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UNCLAS SECTION 01 OF 14 TOKYO 005175 
 
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 11/09/07 
 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
Visit of Secretary Gates: 
4) Secretary Gates meets Prime Minister Fukuda and key cabinet 
members (Asahi) 
5) Good mood prevails during Defense Secretary Gates' visit 
(Mainichi) 
6) Government, ruling camp giving top priority to passing new 
antiterrorism bill out of consideration to US, aware that largest 
opposition party has stumbled badly (Yomiuri) 
7) Prime Minister Fukuda in meeting with Secretary Gates stresses 
early restarting of refueling operations, strong alliance 
relationship (Yomiuri) 
8) Fukuda aims to resume MSDF Indian Ocean activities as soon as 
possible (Nikkei) 
9) In Secretary Gates comments seems to lie a sense of alarm about 
the US-Japan alliance (Yomiuri) 
10) Gates visit marked by three outstanding issues between US and 
Japan: halted refueling in Indian Ocean, stalled Futenma plan, and 
host-nation support cuts (Tokyo Shimbun) 
 
11) Defense Minister Ishiba in Diet reply says US ship refueled by 
MSDF that returned to homeport was engaged in OEF (Yomiuri) 
 
12) Yamada Corp. former managing director arrested for embezzlement; 
prosecutors also probing into his cozy ties with former vice 
minister Moriya (Tokyo Shimbun) 
 
13) Democratic Party of Japan (DPJ) loses momentum in opposing 
antiterrorism bill in the Diet due to weakened status following 
Ozawa caper (Mainichi) 
 
14) DPJ head Ozawa, one day after he talked about "self-reflection" 
and changing ways, absents himself from the Diet session (Tokyo 
Shimbun) 
 
15) China receives final yen loan of 4.6 billion yen (Asahi) 
 
16) 90 PERCENT  of procurement from Independent public corporations 
under discretionary contracts and not competitive bidding (Tokyo 
Shimbun) 
 
17) Prime Minister Fukuda instructs fiscal and economic policy panel 
to come up with a new growth strategy that would keep in balance 
with fiscal reconstruction (Nikkei) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi:  Mainichi: Yomiuri: Sankei: Tokyo Shimbun: Akahata: 
Former Yamada Yoko executive director issued arrest warrant on 
suspicion of embezzlement of 120 million yen: Collusive ties with 
former Administrative Vice Defense Minister Moriya to be brought to 
light 
 
Nikkei: 
Prime minister orders compilation of new growth strategy at CEFP, 
 
TOKYO 00005175  002 OF 014 
 
 
eyeing both growth and fiscal reconstruction 
 
2) EDITORIALS 
 
Asahi: 
(1) Former Yamada Yoko executive director under arrest: Shed light 
on suspected defense interests 
(2) History book screening on mass-suicides: Screening council also 
called into question 
 
Mainichi: 
(1) Former Yamada Yoko executive director under arrest: Shed light 
on shady defense interests 
(2) Two different systems for medical bills -- one with medical 
insurance and the other without it: Explanations given by state have 
not reached patients 
 
Yomiuri: 
(1) US defense secretary visits Japan: Settle individual issues to 
strengthen alliance with US 
(2) Former Yamada Yoko executive director: Will embezzlement scandal 
spill over into Defense Ministry? 
 
Nikkei: 
(1) Thorough investigation into scandals involving defense interests 
urged 
(2) Widen options for patients with double billing system 
 
Sankei: 
(1) Former Yamada Yoko executive director issued arrest warrant: 
Expose collusive ties with former Administrative Vice Defense 
Minister Moriya 
(2) Mixed medical services system: Further discussion urged for sake 
of patients 
 
Tokyo Shimbun: 
(1) Former Yamada Yoko executive director: Expose wrongdoing 
concerning defense interests 
(2) Turkey and Kurds: Keep war from widening 
 
Akahata: 
(1) Do not use subsidies regarding US force realignment as tool to 
make residents follow national policy 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, Nov. 8 
 
NIKKEI (Page 2) (Full) 
November 9, 2007 
 
10:02 
Met at the Kantei with Foreign Ministry's Deputy Foreign Minister 
Yabunaka, North American Affairs Bureau Director General Nishimiya, 
Asian and Pacific Affairs Bureau Director General Sasae, and 
others. 
 
11:13 
Met Chief Cabinet Secretary Machimura and Deputy Chief Cabinet 
Secretary Futahashi. Later, Met Economic and Fiscal Policy Minister 
 
SIPDIS 
Ota. 
 
 
TOKYO 00005175  003 OF 014 
 
 
13:40 
Met Finance Minister Omi. Followed by advisor to Mitsubishi Corp. 
Makihara. 
 
14:31 
Delivered a message for video-taking for the national forum "Ties 
among family members and communities." Then, met Yabunaka, Sasae, 
and Southern Asia Department head Atsumi. Sasae stayed behind. 
 
15:39 
Met Machimura. Then, met New Komeito President Ota, with LDP 
Secretary General Ibuki, New Komeito Secretary General Kitagawa, and 
 
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Machimura. 
 
16:28 
Met US Defense Secretary Gates, with US Ambassador Schieffer and 
others. 
 
17:02 
Met US Ambassador Schieffer. Later, attended a meeting of the 
Council on Economic and Fiscal Policy. 
 
19:41 
Returned to his private residence in Nozawa. 
 
4) US Secretary of Defense Gates, in meeting with prime minister, 
expresses hope for early resumption of Japan's refueling operation 
 
ASAHI (Page 1) (Full) 
November 9, 2007 
 
Visiting US Secretary of Defense Gates yesterday met with Prime 
Minister Fukuda, Defense Minister Ishiba and other key cabinet 
members in succession. Gates expressed a strong hope for an early 
resumption of Japan's Maritime Self-Defense Force's (MSDF) refueling 
mission in the Indian Ocean, which was halted when the Antiterrorism 
Special Measures Law expired (on Nov. 1). In response, Fukuda said, 
"We on the part of the government are making every effort to resume 
the mission as quickly as possible." Ishiba conveyed to Gates that 
the Japanese government planned to discuss a permanent law (general 
law) that would serve as a legal basis for Japan to dispatch the 
Self-Defense Forces (SDF) abroad. 
 
Gates is visiting Japan for the first time since becoming the 
secretary of defense. Ahead of Fukuda's planned first visit to the 
 
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United States as prime minister and at a time when it is impossible 
to tell when Japan resumes the refueling mission, both Japanese and 
the US leaders reaffirmed the need to strengthen the bilateral 
alliance, but they failed to deepen discussions on individual 
subjects, including the realignment of the US Forces Japan (USFJ) 
and the host nation support (commonly called the sympathy budget). 
 
After meeting with Fukuda, Gates met with Ishiba at the Defense 
Ministry. In the session, Ishiba referred to a permanent law aimed 
at allowing Japan to send the SDF abroad and emphasized: "The Fukuda 
administration is strongly aware of the need to create such a law." 
Noting that some in the opposition bloc are also supportive of 
creating such a law, Ishiba conveyed to Gates that the government 
would start a full-scale discussion of such legislation. 
 
In this regard, Gates expressed his hope at a joint press briefing 
after the meeting: "I hope to see Japan play an active part on the 
 
TOKYO 00005175  004 OF 014 
 
 
international scene. I hope Japan will play an appropriate role as 
one of the leading wealthy democracies." 
 
On the MSDF's refueling mission in the Indian Ocean, Gates said at 
the press briefing: "We've appreciated Japan's contribution." In 
response, Ishiba noted: "Japan has a responsibility to the 
international community to provide the refueling services. The 
mission is important also for the Japan-US alliance." 
 
According to an account by the Japanese side, Gates said this of the 
realignment of the US forces in Japan: "The realignment plan needs 
to be implemented as swiftly as possible and as negotiated." He 
urged Japan to implement the bilateral agreement reached in May of 
last year, bearing in mind, for instance, the plan for the 
relocation of the US military's Futenma base. 
 
On the question of the host nation support, the special agreement on 
which is to expire in next March, both Japan and the US agreed to 
finalize it as quickly as possible. 
 
Gates also met with Foreign Minister Koumura and Chief Cabinet 
Secretary Machimura. In the talks between Koumura and Gates, Koumura 
 
SIPDIS 
mentioned the question of the military-civilian joint use of the 
Yokota Base (in Tokyo) in connection with the realignment of the 
USFJ and said, "We hope to continue talks in this regard, for we are 
going to come up with a specific plan." In response, Gates 
reportedly expressed disapproval, noting, "There are difficult 
problems." 
 
5) US Secretary of Defense Gates makes effort to create friendly 
atmosphere, refraining from referring to pending issues 
 
MAINICHI (Page 5) (Full) 
November 9, 2007 
 
US Defense Secretary Robert Gates, who is now visiting Japan for the 
first time since he assumed his post, met yesterday with Prime 
Minister Yasuo Fukuda, Foreign Minister Masahiko Koumura and Defense 
Minister Shigeru Ishiba, respectively. In his meetings, Gates 
brought up such comprehensive issues as the need for strengthening 
bilateral relations as the main topics.  Although this was in 
consideration of the prime minister's planned visit to the US about 
one week from now, there remain many pending issues between the two 
countries such as the suspension of the refueling operation by the 
Maritime Self-Defense Force, as well as Japan's planned cut in its 
host-nation support (or the so-called sympathy budget) for the US 
forces in Japan. Gates appeared to be making an effort to create a 
friendly atmosphere by avoiding discussing specific topics, although 
he referred to some pending issues. 
 
"I had expected that (Gates) would bring up the Futenma issue, but 
he did not," Koumura told the press after his meeting with Gates. 
 
The issue of relocating the US Marine Corps' Futenma Air Station (in 
Ginowan) is the biggest issue in the realignment of US forces in 
Japan. The government held on Nov. 7 consultations with Okinawa 
government and municipalities for the first time in about 10 months 
over the government's plan to construct an alternative facility, but 
Okinawa Prefecture demanded again revising the government's plan. 
The gap between the two sides remains unfilled. 
 
Yesterday considerations by the defense secretary were seen 
 
TOKYO 00005175  005 OF 014 
 
 
everywhere. He did not repeat the request he made in a press 
conference on Nov. 1 that he wanted Japan to resume the refueling 
mission within several weeks. Regarding the scale of a cut in 
Japan's host-nation support budget, he did not refer to specifics, 
just saying, "Let working-level officials take charge for the time 
being." 
 
In preparatory meeting for Ishiba-Gates talks, officials from the 
Japanese and US sided repeatedly said: "Let them focus on positive 
aspects," and "Let them talk about big picture issues." Although the 
Defense Ministry has been busy with dealing also with the scandal 
involving former Vice Minister Takemasa Moriya, Ishiba ordered 
ministry officials to check Gate's interests or hobbies and recent 
events. He seemed to have made efforts to building friendly ties 
with Gates since he was constrained from talking about specifics on 
pending issues. 
 
6) Government, ruling camp giving top priority to enacting new 
antiterrorism bill, out of consideration for US 
 
YOMIURI (Page 2) (Excerpts) 
November 9, 2007 
 
Giving consideration to relations with the United States, the 
government and ruling parties have decided to extend by 35 days the 
current extraordinary Diet session in order to place top priority on 
enacting a new antiterrorism special measures bill. Following the 
turmoil in the main opposition Democratic Party of Japan (DPJ or 
Minshuto) caused by President Ichiro Ozawa's on again off again 
resignation, the sense of alarm has now eased in the ruling 
coalition that an increasing fierce battle between the ruling and 
opposition camps over the antiterrorism bill would force (Prime 
Minister Yasuo Fukuda) to decide to dissolve the House of 
Representatives for a snap election. The government and ruling bloc 
intend to take the offensive in dealing with Diet affairs, taking 
advantage of their two-thirds majority in the Lower House when 
readopting the new antiterrorism bill (that is expected to be 
blocked in the Upper House). 
 
Ruling Liberal Democratic Party (LDP) Secretary General Bunmei 
Ibuki, in a press conference yesterday, stated: "We have decided to 
extend by 35 days the Diet session to carry out intense 
deliberations on the new antiterrorism measures bill." He expressed 
his determination to put all his energy into enacting the 
legislation. New Komeito Secretary General Kazuo Kitagawa also 
stressed in a press briefing yesterday: "I believe that most members 
of the DPJ share the view that Japan has to contribute to the 
international community in preventing terrorism." 
 
Japan's Maritime Self-Defense Force's refueling activities in the 
Indian Ocean were suspended on Nov. 1 when the Antiterrorism Special 
Measures Law expired. In case the new antiterrorism bill is carried 
over to the regular session next year, the MSDF refueling operation 
will likely be resumed next spring or after at the earliest, since 
the Diet must prioritize deliberations on the state budget for next 
fiscal year. A government official expressed anxiety, saying, "If 
the suspension is prolonged, Japan would lose international 
confidence in it and the Japan-US relationship would be damaged." 
 
Prime Minister Fukuda is expected to tell US President George W. 
Bush his resolve to aim at an early resumption of the refueling 
operation in his first trip to the US since he took office, starting 
 
TOKYO 00005175  006 OF 014 
 
 
on the 15. He therefore cannot give up the goal of enacting the bill 
in the current Diet session. 
 
In an attempt to ease the DPJ's stance of opposing the legislation, 
the government and ruling coalition are trying to find a way to hold 
consultations on revising the bill. 
 
Moreover, they intend to re-adopt the bill in the Lower House with 
approval of a two-thirds majority if it is voted down in the Upper 
House. 
 
7) Gov't doing utmost to resume refueling activities: Fukuda 
 
YOMIURI (Page 2) (Full) 
November 9, 2007 
 
Prime Minister Fukuda yesterday met at his office with visiting US 
Secretary of Defense Gates for about 30 minutes, during which he 
 
SIPDIS 
told the Pentagon chief that the Japanese government would do its 
utmost to pass a new antiterror bill in order for Japan to resume 
the Maritime Self-Defense Force's refueling activities in the Indian 
Ocean. "We're doing our best for early resumption," Fukuda 
explained. Gates expressed hopes for the Japanese government's 
efforts. 
 
"The Japan-US alliance is indispensable not only for the security of 
Japan but also for peace and stability in the region," Fukuda said, 
adding, "I'd like to continue to strengthen it." With this, Fukuda 
stressed his intention to give priority to Japan-US relations. Gates 
said: "We'd like to promote our defense cooperation with Japan in a 
steady way on various issues, such as the realignment of US forces 
in Japan. The United States will push for its Asia policy in 
cooperation with Japan." 
 
Gates also met with Chief Cabinet Secretary Machimura, Foreign 
Minister Koumura, and Defense Minister Ishiba. 
 
Ishiba told Gates that the government would create a permanent law 
(general law) that would set the standards for sending the 
Self-Defense Forces overseas. "I told him that this is a challenge 
that the government and the Diet will address," Ishiba told a news 
conference after meeting with Gates. Koumura and Gates agreed that 
the six-party talks over North Korea's nuclear development would 
face a "critical phase" toward the end of the year. They confirmed 
that Japan and the United States would work together to deal with 
North Korea. 
 
8) Fukuda tells Gates that government will make maximum efforts to 
quickly resume MSDF refueling operation 
 
NIKKEI (Page 2) (Full) 
November 9, 2007 
 
Visiting US Secretary of Defense Robert Gates yesterday held 
meetings with Prime Minister Yasuo Fukuda, Foreign Minister Masahiko 
Koumura, Defense Minister Shigeru Ishiba and others. Regarding the 
Maritime Self-Defense Force's refueling operation in the Indian 
Ocean, the prime minister indicated that the government is making 
maximum efforts for an early resumption of the operation, pledging 
to make utmost efforts for the early enactment of a new refueling 
bill. Gates expressed strong hope for a swift resumption of the 
operation, while expressing gratitude for Japan's contributions. 
 
TOKYO 00005175  007 OF 014 
 
 
 
This is Gate's first visit to Japan as defense secretary. He showed 
a certain level of understanding toward Japan's position that the US 
government should make a decision on delisting North Korea as a 
state sponsor of terrorism based on progress on the abduction 
issue. 
 
In the meeting with the defense minister, an agreement was reached 
to increase cooperation on the operation of the missile defense (MD) 
system. The two defense chiefs also confirmed to steadily push ahead 
with US force realignment, such as the relocation and return of the 
US Marine Corps' Futenma Air Station and the planned relocation of 
US Marines from Okinawa to Guam, based on the final report produced 
in May 2006. The dense minister also expressed eagerness to 
establish a permanent law allowing the government to dispatch the 
Self-Defense Forces on overseas missions as necessary. 
 
In the session with the foreign minister, an agreement was reached 
to accelerate administrative-level talks on revising the special 
agreement on Japan's host-nation support (sympathy budget) for US 
forces in Japan that is slated to expire at the end of next March. 
 
The series of talks was intended for the two countries to confirm 
common perceptions to pave the way for the Japan-US summit planned 
for Nov. 16. The prime minister is likely to visit the United States 
with an armful of homework on Japan-US relations. 
 
The Futenma relocation consultative council involving Okinawa and 
Nago reopened on Nov. 7 after a hiatus of 10 months. Views with 
local municipalities remain wide apart. With the cost of the war on 
terrorism in Iraq weighing heavily on it, the US government is 
nervous about a reduction in the sympathy budget. Gates expressed 
his eagerness to settle the matter quickly to the foreign minister. 
 
Asked yesterday by the press for his measures to deal with mounting 
challenges facing Japan and the United States, the prime minister 
said as if to remind himself: "Every country has its own problems. 
Problems must be overcome for important relations." 
 
9) Gates' words indicate a sense of crisis about Japan-US alliance 
 
YOMIURI (Page 4) (Full) 
November 9, 2007 
 
US Secretary of State Gates met with Defense Minister Ishiba and 
other Japanese government officials yesterday. In his meetings, 
Gates expressed strong hopes for Japan to resume the Maritime 
Self-Defense Force's refueling activities (in the Indian Ocean). He 
also urged Japan, an ally of the United States, to continue playing 
its role in the international community. The Pentagon chief came to 
Japan to convey his requests at a time when there is no knowing what 
is in store for Japan's refueling activities. His words indicated a 
sense of crisis about the present state of the bilateral alliance. 
 
"We're of course paying attention to Japan's law, but we want Japan 
to play its appropriate role on the international stage." With this, 
Gates stressed his view when he met the press with Ishiba yesterday 
evening. 
 
Gates, who became Pentagon chief last December, is visiting Japan 
for the first time. A high-ranking Pentagon official accompanying 
Gates explained the purpose of Gates' first visit to Japan, saying: 
 
TOKYO 00005175  008 OF 014 
 
 
"Since we usually tend to talk about the particulars of domestic 
politics in Japan, the secretary intends to raise discussions to a 
strategic level." 
 
Prior to the visit of Gates to Japan, the opposition bloc in the 
Diet pursued allegations that fuel provided by MSDF supply ships was 
used for US military operations in Iraq. The US government was also 
driven to come up with details about the use of MSDF-supplied fuel. 
 
The US side harbors some irritation at Japan. One accompanying 
source noted that Japan has lost sight of "the greater purposes of 
our alliance," such as dealing with China's military buildup and 
strengthening antiterror cooperation. 
 
Gates agreed with Ishiba in yesterday's meeting to expand and deepen 
the bilateral alliance. However, there has been little progress in 
the planned realignment of US forces in Japan. In addition, Japan 
and the United States differ on their respective standpoints over 
some issues, such as the Japanese government's host nation support 
("omoiyari yosan" or literally "sympathy budget") for the stationing 
of US forces in Japan. The two defense chiefs could not find a way 
out of the difficulties over these specific issues that are still 
casting a shadow on the two countries' discussion of the alliance 
and the big picture. 
 
This is the first visit of a Pentagon chief to Japan in four years 
since Rumsfeld last visited Japan in 2003. Gates will meet today 
with lawmakers, including those with the leading opposition 
Democratic Party of Japan (Minshuto), and will ask them to make 
supraparty efforts to strengthen the alliance. 
 
Gates negative about revisions to Futenma relocation plan 
 
US Secretary of Defense Gates met with Defense Minister Ishiba 
yesterday, during which he suggested the need for Japan and the 
United States to expedite the planned realignment of US forces in 
Japan. "It should be implemented as negotiated," Gates said. In this 
regard, Okinawa Prefecture has been calling for the Japanese 
government to revise its plan to relocate Futenma airfield. Bearing 
this in mind, Gates indicated that he was opposed to revising the 
relocation plan. 
 
10) Japan-US defense ministerial held; Bilateral alliance saddled 
with tough issues, such as halted refueling operation, Futenma, and 
sympathy budget 
 
TOKYO SHIMBUN (Page 2) (Full) 
November 9, 2007 
 
A series of meetings took place yesterday between visiting US 
Defense Secretary Robert Gates and Prime Minister Yasuo Fukuda, 
Defense Minister Shigeru Ishiba, and other Japanese leaders. 
Although the prime minister and others conveyed to Gates their 
intention to make utmost efforts to swiftly resume the Maritime 
Self-Defense Force's refueling operation in the Indian Ocean, there 
is still no prospect for it in sight. There are numerous pending 
issues, such as the planned relocation of the US Marine Corps' 
Futenma Air Station and Japan's host-nation support ("sympathy 
budget") for US forces in the country. These are all tough issues 
that might rock the Japan-US alliance. 
 
In the meetings yesterday, the two sides confirmed the need to 
 
TOKYO 00005175  009 OF 014 
 
 
resume the refueling operation at an early time, though there was no 
penetrating discussion of specifics. 
 
At a joint press conference after the Japan-US defense ministerial, 
Ishiba said, "If the suspension drags on, Japan might be taken as 
being passive about the war on terror." Gates, on the other hand, 
expressed gratitude for Japan's efforts to resume the operation. The 
two defense chiefs played up close cooperation between the two 
countries for an early restart of the refueling operation. 
 
At the same time, there is simmering dissatisfaction with Japan 
within the US government, as seen in such comments from officials 
as, "We were disappointed" with the suspension of the refueling 
operation. Gates, too, called for Japan to make more efforts. In a 
press conference on Nov. 1, he said, "I hope to see (the refueling 
operation) resumed comparatively early, in several weeks." 
 
In the divided Diet, in which the opposition camp holds a majority 
in the House of Councillors, the Democratic Party of Japan and other 
opposition parties remain opposed to the new antiterrorism bill. Now 
that the LDP plan to form a grand coalition with the Ozawa-led DPJ 
has ended in failure, there is no prospect for smooth enactment of 
the bill. 
 
The US government is aware that for the Japanese government at time, 
there is no other option but to say that it will make utmost 
efforts. Out of consideration for Japan, the US side expressed only 
hope for the early resumption of the refueling mission. 
 
On Futenma, although the consultative council between Tokyo and 
Okinawa, including the affected municipalities, to discuss the 
relocation issue met on Nov. 7 for the first time in 10 months, the 
gulf between the two sides remains wide. In addition, Japan has 
proposed cutting the Japanese employees' pay and allowances by 10 
billion yen - which are a part of the "sympathy budget." The US, 
however, is seeking a large increase in coverage of utility costs. 
 
The two topics were hardly touched on in the Gates meetings. The 
prime minister has  a heavy load of homework to do before the 
Japan-US summit, planned for mid-November. 
 
11) US warship that returned home after receiving MSDF fuel engaged 
in OEF: Ishiba 
 
YOMIURI (Page 4) (Full) 
November 9, 2007 
 
In December 2001, the USS Antietam, a US Navy cruiser, received fuel 
from a Maritime Self-Defense Force supply ship in waters off Mumbai, 
India, and then returned to the United States. On this issue, 
Defense Minister Ishiba, sitting in yesterday on the House of 
Representatives Special Committee on Antiterror Measures, was driven 
to explain. 
 
Yorihisa Matsuno from the leading opposition Democratic Party of 
Japan (Minshuto) and Tomoko Abe from the Social Democratic Party 
(Shaminto) asked Ishiba if he had checked the facts with the United 
States about the Antietam's operations and missions. "The Antietam's 
website says it carried out a mission for Operation Enduring Freedom 
(OEF)," Ishiba stated before the committee. However, when it comes 
to whether Ishiba checked with the US government, he only said, 
"There's no need to check; I think it was engaged in OEF." 
 
TOKYO 00005175  010 OF 014 
 
 
 
12) Former Yamada Corp. executive arrested on suspicion of 
embezzling over 100 million yen; Prosecutors to pursue alleged cozy 
ties with Moriya 
 
TOKYO SHIMBUN (Top Play) (Excerpts) 
November 9, 2007 
 
The Tokyo District Public Prosecutors Office's special investigation 
squad yesterday arrested former Yamada Corp. executive managing 
director Motonobu Miyazaki on suspicion of embezzling approximately 
120 million yen from Yamada Corp.'s subsidiary in the United States. 
Miyazaki lavishly entertained former Vice Defense Minister Takemasa 
Moriya, playing golf with him more than 200 times. Prosecutors will 
start a full-scale investigation to uncover the details of collusive 
relations between Miyazaki and Moriya. 
 
Prosecutors also obtained an arrest warrant yesterday for Osamu 
Akiyama, former president of the Washington-based Yamada 
International Cop, a trading firm specializing in defense 
equipment. 
 
After leaving the trading firm Yamada Corp. in Tokyo specializing 
defense and aircraft equipment, Miyazaki set up Nihon Mirise Corp. 
in Tokyo in September last year. Miyazaki is suspected of having 
instructed Akiyama to transfer approximately 120 million yen out of 
the hundreds of millions of yen in slush funds that were placed 
under the control of Akiyama to his bank account in Japan on four 
occasions from September last year through January this year. 
Prosecutors suspect that Miyazaki used most of the embezzled money 
for the establishment and operation of the new company. 
 
Akiyama, now in the US, allegedly cashed checks made out under the 
pretext of remuneration for executives at the US subsidiary and 
pooled the slush funds in several bank accounts in the US under the 
instruction of Miyazaki. 
 
(Commentary) 
 
The main aim of the arrest of Miyazaki is to shed light on the 
details of cozy ties between Miyazaki and Moriya. 
 
In the process of investigating a collusive bidding case involving 
the Defense Facilities Administration Agency in 2006, prosecutors 
suspected that Moriya had acted as intermediary to enable a local 
construction company to win an order in a construction project 
related to US military bases in Okinawa. Based on the suspicion, 
they started a secret investigation. Although the investigation was 
canceled in the end, prosecutors continued to collect information 
about suspicions around Moriya. 
 
It was revealed in Moriya's Diet testimony on Oct. 29 that Miyazaki 
had treated Moriya to free rounds of golf more than 200 times and 
had repeatedly wined and dines him. Prosecutors suspect that Moriya, 
in return for such lavish entertainment, might have given some 
favors to Miyazaki when the Defense Ministry (or the former Defense 
Agency) held bidding to procure defense equipment. 
 
However, since Moriya's family and Miyazaki's are on good terms, as 
told by Moriya that he became acquainted with Miyazaki 23 years ago, 
it is not easy to link Moriya's favors in return for the excessive 
entertainment by Miyazaki to influence-peddling. 
 
TOKYO 00005175  011 OF 014 
 
 
 
Miyazaki reportedly had also entertained members of the 
defense-policy clique in the Diet and other Defense Ministry 
official than Moriya with huge amounts of money from the company's 
expense account. Prosecutors will try to find out the move and other 
details of the funds from Miyazaki for the time being. Since defense 
interests are highly confidential in view of national defense, full 
investigation into such cases had never been carried out. The focus 
of attention is on to what extent the special investigation squad 
will be able to clear up the truth of cozy ties between the 
government, the bureaucracy and the business world. 
 
13) Government and ruling bloc may put new antiterrorism legislation 
to revote, anticipating that DPJ, out of fear of dissolution of 
Lower House, is unlikely to submit censure motion 
 
MAINICHI (Page 2) (Full) 
November 9, 2007 
 
Tomoko Onuki 
 
The government and the ruling bloc yesterday decided to extend the 
current session of the Diet for 35 days until Dec. 15, making it 
clear that it will aim to get the new antiterrorism legislation 
adopted during the current Diet session. They have now judged that 
the major opposition Democratic Party of Japan (DPJ), which is in 
turmoil caused by DPJ President Ichiro Ozawa's flip-flop on his 
resignation, is less likely to submit a censure motion against the 
Fukuda cabinet, which could trigger a dissolution of the Lower Hose 
for a snap general election. The government and ruling parties 
envision the possibility of again extending the Diet session in 
order to put the new antiterrorism legislation to a revote if the 
DPJ strengthens its confrontational line. 
 
According to a source connected with the ruling parties, the 
governing Liberal Democratic Party's (LDP) Secretary General Bunmei 
Ibuki yesterday telephoned a senior official of the junior coalition 
partner New Komeito and sounded him out about how long the current 
Diet session should be extended, saying, "If (the Diet) is extended 
beyond Dec. 15, it would become difficult to compile a budget bill 
for next fiscal year." Ibuki reportedly indicated confidence in 
getting the new antiterrorism bill approved without affecting the 
work of compiling a budget bill slated for the year's end. 
 
The government and ruling bloc were highly wary of the possibility 
that the new antiterrorism bill would be adopted by a two-thirds 
majority of votes but that a censure motion would be submitted 
against the government. But they have now judged that that 
possibility is less likely to come true given the recent turmoil in 
the DPJ. Even in the New Komeito, which was cautious about putting 
the bill to a revote, some are beginning to agree to take a revote, 
with one senior member saying, "We may in the end resort to it." 
 
Meanwhile, DPJ President Ozawa emphasized his opposition to the new 
antiterrorism legislation at a press briefing on Nov. 7, in which he 
retracted his resignation as party head. However, his party, which 
has suffered serious damage from his flip-flop, is not ready to face 
a general election. 
 
A senior DPJ official tried to forestall a rising move in the ruling 
bloc to put the new antiterrorism legislation to a revote, arguing, 
"If that happens, we naturally have to submit a censure motion 
 
TOKYO 00005175  012 OF 014 
 
 
against the prime minister. If we don't do so, we would be 
criticized as being gutless." But the fact is that the party can't 
tell whether it should submit a censure motion, which could lead to 
a dissolution of the Lower House for a snap general election. 
 
The ruling parties are still looking into the possibility of holding 
talks with the DPJ as to how revise the new antiterrorism 
legislation. They have taken a carrot-and-stick policy toward the 
DPJ in order to contain its move to submit a censure motion. Former 
Prime Minister Yoshiro Mori insisted on the need to hold policy 
talks with the DPJ at a general meeting yesterday of the Machimura 
faction. In the meeting, Mori said: "If Prime Minister Yasuo Fukuda 
and DPJ President Ozawa had a meeting sharing similar feelings, 
that's praiseworthy. It would be good for the two to discuss such 
problems as social welfare and the consumption tax." 
 
14) DPJ President Ozawa absents himself from Lower House plenary 
session day after he offered apology 
 
TOKYO SHIMBUN (Page 2) (Full) 
November 9, 2007 
 
Ichiro Ozawa, president of the main opposition Democratic Party of 
Japan (DPJ or Minshuto), absented himself from a Lower House full 
session and meeting of the DPJ Lower House members yesterday, the 
day after he withdrew his resignation as party head and offered an 
apology for causing a turmoil in the party. 
 
In a meeting on Nov. 7 of the DP lawmakers from both Diet chambers, 
Yoshito Sengoku, former policy chief, urged Ozawa, who has a poor 
attendance record, saying, "I want you to attend sessions although 
you may be tired physically from your busy work." Ozawa then 
replied: "I take your advice seriously and I will do my best." 
 
According to a concerned source, Ozawa called a senior party member 
yesterday morning and told him: "Let me stay away from sessions 
because I have to visit (support) organizations." The concerned 
source said that it was unusual for Ozawa to inform someone of his 
absence by phone. 
 
Sengoku told the press: "I understand that he did not attend the 
sessions today for a special reason." He continued mirthlessly: "But 
Diet members must attend at least the full sessions of the Lower 
House." Ozawa, however, attended a party hosted last night by Hajime 
Ishii, DPJ vice president. At the event, he offered an apology, 
saying, "I'm sorry for having made you worry." 
 
15) China to receive final yen loans of 46 billion yen 
 
ASAHI (Page 4) (Excerpts) 
November 9, 2007 
 
Speaking before reporters in the Foreign Ministry yesterday, Foreign 
Minister Koumura revealed that the government has determined the 
amount of yen loans to China for FY2007. He said: "The government 
will provide China with its last yen loans of 46.3 billion yen and 
then terminate its yen loan program amicably." Yen loans occupy most 
of the government's official development assistance (ODA) to China. 
The offered money will be used by next March. With this as the last, 
the history of Japan's yen loans to China, which started in 1979, 
the year after Japan and China signed the Japan-China Peace and 
Friendship Treaty, will come to an end. 
 
TOKYO 00005175  013 OF 014 
 
 
 
In reaction to China's rapid economic growth and escalating 
anti-Japanese sentiment, a number of government officials and 
citizens have called on the government to end its yen loans to 
China. In the ODA project for China, the government will continue 
non-reimbursable aid and technical cooperation. The amount for 
FY2007 is down about 26 PERCENT  below the 62.3 billion yen in the 
previous fiscal year, and all the money will be used to finance 
projects to protect the environment. 
 
16) Survey finds 90 PERCENT  of contracts by independent 
administrative institutes with affiliated corporations were 
discretionary 
 
TOKYO SHIMBUN (Page 1) (Excerpts) 
November 9, 2007 
 
According to a survey revealed yesterday by the government's 
administrative reform promotion headquarters, 40 independent 
administrative institutes of the 101 surveyed concluded contracts 
with affiliated corporations for construction, service and 
procurement in FY2005, of which 89.9 PERCENT  were discretionary 
ones (not subject to open bidding). 
 
The survey also found that 230 ex-officials of independent 
administrative institutes assumed executive posts in 236 affiliated 
corporations as of FY2005-FY2006. The administrative reform panel 
intends to urge the administrative institutions to make clearer the 
flow of money and personnel from independent administrative 
organizations to affiliated firms, as well as to review their ways 
to determine contractors. 
 
17) Prime minister orders compilation of new growth strategy at 
CEFP, eyeing both growth and fiscal reconstruction 
 
NIKKEI (Top Play) (Full) 
November 9, 2007 
 
Prime Minister Yasuo Fukuda during a meeting of the Council on 
Economic and Fiscal Policy (CEFP) ordered the compilation of a new 
economic strategy aimed at strengthening the nation's economic 
potential, noting, "I would like to see an immediate launching of 
efforts to consider steps to strike a proper balance regarding a new 
growth strategy concept and policies." In response, the CEFP will 
start discussions from late November, and the government will 
reflect the results in its medium-term guidelines "Course and 
Strategy" due out in January. The prime minister appears to be 
aiming at making economic growth and fiscal reconstruction 
compatible in order to realize sustainable fiscal and social 
security systems as well as to revitalize regional areas. 
 
Sustainable social security system to be crafted 
 
The prime minister during the meeting said, "I said in my policy 
speech that fiscal reconstruction and economic growth are two wheels 
of a cart. It is time for the cabinet to put together views on what 
strategy should be taken in light of the present situation in 
Japan." He indicated a plan to come up with a new policy, after 
probing into the efficacy of the economic growth strategy compiled 
by the previous Abe cabinet. 
 
The new strategy will essentially become a Fukuda vision presenting 
 
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the course of the administration's economic policy, according to a 
senior Cabinet Office official. Boosting productivity in small- and 
medium-size businesses and the service sector, promoting economic 
partnership agreements (EPA), facilitating foreign direct investment 
in Japan, easing regulations and reducing the corporate tax burden 
will likely be discussed. 
 
The government has a goal of moving the primary balance into the 
black by fiscal 2011. If boosted corporate productivity pushes up 
growth rates, tax revenues would increase, reducing the scope of a 
necessary tax increase. Enhanced corporate productivity is also 
expected to make it easier to sustain the pension, medical service 
and nursing-care systems, which see payouts continue to expand due 
to the aging of population, by boosting insurance-related income. 
 
The prime minister hinted at a stance of considering a tax hike to 
raise the government's share of paying for the basic national 
pension program starting fiscal 2009. With the next Lower House 
election close at hand, some ruling party members are increasingly 
concerned about the idea of pushing a tax hike policy to the fore. 
The prime minister appears to have ordered the compilation a new 
growth strategy, motivated by the desire to give the public an 
impression that the cabinet is steering policies, giving 
consideration not only to fiscal reconstruction but also to growth. 
 
Regarding measures to correct differences in tax revenues among 
regional areas, the prime minister ordered the compilation of a plan 
to review the distribution of revenues form two laws -- the 
enterprise tax and the residential tax. 
 
SCHIEFFER