reconsider such economic cooperation with Japan 
as the oil field development project. 
 
Mottaki pointed out: "President Bush's policies instead of 
managing crises are inviting new crises." He expressed his view 
that even if US-led sanctions were imposed on Iran, they would 
not be effective. 
 
Japan relies on Iran for 14% of its oil imports, and in 2004, it 
acquired a 75% interest in a project to develop Iran's Azadegan 
oil field. The foreign minister noted, "The Azadegan oil field is 
a project that symbolizes the cooperation between our countries." 
He expressed his expectation for quick development of the field, 
and he stated, "We are giving priority to inviting in investment 
from Japan, and we are now considering such incentives as 
government guarantees." He indirectly urged Japan in this way not 
to take a hard-line stand on the nuclear issue. 
 
6) North Korea transfers bank accounts to China, then changes 
banks a number of times; Is it trying to escape pursuit of its 
money laundering? 
 
SANKEI (Top Play) (Full) 
March 2, 2006 
 
According to several Japanese and US government sources, North 
Korea, following the financial sanctions imposed by the US 
government over its laundering money using a banks in Macau, 
transferred its bank accounts to a number of banks in China and 
then switched banks several times. Washington and Pyongyang are 
scheduled to hold talks on the financial sanctions in New York on 
Mar. 7. During the talks, the US government will likely strongly 
call on North Korea to stop its illegal financial activities. 
 
North Korea started switching around its bank accounts from 
around last October. Deputy Assistant Secretary of the Treasury 
Grazer visited Japan in Jan. to investigate North Korea's money- 
 
TOKYO 00001096  005 OF 011 
 
 
laundering activities. He reportedly discussed the issue with 
Japanese officials on that occasion. According to authorities 
concerned, following the US sanctions, North Korea informed an 
organization in Japan under its control of the transfers of bank 
accounts to be used for their remittances, providing account 
numbers it holds with a number of banks in China. Though the 
officials did not reveal the names and locations of the banks, 
they said that those banks include a European bank's branch. 
 
One official noted, "North Korea has changed its bank accounts 
about once a month. It may be doing so in order to prevent the US 
from tracking the money or could be unable to obtain full 
cooperation from banks where it opened accounts. 
 
Illegally made profits reach 500 million yen a year 
 
Sources of funds for money laundering by North Korea are believed 
to be profits made on illegal activities, such as the printing of 
bogus US dollar notes and drug trading. 
 
According to the Sep. 2005 edition of the US government Federal 
Register, the US government confiscated 45 million dollars 
(approximately 5.2 billion yen) worth of 100-dollar "super notes" 
printed by North Korea over the past 30 years. It is estimated 
that Pyongyang earned 500 million dollars a year (approximately 
58 billion yen) through criminal acts, including drug trading. 
The US government insists that it has substantial evidence that 
shows North Korea is laundering profits made on such illegal 
activities through a bank in Macau. It claimed that Banco Delta 
Asia received hard cash, including fake dollar notes, for over 
two decades and allowed these to be circulated. 
 
The US Department of the Treasury last September designated the 
bank as a principal bank feared to be involved in money 
laundering by North Korea in line with the Patriot Act, a law 
established after the Sept. 2001 terrorist attacks, and placed a 
ban on its business transactions with US banks. 
 
North Korea is calling for the removal of the sanctions, claiming 
that it has nothing to do with the bogus money circulation. The 
US has taken similar measures against banks in Syria and Burma in 
order to prevent the outflow of illegal funds to terrorists and 
illegal financial activities by foreign governments, taking the 
position that the law is targeted not at a specific 
administration but illegal activities. 
 
7) Government, ruling party members react fiercely to South 
Korean president's speech, calling it "lacking future-oriented 
approach" 
 
YOMIURI (Page 4) (Full) 
March 2, 2006 
 
A number of officials in the government and the ruling parties 
have voiced dissatisfaction at remarks made by South Korean 
President Roh Moo Hyun in a speech yesterday. Roh delivered the 
speech to mark the 87the anniversary of Korea's March 1 
Independence Movement. A senior Foreign Ministry official 
commented: "The speech lacks a future-oriented approach. There 
was no reference to or evaluation of Japan's record over the 60- 
year postwar period." 
 
 
TOKYO 00001096  006 OF 011 
 
 
Asked by reporters about the South Korean president's criticism 
of his visits to Yasukuni Shrine, Prime Minister Koizumi replied: 
"It is reasonable for any country to pay tribute to its war 
dead." 
 
In the speech, Roh also remarked: "If Japan aims to become an 
ordinary country and one of the world's leading nations, it 
should try to win the trust of the international community, 
instead of seeking to amend laws and reinforce its military 
power." Government and ruling party members, taking this comment 
as intended to apply pressure on Japan's moves to amend its 
constitution, fiercely reacted to it. 
 
Chief Cabinet Secretary Abe expressed his strong displeasure at 
the remark, saying: "What we do with our Constitution is a matter 
to be handled by Japan. This is indisputably our domestic issue." 
 
New Komeito leader Kanzaki said: "It is important for Japan to 
thoroughly discuss a revision of the Constitution without being 
influenced by foreign countries." He added: "We should not revise 
the Constitution into one that will pose a threat to neighboring 
countries on the military front." 
 
8) East China Sea gas field: China's new proposal likely to come 
into focus at upcoming senior working-level talks slated for 
March 6 
 
YOMIURI (Page 2) (Excerpts) 
March 2, 2006 
 
Japan and China have decided to hold senior working-level talks 
on explorations of natural gas fields in the East China Sea in 
Beijing on March 6-7. The focus of the first formal bilateral 
talks in five months is what proposal China will come up with 
about joint gas field development. Another focus is whether Trade 
Minister Nikai's recent dialogue in China with its leaders, 
including Premier Wen Jiabao, will have a favorable effect on the 
upcoming talks. 
 
Attention 
 
China has refused to recognize the equidistance line between 
Japan and China as the boundary and consistently maintained the 
position that it is exploring gas fields in undisputed waters, 
which, however, are located around the equidistant line as 
claimed by Japan. In the previous round of talks in last 
September, Japan proposed joint development of four gas fields, 
including "Shirakaba" or Chunxiao in Chinese, near the median 
line, but there has been no response from China. 
 
In informal talks this January, China frowned on Japan's 
proposal, but stated: "Considering Japan's proposal, we will come 
up with a new suggestion." China is less likely to recognize the 
equidistance line, given its boundary issue with other nations 
over, for instance, the Spratly Islands, but how far China's new 
proposal will refer to about joint development is likely to draw 
international attention. 
 
Flexible 
 
When Nikai met with Wen in February, the two leaders did not 
exchange in-depth views over the gas field issue, but agreed on 
 
TOKYO 00001096  007 OF 011 
 
 
some plans, for example, to host a forum aimed at promoting 
cooperation in the areas of energy saving and the environment in 
Tokyo in late May. Nikai's China visit set the stage to mend the 
currently chilly relations with China. 
 
The initial timetable for the upcoming working-level talks was 
that they would be held in October of last year. And in the 
informal talks this past January, such working-level talks were 
scheduled to occur sometime from late January to mid-February, 
but they were not realized. Thus the working-level talks have 
been delayed without any clear reasons and time has been wasted 
to date. 
 
9) 4-nation poll: One-fourth of Chinese, South Korean high school 
students like Japan; US stands at 40%, China at 10% among 
Japanese students 
 
MAINICHI (Page 2) (Abridged) 
March 2, 2006 
 
In China and South Korea, only one-fourth of high school students 
like Japan, a sign that Japan's bilateral relationships with 
these two countries have soured, according to findings from a 
poll released yesterday by the Japan Youth Research Institute, a 
Shinjuku-based think tank. However, the levels of liking for 
Japan among high school students in China and South Korea were 
higher than that for these two countries among Japanese high 
school students. The poll also found that over 70% of Chinese and 
South Korean high school students eager to improve their results 
at school, while the proportion of Japanese high school students 
hoping to do so was only 30%. 
 
The survey was conducted from October through December last year 
in Japan, the United States, China, and South Korea. For the 
survey, a total of 7,300 high school students were chosen in the 
four countries. In the survey, they were asked if they like 
Japan. In the United States, "yes" accounted for 45.2%, topping 
all other countries. In China and South Korea, the pro-Japan 
figure was respectively at 24.5% and 24.0%. 
 
In Japan, 39.6% chose the United States as a country they like, 
followed by South Korea at 16.7% and China at 10.2%. Japan and 
the United States were popular among each other's high school 
students. Respondents were also asked if they like Japanese 
comics or animations. In response to this question, 73.3% 
answered "yes" in China, and 81.4% in South Korea. Among those 
who like Japanese TV programs or books, the degree of liking for 
Japan rose to 40.5% and 39.1% in South Korea. Among those who 
have ever been to Japan, the figure was even higher, reaching 
48.6% in China and 40.3% in South Korea. 
 
10) Gloomy outlook hangs over Japan's plan to begin withdrawing 
GSDF troops from Iraq 
 
TOKYO SHIMBUN (Page 2) (Full) 
March 2, 2006 
 
Dark clouds are hanging over Japan's plan, now in its final 
phase, to withdraw Ground Self-Defense Force (GSDF) troops from 
Iraq. The reason is because with the religious conflict between 
Shiite Muslims and Sunnis intensifying, there is no telling when 
Iraq can install a legitimate government. Although the government 
 
TOKYO 00001096  008 OF 011 
 
 
intends to begin pulling the GSDF out of Iraq later this month 
and finish up in May, if tensions grow further in Iraq, the 
planned withdrawal may be delayed. 
 
The religious conflict was triggered by the bombing on Feb. 22 of 
the Al Askari Mosque, a key Shi'a shrine, in the central Iraqi 
city of Samarra. The bombing triggered a series of bloody 
conflicts between Shiites and Sunnis in Baghdad and other cities, 
producing a large number of victims. Shiite residents of Samawah 
where GSDF troops are stationed have also staged a massive 
protest. 
 
A senior GSDF officer said, "Suppressed hostility toward each 
other has exploded. Iraq may fall into a state of civil war." 
Following the legislative election in December, talks have been 
held with the aim of establishing a grand coalition encompassing 
all religious and ethnic groups. But achieving that goal at an 
early date seems extremely difficult. 
 
The Japanese government has been making preparations for the 
planned GSDF withdrawal based on progress in the political and 
security situations in Iraq. But the environment surrounding Iraq 
has now completely changed. A government source lamented, 
"Although the establishment of a legitimate government is not a 
condition per se, we cannot pull troops out of Iraq when there is 
no prospect for it." 
 
British and Australian forces that have been conducting security 
duties in Samawah have also studied plans to leave the country 
after transferring powers to local security authorities. Unable 
to transfer powers under the unstable situation in Iraq, their 
plans may also have to be shelved. That would make it even more 
difficult for the SDF to leave the country. 
 
In a working-level talks held between Japan, the US, Britain, and 
Australia, the government presented a plan to begin withdrawing 
the GSDF in late March. The government also plans to allow the 
Air Self-Defense Force to continue its Kuwait-based transport 
mission with more airlift hubs. Such plans of Japan obtained the 
understanding of other countries. 
 
But the working-level meeting discussed each country's withdrawal 
plan on the assumption that Iraq would soon install a legitimate 
government. However, given the increasingly unstable security 
situation in Iraq, each country may reexamine their troop 
structure. 
 
The government has been making arrangements for Prime Minister 
Junichiro Koizumi to formally announce the withdrawal in mid- 
March or later. Given the murky outlook for the security 
situation in Iraq, though, the government will likely find it 
difficult to make such a decision. 
 
11) Mayor accepts Iwakuni redeployment plan 
 
YOMIURI (Page 4) (Full) 
March 2, 2006 
 
The town of Yu, which neighbors the city of Iwakuni in Yamaguchi 
Prefecture, has accepted the planned redeployment of US carrier- 
borne fighter jets from the US Navy's Atsugi base, which is 
located across the city of Yamato and other municipalities in 
 
TOKYO 00001096  009 OF 011 
 
 
Kanagawa Prefecture, to the US Marine Corps' Iwakuni base in the 
city of Iwakuni. The town's mayor, Toshimitsu Makimoto, visited 
Defense Agency Director General Nukaga, Chief Cabinet Secretary 
Abe, and other government officials yesterday, and the mayor 
handed a written petition regarding the planned realignment of US 
forces in Japan. "We are opposed to a further buildup of the 
base," the petition says. However, the petition also notes, "We 
cannot say our living environment will be further affected along 
with the realignment." With this, the petition shows the town's 
de facto acceptance of the redeployment of carrier-borne fighters 
to the base. The petition, however, conditions the town's 
acceptance on an expanded package of economic stimulus measures 
from the government for base-hosting local communities. 
Meanwhile, Iwakuni City is scheduled to poll its residents on 
March 12 to ask them whether to accept the redeployment. 
 
12) GSDF also leaked info for bid rigging 
 
NIHON KEIZAI (Page 43) (Full) 
March 2, 2006 
 
The Ground Self-Defense Force was recently found to have rigged 
bids for dry cells ordered for its communication equipment. In 
this bid-rigging case, GSDF officials had leaked information, 
such as estimated prices, to battery makers, the Defense Agency 
found yesterday from its internal investigation. The agency is 
considering punitive measures for those GSDF officials. 
 
According to the Defense Agency, administrative officials and 
GSDF personnel assigned to the GSDF Central Supply Command 
provided budget memos describing quantities and unit prices to 
battery-manufacturing companies' officials from April 1996 
through March 1999. Around 1997, an administrative official of 
the GSDF Communication Supply Command (currently the Kanto Supply 
Depot), when asked by officials from battery makers, told them 
that the estimated price would be the same as last year's. 
 
In December 2000, the Fair Trade Commission warned four battery- 
manufacturing companies against their violation of the 
Antimonopoly Law. The four companies are Fuji Denki Kagaku Co., 
Ltd. (FDK), Matsushita Electric Industrial Co., Ltd., Toshiba 
Battery Co., Ltd., and Toyo Takasago Dry Battery Co., Ltd. 
(Tokan). 
 
In November 2004, the Defense Agency instituted a lawsuit at the 
Tokyo District Court, claiming back approximately 700 million yen 
as an unreasonable profit. 
 
In July last year, the four companies stated before the court 
that the Defense Agency rigged the bids on its own initiative. 
They submitted budget memos from Central Supply Command officials 
describing items and prices. 
 
However, the Defense Agency comments: "They were asked by the 
makers to provide that information. The Defense Agency did not 
initiate the bid rigging." 
 
13) Lower House to approve FY2006 budget bill today 
 
YOMIURI (Page 4) (Full) 
March 2, 2006 
 
 
TOKYO 00001096  010 OF 011 
 
 
The House of Representatives Steering Committee decided in its 
board meeting yesterday to take a vote on the budget bill for 
fiscal 2006 at a Lower House plenary session this evening. The 
bill is likely to be approved by a majority from the ruling 
parties and sent to the House of Councillors. 
 
The budget bill is now certain to be enacted by the end of this 
fiscal year. Based on constitutional rules, if the bill passes 
the Lower House today, it will be enacted at 12:00 a.m. on Apr. 1 
even without voting at the Upper House. 
 
14) Minshuto's Tokyo Metropolitan Assembly members demand 
resignation of lawmaker Nagata, Local chapters express 
unhappiness with the party executive's response 
 
TOKYO SHIMBUN (Top Play) (Full) 
March 2, 2006 
 
The main opposition party Minshuto (Democratic Party of Japan) 
started yesterday the work of picking the replacement of 
Yoshihiko Noda, who quit his post as the party's Diet affairs 
chief to take responsibility for disrupti9ng the Diet by giving 
party lawmaker Hisayasu Nagata the go-ahead to bring up an e-mail 
allegedly sent from Livedoor Co. founder Takafumi Horie ordering 
his staff to transfer money to Liberal Democratic Party (LDP) 
Secretary General Tsutomu Takebe's son. After deciding on what 
 
SIPDIS 
punitive measures to impose, Minshuto is now putting energy into 
quelling internal party disorder. However, Akihiko Nakamura, 
secretary general of Minshuto's Tokyo Metropolitan Assembly 
 
SIPDIS 
members, and other assembly members called on Minshuto's 
Secretary General Yukio Hatoyama at party headquarters to hand 
 
SIPDIS 
over a letter demanding the resignation of Nagata from the Diet. 
 
The letter included such charges as that the party would 
otherwise never secure public understanding and that party 
leaders did not realize the seriousness of the situation. The 
assembly members wanted Nagata to voluntarily give up his Diet 
seat. Hatoyama responded by saying, "I would like to do my best 
to restore public confidence in the party in consideration of 
your views." 
 
The party executive will explain in a meeting on March 4 the 
punitive measures they have decided and seek party members' 
understanding. Party regional chapters will inevitably intensify 
criticism of the party's responsibility for the e-mail uproar. 
 
Party President Seiji Maehara is now working on the selection of 
new Diet affairs chief. He has already asked former party head 
Naoto Kan and Vice President Yoshiaki Takagi to assume the post, 
but both Kan and Takagi turned down the offer. He intends to pick 
Noda's successor from veteran lawmakers based on an advice by a 
senior party member that it would be desirable to pick a person 
with the experience of dealing with Diet affairs since the 
personnel change came during deliberations on the fiscal 2006 
budget. 
 
The party has decided to set up a taskforce headed by Acting 
Secretary General Koichiro Genba to examine the party executive's 
 
SIPDIS 
response to the e-mail issue and to look into measures to prevent 
a recurrence. The taskforce will hold its first meeting today. It 
will come up with a report by the end of March after hearing 
views of experts on crisis management. 
 
TOKYO 00001096  011 OF 011 
 
 
 
15) Livedoor e-mail uproar: Minshuto President isolated in party 
due to resignation of Noda as Diet affairs chief 
 
MAINICHI (Page 2) (Excerpts) 
March 2, 2006 
 
Minshuto (Democratic Party of Japan) Diet Affairs Committee 
Chairman Yoshihiko Noda stepped down from his post to take 
responsibility for throwing the Diet into confusion by allowing 
false allegations to be raised in the Diet by lawmaker Hisayasu 
Nagata. However, coordination on the selection of Noda's 
successor has run into trouble. The situation reflects the fact 
that Minshuto President Seiji Maehara is now isolated in the 
party. While the party leadership losing momentum, other internal 
forces have begun distancing themselves from Maehara by refusing 
his offer to assume the party's Diet Affairs Committee 
chairmanship. Given this situation, Maehara is busy trying to 
coordinating views in the party. 
 
"I would like to fulfill my duty until my successor is picked," 
said Noda in a meeting yesterday of the party's Diet Affairs 
Committee members. His remark impressed that the party was having 
a difficult time in selecting Noda's replacement. 
 
Secretary General Yukio Hatoyama told reporters yesterday 
 
SIPDIS 
morning, "We want to pick the replacement today," but he said 
later in the day, "It has not been that easy." 
 
Maehara is trying to give top priority to internal harmony by 
installing in the vacant post a veteran lawmaker, and not a mid- 
level or junior member. While communicating with Secretary 
General Hatoyama, Maehara called up several candidates to offer 
the post. However, his offer was rejected by former party head 
Naoto Kan on Feb. 28 and by Vice President Yoshiaki Takagi, of 
the now defunct Democratic Socialist Party, on March 1. A mid- 
level lawmaker commented that nobody wanted to board a sinking 
ship. 
 
Maehara's advantage is that he is not obsessed with preserving 
internal harmony. He has the support of junior lawmakers because 
of his motto to "break the shackles." But the fact that he let 
only a few persons know about a copy of the e-mail in question 
has worked against him. His party management supported by mid- 
level and young lawmakers has now come under fire in the party. 
 
SCHIEFFER