VZCZCXRO3058
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #5573/01 3510138
ZNR UUUUU ZZH
P 170138Z DEC 07
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 0342
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 7389
RUEHFK/AMCONSUL FUKUOKA 4993
RUEHOK/AMCONSUL OSAKA KOBE 8655
RUEHNAG/AMCONSUL NAGOYA 3714
RUEHKSO/AMCONSUL SAPPORO 5630
RUEHBJ/AMEMBASSY BEIJING 0661
RUEHUL/AMEMBASSY SEOUL 6710
RUCNDT/USMISSION USUN NEW YORK 7437

UNCLAS SECTION 01 OF 10 TOKYO 005573 
 
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 12/17/07 
 
 
Index: 
 
Opinion polls: 
1) Fukuda Cabinet support rate drops 12 points to 43 PERCENT  in 
Nikkei poll, with Democratic Party of Japan (DPJ) support now 
challenging that of LDP (Nikkei) 
2) Kyodo poll: Fukuda Cabinet support plummets 11 points to 35 
PERCENT , with 52 PERCENT  of the public citing "broken promise" on 
pension mess, 46 PERCENT  against antiterror bill (Tokyo Shimbun) 
3) Jiji poll: 60 PERCENT  of the public prefer to see Diet 
dissolution and election after budget bill is passed in the spring 
(Tokyo Shimbun) 
 
Political agenda: 
4) Prime Minister Fukuda: Even if opposition passes censure motion, 
will not dissolve the Diet for a snap election (Tokyo Shimbun) 
5) DPJ head Ozawa calls Fukuda administration "corrupt" and expects 
an early Diet dissolution and general election (Tokyo Shimbun) 
6) DPJ Secretary General Hatoyama does not see an Upper House vote 
on the antiterrorism bill until after the New Year (Tokyo Shimbun) 
 
7) DPJ strategy is to delay Upper House vote until early next year 
in order to give more time for pummeling Fukuda government on 
defense scandals, pensions (Nikkei) 
 
Defense issues: 
8) Government is way behind schedule in carrying out USFJ 
realignment plan, starting with Futenma relocation (Nikkei) 
9) Sankei retracts with apology part of report that accused former 
Deputy Secretary Armitage of taking money from defense contractor 
while in office (Sankei) 
10) Vice defense minister's office had hefty secret slush fund that 
grew when Moriya was in office (Tokyo Shimbun) 
11) MD-related PAC3 missile drill again postponed out of 
consideration for Diet deliberations on sensitive antiterrorism 
bill, defense scandals (Sankei) 
 
12) Fukuda's new economic growth strategy centers heavily on 
environmental and energy conservation cooperation with Asia (Nikkei) 
 
 
Artricles: 
 
1) Poll: Cabinet support sags to 43 PERCENT 
 
NIKKEI (Page 1) (Abridged) 
December 17, 2007 
 
The Nihon Keizai Shimbun conducted a public opinion survey on Dec. 
14-16, in which the rate of public support for Prime Minister Yasuo 
Fukuda and his cabinet was 43 PERCENT , down 12 percentage points 
from the last survey conducted in November. The nonsupport rate for 
the Fukuda cabinet was 46 PERCENT , up 13 points. The Fukuda 
cabinet's disapproval rating topped its approval rating for the 
first time since it came into office in September. In the survey, 
respondents were asked if they thought the Maritime Self-Defense 
Force's refueling activities in the Indian Ocean should be resumed. 
In response to this question as well, the proportion of negative 
answers topped that of affirmative ones, with "no" accounting for 44 
PERCENT  and "yes" at 39 PERCENT . 
 
The Fukuda cabinet has pledged to check pension records up for about 
 
TOKYO 00005573  002 OF 010 
 
 
50 million unidentified persons by March next year and inform them 
of their pension records. However, it has now become difficult to do 
so. In addition, the Defense Ministry has been involved in a series 
of scandals. The sharp drop in the cabinet support rate can be taken 
as reflecting these events. 
 
Among men, the Fukuda cabinet's support rate was 39 PERCENT , down 
13 points. Among women, it was 46 PERCENT , down 12 points. By age, 
the nonsupport rate topped the support rate in all age brackets 
except those in their 70 and over. Those who do not support the 
Fukuda cabinet were asked to pick one or more reasons. To this 
question, 43 PERCENT  gave the prime minister's lack of leadership. 
This answer topped all other answers. Among other answers, 33 
PERCENT  said its policies are bad. 
 
In the breakdown of public support for political parties, the ruling 
Liberal Democratic Party stood at 38 PERCENT , down 4 points from 
the last survey. The leading opposition Democratic Party of Japan 
(Minshuto) was at 34 PERCENT , up 6 points. The DPJ closed in on the 
LDP with a margin of 4 points. 
 
The survey was taken by Nikkei Research Inc. over the telephone on a 
random digit dialing (RDD) basis. For the survey, samples were 
chosen from among men and women aged 20 and over across the nation. 
A total of 1,487 households with one or more eligible voters were 
sampled, and answers were obtained from 870 persons (58.5 PERCENT 
). 
 
2) Poll: Fukuda cabinet's support rate nosedives to 35 PERCENT 
 
TOKYO SHIMBUN (Top play) (Abridged) 
December 17, 2007 
 
In a telephone-based poll conducted by Kyodo News across the nation 
on Dec. 15-16, the rate of public support for Prime Minister Yasuo 
Fukuda and his cabinet was 35.3 PERCENT , down 11.7 percentage 
points from a survey taken in early November. The nonsupport rate 
for the Fukuda cabinet rose 11.0 points to 47.6 PERCENT . The Fukuda 
cabinet's disapproval rating topped its approval rating for the 
first time. The government has now given up resolving the issue of 
pension records up for unidentified persons. In the survey, 
respondents were asked if they thought this violated the Fukuda 
cabinet's public pledge. To this question, 57.6 PERCENT  answered 
"yes," with 34.3 PERCENT  saying "no." 
 
"Some people say it's a breach of my cabinet's public pledge, but I 
wonder if it's as big as they say." Fukuda gave this remark when 
asked about the pension issue. Meanwhile, the Defense Ministry has 
been involved in a series of scandals. The sharp drop in the Fukuda 
cabinet's support rate can be taken as reflecting these events. 
Meanwhile, the Diet, in its reextended session, is focusing its 
debate on a new antiterror bill intended to resume the Maritime 
Self-Defense Force's refueling activities in the Indian Ocean. In 
the survey, respondents were asked if they supported the 
legislation. To this question, 46.7 PERCENT  answered "no," with 
38.8 PERCENT  saying "yes." 
 
Respondents were also asked about the desirable form of government. 
In the last survey, those choosing a coalition government led by the 
Liberal Democratic Party outnumbered those preferring a coalition 
government led by the Democratic party of Japan (Minshuto). This 
time, however, 44.7 PERCENT  chose a DPJ-led coalition government, 
 
TOKYO 00005573  003 OF 010 
 
 
with 28.5 PERCENT  picking an LDP-led coalition government. 
Respondents were also asked when they would like an election to be 
held for the House of Representatives. In response to this question, 
47.0 PERCENT  answered that they would like it to be held "by the 
first half of next year," with 26.0 PERCENT  saying "by the latter 
half of next year" and 12.8 PERCENT  saying "the year after next." 
 
Respondents were further asked if they thought the ruling coalition 
should revote on the new refueling legislation in the House of 
Representatives to enact it into law if the House of Councillors 
votes it down. In response to this question, public opinion was 
split, with 41.2 PERCENT  saying "yes" and 43.6 PERCENT  saying 
"no." 
 
In the breakdown of public support for political parties, the LDP 
stood at 25.2 PERCENT , down 13.0 points from the last survey. The 
LDP was below the 28.5 PERCENT  rating for the DPJ. New Komeito, the 
LDP's coalition partner, was at 3.1 PERCENT . Among other political 
parties, the Japanese Communist Party was at 3.6 PERCENT , with the 
Social Democratic Party (Shaminto) at 1.5 PERCENT , the People's New 
Party (Kokumin Shinto) at 0.3 PERCENT , and the New Party Nippon 
(Shinto Nippon) at 0.2 PERCENT . Those with no particular party 
affiliation accounted for 36.0 PERCENT , up 12.5 points. 
 
3) Jiji poll: 60 PERCENT  think next spring or later desirable time 
for Lower House dissolution; Priority given to passage of fiscal 
2008 budget 
 
TOKYO SHIMBUN (Page 2) (Full) 
December 15, 2007 
 
In an opinion poll carried out by Jiji Press on Dec. 14, 60 PERCENT 
of respondents replied that it would be desirable to dissolve the 
Lower House after passage of the fiscal 2008 budget in the spring at 
the earliest. Only about 20 PERCENT  called for a Diet dissolution 
at the end of the year or at the outset of the regular Diet session 
to be convened in January next year. With the confrontation between 
the ruling and opposition parties getting fierce over the new 
antiterror special measures bill, there are growing calls for a Diet 
dissolution at an early date. However, the findings of the poll 
revealed that many eligible voters do not want to see the political 
situation become fluid until the budget bill for the next fiscal 
years secures Diet approval. 
 
The poll, carried out on Dec. 6-9, was directed at 2,000 men and 
women throughout the nation, based on an individual interview 
formula. The rate of effective replies recovered was 65.7 PERCENT . 
 
Regarding a timetable for a Diet dissolution, the largest number of 
27.5 PERCENT  cited "after passage of the fiscal 2008 budget in the 
spring," followed by 18.6 PERCENT , who gave "2009 (including after 
the termination of the term)," and 13.8 PERCENT , who cited, "after 
the Hokkaido Lake Toya Summit in July, 2008." Only 4.4 PERCENT 
cited, "at the end of the year," and 11.8 PERCENT  gave, "at the 
outset of the regular Diet session." 
 
4) Prime Minister Fukuda will not dissolve Lower House even if 
censure motion against him is submitted to Upper House 
 
TOKYO SHIMBUN (Page 1) (Full) 
December 15, 2007 
 
 
TOKYO 00005573  004 OF 010 
 
 
Prime Minister Yasuo Fukuda decided on Dec. 14 that he will not 
dissolve the House of Representatives even if the main opposition 
Democratic Party of Japan (DPJ or Minshuto) submits a censure motion 
against him to the House of Councillors and the motion is adopted. 
Several senior ruling coalition members revealed this. In the 
current extraordinary Diet session, which was extended again until 
Jan. 15, the focus will be on whether the DPJ decides to submit a 
censure motion after the ruling camp readopts a new antiterrorism 
special measures bill at the Lower House. 
 
In an interview by reporters attached to the Cabinet on the 14th, 
Fukuda denied the possibility of dissolving the Lower House before 
the compilation of the state budget for fiscal 2008. He stated: "We 
will have to carry out deliberations on the budget so that there 
will be no adverse effect on the livelihood of the people." 
 
Considering that a censure motion against the prime minister has no 
binding force unlike a no-confidence motion against the cabinet, a 
senior Liberal Democratic Party (LDP) pointed out: "We are free as 
to how to respond to it." Another senior LDP member stated: "We will 
ignore a censure motion even if it is adopted." 
 
A senior member of the New Komeito, the LDP's junior coalition 
member, noted: "We will entirely ignore (a censure motion against 
Fukuda). Unless we make such a determination, we won't be able to 
override an Upper House decision." 
 
The government and ruling coalition aim to complete the compilation 
of the state budget for fiscal 2008 before the end of the year and 
adopt it before the end of this fiscal year (March), convening a 
regular Diet session as early as Jan. 18. 
 
5) DPJ hopes for early Lower House dissolution 
 
TOKYO SHIMBUN (Page 2) (Excerpts) 
December 17, 2007 
 
With about 20 PERCENT  of the some 50 million public pension 
accounts that remain unidentified still unaccounted for, calls are 
growing in the main Democratic Party of Japan (DPJ or Minshuto) for 
an early dissolution of the House of Representatives and a snap 
general election that would follow. Many lawmakers in the largest 
opposition party used to feel worried about the possibility of an 
early Lower House election because of such reasons as the internal 
uproar over party head Ichiro Ozawa's on again off again resignation 
and the party's delay in making preparations for the election. But 
if the election is conducted with the public angry about the 
pension-record fiasco, the DPJ now feels it would be possible for it 
to win the election, forcing the now ruling parties into the 
minority camp in the Lower House, a replay of what had happened in 
the July House of Councillors election. 
 
In a party meeting yesterday in the city of Noda, Chiba Prefecture, 
DPJ President Ozawa stressed his resolve to drive (Prime Minister 
Yasuo Fukuda) into a situation under which he would have no choice 
but to dissolve the Lower House at an early time. He said: 
 
"Both the pension-record fiasco and the Defense Ministry issue 
occurred because politics and the bureaucracy have been corrupted. A 
long-term government is sure to become corrupt." 
 
In addition to the series of scandals involving the Defense 
 
TOKYO 00005573  005 OF 010 
 
 
Ministry, another reason for the DPJ's waning fear of election is 
the ruling camp's series of mistakes, such as Fukuda's remark that 
he did not think the pension-record fiasco involved a broken pledge 
by the government. 
 
6) DPJ Secretary General Hatoyama: Re-extension of Diet session 
straight through New Year inevitable; Maneuvering between ruling and 
opposition camps to intensify over re-voting on new antiterrorism 
bill in Lower House 
 
TOKYO SHIMBUN (Page 2) (Slightly abridged) 
December 17, 2007 
 
In the wake of the government's decision to re-extend the current 
Diet session until Jan. 15, the ruling and opposition camps will 
start from this week fierce maneuvering over on the timing of the 
vote on the new antiterrorism special measures bill in the House of 
Councillors. Although the ruling coalition still aims to enact the 
bill before the end of the year, the opposition camp, including the 
Democratic Party of Japan (DPJ or Minshuto), which controls the 
Upper House, has called for placing priority on pursuing the 
pension-record fiasco and a series of scandals involving the Defense 
Ministry. The outlook is for the fierce wrangling to continue in the 
Diet. 
 
The Upper House Foreign Affairs and Defense Committee has held 
deliberations for about 20 hours. The ruling bloc has called for 
holding deliberations on the bill not only Tuesdays and Thursdays 
but also other days of the week. The DPJ, as the largest party in 
the Upper House, along with the other opposition parties, have not 
accepted the request, however. 
 
If the committee continues to hold deliberations twice a week, it 
will be not be until Dec. 17 when the total time for deliberations 
will reach about 41 hours, equal to the time spent in the House of 
Representatives, which the DPJ has sought. The ruling coalition 
envisions that it will readopt the bill at the Lower House before 
the end of the year if the opposition decides to takes a vote on the 
bill at the committee on Dec. 17 and to reject it at an Upper House 
plenary session on the 28th. 
 
Appearing on an NHK talk show program yesterday, DPJ Secretary 
General Yukio Hatoyama stated: "It would be difficult to put the 
bill to a second vote without resolving the series of scandals 
involving the Defense Ministry. It is inevitable that we will go 
straight through the New Year in the re-extended session." 
 
7) DPJ gives up on taking vote on new refueling legislation in Upper 
House before year's end in order to determine propriety of 
submitting censure motion 
 
NIKKEI (Page 2) (Abridged slightly) 
December 16, 2007 
 
The major opposition Democratic Party of Japan (DPJ or Minshuto) 
decided yesterday to forgo taking a vote on the new legislation 
designed to resume the Maritime Self-Defense Force's refueling 
operation in the Indian Ocean in the opposition-controlled House of 
Councillors before the end of the year. By postponing a vote until 
early next year, the DPJ intends to watch developments in scandals 
involving the Ministry of Defense (MOD) and to make a decision on 
whether to submit a censure motion against Prime Minister Yasuo 
 
TOKYO 00005573  006 OF 010 
 
 
Fukuda. 
 
Now that the current Diet session has been re-extended to Jan. 15, 
the new legislation is certain to clear the Diet. But the subsequent 
delay in taking a vote is likely to cause new developments in the 
MOD scandals to affect the political situation that might lead to a 
Lower House dissolution for a general election. The next regular 
Diet session is scheduled to open on Jan. 18. If the standoff 
between the ruling and opposition camps escalates over a vote on the 
new refueling legislation, a severe confrontational mood might 
linger on in the next regular Diet session. 
 
The Upper House Foreign Affairs and Defense Committee has already 
discussed the refueling bill for 21 hours. If six hours are spent 
each on the planned weekly regular session, total deliberation time 
would come to 41 hours on Dec. 27, as was requested by the 
opposition camp. 
 
A senior DPJ member indicated yesterday that shedding light on the 
MOD scandals is closely associated with the timing for taking a vote 
on the new legislation, saying: "Deliberation time is not the only 
prerequisite for a vote." The committee is expected to take a vote 
either on Jan. 8 or 10. 
 
Because the committee is controlled by the opposition bloc, it 
cannot bring the legislation to a vote without the concurrence of 
the DPJ and other opposition parties. 
 
Over the MOD scandals, the DPJ is demanding the party be allowed to 
question former Yamada Corp. executive Motonobu Miyazaki, who is 
under arrest. The largest opposition party is also set to grill the 
government, demanding intensive deliberations on the pension 
recordkeeping fiasco. 
 
8) USFJ realignment suffering from deadlocked Futenma relocation and 
MOD scandals 
 
NIKKEI (Page 2) (Abridged slightly) 
December 16, 2007 
 
The government is concerned about the delay in implementing plans 
for the realignment of U.S. forces in Japan. Although Japan is in 
agreement with the United States to complete the realignment by 
2014, coordination with affected municipalities over a plan to 
relocate the U.S. Marine Corps' Futenma Air Station is having 
rough-going. As if to add insult to injury, former Vice-Defense 
Minister Takemasa Moriya has been arrested. The realignment of USFJ 
is designed to serve as the foundation for future Japan-U.S. 
security cooperation. Stalemate in the process might cast a pall 
over the unity of the Japan-U.S. alliance. 
 
The U.S. Army 1st Corps forward command will be established on Dec. 
19 on Camp Zama in Kanagawa Prefecture, as was agreed upon between 
Tokyo and Washington in May 2006. The number of personnel at the 
forward command is scheduled to increase from 30 to some 300 next 
summer to serve as the headquarters in the Far East. The Ground 
Self-Defense Force's Central Readiness Command is also scheduled to 
move from Camp Asaka to Zama by 2012 to increase the level of 
cooperation between the two countries. 
 
However, the overall USFJ realignment program is behind schedule. 
Particularly serious is the deadlocked Futenma relocation plan, a 
 
TOKYO 00005573  007 OF 010 
 
 
pivotal element in the realignment plan. If this situation persists, 
completing the Futenma relocation by 2014 will be difficult. 
 
The government held Futenma relocation consultative council meetings 
in November and December and conveyed to Okinawa its plan to 
unfreeze the 10-billion-yen economic package for northern Okinawa. 
With this as an incentive, the government plans to obtain Okinawa's 
cooperation for the Futenma relocation. Okinawa is seeking changes 
to the government's plan to build a V-shaped pair of runways on the 
coast of Camp Schwab. The prefectural side is not showing any signs 
of concessions. 
 
Another pillar in the USFJ realignment is the relocation of some 
8,000 U.S. Marines from Okinawa to Guam. A plan is afloat to start 
work in 2012. But a senior Defense Ministry official said 
apprehensively: "Unless Futenma relocation is realized, the planned 
relocation of Marines to Guam, as well as the (agreed-upon) deal to 
return U.S. military sites south of Kadena Air Base to Japan, will 
be called off, dealing a fatal blow to the Japan-U.S. alliance." 
 
The revelation of scandals involving the Defense Ministry is also 
casting a blight on the realignment plan. It has been found out that 
a former managing director of defense contractor Yamada Corp., who 
was on friendly terms with former Vice-Defense Minister Moriya, was 
involved in the Guam relocation plan. Japan is to contribute 
approximately 6.1 billion dollars (690 billion yen), or 60 PERCENT 
of the total, to the project. Questions have been raised about the 
basis for that amount. 
 
The government is truly concerned about the deadlocked USFJ 
realignment, because it might have a negative impact on the 
bilateral alliance far more serious than that of the discontinued 
refueling operation in the Indian Ocean. 
 
A new refueling bill is expected to be enacted in the current Diet 
session, and as a result, Japan might be able to resume the 
refueling operation as early as the end of February. Talks on the 
Japan-U.S. Special Measures Agreement on Japan's host-nation support 
(the so-called sympathy budget) have also been settled. Those 
matters are easy. The hard part for Japan and the United States is 
the realignment of USFJ. 
 
9) Correction and apology: Mr. Armitage did not receive any fees 
from Yamada during his tenure as deputy secretary of state 
 
SANKEI (Page 3) (Full) 
December 15, 2007 
 
On Dec. 1, the Sankei Shimbun carried an article titled "Yamada 
Corp. paid over 100 million yen to Armitage in consultant fees, even 
during his tenure as deputy secretary of state." The newspaper 
retracts the part reading "the firm continued to pay Armitage even 
during his tenure as deputy secretary of state." 
 
The Sankei Shimbun has received a complaint from Mr. Armitage 
pointing out:  "There was a description indirectly saying that I had 
received money from Yamada Corp. during my tenure as deputy 
secretary of state. The description is not true." 
 
SIPDIS 
 
The article was based on records of payments by Yamada International 
Corporation, Yamada Corp.'s subsidiary in the United States, and 
accounts by persons concerned that the firm had paid a total of 1 
 
TOKYO 00005573  008 OF 010 
 
 
million dollars (110 million yen) in consultant fees to Armitage 
Associates, a firm established by Armitage, and companies associated 
with Armitage Associates, over the last seven years. 
 
But Mr. Armitage pointed out: "I became deputy secretary of state on 
March 26, 2001, but I had severed relations with Armitage Associates 
before taking on the job." Explaining that the company name was 
changed into AALC by former partners, Mr. Armitage also explicitly 
said, "I had no interests in AALC." 
 
The article was solely intended to point out that a former Yamada 
Corp. executive and others had used a large amount of money to build 
channels to U.S. government officials. There was not intention of 
defaming Mr. Armitage. 
 
However, taking Mr. Armitage's complaint that he did not receive any 
fees from (Yamada) during his tenure as deputy secretary of state to 
heart, we apologize to Mr. Armitage. 
 
10) Defense Ministry slush fund: Vice minister's office receives 
hundreds of thousand of yen per month; Amount increased when Moriya 
was in office 
 
TOKYO SHIMBUN (Page 1) (Full) 
December 17, 2007 
 
The Defense Ministry has been accused of setting aside portions its 
annual rewards budget worth approximately 160 billion as a slush 
fund that could be tapped as pleased, It has been learned that the 
vice minister's office received hundreds of thousand of yen per 
month in such money during the tenure of Vice Minister Takemasa 
Moriya, who is now under arrest on the charge of receiving bribes 
from a former executive director of a defense-related trading 
company. The fund's existence was verified by several sources in the 
Defense Ministry and the Self-Defense Forces (SDF) yesterday. 
 
According to the sources, the Ministry Secretariat Secretarial 
Division has controlled and distributed the slush funds to the 
defense minister and such high officials as the senior vice minister 
and other vice ministers. Until Moriya took office, 200,000 yen or 
so was allotted to the slush fund in the vice minister's office. The 
amount reportedly was increased after he came into office. 
 
In the wake of the bribery scandal involving the former vice defense 
minister and the revelation of the existence of such a fund, the 
ministry intends to stop the practice of using off-the-book funds 
drawn from the rewards budget, starting in fiscal 2008. The Defense 
Ministry as a whole reportedly has at least several tens of millions 
of yen in a secret account. What to do with these funds will likely 
be on the agenda. 
 
The ministry has launched an internal investigation into the 
slush-fund issue. However, since many bureaus and divisions are 
involved in the matter, to what extent it will be able to grasp the 
situation and release the findings is unknown. Officials seemed to 
have faked a great number of receipts in order to clear auditing by 
the Board of Audit and to use up the budgeted money each year. 
However, since those receipts are reportedly kept only for five 
years, it seems impossible to investigate the matter much further. 
 
11) PAC3 drill again delayed, consideration having been given to 
bill under deliberation and series of scandals 
 
TOKYO 00005573  009 OF 010 
 
 
 
SANKEI (Page 2) (Excerpt) 
December 16, 2006 
 
In connection with the ground-to-air ballistic missile PAC3, which 
forms the core of the missile defense (MD) system that is being 
deployed around the Tokyo metropolitan area, the Defense Ministry 
has decided to delay until next year a mobilization drill originally 
planned for mid-December. The drill was planned for this month at 
state controlled Shinjuku Gardens (in Shinjuku ward) and at a site 
in Ichigaya owned by the Defense Ministry, and then later at the 
park at Harumi Wharf, also under government control (Chuo-ku). 
Apparently, the postponement was due to consideration having been 
given to the ongoing deliberations in the Diet on the antiterrorism 
special measures bill, as well as the strong reaction to the Defense 
Ministry's series of scandals. 
 
12) EXTERNAL ECONOMIC RELATIONS & ENVIRONMENT 
 
Premier's new economic growth strategy uses environment to link Asia 
and Japan 
 
NIKKEI (Page 3) (Full) 
December 17, 2007 
 
Prime Minister Yasuo Fukuda has come up with an Asian Economy and 
Environment Community Initiative aimed at using the environment to 
deepen links with Asian countries as a feature of his new economic 
growth strategy. The package characterizes Japan's forte, the 
highest-level environmental technology in the world, as a driving 
force for that purpose. It also plays up Japan's role as a bridge 
between industrialized countries and developing countries in the 
run-up to the G-8 (Lake Toya Summit) to be held next summer. The 
prime minister expects the strategy to serve a triple role also for 
his synergistic diplomacy of linking the Japan-U.S. alliance to Asia 
diplomacy. 
 
The prime minister, appearing on an TBS program on Dec. 15, stressed 
his view that strengthening ties with Asian economies, the growth 
center of the world, will lead to accelerating Japan's growth. He 
noted, "Japan's growth rate is between 1 PERCENT  and 2 PERCENT , 
but the economies of its neighbors are growing at the rates of 
between 6 PERCENT  and 10 PERCENT ."  He indicated his determination 
to speed up efforts to map out specific measures to be incorporated 
in a policy speech he will deliver in January next year. 
 
An aide to the prime minister said, "Japan's future will hinge on 
environmental technology. It will also be a solution to two issues 
-- prevention of global warming and promotion of economic growth." 
 
The Ministry of Economy, Trade and Industry (METI) was behind the 
effort to map out the strategy. Reducing the environmental load and 
promoting energy-conservation efforts will be indispensable in order 
to sustain economic development in Asia. According to an estimate by 
METI, the scale of the environmental and energy-conservation markets 
in Asia will expand from the current 5 trillion yen to 24 trillion 
yen by 2020. Japan's advantage in environmental technology is 
overwhelming. 
 
The focus of a post-Kyoto Protocol greenhouse gas reduction 
framework for 2013 and beyond, a major agenda item for the Lake Toya 
Summit, will be technology transfer and financial assistance to 
 
TOKYO 00005573  010 OF 010 
 
 
developing countries. In order for Japan to take the initiative as 
the host nation, it is imperative for it to come up with specific 
models. 
 
The prime minister ordered METI Minister Amari, when he visited him 
to give a prior briefing on the strategy in late November, not to 
forget Japan-U.S. relations. He made this request, indicating his 
interest that synergistic diplomacy, which aims at linking the solid 
Japan-U.S. alliance to proactive diplomacy toward Asia, should be 
incorporated in the package. The words "open community" were 
hurriedly included in the paper the METI minister presented at a 
meeting of the Council on Economic and Fiscal Policy on Dec. 14. 
 
SCHIEFFER