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UNCLAS SECTION 01 OF 10 TOKYO 004462 
 
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:  DAILY SUMMARY OF JAPANESE PRESS 09/26/07 
 
 
Index: 
 
(1) Japanese, US chief negotiators reiterate need for cooperation in 
effort to denuclearize North Korea 
 
(2) Hill reveals US plan to provide North Korea with 50,000 tons of 
heavy oil as early as October 
 
(3) US Assistant Secretary of State Hill: "We'll focus on uranium 
enrichment programs and graphite-moderate nuclear reactors, etc." 
 
(4) Foreign minister to visit US starting on Sept. 27 to take part 
in global warming conference, UN General Assembly 
 
(5) Chief Cabinet Secretary Machimura eyes discussions on new 
refueling legislation as early as mid-October 
 
(6) Fukuda administration launched: Consensus-oriented Fukuda's 
leadership in structural reform questionable 
 
(7) Fate of economic policy: Switch from structural reforms; 
Realistic scenario for tax hike 
 
(8) Prime Minister Fukuda installs tried and true lawmakers to 
Kantei posts; Picks his elder son as political secretary 
 
(9) Scanner column -- Aso eyes next opportunity for him to take top 
seat of government; He refused to join Fukuda cabinet, citing 
"difference in philosophy" 
 
(10) New LDP President Fukuda's four organizations raise 100 million 
yen, leaving some expenditures unaccounted for 
 
ARTICLES: 
 
(1) Japanese, US chief negotiators reiterate need for cooperation in 
effort to denuclearize North Korea 
TOKYO WEB 
September 26, 2007 
 
Foreign Ministry's Asian and Oceanian Affairs Bureau Director 
General Kenichiro Sasae, Japan's chief delegate for the six-party 
talks on North Korea's nuclear development problem, met with United 
States Assistant Secretary of State Christopher Hill, the US' top 
negotiator with North Korea, at the Foreign Ministry this morning. 
They agreed on the need for Japan and the US to work together to 
produce substantive results in the next round of the six-party talks 
in Beijing starting Sept. 27 in an effort to address specific steps 
for disabling North Korea's nuclear facilities and other measures to 
be taken in the second phase. 
 
In reference to the issue of North Korea's past abductions of 
Japanese nationals, Hill emphasized: "The US will never sacrifice 
relations with Japan for the sake of US-North Korea relations." They 
also shared the view that the two countries also should take joint 
steps in tackling the abduction issue. After the meeting, Hill told 
reporters: "The abduction issue is our priority task." 
 
Sasae said to reporters: "I appreciate the US' strong support. Such 
support from the US is crucial to our negotiations." 
 
(2) Hill reveals US plan to provide North Korea with 50,000 tons of 
 
TOKYO 00004462  002 OF 010 
 
 
heavy oil as early as October 
 
MAINICHI NET (Full) 
13:16, September 26, 2007 
 
Visiting US Assistant Secretary of State Christopher Hill gave an 
interview to news companies, including the Mainichi Shimbun, at the 
US Embassy in Tokyo earlier today, in which he indicated that the 
United States would start providing North Korea with 50,000 tons of 
heavy oil as early as October in return for its denuclearization 
steps. 
 
In the six-party plenary session scheduled to begin in Beijing on 
Sept. 27, the focus will be on concrete steps to disable the nuclear 
facilities and to completely declare the nuclear programs by the end 
of the year -- the second stage in the agreed-upon dismantlement of 
the existing nuclear programs. Assistant Secretary Hill underlined 
the need to focus on the North's plutonium production capability, 
while predicting tough negotiations on the definition of disablement 
and other matters. For the time being, the focus will be on three 
facilities, including the 5000-kilowatt graphite-moderated rector in 
Yongbyon, that were inspected in mid-September by nuclear experts 
form the United States, China, and Russia. 
 
The US official also indicated the need to pursue alleged 
development of highly-enriched uranium. 
 
(3) US Assistant Secretary of State Hill: "We'll focus on uranium 
enrichment programs and graphite-moderate nuclear reactors, etc." 
 
SANKEI ONLINE NEWS (Full) 
September 26, 2007, 11:22 a.m. 
 
Akio Takahata 
 
US Assistant Secretary of State Hill this morning met with a small 
number of reporters, including a Sankei Shimbun reporter, and 
revealed that in the upcoming six-party talks to begin tomorrow, he 
would fully shed light on the uranium enrichment programs and narrow 
the objects of disablement down to such main facilities as: (1) 
graphite-moderated nuclear reactors, (2) reprocessing facilities, 
and (3) fuel-rod production factories. 
 
Citing the total amount of nuclear-bomb-grade plutonium possessed by 
North Korea as "50 or so kilograms," Hill proclaimed: "The final 
goal is to remove all of it from the country, in other words, a 
complete nuclear program dismantlement as specified in the six-party 
joint statement." Referring to the definition of disablement, Hill 
explained: "It means to make it impossible to re-operate the 
facilities for one or so year. If during that time the nuclear 
abandonment process makes progress, the (nuclear) issue will be 
resolved." 
 
According to Hill, the major purpose of the talks this time is to 
define the term "disablement of North Korea's nuclear facilities" 
based on a report made by a group of experts from the United States 
and Russia, who recently conducted an on-the-spot inspection in 
Yongbyon and then to call on North Korea to report on every aspect 
of its nuclear weapons. 
 
On the delisting of North Korea from the list of state sponsors of 
terrorism, a matter of concern for the Japanese government in 
 
TOKYO 00004462  003 OF 010 
 
 
relation to the issue of Japanese nationals abducted to North Korea, 
Hill commented: "We have recognized that the abduction issue is a 
serious, humanitarian issue. Whenever we hold talks with the North 
Koreans, we have called on them to move forward to resolve the 
issue. There is no change in this policy." 
 
Western media have reported on the suspicions about cooperation 
between North Korea and Syria on nuclear development. When asked 
about the suspicions, Hill said:  "We can't overlook any nuclear 
proliferation case. In the six-party talks this time, we will demand 
that North Korea gives us a proper explanation." 
 
(4) Foreign minister to visit US starting on Sept. 27 to take part 
in global warming conference, UN General Assembly 
 
Tokyo Shimbun Online (Full) 
September 26, 2007 
 
Foreign Minister Masahiko Komura on Sept. 26 decided to make a 
four-day visit to the US starting on Sept. 27 in order to attend the 
conference of major global warming gas emitters to be held in 
Washington. US Secretary of State Rice is also expected to take 
part. Komura will go to New York on Sept. 28. He is considering 
delivering a speech in a general debate session at the UN General 
Assembly. 
 
Komura during the global warming conference explain Japan's 
long-term target of cutting its greenhouse gas emissions by 50 
PERCENT  by 2050. He will also play up his resolve to establish an 
international framework replacing the Kyoto Protocol. 
 
He wants to underscore the Fukuda cabinet's determination to combat 
global warming with an eye on the G-8 Summit (Lake Toya Summit in 
Hokkaido) next year. 
 
The conference will be held at the initiative of President Bush. 
Participants will include Japan, the European Union and China. 
 
(5) Chief Cabinet Secretary Machimura eyes discussions on new 
refueling legislation as early as mid-October 
 
TOKYO WEB (Full) 
September 26, 2007 01:31 p.m. 
 
Chief Cabinet Secretary Nobutaka Machimura expressed at a press 
conference after the first cabinet meeting his hopes for the House 
of Representatives to start discussions as early as mid-October on 
new legislation designed to allow the Maritime Self-Defense Force to 
continue its refueling mission in the Indian Ocean. He also 
indicated that the new legislation would be limited to refueling and 
supplying water and the rule for requiring Diet approval would be 
deleted as the government due to the limitations. 
 
Regarding the creation of the new legislation, Machimura pointed 
out: "It is only natural for us to make efforts so that we will be 
able to launch deliberations after the end of budget committee 
sessions in the two chambers of the Diet (slated for the second week 
in October)." He then said: "The contents of the legislation that 
were studied by the former Abe cabinet would become the basis." 
 
Asked by reporters about the possibility of the legislation being 
re-approved at the Lower House after being voted down at the Upper 
 
TOKYO 00004462  004 OF 010 
 
 
House, Machimura responded: "If I am asked, I will say that there is 
such a method, but there are matters we should pursue before we 
reach such a conclusion." 
 
(6) Fukuda administration launched: Consensus-oriented Fukuda's 
leadership in structural reform questionable 
 
TOKYO SHIMBUN (Page 11) (Abridged slightly) 
September 26, 2007 
 
Prime Minister Yasuko Fukuda launched his cabinet yesterday. The 
reappointed economic ministers all indicated that they would push 
ahead with structural reform, just as they had done under the Abe 
administration. The advancement of structural reform requires the 
prime minister's strong leadership. Yet the lineup of new Liberal 
Democratic Party executives testifies to Fukuda's inclination toward 
harmony rather than leadership. Although the coordination of views 
with the Democratic Party of Japan (Minshuto or DPJ), the largest 
party in the House of Councillors, is indispensable in implementing 
policies, the future of structural reform has now become unclear. 
 
Council on Economic and Fiscal Policy 
 
The Council on Economic and Fiscal Policy (CEFP), a body chaired by 
the prime minister that served as an engine of the structural reform 
drive under the Koizumi and Abe administrations, is likely to reduce 
its presence under the Fukuda administration. 
 
The path to structural reforms has been paved with the prime 
minister's bold decisions based on proposals by private-sector CEFP 
members. In order for the CEFP to function effectively, the prime 
minister' strong leadership is essential. Chances are slim, however, 
for Prime Minister Fukuda, who puts high priority on factional 
harmony in running the LDP, to exhibit strong leadership in such 
policy areas. 
 
Fukuda reappointed Hiroko Ota as minister in charge of economic and 
fiscal policy, who has been closely associated with the CEFP since 
the Koizumi administration. But under the consensus-oriented prime 
minister, the CEFP might no longer be able to function as before. 
The panel might also find it difficult to discuss drastic policies 
in deference to the DPJ. 
 
Road-related tax revenue 
 
Last December, then Abe cabinet came up with a plan to transform 
road-improvement taxes, such as gasoline taxes, into general 
revenue. This, too, might roll back under the Fukuda cabinet. In a 
press conference following his election as LDP president, Fukuda 
said: "I wonder if the road-improvement tax revenue should be used 
for other purposes. The matter needs discussion." 
 
Although public works spending in the general account has been 
dropping in recent years, the government has lavishly distributed 
the road-improvement tax revenue in excess of 3 trillion yen 
annually. A stop can be put to it by turning the road-improvement 
tax revenue into general revenue. A re-discussion on the matter is 
expected to elicit stiff resistance from the LDP road policy clique 
in the Diet. 
 
The temporary tax rate system, the basis for high road-improvement 
taxes, ends next March. The government needs to enact new 
 
TOKYO 00004462  005 OF 010 
 
 
legislation. Depending on the DPJ's move, the tax rates might drop 
significantly. This might prevent the government from turning the 
road-improvement tax revenue into general revenue and cause an 
adverse effect on maintaining and improving roads. 
 
Fiscal reconstruction 
 
Attention is focused on hiking the consumption tax as a means of 
funding the government's plan to raise its contribution to the basic 
pension scheme from one-third to half. As seen from his eagerness to 
hold talks with the DPJ, Prime Minister Fukuda is receptive to a 
plan to totally fund the basic pension scheme with taxes. 
Nevertheless, the ruing coalition is expected to face difficulties 
in coordinating views with the DPJ, which aims to wrestle power from 
it. 
 
The LDP's coalition partner of the New Komeito is also calling for 
freezing the planned increase in elderly people's share of medical 
payments and other matters. With growing social security costs in 
the backdrop, securing financial resources is essential for 
restoring fiscal health. The New Komeito has even suggested 
postponing the government's goal of realizing a surplus in the 
primary balance in 2011. Whether the consensus-oriented Prime 
Minister Fukuda can withstand such pressure remains to be seen. 
 
(7) Fate of economic policy: Switch from structural reforms; 
Realistic scenario for tax hike 
 
SANKEI (Page 2) (Full) 
September 26, 2007 
 
With the inauguration of the Yasuo Fukuda cabinet, Fukuda-style 
economic and fiscal reforms will get underway. He has shown 
understanding for increasing fiscal expenditures to deal with such 
issues as social security and regional disparities. He has at the 
same time indicated a positive stance toward a consumption tax hike 
in the future. During power-sharing talks with the New Komeito, he 
has pledged to consider taking measures that would lead to an 
increased spending. The situation is such that the structural reform 
policy, which has been carried on by the Koizumi and Abe 
administrations, is bound to be adjusted by the new prime minister. 
 
Prime Minister Fukuda during a press conference held yesterday 
evening noted: "The social situation has changed in terms of pending 
issues we face. We have now entered a new age characterized by 
declines in birthrates and population. We must also consider how the 
economy will change." He indicated his stance of moving forward with 
the reform drive, while taking into account the changing 
socio-economic situation. 
 
Fukuda incorporated in his policy initiative a plan to consider 
placing a freeze on an increase in the medical burden shouldered by 
the elderly. The LDP and the New Komeito have also agreed on this 
policy in their power-sharing talks. They will also consider putting 
on hold reductions in portions of child allowances for single-mother 
families. Some take the view that this would lead to an increase in 
fiscal outlays up to 100 billion yen. 
 
Medical expenses shared by elderly people aged between 70 and 40 are 
set to be raised from the current 10 PERCENT  to 20 PERCENT  next 
April. The reform had been intended to constrain growth in medical 
expenses for the elderly. However, there is a gap between this 
 
TOKYO 00004462  006 OF 010 
 
 
reform policy and the new administration's policy. 
 
Reappointed State Minister in charge of Economic and Fiscal Affairs 
Hiroko Ota pointed out, "We would like to have the Council on 
Economic and Fiscal Policy discuss options, while taking into 
account the issue of who is going to shoulder the burden caused by a 
change in the medical service system for the elderly." 
 
The Abe administration explored ways to reconstruct public finances 
without hiking taxes by striking a balance between spending cuts and 
economic growth. It drew up a scenario of squeezing funding 
resources to bring the primary balance into the black by 2011 by 
cutting expenditures by 11-14 trillion yen over five years and 
making up for the remaining cost with an increase in tax revenues 
through economic growth. 
 
In contrast, Fukuda appointed former Finance Minister Sadakazu 
Tanigaki, who advocates fiscal reconstruction, as Policy Research 
Council chairman -- one of the three LDP top executives. He has thus 
veered from the growth strategy in terms of the selection of 
personnel as well. The appointment of Tanigaki glimpses Fukuda's 
realistic scenario of securing necessary revenues with tax hikes, 
while avoiding excessive spending cuts. 
 
Fukuda did not touch on when to hike the consumption tax and the 
scope of a hike. He has given few explanations on concrete measures 
to persuade the DPJ. His ability to deliver new policies, while 
showing funding resources and abiding by fiscal disciplines, will be 
put to the test. 
 
(8) Prime Minister Fukuda installs tried and true lawmakers to 
Kantei posts; Picks his elder son as political secretary 
 
YOMIURI (Page 2) (Full) 
September 26, 2007 
 
Prime Minister Yasuo Fukuda has appointed Nobutaka Machimura, who 
heads the faction to which Fukuda belonged, as chief cabinet 
secretary. He installed tried and true lawmakers and bureaucrats to 
 
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Kantei (Prime Minister's Official Residence) posts, putting a former 
Kantei staff member back in his old haunts. Fukuda was elected LDP 
president and prime minister soon after Shinzo Abe's abrupt 
resignation announcement. He appears to have placed priority on 
forming a sound cabinet lineup in order to cover the lack of 
preparations for becoming prime minister. 
 
Both Matsushige Ono and Mitsuhide Iwaki, deputy chief cabinet 
secretaries for political affairs, who were retained in their posts, 
 
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belong to the Machimura faction. The prime minister, the chief 
cabinet secretary and deputy chief cabinet secretaries are members 
of the Machimura faction. 
 
Masahiro Futahashi was appointed again as deputy chief cabinet 
secretary, the top of the bureaucracy, after a year hiatus. He 
 
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served in the post for three years from September 2003 in the 
Koizumi government, assisting Fukuda until May 2004 when he stepped 
down from the chief cabinet secretary's post. 
 
Chief Cabinet Secretary Machimura stated yesterday at a press 
conference on the appointment of Futahashi: "My understanding is 
that the prime minister determined that Mr. Futahashi, who is 
familiar with the Kantei, would be necessary to deal with various 
 
TOKYO 00004462  007 OF 010 
 
 
issues." 
 
Fukuda informally picked his elder son, Tatsuo Fukuda, 40, as 
political secretary, and the Finance Ministry's Overall Coordination 
Division Director Nobumitsu Hayashi, the Foreign Ministry's 
International Cooperation Bureau's Aid Policy Management Division 
Director Kimihiro Ishigane, the Economy, Trade and Industry 
Ministry's Policy Planning and Coordination Division Director Ikuro 
Sugawara, and the National Policy Agency's Investigative Planning 
Division Director Shunichi Kuryu as administrative secretaries. 
Hayashi and Ishigane worked as secretaries to Fukuda when he was 
serving as chief cabinet secretary. 
 
Prime ministerial assistants -- Kyoko Nakayama and Eriko Yamatani -- 
were retained in their posts. 
 
Number of faction members named cabinet ministers and LDP 
executives 
 
Faction  Faction leader Fukuda cabinet Second Abe cabinet First Abe 
cabinet 
Machimura  Chief Cabinet Secretary Machimura 2 1 4 
Tsushima Finance Minister Nukaga 4 3 2 
 
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Koga Election Committee Chairman Koga  2 2 4 
Yamasaki  2 2 1 
Ibuki  LDP Secretary General Ibuki  1 2 
Aso    1 
Nikai  General Council Chairman Nikai 1 1 
Komura  Foreign Minister Komura 1 1 1 
Tanigaki LDP Policy Research Council Chairman Tanigaki 
No faction  2 3 
New Komeito  1 1 1 
Private sector  2 2 1 
 
The prime minister is excluded. Nukaga is deputy head of the 
Tsushima faction. 
 
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(9) Scanner column -- Aso eyes next opportunity for him to take top 
seat of government; He refused to join Fukuda cabinet, citing 
"difference in philosophy" 
 
YOMIURI (Page 3) (Full) 
September 26, 2007 
 
Takaharu Yoshiyama, Kohei Kawashima 
 
The Fukuda cabinet was launched, retaining most members of the 
former Abe cabinet. The focus of the public attention was on whether 
former Secretary General Taro Aso would join the cabinet, but Aso 
refused, making clear his posture of readying himself to make a bid 
for the top seat after Fukuda. In the days of the Koizumi and Abe 
administrations, factions had nothing to do with the selection of 
cabinet members, but the situation has changed completely. 
Influential faction members have now retrieved their former pattern 
of behavior over personnel selection as evidenced by the movements 
of former Prime Minister Yoshiro Mori, the honorary chairman of the 
Machimura faction. Mori bustled about coordinating views for the 
selection of cabinet members, as well as top party officials. 
 
Fukuda directly tapped Aso's intention 
 
In forming a cabinet, Fukuda gave priority to offering a ministerial 
 
TOKYO 00004462  008 OF 010 
 
 
portfolio to Aso, with whom Fukuda fought for premiership. 
 
Aso was beaten by Fukuda, but nearly 40 PERCENT  of the LDP Diet 
members and its local chapters voted for Aso. In order to revive the 
party, Fukuda needed to obtain Aso's cooperation. He repeatedly 
tried to approach Aso to install him as a cabinet minister. 
 
Early morning of Sept. 24, the telephone in Aso's private residence 
was ringing. It was a call from Mori. 
 
Mori: "I'd like you to join the cabinet and support Fukuda." 
 
Aso: "I understand your request. But as I have mentioned before, Mr. 
Fukuda and I are fundamentally far apart in our philosophies." 
 
Fukuda, however, did not give up the idea of installing Aso in a 
ministerial post. 
 
When Fukuda and Aso attended together a special session of the LDP 
General Council at noon of the same day, Fukuda directly asked Aso 
to join the cabinet, saying, "I'd like to talk in detail with you on 
this matter." 
 
On Sept. 25, immediately before the designation of prime minister, 
Fukuda stressed to reporters: "I'd like to ask Mr. Aso to help me. 
I'll again ask him to join the cabinet at a time when (I am named as 
prime minister)." Immediately after being designated as prime 
minister at a full session of the House, Fukuda and Aso passed each 
other in the Diet and Fukuda offered Aso his hands in public for a 
handshake and whispered to Aso: "Please change your mind. I need 
your cooperation." 
 
In the meantime, aides to Aso had their own views respectively about 
how to distance themselves from the Fukuda administration. 
 
Former State Minister in Charge of Disaster Prevention Yoshitada 
Konoike suggested directly to Aso: "You should not assume just any 
post that will be offered to you." On the other hand, a deep-seated 
view in the Aso faction was that "Aso is the head of a very small 
faction. If he does not hold any cabinet post, it will become 
difficult for him to make his presence felt." 
 
Under this situation, one rumor flew around yesterday that enraged 
Aso. The rumor was that a senior member of the Machimura faction 
said that Justice Minister Hatoyama and Minister of Economy, Trade 
and Industry Amari "who had both backed Aso in the presidential race 
should be replaced.' 
 
In fact, former Vice President Taku Yamasaki told Fukuda "to remove 
Amari from the post," according to a senior Machimura faction 
member. 
 
Aso flew into a rage, arguing, "Who is responsible for personnel 
selection?" Yesterday evening, there was a telephone call from the 
Fukuda office to the Aso office seeking to have contact with Aso. 
But Aso told his staff to "ignore it." This was the moment of Aso 
giving his final no to (Fukuda's call) for him to join the cabinet. 
 
It was eventually decided to keep Hatoyama and Amari in their 
previous ministerial posts. Meeting the press, Hatoyama said, 
"Although Mr. Aso will not join the cabinet, Mr. Amari and I will 
join, so a whole-party stance has now been formed," indicating that 
 
TOKYO 00004462  009 OF 010 
 
 
Aso insisted that ministerial posts be offered to Hatoyama and Amari 
instead of himself. 
 
At a press briefing late yesterday, Fukuda stressed: "Mr. Aso has 
his own circumstances. He is not a cabinet member this time, but I 
think we can work together." Meanwhile, Mori criticized Aso's 
response in New York, telling reporters: "Mr. Aso made such a 
decision, but frankly speaking, it is regrettable." 
 
A senior Yamasaki faction member made this analysis: "Mr. Aso's 
refusal to join the Fukuda cabinet is the same as Mr. Fukuda's 
refusal to join the Abe cabinet." Aso has said, "I'd like to travel 
to local areas," but apparently he eyes the next opportunity for him 
to come to power after Fukuda. 
 
On the night of Sept. 24, Aso telephoned House of Representatives 
member Taizo Sugimura, one of the so-called Koizumi children. 
Sugimura belongs to a group of one-term lawmakers "Atarashii Kaze" 
(New Breeze). This group decided to back Fukuda in the recent 
presidential race, but in reaction to the group's decision, Sugimura 
voted for Aso. Aso told Sugimura: "You may face a number of 
difficulties. If you are in trouble, please feel free to ask for 
help from me." 
 
(10) New LDP President Fukuda's four organizations raise 100 million 
yen, leaving some expenditures unaccounted for 
 
AKAHATA (page 15) (Full) 
September 26, 2007 
 
Former Chief Cabinet Secretary Yasuo Fukuda (House of 
Representatives member from Gunma No. 4 constituency) was elected 
new Liberal Democratic Party president. He has four "wallets": i.e., 
political organizations. It has been found that these groups raised 
108.5 million yen in 2006, if calculated with the money moved among 
these political groups excluded. 
 
Corporate donations and taxpayers' money 
 
The LDP Gunma Prefecture 4th electoral district branch office in 
Takasaki City, led by Fukuda, serves as an office to receive 
corporate or group donations and state subsidies originally coming 
from taxpayers' money. 
 
Out of the 45.57 million yen recorded in political funds reports, 
17.05 million yen came from companies or groups, with only 420,000 
yen from individuals. 
 
The branch office listed the names of 50 companies or organizations 
in Gunma, Tokyo, Kyoto, Osaka, and other districts that offered more 
than 50,000 yen each. But since political groups are not required to 
declare a contribution of less than 50,000 yen, contributors for 
about 2.85 million yen or about 17 PERCENT  of the total were left 
unaccounted for. 
 
The branch office received a total of 16 million yen in subsidies 
from LDP headquarters in six installments, of which 10 million yen 
were state subsidies coming from taxpayers' money. 
 
Looking at expenditures, the branch office provided 3.4 million yen 
to LPP branch offices in Takasaki, Fujioka and other places, giving 
consideration to power bases for the party. 
 
TOKYO 00004462  010 OF 010 
 
 
 
50 million yen in two installments 
 
The Chiyoda Economic Council, based in Toranomon, Tokyo, a 
fund-management organization that raised 52.11 million yen, set up 
an office on the same site and held a party at the Akasaka Prince 
Hotel in Tokyo twice in cooperation with the Fukuda Economic 
Research Institute, an affiliated political group that collected 
6.53 million yen. By holding the parties, the council earned 
approximately 50 million yen, while using only about 7.4 million yen 
for the parties. 
 
Although 1,061 bought party tickets, it remains unknown who 
purchased the tickets, because political groups are required under 
the Political Funds Control Law to list only those who purchased 
party tickets worth 200,000 yen or over. 
 
It has also been learned that the Fukuda groups received 3 million 
yen worth of donations from a political arm of the Japan Medical 
Association. 
 
Political groups with same name 
 
Surprising enough, there is also a group called the "Fukuda Economic 
Research Institute," under the jurisdiction of the Gunma prefectural 
election administration commission -- besides the one with the same 
name but under the Internal Affairs Ministry. This institute is 
located on the same site as that housing the 4th electoral branch 
office. The institute received 12.4 million yen in contributions in 
three installations from the Chiyoda Economic Council. It booked 
4.29 million yen in revenues, but there was no declaration of 
expenditures. 
 
The Chiyoda Economic Council listed about 4.67 million yen as 
expenditures for managing the organization, but about 3.87 million 
yen was reported as payments to Japanese restaurants and sushi bars 
near Nagata-cho, the political area in Tokyo, as expenses for 
meetings. About 800,000 yen was left unaccounted for. 
 
In the 4th electoral district branch office and the Fukuda Economic 
Research Institute in Takasaki, 1.45 million yen in total remains 
unaccounted for. 
 
Negative stance about disclosure 
 
On Sept. 23, when Fukuda was elected new party president, Fukuda's 
office in Takasaki served a cask of sake and festive red rice to his 
supporters who had gathered there. But where did the money to pay 
for that come from? 
 
Fukuda remains negative about a proposal for requiring political 
groups to attach receipts for expenditures of more than one yen, 
saying: "If political groups are required to publicize everything, 
our political activities will be totally disclosed." Fukuda's 
political funds reports show why he takes a negative stance. 
 
SCHIEFFER