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UNCLAS SECTION 01 OF 10 TOKYO 004976 
 
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 10/25/07 
 
 
Index: 
 
Ambassador Schieffer at the Japan National Press Club (JNPC): 
1) Ambassador Schieffer is concerned that stoppage of MSDF refueling 
in Indian Ocean will give world impression that Japan leaving war on 
terror (Yomiuri) 
2) Schieffer confident that US had fulfilled its responsibility by 
answering questions about MSDF refueling operation in the Indian 
Ocean (Asahi) 
3) Schieffer criticizes Democratic Party of Japan (DPJ) during JNPC 
speech (Mainichi) 
 
Maritime Self-Defense Force (MSDF) refueling operation: 
4) Ambassadors from 11 countries participating in Indian Ocean 
OEF/MIO will brief Diet members on Oct. 31 (Yomiuri) 
5) MSDF will receive order on Nov. 1 to withdraw from Indian Ocean 
(Tokyo Shimbun) 
6) DPJ counterproposal to government's MSDF refueling bill is 
limited to civilian aid in Afghanistan (Sankei) 
7) DPJ to postpone submitting its own bill designed to counter 
government's new antiterrorism bill (Yomiuri) 
 
Defense Ministry scandal: 
8) Former Vice Defense Minister Moriya to hit the witness stand in 
the Diet on Oct. 29 (Asahi) 
9) How much Moriya's testimony in the Diet will clear up allegations 
of collusion with defense contractor is unknown (Tokyo Shimbun) 
10) Former defense contractor with close ties to Moriya skimmed off 
30 million yen from the company that remains unaccounted for (Asahi) 
 
 
11) Pentagon promotes Asia-specialist Shinn to assistant secretary 
level; Defense Secretary's Japan visit set for Nov. 7-9 (Nikkei) 
 
12) Futenma relocation talks involving chief cabinet secretary and 
state minister meeting Okinawa officials to restart next month 
(Yomiuri) 
 
13) Association of members of families of abductees to meet Prime 
Minister Fukuda tomorrow to press for a continued hard-line stand 
toward North Korea (Sankei) 
 
14) Japan denies Moscow report that it had floated a new proposal on 
the northern islands (Yomiuri) 
 
15) Former postal rebel Hiranuma, who was booted out of the LDP by 
then Prime Minister Koizumi, may form new conservative party 
(Sankei) 
16) Former and current Health Minister square off in Diet over new 
"tainted-blood" issue (Tokyo Shimbun) 
17) US fund Blackstone, known as the world's largest, is heading 
toward Japan (Sankei) 
 
Articles: 
 
1) US ambassador to Japan concerned that halting MSDF refueling 
operation in Indian Ocean will give impression Japan is leaving the 
war on terror 
 
YOMIURI (Page 2) (Full) 
October 25, 2007 
 
 
TOKYO 00004976  002 OF 010 
 
 
In a speech at the Japan National Press Club yesterday, US 
Ambassador to Japan Schieffer expressed strong concern about the 
growing possibility that Japan would halt the Maritime Self-Defense 
Force's (MSDF) refueling services in the Indian Ocean. He said: "It 
would send the wrong message to the international community and to 
terrorists. It would give the impression that Japan was withdrawing 
from the war on terror." 
 
He once more denied the allegation that Japan had diverted fuel 
provided to US warships to the Iraq war, saying: This is an issue 
connected to the credibility of the US. The US has investigated a 
large amount of documents and reached the conclusion that there was 
no diversion of fuel. That should be sufficient." He also leveled 
criticism at the Democratic Party of Japan (DPJ) and the rest of the 
opposition camp: "No matter what kind of explanation we give, there 
will be those who will be dissatisfied for political reasons. There 
is nothing that America can do to change the thinking of such 
people." 
 
2) "The US government has accounted for the fuel," says US 
ambassador on diversion allegation 
 
ASAHI (Page 4) (Full) 
October 25, 2007 
 
US Ambassador to Japan J. Thomas Schieffer delivered a speech at the 
Japan National Press Club yesterday. Touching on allegations that 
fuel provided to a US oiler by the Maritime Self-Defense Force in 
the Indian Ocean was diverted for use in the Iraq operations, the 
ambassador said: "We have accounted for the oil. I believe we have 
answered the questions asked." He also indicated that the statement 
released last week by the US Department of Defense is a de facto 
final response, saying: "The government has concluded that there was 
no diversion after analyzing thousands of documents. I think that is 
sufficient." 
 
In the statement, the Pentagon, while denying any diversions, 
admitted difficulty in tracking fuel in the event of oilers and 
vessels engaged in multiple missions. As grounds for denying 
diversion, the ambassador simply said: "We know the amount of fuel 
from Japan. In view of that, it is clear that (Japanese oil) was 
used for Operation Enduring Freedom (against terrorism)." 
 
The ambassador strongly called for a continuation of the refueling 
operation, noting: "If Japan halts the refueling operation, that 
would end up sending the wrong message to the terrorists. That would 
leave the impression that Japan is withdrawing from the war on 
terror." 
 
About the concern that the abduction issue would be left unattended 
behind advanced US-DPRK relations, the US envoy also stated: "The 
United States' stance toward the abduction issue has not changed. I 
don't think this issue will divide the United States and Japan." 
 
3) US ambassador criticizes DPJ over fuel diversion allegation 
 
MAINICHI (Page 5) (Full) 
October 25, 2007 
 
US Ambassador to Japan J. Thomas Schieffer yesterday delivered a 
speech at the Japan National Press Club in Chiyoda Ward, Tokyo. The 
ambassador tacitly criticized the Democratic Party of Japan in 
 
TOKYO 00004976  003 OF 010 
 
 
connection with alleged diversion of oil provided by the Maritime 
Self-Defense Force in the Indian Ocean, saying: "There is no need to 
receive fuel from Japan for the war in Iraq. Those who are still not 
convinced (even after information was disclosed) are probably not 
satisfied for political reasons." 
 
4) Ambassadors from various countries to express support for 
continuation of Japan's refueling operations: Briefing for lawmakers 
to be held on Oct. 31 
 
YOMIURI (Page 4) (Full) 
October 25, 2007 
 
Ambassadors from countries that are participating in the Maritime 
Interdiction Operations (MIO) in the Indian Ocean will hold a 
briefing for lawmakers of both the ruling and opposition camps at a 
facility of the Canadian Embassy in Akasaka, Tokyo. The aim is to 
indirectly support passage of Japan's new antiterror special 
measures bill, by seeking understanding for continuation of the 
Maritime Self-Defense Force's refueling operations, part of the MIO. 
US Ambassador to Japan Schieffer, Canadian Ambassador Joseph Caron, 
as well as military attaches of various countries will take part in 
the briefing. 
 
5) MSDF pullout order to be issued on Nov. 1 
 
TOKYO SHIMBUN (Page 2) (Full) 
October 25, 2007 
 
The Antiterrorism Special Measures Law, which has been the legal 
basis for the Maritime Self-Defense Force's refueling operation in 
the Indian Ocean, is slated to expire on Nov. 1. For this reason, 
the government yesterday outlined an MSDF withdrawal timetable, 
including the issuance of a pullout order by Defense Minister 
Shigeru Ishiba on Nov. 1. 
 
With the law's expiration only a week away, there is no prospect 
that new antiterrorism legislation will pass the Diet. Given the 
situation, the government will begin work for discontinuing the 
refueling operation. The MSDF vessels are scheduled to depart for 
Japan before dawn of Nov. 2 to return home in late November. 
 
The dispatched unit is composed of the supply ship Tokiwa and the 
destroyer Kirisame and some 340 personnel. The unit, which left 
Japan this July, has been engaged in the refueling operation in the 
Indian Ocean since August. 
 
If the Antiterrorism Law had been extended, they were supposed to 
provide services until around January. But because the government 
has given up on the law's extension and submitted a new bill to the 
Diet, the unit's term has been shortened to Nov. 1. The unit will 
continue refueling foreign vessels until the deadline while making 
preparations for the pullout. 
 
In the event the new legislation passes the Diet early, the unit 
that will be cruising toward Japan is expected to head back toward 
the Indian Ocean after receiving an order from Defense Minister 
Ishiba. 
 
The MSDF's Indian Ocean mission started in November 2001 under the 
current Antiterrorism Law. As of August 31, 2007, the MSDF provided 
some 480,000 kiloliters of oil on 777 occasions at a total cost of 
 
TOKYO 00004976  004 OF 010 
 
 
over 22 billion yen. 
 
6) DPJ's antiterrorism bill to limit operations in Afghanistan to 
public welfare area 
 
SANKEI (Page 5) (Full) 
October 25, 2007 
 
The Democratic Party of Japan started a discussion in an executive 
meeting of its foreign and defense affairs committees on its own 
bill to counter the government's new antiterrorism special measures 
bill. The draft bill that was spelled out in the meeting specifies 
that assistance in Afghanistan should be limited to the public 
welfare area, dismissing Japan's participation in peacekeeping 
operations (PKO). On the propriety of the dispatch of Self-Defense 
Force (SDF), the draft includes measures to dispatch SDF to 
Afghanistan to join UN PKO, as well as to reassign SDF personnel to 
other organizations, like the Japan International Cooperation Agency 
(JICA), to engage in aid operations as civilians. 
 
7) DPJ to put off finalization of counterproposals to new antiterror 
legislation, prioritizing pursuit of scandal involving Moriya 
 
YOMIURI (Page 4) (Full) 
October 25, 2007 
 
The Democratic Party of Japan (DPJ or Minshuto) yesterday put off 
the finalization of proposals countering the ruling camp-sponsored 
new antiterror special measures bill until next week or later. This 
is because it wants to prioritize pursuit of former Administrative 
Vice Defense Minister Takemasa Moriya over his improper relations 
with a defense-related trading house and the correction of the 
amount of fuel the Maritime Self-Defense Force supplied to a US 
oiler. 
 
The DPJ at first planned to finalize counterproposals at a meeting 
of the Foreign and Defense Affairs Division within this week. 
However, it actually went no further than listening to explanations 
on the correction to the amount of fuel provided by the Defense and 
Foreign Ministries during the meetings held on Oct. 23-24. It plans 
to listen to circumstances from both ministries at a meeting on the 
25th as well, instead of discussing the finalization of 
counterproposals. 
 
In the meantime, the DPJ's Project Team to Shed Light on Scandals 
Involving the Defense Ministry, set up both in the Lower and Upper 
Houses, held their first meetings in the Diet yesterday. The Lower 
House team confirmed their determination to collect information in 
the run-up to the summoning of Moriya as a sworn witness on the 
29th. The Upper House team decided to call for summoning Moriya to 
the Budget Committee as well as to the Foreign Relations and Defense 
Affairs Committee as a witness. 
 
The DPJ has put off the finalization of counterproposals, because it 
finds it difficult to consolidate views of party members on the 
dispatch of Self-Defense Force troops to Afghanistan. It has judged 
that it would not be wise to create a fissure by discussing the 
matter, according to a senior member. Scandals involving Moriya then 
surfaced conveniently for the DPJ. 
 
Policy Research Committee Chair Naoshima yesterday told a news 
conference, "We are now discussing counterproposals in a cautious 
 
TOKYO 00004976  005 OF 010 
 
 
manner due to changes in the political situation." He thus indicated 
that the DPJ will take time to compile counterproposals. 
 
8) Moriya to be summoned to testify in Diet on Oct. 29 
 
YOMIURI (Page 2) (Slightly abridged) 
October 25, 2007 
 
The House of Representatives Special Committee on Prevention of 
Terrorism, chaired by Takashi Fukaya, decided yesterday to summon 
former Administrative Vice Defense Minister Takemasa Moriya to the 
Diet as a sworn witness. The session will begin at 1:00 p.m. on Oct. 
¶29. Moriya has been criticized for his inappropriate ties with a 
defense equipment trading house. The ruling and opposition parties 
also agreed in a meeting of the committee's executives to hold a 
question-and-answer session on the 26th on the new antiterrorism 
special measures bill with the presence of Prime Minister Yasuo 
Fukuda. 
 
Regarding the issue of the Defense Ministry having underreported the 
fuel Japan supplied to US supply ships (in 2003), the ruling and 
opposition parties have decided to continue deliberations on whether 
to summon to the Diet the Maritime Staff Office Operations and 
Plans' division director, who was serving in the post in 2003 and 
whom the opposition bloc has called for a summoning along with 
Moriya. 
 
Although the ruling coalition aims to pass the new antiterrorism 
bill through the House of Representatives in early November, it 
remains to be seen if the bill will even clear the Lower House as 
the ruling camp hopes. 
 
The expectation is that in Moriya's testimony the focus will be on 
whether he was involved in the ministry's purchase of defense 
equipment from the defense equipment trader Yamada Yoko Corp., in 
addition to his golfing and dining and wining with a former trade 
house executive. It will be the first time in 19 years for a former 
vice minister to be summoned to the Diet since former vice education 
minister Kunio Takaishi and former vice labor minister Takashi Kato 
gave testimonies in 1988. 
 
The opposition camp had opposed the holding of deliberations on the 
new legislation before summoning them, but they agreed to hold on 
the 26th a question-and-answer session by representatives from the 
ruling bloc and on 30th, after the summoning, a question-and-answer 
session by opposition representatives. 
 
The ruling coalition will hold question-and-answer sessions every 
day after the 30th, aiming at passing the legislation through the 
Lower House by the end of the current Diet session, on Nov. 10, to 
send it to the Upper House. However, the opposition's position is 
that the testimony by Moriya is the start of shedding light on the 
Moriya scandal. Besides testimony by the former Maritime Staff 
Office division director, the opposition side intends to demand that 
Moriya give testimony at the Upper House Foreign Affairs and Defense 
Committee. Many observers predict nothing will turn out as the 
ruling coalition plans. 
 
A senior Liberal Democratic Party (LDP) member said yesterday: 
"Nobody knows what may happen tomorrow. We have no choice but to 
walk ahead step by step." 
 
 
TOKYO 00004976  006 OF 010 
 
 
Prime Minister Fukuda told reporters last night: "I must try my best 
under the given situation." 
 
9) Moriya to be questioned in Diet over cozy ties with contractor, 
error cover-up 
 
TOKYO SHIMBUN (Page 2) (Excerpts) 
October 25, 2007 
 
Scandal-tainted former Administrative Vice Defense Minister Takemasa 
Moriya will be summoned to the Diet as a sworn witness on Oct. 29. 
The opposition camp is ready to question him over his cozy ties with 
Yamada Yoko Corp., a trading firm specializing in defense and 
aircraft equipment, and his possible involvement in the cover-up of 
an error in records of refueling. The focus of attention is on to 
what extend the opposition bloc will be able to unveil how Moriya 
was exerting influence in the Defense Ministry from a position 
responsible for defense policymaking for many years. 
 
Democratic Party of Japan (DPJ) Diet Affairs Committee Chairman 
Kenji Yamaoka said in a press conference yesterday: "In the Defense 
Ministry, there is a suspicious syndicate. Former Vice Defense 
Minister Moriya was at the center of it." He then stressed he would 
zero in on the ministry's structural problems through questioning 
Moriya in the Diet. 
 
A number of scandals based on collusive ties between Defense 
Ministry officials and contractors have been reported, such as the 
bid-rigging case involving the Defense Facilities Administration 
Agency in 2006. In the upcoming summons, the improper relationship 
between Yamada Yoko and Moriya will also be focused on. 
 
In current questioning, Moriya has admitted that he was treated to 
free golf and to wining and dining by a former executive of the 
company for many years, although he was aware that such practices 
violate the Self-Defense Forces' code of ethics,. 
 
Yamada Yoko received orders worth approximately 14.3 billion yen 
from the Defense Ministry during Moriya's four-year term of office 
as vice minister. It has also been revealed that Moriya had 
earnestly recommended a company established by the former executive 
in a tender to procure engines for CX transport aircraft. Focusing 
on this fact, the opposition camp suspects that Moriya might have 
received kickbacks. 
 
Regarding the problem of uncovered data error, Moriya was in the 
position of being deeply involved in Maritime Self-Defense Force's 
(MSDF) refueling operation as Defense Bureau director general at 
that time. 
 
10) Prosecutors trying to clear up location of missing 30 million 
yen taken by former executive director from Yamada Yoko Corp. in 
order to create close ties with Defense Agency around 1989 
 
ASAHI (Page 39) (Excerpts) 
October 25, 2007 
 
Around 1989, the then executive director of Yamada Yoko Corp., a 
Tokyo-based trading firm specializing in military sales, withdrew 30 
million yen from his company as a temporary advance, but later, 
according to an informed source, the whereabouts of the money became 
unknown. Over ten years later, the temporary advance remained 
 
TOKYO 00004976  007 OF 010 
 
 
outstanding, the result of sloppy management, and the executive 
repaid the money when he retired last year. The money withdrawn by 
the former executive director was around the time when business 
activities toward the then Defense Agency started in earnest. The 
special investigation unit of the Tokyo District Prosecutors Office, 
in order to completely clear up Yamada Yoko's capital situation, is 
starting to question former employees and others about what happened 
to the money. Although the money was returned by the retiring 
executive director, where it was used remains unknown. 
 
11) US Defense Department appoints first assistant secretary for 
Asia; High priority on Asia clear 
 
NIKKEI (Page 2) (Full) 
October 25, 2007 
 
Hiroshi Maruya, Washington 
 
The White House announced on Oct. 23 that the Department of Defense 
has appointed Deputy Undersecretary of Defense James Shinn as the 
nation's first Assistant Secretary for the Asia-Pacific Region, a 
post established by President George W. Bush. The post of Assistant 
Secretary for Asia was established in October 2006 by the Defense 
 
SIPDIS 
Department as part of its reorganization effort. The position is 
responsible for the region from East Asia, including Japan, to 
Central Asia, including Afghanistan. The appointment clearly 
reflects the US military's stance of attaching importance to Asia. 
 
The Pentagon's Asia-oriented policy is also reflected in Secretary 
of Defense Robert Gates' planned visit to Japan on Nov. 7-9. During 
his stay in Japan, Gates is expected to hold talks with Prime 
Minister Yasuo Fukuda and Defense Minister Shigeru Ishiba. 
 
12) Chief cabinet secretary and state minister for Okinawa affairs 
agree to restart talks on Futenma relocation next month 
 
YOMIURI (Page 4) (Excerpt) 
October 25, 2007 
 
Chief Cabinet Secretary Machimura and State Minister for Okinawa 
Kishida met on the 24th in the Prime Minister's Official Residence 
(Kantei) and agreed to start coordination to restart, prior to Prime 
Minister Fukuda's visit the United States in mid-November, talks 
with Okinawa Prefecture officials on the issue of relocating the US 
Marines' Futenma Air Station in Okinawa. Their thinking is to 
convene the talks in mid-November of the Futenma Relocation Council, 
which consists of representatives of the relevant ministries of the 
central government, Okinawa Prefecture, and four local governments. 
 
13) Members of families of abductees to meet prime minister tomorrow 
to ask for hard-line stance toward DPRK 
 
SANKEI (Page 3) (Full) 
October 25, 2007 
 
Members of the Association of the Families of Victims Kidnapped by 
North Korea (AFVKNK) will meet Prime Minister Yasuo Fukuda tomorrow 
at the Prime Minister's Official Residence (Kantei). This will be 
their first meeting since the inauguration of his administration. 
During the meeting they will ask the prime minister to deal with 
North Korea with a hard-line approach, inheriting former Prime 
Minister Shinzo Abe's policy, and settle the abduction issue by 
 
TOKYO 00004976  008 OF 010 
 
 
rescuing the abductees as soon as possible. 
 
The prime minister during the LDP presidential election campaign 
noted, "I want to settle the abduction issue myself." He also noted 
in his recent policy speech, "I will do my utmost to normalize ties 
between Japan and North Korea, by settling unfortunate past accounts 
through the realization of the return of all abduction victims as 
soon as possible." On the other hand, he is reportedly searching for 
a dialogue policy toward that nation. 
 
The AFVKNK and the National Association for the Rescue of Japanese 
Kidnapped by North Korea had sought a meeting with the prime 
minister to ask him to have the cabinet impose additional sanctions, 
arguing that in late October sanctions against North Korea are 
showing signs of producing effects. 
 
Prior to the meeting with the prime minister, members of the AFVKNK 
on Oct. 5, following the inauguration of the Fukuda cabinet, visited 
the Kantei and met Chief Cabinet Secretary Nobutaka Machimura. 
Machimura told them, "We would like to produce results with the 
determination that we want to settle the issue along with you as 
soon as possible. On that occasion, Shigeo Iizuka (69), brother of 
Yaeko Taguchi (22 at the time of the abduction) and the deputy 
representative of the AFVKNK, said, "I want to directly meet the 
prime minister to confirm his determination to settle the abduction 
issue." 
 
14) "Japan offers new proposal on northern territorial issue," says 
Russian newspaper but Japan denies report 
 
YOMIURI (Page 2) (Full) 
October 25, 2007 
 
Kenichi Ogata, Moscow 
 
The Russian newspaper Kommersant reported on Oct. 24 that Japan had 
informally sounded out Russia to conclude a peace treaty on the 
condition that the two countries would continue negotiations on the 
ownership of Kunashiri and Etorofu islands -- two of the four 
disputed Russia-held islands off Hokkaido. 
 
According to the article written by the Tokyo bureau chief of the 
ITAR-TASS, Japan's new proposal went: the two countries should 
conclude a peace treaty; Russia would return the Shikotan Island and 
Habomai islets -- the two of the four disputed islands -- to Japan; 
and a peace treaty would stipulate that the attribution of Kunashiri 
and Etorofu islands is in dispute. The proposal also says that in 
order to conclude a peace treaty, Russia needs to agree to continue 
talks on the ownership of Kunashiri and Etorofu islands. The 
ITAR-TASS article reported that Japan had not offered the proposal 
formally but it did so to feel the Russian side's opinion. 
 
A Japanese Foreign Ministry official, however, yesterday rejected 
the report, saying, "We haven't offered any proposal as was 
reported." 
 
15) Takeo Hiranuma implies possibility of forming new party with eye 
on new Lower House election 
 
SANKEI (Page 5) (Excerpts) 
October 25, 2007 
 
 
TOKYO 00004976  009 OF 010 
 
 
House of Representatives member Takeo Hiranuma, a former 
international trade minister who has remained an independent since 
he left the ruling Liberal Democratic Party in opposition to the 
government's postal-privatization plan, delivered a speech in a 
Tokyo hotel yesterday. In his speech, Hiranuma stressed his view 
that he would not rejoin the LDP for the time being. He stated: 
 
"I would like to fight the next Lower House election as a 
conservative independent. My mission as a senior politician is to 
build a ship on which members of the Democratic Party of Japan (DPJ 
or Minshuto) who hope for healthy conservatism can easily board." 
 
Hiranuma indicated in his remarks that he would form a "Hiranuma 
Party" on the occasion of the next Lower House election. 
 
He said: 
 
"Since I became an independent, I have realized that there are many 
talented junior lawmakers in the DPJ. In order to put an end to the 
divided Diet, it is necessary to win DPJ lawmakers to my side. I 
predicted that the DPJ would split in the July Upper House election, 
but the party won big. So I was unable to take action. " 
 
16) Former Health Minister Kan and incumbent Masuzoe clash over 
issue of drug-induced illnesses in Lower House 
 
TOKYO SHIMBUN (Page 2) (Slightly abridged) 
October 25, 2007 
 
The Democratic Party of Japan is intensifying its attack on the 
government over the problem of drug-induced hepatitis patients. In a 
House of Representatives Health, Labor and Welfare Committee meeting 
yesterday, DPJ Deputy President Naoto Kan, who had addressed the 
HIV-tainted-blood scandal when he was health and labor minister, 
took the floor as a questioner. 
 
On the hepatitis problem, the ministry has found recently documents 
listing the names of patients who contracted hepatitis C after being 
administered a tainted blood product. Kan said: "The ministry has 
customarily concealed unfavorable documents." He further demanded 
that the government should promise the state and pharmaceutical firm 
in question that it will provide the patients with treatment costs. 
 
Comparing the stance he took as health minister and that of Health, 
Labor and Welfare Minister Yoichi Masuzoe, Kan demanded that Masuzoe 
should take a more confrontational approach to the bureaucracy. He 
then said: "You look like a bureaucrat." 
 
Masuzoe refuted him: "I have not been controlled by bureaucrats." 
But he added: "As someone who was once health minister, I would like 
you to advise me on any deficiencies," calling for a "joint 
struggle" with Kan in resolving the problem. 
 
The DPJ has placed importance on the drug-induced hepatitis problem 
in the same way as its approach to the government's antiterrorism 
special measures bill in the current Diet session. The main 
opposition party intends to grill the government with such arguments 
as: "Both the Health, Labor and Welfare Ministry and the Defense 
Ministry have taken the same method of concealing information," as 
said by a senior House of Councillors member. 
 
17) Blackstone, largest US investment fund, to branch out to Japan 
 
TOKYO 00004976  010 OF 010 
 
 
shortly 
 
SANKEI (Page 1) (Excerpts) 
October 25, 2007 
 
It was learned yesterday that the Blackstone Group of the US, the 
largest investment fund in the world, will make inroads into Japan 
for the first time. It will shortly set up Blackstone Group Japan in 
the AIG Building in Marunouchi, Tokyo. The decision will be formally 
announced in November. The group is known for the fact that the 
Chinese government invests in it. The company is listed on the New 
York Stock Exchange. Its advance into Japan will enable it to carry 
out triangular mergers, under which it can acquire Japanese 
companies using its own stocks as merger consideration. The advance 
of the largest investment fund that can manage huge amounts of funds 
will likely further activate M&As on the Japanese market. 
 
Blackstone Group has decided to advance into Japan on a full scale 
by establishing a Japan corporation, because it has judged that amid 
the unabated commotion on the global financial market stemming from 
the sub-prime loan fiasco, revitalization of businesses by Japanese 
companies that have many healthy assets, and large-scale corporate 
reorganization, such as M&As, in industrial circles have yet to move 
into full swing. It appears to intend to expand its income and 
earnings, by developing investment targets and giving advice to 
funds it manages. 
 
For a start, it will likely invest in real estate, such as hotels, 
and then launch a drive to acquire Japanese companies. 
 
SCHIEFFER