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UNCLAS SECTION 01 OF 08 TOKYO 004879 
 
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 10/19/07 
 
 
Index: 
 
MSDF refueling mission: 
1) Pentagon denies diversion of MSDF fuel, but finds it difficult to 
track use of all fuel; Ambassador Schieffer also denies diversion 
(Yomiuri) 
2) Government sees US statement on MSDF fuel as "sincere" but 
opposition camp is more suspicious of fuel diversion than ever 
(Nikkei) 
3) Defense Minister Ishiba willing to release some of the ship logs 
on refueling operations in the Indian Ocean if the opposition 
requests such (Yomiuri) 
4) Government, ruling parties resolve to pass the new anti-terror 
bill during the current Diet session (Yomiuri) 
5) British Prime Minister Brown in telephone call to Prime Minister 
Fukuda expresses hope that MSDF refueling service will continue 
(Yomiuri) 
 
DPJ on the move: 
6) Democratic Party of Japan (DPJ) submits bill to scrap the Iraq 
Special Measures Law in order to bog down Lower House deliberations 
(Mainichi) 
7) DPJ having trouble cobbling together its own bill to counter the 
ruling camp's anti-terror bill (Yomiuri) 
8) -- DPJ suddenly decides to accept prior talks with the ruling 
camp over the political funds bill (Yomiuri) 
 
Defense affairs: 
9) Key defense contractor with cozy relations with former vice 
defense minister Moriya being investigated by prosecutor's office 
(Sankei) 
10) Moriya regularly treated to free golf at posh club by defense 
contractor (Asahi) 
11) Concerned about impact of MSDF refueling row, government mulling 
reducing the cuts in the host-nation support budget for US forces in 
Japan (Mainichi) 
12) Futenma council of local and central government officials to 
meet next month (Yomiuri) 
 
13) Diet members' league on the abduction issue to send a delegation 
to the US later this year (Sankei) 
 
Articles: 
 
1) US gov't denies fuel diversion 
 
YOMIURI (Page 2) (Full) 
October 19, 2007 
 
WASHINGTON-The US Department of Defense released a statement 
yesterday, saying US warships refueled by the Maritime Self-Defense 
Force in the Indian were entirely in support of Operation Enduring 
Freedom (OEF) in Afghanistan. With this, the Pentagon denied fuel 
diversion. In its statement, however, the Pentagon added that it 
would be "difficult" to track the use of all fuel supplied. 
 
As one of the reasons why it is difficult to track the use of all 
fuel provided, the Pentagon says fuel provided by Japan is not 
segregated and is tanked with fuel from other sources. The Pentagon 
also explains that US warships may be engaged in multiple missions. 
 
US envoy also denies fuel diversion 
 
TOKYO 00004879  002 OF 008 
 
 
 
Meanwhile, the government has now presented a new antiterror 
legislative measure to the Diet. In this regard, US Ambassador to 
Japan Schieffer expressed hopes for the legislation's early passage 
through the Diet. "We are also aware of the difficulty in continuing 
(the MSDF's) activities," Schieffer said yesterday evening before 
the Pentagon statement was released. "We hope the suspension (of 
Japan's fuel supply) will be as short as possible," he added. 
 
Schieffer also brushed off the alleged diversion of MSDF-supplied 
fuel for operations in Iraq. "I can declare all the fuel was used 
for Operation Enduring Freedom (OEF)," he told reporters at the 
Foreign Ministry. 
 
Tokyo baffled 
 
Concerning the Pentagon statement over Japanese fuel supplied by the 
MSDF to US warships in the Indian Ocean, the Japanese government 
takes the position that the United States' denial of fuel diversion 
basically remains unchanged. However, the Pentagon statement also 
bewildered the Japanese government since it implies that the US 
government cannot definitely say all fuel was used for Operation 
Enduring Freedom (OEF) in Afghanistan. 
 
"They say the United States couldn't track the use of all fuel," a 
senior official of the Foreign Ministry said early this morning. 
"But," the official also said, "they didn't tell us they would 
release a report to that effect." The official added, "We heard that 
they would say all the fuel provided by Japan was used for Operation 
Enduring Freedom." 
 
In response to the Pentagon statement released this time, the 
government and the ruling parties are concerned about possible 
repercussions on Diet deliberations starting Oct. 23 on the new 
antiterror legislation. "It will give momentum to the opposition 
bench that is opposed to the bill," an executive of the ruling 
Liberal Democratic Party said, adding, "It may also affect its 
passage during the current Diet session." 
 
2) US denies diversion of MSDF-supplied fuel: Government takes 
statement as "sincere": Opposition parties determined to continue 
its pursuit, claiming suspicion of diversion has grown deeper 
 
NIKKEI (Page 2) (Full) 
October 19, 2007 
 
The US government has issued a statement concerning the Maritime 
Self-Defense Force's (MSDF) refueling operations in the India Ocean. 
The Japanese government highly evaluated the statement with one 
senior Foreign Ministry official noting, "The US announced the 
result of its investigation, which has been carried out with honesty 
and sincerity." However, since the statement does not totally rule 
out the possibility of the fuel provided by the MSDF having been 
used for purposes other than antiterror operations in Afghanistan, 
opposition parties are bound to strengthen their pursuit. 
 
The Japanese government had stressed that the fuel supplied by Japan 
was used properly, as Prime Minister Fukuda put it. The US 
government's statement noted that the US government reassures to the 
Japanese government that the fuel provided by Japan was used for the 
Operation Enduring Freedom (OEF). The government wants to seek 
understanding from the opposition camp, by stressing this point in 
 
TOKYO 00004879  003 OF 008 
 
 
deliberations on the new refueling legislation. 
 
However, opposition parties, such as the Democratic Party of Japan 
(DPJ or Minshuto), are determined to heighten their criticism, 
noting that there are even deeper suspicions of diversion now. 
Heated exchanges on this can be expected during deliberations on the 
bill. 
 
3) Defense Minister Ishiba willing to release some ship logs on 
Indian Ocean refueling operations if the opposition parties request 
such (Yomiuri) 
 
YOMIURI (Page 4) (Full) 
October 19, 2007 
 
Defense Minister Ishiba appearing on a CS television program 
yesterday stated that he was willing to release some of the ship 
logs still being stored if the opposition parties would request 
such. He also said: "Disclosure standards vary depending on the 
country. Material that would pinpoint the location of ships could 
not be disclosed." 
 
Regarding the discarding of some ship logs from the Towada, a supply 
ship that has carried out refueling operations in the Indian Ocean, 
Ishiba made it clear: "The person responsible made a mistaken 
decision (about the time limit for preserving documents) and 
shredded the material." 
 
4) "We will secure Diet passage for the bill during the current 
session," senior government and ruling camp officials underscore 
 
YOMIURI (Page 4) (Full) 
October 19, 2007 
 
Senior officials of the government and the Liberal Democratic Party 
(LDP) yesterday once again stressed their intention to obtain Diet 
approval during the current session of for a new antiterrorism 
special measures bill intended to continue the Maritime Self-Defense 
Force's (MSDF) refueling operations in the Indian Ocean. 
 
Chief Cabinet Secretary Machimura during a plenary session of his 
faction stressed, "I will tackle the issue with an indomitable 
resolve to secure Diet approval during the current session." One 
high-ranking LDP official noted, "We will never allow the bill to be 
carried over to the next session for deliberations in the Lower 
House. We must send it to the Upper House and bring the Democratic 
Party of Japan's (DPJ or Minshuto) stance toward the terrorism issue 
to a head." He thus indicated his party's intention to send the bill 
to the Upper House after securing approval from the Lower House at 
an early date. 
 
Prime Minister Fukuda yesterday evening said, "Now that we have 
submitted the bill, we have no choice but to do our utmost to secure 
Diet approval." He made this comment to reporters at the Prime 
Minister's Office (Kantei). 
 
5) British prime minister in telephone conversation with Prime 
Minister Fukuda expresses hope for continued MSDF operation in the 
Indian Ocean 
 
YOMIURI (Page 4) (Excerpt) 
October 19, 2007 
 
TOKYO 00004879  004 OF 008 
 
 
 
Prime Minister Fukuda and British Prime Minister Brown held a 
telephone conversation yesterday in which Fukuda explained that his 
government had presented to the Diet a new antiterrorism special 
measures bill that would continue refueling operations by the 
Maritime Self-Defense Force in the Indian Ocean. Prime Minister 
Brown expressed his hope that the operations would continue, saying, 
"I would like Japan to continue its close cooperation (with its 
anti-terror measures)." 
 
On the Burma (Myanmar) issue, Prime Minister Fukuda explained: "We 
are working on (the military junta) to release political prisoners 
and enter into a dialogue with democratization forces." Prime 
Minister Brown expressed appreciation for Japan's efforts. 
 
6) DPJ trying to bog down Lower House deliberations by submitting 
bill calling for abolishing Iraq law 
 
MAINICHI (Page 2) (Full) 
October 19, 2007 
 
Deliberations on the new antiterrorism bill will start in a House of 
Representatives plenary session on Oct. 23. Prior to this, the 
Democratic Party of Japan (DPJ) yesterday submitted a bill calling 
for scrapping the Iraq Reconstruction Support Special Measures Law 
to the House of Councillors. The main opposition party is grilling 
the government on the allegation of diversion of fuel supplied by 
the Maritime Self-Defense Force in the Indian Ocean for use in the 
Iraq war. The DPJ is aiming to also bog down to the deliberations in 
the Lower House, on the strength of its holding a majority in the 
Upper House. 
 
Upper House member Keiichiro Asao, who submitted the bill, 
emphasized in a press conference: "We will naturally pursue the 
diversion allegation in the deliberations, as well as the 
government's new antiterrorism bill." 
 
The DPJ will ask relevant cabinet ministers, including Chief Cabinet 
Secretary Nobutaka Machimura and Defense Minister Shigeru Ishiba, to 
 
SIPDIS 
attend both meetings of the Lower House antiterrorism and Iraq 
support special committee and the Upper House's foreign and defense 
committees. Taking advantage of its control in the Upper House's 
committees, the DPJ is poised to undermine the ruling camp's 
leadership in Lower House deliberations. 
 
7) New antiterror counterproposal: DPJ likely to face rough going in 
consolidating views, with many members harboring deep concern about 
participation in ISAF; Leadership having difficulty making 
judgments 
 
YOMIURI (Page 4) (Full) 
October 19, 2007 
 
The Democratic Party of Japan (DPJ or Minshuto) yesterday started 
efforts to finalize its counterproposals to the government's new 
antiterror special measures bill. However, it has yet to consolidate 
views within the party, such as whether to submit a set of 
counterproposals in the form of a bill and whether to incorporate 
the dispatch of Self-Defense Forces (SDF) troops in it. The 
leadership will likely be pressed to make difficult judgments. 
 
President Ozawa, Policy Research Council Chairman Majima and several 
 
TOKYO 00004879  005 OF 008 
 
 
others conferred in the Diet on the basic aspects of the 
counterproposals. They agreed in general on an approach of 
incorporating measures focused on basic human needs and 
reconstruction assistance, such as education and medical services - 
all activities related to the International Security Assistance 
Force's (ISAF) operations in Afghanistan. On the question of 
dispatching SDF personnel to Afghanistan, the conferees looked into 
the possibility of SDF troops engaging in security duties, as well 
as assisting the reconstruction of schools and hospitals. 
 
Secretary General Hatoyama during a meeting of the Foreign Affairs 
 
SIPDIS 
and Defense Division indicated his intention to speed up the work of 
drafting a set of counterproposals. However, participants noted that 
there must be more intraparty discussions. Regarding the idea of 
dispatching SDF troops, a negative view prevailed at the meeting 
with one member saying, "Japan should specialize in assistance for 
basic human needs, such as assistance in medical services and 
economic reconstruction areas." 
 
There is a deep-seated concern in the party about Ozawa's proposal 
for taking part in the ISAF. That is because many members are 
dissatisfied that since Ozawa has not explained his view clearly, 
they cannot reply to questions asked by supporters, as a mid-ranking 
member put it. 
 
The views of senior officials are not unanimous regarding the 
treatment of counterproposals. Deputy President Kan told a press 
conference yesterday, "If the government is determined to railroad 
its proposal, there will be a probability of the DPJ submitting its 
proposals in the form of a bill. However, if the government gives up 
on its passage, the propriety of submitting such a bill is 
questionable." He thus indicated his stance of determining what move 
the government and the ruling camp will make. In contrast, Hatoyama 
categorically told a news conference on the evening of Oct. 17, "I 
want to show our proposals to the public in the form of a bill." 
 
8) DPJ agrees to prior talks with ruling camp to unify bills 
amending Political Funds Control Law 
 
YOMIURI (Page 2) (Excerpts) 
October 19, 2007 
 
The Democratic Party of Japan (DPJ) decided yesterday to start talks 
with the ruling coalition to unify both sides' bills amending the 
Political Funds Control Law. DPJ Diet Affairs Committee Chairman 
Kenji Yamaoka will meet separately with his counterparts of the 
Liberal Democratic Party (LDP) and the New Komeito to explain the 
contents of the DPJ bill and call for their cooperation. 
 
The main opposition party had indicated an unwillingness to respond 
to a call by the ruling camp for holding talks before the party 
submits its bill. However, the DPJ, probably reflecting high public 
interest in the "politics-and-money" issue, decided to take a 
flexible stance on proposed talks. 
 
President Ozawa, Secretary General Hatoyama and other members of the 
DPJ agreed in an executive meeting yesterday that the party would 
listen to views from the ruling coalition before it submits its bill 
to the Diet and study the possibility of partially correcting the 
bill in order to obtain cooperation from the coalition. The DPJ 
intends to aim at coming up with a unified bill by holding 
deliberations with the ruling coalition in the Diet even after it 
 
TOKYO 00004879  006 OF 008 
 
 
presents the bill. 
 
9) Tokyo district prosecutors question former Yamada Corp executive, 
who is close to former Vice Defense Minister Moriya, on suspicion of 
breach of trust 
 
SANKEI (Top play) (Abridged slightly) 
October 19, 2007 
 
A group of former executives of Yamada Corp., a Minato Ward, 
Tokyo-based major trading company specialized in defense products, 
including a 69-year-old former senior managing director, is 
suspected to have misappropriated funds by manipulating accounting 
books during their employment at the company, sources familiar with 
the matter revealed yesterday. Yamada Corp has filed a 1.5 billion 
yen damage suit against executives of Nihon Miraise Corp. (NMC), a 
defense trading firm founded by the former executive and others. 
Paying close attention to a series of developments, the Tokyo 
District Public Prosecutors Office's special investigation team 
seems to have questioned persons concerned, including NMC 
executives, on suspicion of aggravated breach of trust. 
 
According to the sources, the former executive while at Yamada 
played a central role in promoting business with US arms makers and 
the Defense Agency (currently the Defense Ministry) and laying the 
groundwork in the political world. Being on friendly terms with 
former Vice Defense Minister Takemasa Moriya and other senior 
Defense Ministry officials, he also allegedly played golf and dined 
and wined with them for a dozen or so years. Part of the 
misappropriated funds might have been used for entertaining them. 
 
Yamada Corp. was established in 1969 by spinning off from a real 
estate company. Growing into a major defense trading firm 
specializing in aviation, Yamada began being designated as Japanese 
agents by US arms makers from about 15 years ago. Today, the firm 
holds an important position in the defense industry packed with 
leading trading companies. 
 
The former executive left Yamada in June 2006 to establish NMC with 
a dozen or so former Yamada employees in September. According to the 
sources, suspicions arose later on that NMC executives had 
misappropriated funds while they were with Yamada. 
 
NMC was joined by many former Yamada employees who were responsible 
for US General Electric, with which Yamada was in contract on 
shipping the new engine in the Air Self-Defense Force's 
next-generation transport place (CX). This led Yamada to accuse of 
trying to steal its CX engine partner. Yamada filed last October a 
damage suit with the Tokyo District Court, demanding NMC employees, 
including the former executive, pay 1.5 billion yen by February 2007 
and return part of the retirement allowances of its former 
employees. 
 
The special investigative team seems to have interviewed executives 
of the two firms, believing that the former executive and others 
have committed accounting misdeeds in connection with the merger of 
a related company while working at Yamada. 
 
10) Former Vice-Defense Minister Moriya played golf with arms 
supplier in violation of SDF regulation 
 
ASAHI (Top play) (Excerpts) 
 
TOKYO 00004879  007 OF 008 
 
 
October 19, 2007 
 
Former Vice Defense Minister Takemasa Moriya, 63, during his term of 
office played golf on several occasions with a former executive of 
Yamada Corp., a Minato Ward, Tokyo-based military trading firm, 
sources familiar with the matter have revealed. Moriya's wife 
occasionally accompanied him, according to the sources. Playing golf 
with concerned parties (defense contractors) is prohibited under the 
Self-Defense Force code of ethics. He would have been subject to 
punishment if he were still in office. The top SDF official 
repeatedly violated the law. 
 
Yamada Corp.'s sales for FY2005 amounted to 34 billion yen. Of it, 
9.41 billion yen came from orders from the Defense Ministry. The 
company's shipments included two engines (1.2 billion yen) in the 
Air Self-Defense Force's next-term transport plane CX. 
 
While at Yamada, the former executive became chief of the section 
handling aircraft parts in 1990. According to the sources, Moriya 
developed a deep personal relationship with the former executive 
over the years. The two began playing golf together several years 
later. At the initial stage, the former executive coached Moriya. 
They played together at golf courses in such places as Saitama and 
Chiba that were run by a company connected with Yamada Corp. Moriya 
showed up with his wife from time to time, and the former 
executive's subordinate provided transportation for her. The former 
executive continued to play golf with Moriya until late 2005, six 
months before he quit Yamada. They played together as many as three 
times a month. In some years, they played golf over 10 times, 
according to the sources. 
 
11) Government eyes smaller cut in host nation support 
 
MAINICHI (Page 2) (Full) 
October 19, 2007 
 
Prior to the start of negotiations between the governments of Japan 
and the United States on a new special agreement to replace the 
current one, which expires next March, Japan decided to slash its 
sympathy budget for US forces in Japan. But now, giving 
consideration to the US, the government is mulling smaller cuts in 
the special measures agreement portion that totals approximately 140 
billion yen. With this possibility in mind, discussions began 
yesterday. Japan is concerned that if the two governments clash over 
Japan's host nation support at a time when it is almost certain the 
Maritime Self-Defense Force's (MSDF) refueling mission in the Indian 
Ocean will be suspended, there could be a serious impact on the 
bilateral alliance. Prime Minister Fukuda is expected to inform 
President Bush of this plan during his visit to the US in November. 
 
The 140.9 billion yen allocated under the special measures agreement 
that went into effect in 2006 covers 115 billion yen in salaries for 
(Japanese) employees of US bases and 25.3 billion yen in utility and 
water costs. 
 
The government initially eyed a greater reduction in utility and 
water expenses, but some officials worried about a negative impact 
on the Japan-US alliance, as a senior Foreign Ministry official 
said: "A cut in the sympathy budget, in addition to the expected 
suspension of the MSDF mission, would harm the bilateral alliance." 
 
The US government has asked Japan to significantly increase its 
 
TOKYO 00004879  008 OF 008 
 
 
outlays, citing growing threats from arms buildup by North Korea and 
China. Reflecting this call, the government is studying a cut by 
only several hundreds of millions of yen. Since it is necessary to 
include the necessary outlays in next fiscal year's budget, the 
government intends to speed up the calculation of the funds needed 
and conclude talks with the US by the end of November. 
 
12) Futenma panel to resume next month 
 
YOMIURI (Page 2) (Full) 
October 19, 2007 
 
The government firmed up its intention yesterday to resume its 
consultative meeting in November with officials from Okinawa's 
prefectural and municipal governments on the pending issue of 
relocating the US Marine Corps' Futenma Air Station in the city of 
Ginowan, Okinawa Prefecture, to a coastal area of Camp Schwab, a US 
military base in the island prefecture's northern coastal city of 
Nago. The government has held no consultative meeting with Okinawa 
over the Futenma issue since January. However, Prime Minister Fukuda 
is scheduled to make his first official visit to the United States 
in November. With his US visit ahead, the government apparently 
deemed it necessary to go ahead with the planned relocation of 
Futenma airfield in the process of realigning US forces in Japan. 
 
Chief Cabinet Secretary Machimura yesterday told Defense Ministry, 
Foreign Ministry, and Cabinet Office officials to push for 
coordination with Okinawa Prefecture and its base-hosting 
localities. Machimura is scheduled to meet with Defense Minister 
Ishiba and Foreign Minister Komura today to discuss Futenma 
relocation. 
 
13) Parliamentary abduction league to send delegation to US for 
first time later this year 
 
SANKEI (Page 5) (Full) 
October 19, 2007 
 
The parliamentary league on the abduction issue, chaired by Takeo 
Hiranuma, in a meeting in the Diet Building yesterday, formally 
decided to send delegations to the United States and South Korea 
before the end of the year. This is the first time that the 
parliamentary abduction group has decided to send delegations 
overseas. The delegations will be accompanied by members of the 
Association of the Families of Victims of Kidnapped by North Korea 
(AFVKN) 
 
In the United States, where there are moves to delist North Korea as 
a state sponsor of terrorism, the group intends to conduct in-depth 
discussions with Representatives who have submitted to the House a 
bill placing new conditions on the removal of sanctions. They also 
plan to share the perception about the issue with South Korea 
legislators. AFVKN Representative Shigeru Yokota, who attended the 
meeting, expressed hope for good results, saying, "Exchanges between 
legislators (of Japan, the United States, and South Korea) will 
result in tremendous energy." 
 
SCHIEFFER