VZCZCXRO6025
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #5338/01 3310111
ZNR UUUUU ZZH
P 270111Z NOV 07
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 9771
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/USFJ //J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 6974
RUEHFK/AMCONSUL FUKUOKA 4571
RUEHOK/AMCONSUL OSAKA KOBE 8236
RUEHNAG/AMCONSUL NAGOYA 3353
RUEHKSO/AMCONSUL SAPPORO 5233
RUEHBJ/AMEMBASSY BEIJING 0282
RUEHUL/AMEMBASSY SEOUL 6334
RUCNDT/USMISSION USUN NEW YORK 7101

UNCLAS SECTION 01 OF 08 TOKYO 005338 
 
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 11/27/07 
 
 
Index: 
 
1) Prime Minister's daily schedule (Nikkei) 
 
Defense issues: 
2) Former Vice Defense Minister Moriya to be questioned later this 
week by prosecutors on suspicion of receiving bribes (Asahi) 
3) Defense Ministry budgets for GSDF's AH64D helicopter, which at 
21.6 billion yen a unit will be twice the cost of the world's most 
expensive fighter, the F2 (Tokyo Shimbun) 
 
Politics in flux: 
4) Opposition camp in Diet wants to summon former defense chief 
Nukaga as sworn witness, alleging he was wined and dined by shady 
defense contractor (Mainichi) 
5) DPJ President Ozawa warns of possibility of Diet being dissolved 
early in 2008 (Asahi) 
6) Prime Minister Fukuda, commenting on current political state, 
cites adage: One inch ahead is darkness (Asahi) 
7) LDP tax council, wary of public opinion, postpones discussion of 
possible hike in consumption tax (Yomiuri) 
 
North Korea problem: 
8) Two Japanese experts join the team inspecting North Korea's 
disabled nuclear facility (Yomiuri) 
9) Government alarmed by discovery of Taiwan route for export of 
precision Japan machinery to North Korea (Yomiuri) 
 
10) Environment Minister Kamoshita reveals new plan to help poor 
countries cut greenhouse gas emissions under post-Kyoto Protocol 
regime (Sankei) 
 
Articles: 
 
1) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, November 26 
 
NIKKEI (Page 2) (Full) 
November 27, 2007 
 
09:01 
Attended a welcome party for Vietnamese President Nguyen Minh Triet 
and his wife at the Imperial Palace. 
 
09:59 
Met at the Kantei with Deputy Chief Cabinet Secretary Futahashi. 
Followed by Deputy Chief Cabinet Secretary Iwaki. 
 
10:54 
Met Economic and Fiscal Minister Ota. Later met Chairman Kosai of 
the government's Tax Commission. 
 
13:14 
Met Foreign Ministry's Asian and Oceanian Affairs Bureau Director 
General Sasae. Followed by Chief Cabinet Secretary Machimura. 
 
14:01 
Attended an Upper House plenary session. 
 
16:11 
Met at the Kantei with Futahashi and Assistant Deputy Chief Cabinet 
 
TOKYO 00005338  002 OF 008 
 
 
Secretary Saka. 
 
SIPDIS 
 
17:01 
Attended a party executive meeting at the Kantei. 
 
17:33 
Attended a meeting of the Council on Economic and Fiscal Policy in 
the Diet building. 
 
18:39 
Arrived at his official residence. 
 
19:09 
Attended a banquet with his wife for President Nguyen Minh Triet at 
the Imperial Palace. 
 
23:12 
Returned to his private residence in Nozawa. 
 
2) Tokyo District Prosecutors Office special investigation team to 
conduct criminal investigation into Moriya this week on suspicion of 
taking bribes 
 
ASAHI (Top play) (Abridged slightly) 
November 27, 2007 
 
The special investigation squad of the Tokyo District Public 
Prosecutors Office has decided to conduct before the end of the week 
a criminal investigation into former Administrative Vice-Defense 
Minister Takemasa Moriya, 63, on suspicion of taking a bribe from 
Motonobu Miyazaki, 69, a former managing director of defense 
equipment trading house Yamada Corp. who is already under arrest on 
suspicion of corporate embezzlement and other charges, in the form 
of free rounds of golf worth 5 million yen in total over the last 
five years in anticipation of receiving favors in supplying defense 
equipment to the Defense Ministry. Former Yamada boardroom chief 
Tomonari Imaji, 57, under arrest for document forgery, who had 
accompanied Miyazaki in treating Moriya to free golf outings, has 
reportedly admitted that such entertainment was bribery. 
 
Yamada President Yoshihiko Yonezu testified at the Diet that Moriya 
had played golf more than 300 times at Miyazaki's expense in eight 
years until March 2006 and that the cost, including the fees for 
Miyazaki, came to over 15 million yen. 
 
Of them, the special investigation squad has intensively 
investigated the portion of the last five years that does not come 
under the statute of limitations. Moriya has allegedly been treated 
to free golf worth 5 million yen over the last five years. 
 
Miyazaki reportedly began treating Moriya to free golf 12 years ago 
when he was still Defense Policy Division director. Prosecutors 
looked into whether a long period of entertainment could be 
determined as bribery. As a result, they have concluded that Moriya 
was aware that extravagant golf tours to such regions as Hokkaido, 
Kyushu, Chugoku, and Hokuriku that cost Moriya several hundred 
thousand yen each time was bribery. In addition, Imaji, who had 
accompanied Moriya to a golf outing in April this year, has 
reportedly admitted to investigators that they had treated Moriya to 
free golf in the hope of receiving orders for defense equipment in 
return. 
 
 
TOKYO 00005338  003 OF 008 
 
 
The special investigation squad seems to have concluded that free 
golf for Moriya was bribery by Miyazaki and others who had hoped 
that Moriya would in return give favors to Yamada and Nihon Mirise 
Corp., a defense equipment trading firm founded by Miyazaki in 
September 2006, in supplying defense equipment to the Defense 
Ministry. Prosecutors are expected to continue investigating the 
case to find out whether or not Miyazaki had given a large sum of 
money to Moriya. 
 
Moriya served as administrative vice-defense minister from August 
2003 through August 2007 when he retired from the ministry. It has 
become clear that Moriya had repeatedly made comments defending 
Moriya's Nihon Mirise from this spring through June over the 
procurement of engines for the Air Self-Defense Force's CX 
next-generation transport aircraft. 
 
3) GSDF chopper costs 21.6 billion yen, nearly double world's most 
expensive fighter jet 
 
TOKYO (Page 1) (Abridged) 
November 27, 2007 
 
An attack helicopter, codenamed the AH-64D, is known for being 
priced high. Its per-unit cost is 21.6 billion yen. Such an 
expensive chopper is on the Defense Ministry's shopping list for the 
Ground Self-Defense Force. The AH-64D is earmarked in the Defense 
Ministry's budget estimate for next fiscal year. It is priced higher 
than the F-2 support fighter, which was said to be "the world's most 
expensive fighter plane" (approx. 12 billion yen per unit). 
Moreover, the Defense Ministry will give up procuring the AH-64D 
after fiscal 2009. The ministry will therefore have to select an 
alternative model only eight years after its start of AH-64D 
procurement. 
 
The AH-64D is the follow-on model to replace the GSDF's AH-1S 
helicopter. The AH-64D chopper, developed by Boeing Co., a US 
manufacturer of aircraft, is produced by Fuji Heavy Industries Ltd. 
(FHI) under license. The AH-64D was adopted by the US Army and used 
in the Gulf War. In addition, it was the world's strongest chopper 
loaded with all-weather scouting fire control radar. These factors 
led the Defense Ministry to select the AH-64D in 2001. 
 
The AH-1S's cost was about 3 billion yen. Meanwhile, the AH-64D's 
price was initially estimated at about 6 billion yen. Furthermore, 
the AH-64D now uses more domestically produced parts. Its unit cost 
has therefore skyrocketed in the past years. 
 
The AH-64D's unit cost is estimated at 8.3 billion yen in the 
Defense Ministry's budget request for next fiscal year. The Defense 
Ministry will now give up on its AH-64D procurement after its 
current midterm defense buildup plan for the period of five fiscal 
years from 2005 to 2009. The Defense Ministry estimates 40 billion 
yen for FHI's investments and will add this cost to the price of 
three AH-64D helicopters to be procured in fiscal 2008 and 2009. 
 
The AH-64D's per-unit additional cost is 13.3 billion yen, and its 
end-user price is as high as 21.6 billion yen. 
 
Procurement review needed 
 
The Defense Ministry initially planned to procure a total of 62 
AH-64D helicopters. However, the Defense Ministry has now decided to 
 
TOKYO 00005338  004 OF 008 
 
 
give up its AH-64D procurement after buying 13 units. This is deeply 
related to Japan's national security. The primary reason for the 
Defense Ministry's decision to give up on the AH-64D chopper is 
Boeing's announced plan to discontinue production. Even so, money 
can buy the follow-on model. However, the Defense Ministry deemed it 
difficult to spend further on the AH-64D. 
 
Aircraft procurement is almost always based on optimistic estimates. 
The AH-64D was first estimated at about 6 billion yen. However, its 
actual cost was close to that estimate only in 2002 when AH-64D 
procurement started. The AH-64D's price annually went up. In fiscal 
2006, its unit cost reached 10.5 billion yen. In the case of the F-2 
support fighter jet as well, its initially estimated cost was about 
5.4 billion yen. However, its price went up to 12.2 billion yen. 
 
The defense industry pulls up the price with domestic production or 
licensed production, and the Defense Ministry continues to buy its 
products. There is such a pattern. There are also many golden 
parachutists in the defense industry. This is also a factor that 
causes doubts. "Domestic companies have technologies that can make 
weapons halfway," a staff officer of the Self-Defense Forces noted. 
"That's why," he went on, "the price goes up." He added, "There's no 
problem in a country that has no choice but to buy weapons from the 
United States because that country will buy them at the same time." 
 
4) Opposition parties agree to demand Diet testimony by Nukaga, 
Moriya 
 
MAINICHI (Page 5) (Full) 
November 27, 2007 
 
In connection with former Administrative Vice Defense Minister 
Takemasa Moriya's sworn testimony in the Diet that Finance Minister 
Fukushiro Nukaga was present at a dinner treated by Motonobu 
Miyazaki, a former executive of the defense equipment trading house 
Yamada Corp., who is under arrest, the main opposition Democratic 
Party (DPJ or Minshuto) and three other opposition parties agreed 
yesterday afternoon in a meeting of their Diet affairs committee 
chairmen to demand that Nukaga and Moriya be summoned to testify as 
witnesses before the House of Councillors Committee on Financial 
Affairs. Prime Minister Yasuo Fukuda, however, backed Nukaga 
yesterday in an Upper House plenary session, stating: "Mr. Nukaga 
has given his account at press conferences and Diet committee 
sessions. I want him to continue making efforts to compile the state 
budget for next fiscal year." With the prime minister's clear stance 
of supporting Nukaga, confrontation between the ruling and 
opposition camps is intensifying over the testimony issue. 
 
The DPJ has pursued Nukaga on the allegation that he was wined and 
dined by Miyazaki along with Moriya, specifying the date, time and 
place based on testimony the party obtained. Nukaga has, however, 
totally denied the allegation, saying on Nov. 23: "The Diet member 
should show us the seating list before questioning. His approach is 
beneath the dignity of the Diet." In an informal directors meeting 
of the Upper House Financial Affairs, the largest opposition party 
yesterday requested Nukaga and Moriya be summoned to testify before 
the committee, brandishing the threat of carrying out testimony by 
taking a vote in the committee. DPJ President Ichiro Ozawa asserted 
yesterday in Nagasaki City that the ruling camp should accept the 
opposition's demand, saying, "If (Nukaga) has nothing to hide, he 
should testify fairly and squarely." 
 
 
TOKYO 00005338  005 OF 008 
 
 
However, the ruling coalition has gradually stepped up its stance of 
backing Nukaga. In a press conference yesterday, Chief Cabinet 
Secretary Nobutaka Machimura sought to constrain the DPJ, saying: 
 
SIPDIS 
 
"Mr. Nukaga has explained in an accurate fashion. I have a question 
whether it is appropriate to subject a cabinet minister to testify 
based on an allegation about which everybody knows there is no hard 
evidence." 
 
If the opposition's pursuit of Nukaga, who is finance minister, is 
prolonged, it will impact negatively on state budget compilation in 
late December. The opposition camp predicts that if the allegation 
is proved, Nukaga may have to step down. One ruling coalition member 
said, however, "If the DPJ delves deep into the matter, it will 
commit the same error as last year's e-mail fiasco." 
 
5) DPJ President Ozawa: Lower House might be dissolved early in 
2008 
 
ASAHI (Page 4) (Excerpts) 
November 27, 2007 
 
Democratic Party of Japan (DPJ) President Ichiro Ozawa told 
reporters yesterday in the city of Otsu: 
 
"In general, (dissolving the Lower House around the turn of the 
year) is not necessarily good for the government and ruling parties, 
but nobody knows what will happen at this time. It is fully possible 
that it will occur early in the coming year." 
 
He also stressed yesterday in a press conference in Nagasaki: "I 
want to field candidates across the nation by the end of the year at 
the latest so that we will be ready for an election if the Lower 
House is dissolved soon." In his meeting yesterday with senior 
Nagasaki Rengo (Japan Trade Unions Confederation) members, Ozawa 
said: "It will be a decisive battle. Now the DPJ can fight the 
election under the best conditions. I would like to file appropriate 
candidates." 
 
Behind Ozawa having mentioned his prediction of a Lower House 
dissolution is his attempt to dispel the notion that the time for a 
dissolution is slipping away. He reportedly intends to file some 220 
candidates by today and the remaining 30 by the end of the year. 
 
Ozawa believes that the Fukuda administration has reached a dead end 
earlier than expected. Some DPJ members have predicted that there is 
a possibility that the prime minister will dissolve the Lower House 
before maneuvering over the state budget between the ruling and 
opposition parties begins next spring. 
 
6) Prime Minister Fukuda: The future is unknowable 
 
ASAHI (Page 4) (Full) 
November 27, 2007 
 
When asked by the press about his comment on Democratic Party of 
Japan (DPJ or Minshuto) President Ichiro Ozawa's remark that the 
Lower House might be dissolved early in the New Year, Prime Minister 
Yasuo Fukuda responded yesterday: 
 
"Politics has such an element. Nobody knows what will happen 
tomorrow. . . .  It is not good to predict what will happen in the 
 
TOKYO 00005338  006 OF 008 
 
 
future." 
 
7) LDP tax panel to put off discussion on consumption tax 
 
YOMIURI (Page 1) (Full) 
November 27, 2007 
 
The Liberal Democratic Party's Tax System Research Commission, 
chaired by Yuji Tsushima, launched full-fledged discussions on tax 
reform for FY2008 in its general meeting at party headquarters 
yesterday. The panel is expected to put off debate on bold reform 
plans, including a hike in the consumption tax, and to discuss only 
urgent priorities, such as measures to narrow regional disparities 
in terms of tax revenues. 
 
The key items to be discussed by the panel include future options 
for such additional taxes as the gasoline tax exclusively used for 
road construction after they expire next March. It also will discuss 
whether to scrap tax breaks for investors, which halve the tax rate 
on capital gains from 20 PERCENT  to 10 PERCENT . This tax break is 
scheduled to expire in FY2007. The LDP panel aims to draw up its 
reform proposals in mid-December after consulting with the tax panel 
of the New Komeito, its coalition partner. 
 
On the consumption tax, the government's Tax Commission, an advisory 
panel to the prime minister, and the LDP's Fiscal Reform Study 
Group, chaired by Kaoru Yosano, proposed late this month that a 
consumption tax hike should be discussed on the condition of 
limiting the use of the additional income to spending on social 
security. However, under the current political situation, in which 
the House of Councillors is controlled by the Democratic Party of 
Japan, which insists that the current 5 PERCENT  rate should be 
maintained, even if the coalition bloc submits related bills, there 
will be no prospects for them to clear the Diet. With an eye on the 
next House of Representatives election, many LDP members are also 
opposed to a policy that will lead to a heavier tax burden. 
Reflecting such calls, Prime Minister Fukuda had already revealed a 
decision to forgo raising the consumption tax in FY2008 before the 
LDP tax panel started discussion. 
 
8) Six-party inspectors to begin inspecting disablement process at 
Yongbyon today 
 
YOMIURI (Page 2) (Abridged slightly) 
November 27, 2007 
 
The Chinese Foreign Ministry announced yesterday that officials from 
Japan, the United States, China, and South Korea who are involved in 
the six-party talks on North Korea's nuclear programs will visit 
Yongbyon on Nov. 27-29 to check progress on the disabling of North 
Korea's nuclear reactors. 
 
Amid multilateral coordination for holding a meeting of the heads of 
the six delegations for December, they are expected to check whether 
there are any problems associated with disabling work. 
 
According to the six-party agreement reached in October, North Korea 
is required to disable the nuclear facilities at Yongbyon and 
declare all its nuclear programs before the end of the year. 
 
Two officials from Japan 
 
 
TOKYO 00005338  007 OF 008 
 
 
The Foreign Ministry announced yesterday that it would send two 
ministry officials to Yongbyon for three days from Nov. 27 to 
confirm progress on the disablement of nuclear facilities there. 
This is the first time for the Japanese government to send personnel 
to Yongbyon to join the on-the-spot examination of the 
denuclearization of North Korea. The results will be reported to the 
Dec. 6-8 six-party meeting, now under coordination. 
 
Joining the on-the-spot inspection from Japan is Foreign Ministry 
Nonproliferation, Science and Nuclear Energy Division Director 
Tomiko Ichikawa and another official. 
 
The Japanese government takes a positive view about bearing the cost 
of denuclearization work, with a Foreign Ministry official saying, 
"We will consider it positively if there is a request." 
 
9) Government alarmed at "Taiwan route" of exports to North Korea 
 
YOMIURI (Page 2) (Full) 
November 27, 2007 
 
A trading firm in Taiwan has exported precision equipment capable of 
producing nuclear weapons-related materials to North Korea. The 
Japanese government is now alarmed, with a senior Defense Ministry 
official saying, "There is a possibility that Taiwan, which is not a 
member of the United Nations, has been a loophole in control of 
exports to North Korea." 
 
Taiwan is not constrained by a series of sanction resolutions 
adopted by the United Nations following the North's nuclear test 
last year. Taiwan also has advanced technologies with possible 
application to weapons of mass destruction, such as nuclear, 
biological and chemical weapons. 
 
The Japanese government is paying special attention to Taiwanese 
investigators' discovery of yet another illicit export to North 
Korea. A Foreign Ministry source said: "'The Taiwan route' will not 
directly pose a serious threat to stability in Northeast Asia." 
Nevertheless, the government is keenly interested in the specific 
timeframe the North imported the precision equipment from Taiwan. 
 
Pyongyang agreed this October to disable the nuclear facilities at 
Yongbyon before the end of the year. The Foreign Ministry source 
pointed out: "Although the North appears to be moving toward 
denuclearization, if the import from Taiwan occurred just recently, 
that doesn't match with what they are doing." 
 
Although the Japanese government does not have diplomatic relations 
with Taiwan, it intends to closely watch investigations by Taiwanese 
authorities in the coming weeks. 
 
10) Environment minister to propose plan to help island states, 
poorest countries cut greenhouse gas emissions under post-Kyoto 
framework 
 
SANKEI (Page 1) (Full) 
November 27, 2007 
 
In an interview with Sankei Shimbun yesterday, Environment Minister 
Ichiro Kamoshita spoke of the measures the Japanese government plans 
to take to contain global warming. In the 13th session of the 
Conference of the Parties to the UN Framework Convention on Climate 
 
TOKYO 00005338  008 OF 008 
 
 
Change (COP13) in Indonesia on Dec. 3, in which a full-scale 
discussion will start on ways to cut greenhouse gas emissions after 
2012, when the Kyoto Protocol expires. Kamoshita will announce 
Japan's plan to help island states and the poorest countries cut 
greenhouse gas emissions. Under the plan, Japan aims to discuss 
measures for such countries separately from those for developing 
countries in Africa and for emerging countries such as China and 
India. 
 
Kamoshita emphasized that priority should be given to building a 
consensus among all participants in COP13. He said: "It is important 
for all the members to reach an agreement in the process of making 
rules. We must avoid a situation in which some countries drop out of 
the new framework as a result of overly intense arguments." 
 
Japan will renew its call for a special working group joined by all 
the parties to be established under the COP to discuss a post-Kyoto 
framework. Japan will also propose assistance measures to enable 
economic growth in harmony with the environment for the poorest 
countries in Africa and other areas, as well as island states such 
as Tuvalu and the Republic of Kiribati, both of which may be 
threatened by any future sea level rise because of the low 
elevation. 
 
Kamoshita explained: "It is necessary for rising powers that are 
expected to emit more greenhouse gases, such as Brazil, Russia, 
India, China, and South Korea, to assume their due obligation." But 
he also said: "It may become difficult to build a consensus if 
overly tight restrictions are imposed on them," indicating a 
cautious view about imposing similar strict restrictions on such 
countries to those on industrialized countries. 
 
The European Union (EU) is expected to announce by 2020 a plan to 
cut greenhouse gas emissions by up to 30 PERCENT  below 1990 levels. 
On this possibility, Kamoshita commented: "It will be undesirable if 
China, India and the United States refuse to join (the new 
framework)." He then indicated that Japan would stop short of 
mentioning any numerical targets, remarking: "We should not come up 
with numerical targets." 
 
SCHIEFFER