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UNCLAS SECTION 03 OF 16 TOKYO 005589 
 
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:  DAILY SUMMARY OF JAPANESE PRESS 12/17/07 
 
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* Missing Section 002 * 
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TOKYO 00005589  003.4 OF 016 
 
 
tax-reduction strategy; and records held by those who emigrated 
foreign countries and held by foreign nationals, who used to work in 
Japan. 
 
In the case of 1), since the SIA cannot find where mistakes are in 
the records, it cannot analogize them, if it did so, the possibility 
would increase that the records would mix up with those of other 
pensioners. Regarding 2) and 4), unless pensioners and companies 
make requests, it will be difficult to identify and consolidate 
them. Regarding 3), no one would request. 
 
The SIA cannot send pension records to the holders of 2.8 million 
pension accounts who are believed to have died, and to the holders 
of 5.1 million accounts, whose last names were changed. Although the 
SIA will call out to pensioners through local governments, whether 
it is effective is unknown since there are many people who don't 
know about the survivor annuity system. 
 
(2) Mainichi poll: 63 PERCENT  approve of foreign workers with 
conditions attached 
 
MAINICHI (Page 1) (Full) 
December 17, 2007 
 
A nationwide telephone-based opinion poll conducted by Mainichi 
Shimbun found that 63 PERCENT  of pollees think it is all right to 
accept unskilled foreign workers. The government does not intend to 
allow simple laborers to work in Japan. However, more than half the 
respondents who work in areas which are experiencing a labor 
shortage approved accepting unskilled workers. However, 31 PERCENT 
are against the idea of accepting such workers for the reason of 
their having an adverse effect on the employment of Japanese. Many 
are cautious about a policy change. 
 
Japan has adopted a policy of practically not accepting unskilled 
workers, based on the Sixth Employment Measures Basic Program, 
adopted at a cabinet meeting in June, 1988, which notes that 
specialist and technical workers can be accepted, but the acceptance 
of simple workers (who do unskilled work) needs to be addressed in a 
cautious manner. 
 
To a question on this government policy, 58 PERCENT  of pollees who 
work in areas with a labor shortage approved of the acceptance of 
unskilled workers. However, only 5 PERCENT  replied that such 
workers should be accepted without attaching any conditions. On the 
other hand, 31 PERCENT  replied that such workers must not be 
accepted as it is the case now. 
 
As reasons that unskilled workers should not be accepted, the 
largest ratio of 51 PERCENT  said, "Accepting such workers will have 
an adverse effect on the employment of Japanese and the labor 
environment," followed by 35 PERCENT , who replied, "Public security 
will deteriorate, 10 PERCENT , who noted, "Trouble stemming from 
differences in customs will occur," and 3 PERCENT , who said, 
"Social security and education costs will increase." Regarding a 
question on who should shoulder foreign workers' social security and 
education costs, 38 PERCENT  of respondents gave, "employers." 
Another 38 PERCENT  gave "industries that need foreign workers." 
"Foreign workers" and "the entire people" were respectively cited by 
11 PERCENT . 
 
Consolidating system is pressing need 
 
 
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* Missing Section 004 * 
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TOKYO 00005589  005.4 OF 016 
 
 
preferred choice for the country's next-generation mainstay combat 
jet. 
 
Investigative authorities leaned toward a severe step, thinking that 
it was grave that an MSDF officer leaked the information that could 
have fell in the hands of other countries, harming Japan-US 
relations. Law enforcement arrested Matsuuchi on Dec. 13, concluding 
that his action taking advantage of his position that has access to 
special defense secrets under the Law Concerning the Protection of 
Secrets for the Japan-U.S. Mutual Defense Assistance Agreement led 
 
SIPDIS 
to the widespread dissemination of the information among 
unauthorized MSDF personnel. 
 
Matsuura's awareness of defense secrets weak, actively attending 
study sessions 
 
Although Matsuura belonged to the programming unit, he was 
responsible for the domestically-produced destroyer system and was 
not in a position to directly handle the Aegis data provided by the 
United States. How could Matsuura get hold of Aegis information? 
 
Japanese-made destroyers take joint action with Aegis-equipped 
vessels and perform duties, such as escorting cargo ships, in 
collaboration with them. In the early 1990s, a senior officer 
ordered developing a new domestic system transcending the Aegis 
system. For cooperation between the domestically-made destroyers and 
Aegis vessels, officers responsible for the system needed to know 
the state-of-the-art Aegis system inside out. Looking back at those 
days, an official used to be responsible for the system said: "We 
worked until night on our regular shift and attended study sessions 
from midnight to morning. We worked like crazy." 
 
Matsuura joined the section in 2001. As a young promising officer, 
he made extra efforts to acquire knowledge of the Aegis system, 
attending a workshop in the United States as well. 
 
Their daily access to Aegis information has weakened the 
organizational awareness of handling special secrets. Special 
defense secrets were kept on a computer shared by the officers 
responsible for the domestic destroys instead of security storage. 
 
Such mentality seems to be at work behind Matsuura's provision of 
the Aegis data to a First Service School instructor, also a 
lieutenant commander. A former senior officer said regrettably: 
"Preoccupied with absorbing new knowledge and developing a new 
system, we could not think of information security." 
 
Ban on keeping business data on personal computers failed to bear 
fruit 
 
The latest incident was preceded by the upload of information to the 
Internet via file-sharing software by an official of MOD and the 
Self-Defense Forces, respectively. In April this year, MOD and SDF 
compiled fundamental measures to prevent any recurrence and 
prohibiting the use at workplaces of personal computers and mobile 
large capacity storages, also introducing encrypted software and 
conducting spot inspections. 
 
As part of this effort, the MSDF made its personnel declare and 
delete all business-related data stored on their personal computers. 
But the officers possessing the Aegis data made false declarations. 
 
 
TOKYO 00005589  006 OF 016 
 
 
If they had deleted the data as was ordered, the latest incident 
would not have come to light. This reveals the limits to a response 
based on the belief that human nature is fundamentally good and the 
difficulty in raising awareness throughout the organization, 
including the rank and file. 
 
"It's ironical that their failure to delete the data exposed the 
sloppy data management system, giving an opportunity for a thorough 
review," a senior MSDF official noted. 
 
A senior MSDF officer also took this view about the fact that 
Matsuura handed the Aegis data to the First Service School chief 
instructor at the request of his request: "At the SDF, it has been a 
tradition that when a junior member is asked by a senior officer for 
something, he has to comply with it. But such nature must be 
reexamined." 
 
The Defense Ministry Reform Council made up of experts held its 
inaugural meeting at the Prime Minister's Official Residence 
(Kantei) earlier this month, in which the establishment of a sound 
information security system was mentioned as a must. The council is 
being challenged to come up with effective countermeasures, 
including the improvement of hardware. 
 
Establishing a system that does not leak defense secrets essential 
 
A senior investigator who lead the case said: "Japan is being tested 
if it is trustworthy as a security partner, and we looked for a 
conclusion that can convince the United States." Although 
investigators arrested the lieutenant commander for leaking 
information, they did not conduct a criminal investigation into 
other MSDF officers who had also been involved in the information 
leakage, concluding that they did not have any malicious intent. But 
the case has marred the country's credibility. 
 
The senior investigator also said: "In a way, petty officers' 
eagerness to deepen their knowledge for defending the country ran 
wild." The ministry needs not only to increase the level of 
awareness of SDF personnel but also to build a system that does not 
leak defense secrets. 
 
(4) Good chance to review everything in Defense Ministry: Shikata 
 
SANKEI (Page 13) (Abridged) 
December 13, 2007 
 
Toshiyuki Shikata, professor at Teikyo University 
 
Due to the Antiterrorism Special Measures Law's expiry, the Maritime 
Self-Defense Force was ordered to recall its squadron that was on a 
refueling mission in the scorching Indian Ocean for nearly six 
years. Japan has been inattentive to its defense policy. Now, Japan 
has exposed the vagueness that is a defect in its defense policy. 
 
At the time, the matter was politically delicate, and the government 
needed to rush. That is why the government passed a special measures 
law. Since then, many years has passed. However, the government has 
yet to create a permanent law. Over the past three years, six 
defense ministers were replaced. Even if the cabinet is changed due 
to political developments, the foreign minister and the defense 
minister must not be changed so frequently. 
 
 
TOKYO 00005589  007 OF 016 
 
 
Politicians-whenever they open their mouths-say "civilian control". 
In the absence of politics, however, it is difficult to have defense 
bureaucrats become clearly aware of what it really means. 
 
Foreign countries refer to "political leadership" when it comes to 
relations between their governments and militaries. This means that 
politics comes before military affairs. I don't know why, but this 
is called "civilian control" in Japan. So there are some people who 
misunderstand its meaning. 
 
Then, some defense bureaucrats are thinking to themselves that 
civilian control is for bureaucrats in suits to control the 
Self-Defense Forces' personnel in uniforms. There are also some 
people who often see discord between the SDF's uniformed staff and 
the Defense Ministry's bureaucracy as a problem. In fact, the media 
only plays it up for fun. 
 
The SDF's uniformed staff takes it as 'orderliness' in doing their 
jobs, and they are extremely coolheaded. 
 
The SDF's uniformed staff officers are frequently transferred. 
Moreover, they are often away from Tokyo. They are busy with 
educational and training programs for the rank and file. Moreover, 
they are also busy with disaster relief operations and overseas 
missions. As it stands, they cannot afford to give explanations in 
detail to politicians. 
 
Accordingly, it is only natural that the Defense Ministry's 
bureaucrats in suits liaise with politicians, get budgets, acquire 
equipment, improve facilities, maintain and manage them. 
 
Taking the Moriya issue as an opportunity, the government launched a 
panel on Dec. 3 to reform the Defense Ministry. The government 
intends to carry out a drastic reform of the Defense Ministry for 
thoroughgoing civilian control, transparent procurement, and strict 
information security. The present cabinet has technocrats for the 
posts of chief cabinet secretary, foreign minister, and defense 
minister. The Defense Ministry has also reshuffled its personnel. 
The government therefore must not miss this timing for a reform of 
the Defense Ministry. 
 
Those who passed the career-track examination for the national 
public service at the Defense Ministry go up the ladder of success 
without knowing anything about Japan's national defense on the 
front. In order to eliminate its negative effects, the SDF's officer 
candidate schools can establish an experimental course for those 
young career-track bureaucrats. This can help the Defense Ministry's 
bureaucracy and the SDF's uniformed staff understand each other. 
 
Furthermore, it is also important for the Defense Ministry to have 
its young bureaucrats experience SDF local recruiting offices and 
some SDF workplaces. The Defense Ministry currently contracts 
trading companies in order to procure equipment for the SDF. If the 
Defense Ministry is to do this job on its own, it will need human 
resources with expertise for collecting and analyzing information, 
negotiating with manufacturers, preparing data, and providing 
aftercare. 
 
Overhauling the Defense Ministry's organization within its current 
personnel scheme will end up affecting SDF units on the front. If 
that is the case, the SDF's manning level, which is low even now, 
will further go down. It will be difficult for the SDF to train its 
 
TOKYO 00005589  008 OF 016 
 
 
members. 
 
In addition, the retiring age of SDF personnel is younger that that 
of other government employees. The SDF continues its employment of 
some personnel after retirement only for areas where their knowledge 
and insight are needed. However, they are limited. 
 
SDF personnel with a knowledge and insight of specific defense 
equipment are not useful in the private sector at all. SDF retirees, 
however, can find jobs with trading companies dealing in defense 
equipment. This is good not only for SDF retirees but also for 
trading companies. In addition, SDF retirees can also serve as 
advisors for civilian defense drills. 
 
The bottom line is the government must keep an eye on collusive 
ties. At the same time, the government must consider how to bring 
its collaboration with the private sector to fruition. 
 
It is easy to denounce this as "amakudari" (literally "descent from 
heaven"). However, the SDF's aging will progress after its early age 
limit is dropped. Of course, SDF personnel are also on the 
government's payroll as public servants. However, the SDF must not 
lower its manning level. I hope the panel will come up with good 
suggestions. 
 
(5) Regulatory Reform Council: Second report puts emphasis on area 
directly related people's lives: Reform of child-care centers 
 
MAINICHI (Page 2) (Full) 
December 17, 2007 
 
The government's Regulatory Reform Council (chaired by Nippon Yusen 
Kaisha Chairman Takao Kusakari) has completed its second report. 
The package of proposals  |2"]and reform of child-care 
centers with emphasis placed on areas directly related to people's 
lives and areas contributing to the revitalization of regional 
areas. The panel will submit the report to Prime Minister Yasuo 
Fukuda later in the month. The government will revise the three-year 
regulatory reform program in March next year, accordingly. 
 
Regarding the medical services area, the report notes that a 
shortage of doctors should be addressed first. As part of such 
measures, it calls for an immediate revision of the roe-shring 
btwee nurses and doctors, including allowing nurses to administer 
simple medicines, a practice now prohibited without the presence of 
a doctor. However, regarding the blanket lifting of a ban on 
hospitals operating two different systems for medical bills -- one 
with medical insurance and the other without it, coordination with 
the Ministry of Health, Labor and Welfare has yet to be undertaken. 
 
The package proposes that authorized child-care centers, to which 
municipalities allocate children to be admitted, adopt a direct 
contract system with users for improved services. The report also 
calls for a revision of admission standards so that children of 
part-timers can also be admitted. 
 
The report attaches importance to the fact that when foreigners 
marry Japanese citizens, their names are not entered into the Basic 
Resident Register, causing harmful results in terms of taxation, 
etc. To address this problem, the report proposes the drafting of a 
basic initiative for a new registration system linked with 
 
TOKYO 00005589  009 OF 016 
 
 
foreigners' registration system within fiscal 2007 and the 
introduction of related laws to the regular Diet session in fiscal 
¶2009. 
 
Concerning the education area, the package calls for the description 
of world history appropriate for compulsory education on social 
studies provided at middle schools with the aim of cultivating an 
international viewpoint and a revision of Education Ministry 
guidelines to adopt an optional system for world history taught at 
high schools, replacing the current compulsory system. 
 
Outline of second report by Regulatory Reform Council 
 
¶1. Realize peace of mind and affluence: Expand medical services 
areas offered by nurses and midwives to reduce the burden of 
doctors. Introduce a direct contract method between authorized 
child-care centers and users. Ease standards for admission to 
child-care centers. Establish a school teacher-rating system by 
students and parents. Disseminate a school-choice system.  Adopt a 
choice system for world history taught at high schools. Improved 
transparency of the school textbook screening process. 
¶2. Improve vitality and livelihood in regional areas: Construct a 
database for information on farming land and forests. Ease the 
diversion regulation for effective use by regional areas of 
state-subsidized facilities. Ease the ratio of floor space to land 
space regarding factory sites. 
¶3. Accelerate growth backed by strengthened international 
competitiveness: Speedier customs clearance procedures for imports 
and exports, based on a complete on-line system. Further expansion 
of capacity at Haneda and Narita Airports. 
¶4. Realize equal opportunities: Clarify differences between 
dispatched workers and sub-contractors in order to prevent faked 
sub-contracts. Set up a new basic resident register system to be 
applied to foreign residents. 
¶5. Reform government enterprises: Abolish, curtail or liberalize 
independent administrative agencies that receive a large amount of 
fiscal assistance from the state. 
 
(6) Challenge for special investigators to probe the dark recesses 
of Japan-U.S. defense interests 
 
SENTAKU (Pages 56-58) (Abridged) 
December 2007 
 
Deep relationship between the grand-alliance concept and the Yamada 
Yoko Corp. 
 
Prior to the arrest former Administrative Vice Minister for Defense 
Takemasa Moriya for receiving bribes, the special investigation team 
of the Tokyo District Special Prosecutors Office on Nov. 9 entered 
the main office of Nihon Mirise, located near the Prime Minister's 
Official Residents, and on the 10th, they arrested it president, 
Motonobu Miyazaki, on embezzlement charges. 
 
A source in the Tokyo District Prosecutor's office said: 
 
"Upon sending over the papers charging Moriya for using his 
influence in the bidding war over the CX engine for the next 
generation transport aircraft, the special investigative unit is 
thinking of making Miyazaki and Moriya break their silence on what 
might be called a major state secret centered on the political 
world." 
 
TOKYO 00005589  010 OF 016 
 
 
 
The targets of the special investigators go beyond the alleged 
wining and dining of defense policy specialists in the Diet and the 
clearing up of charges of their providing their good offices in 
return. Their main mission is the dirty tricks by vested interests 
tied to Japan-U.S. defense affairs. 
 
"Ozawa seems to have brought the message to Fukuda that Kyuma cannot 
be helped." This was the rumor whispered about parts of the Liberal 
Democratic Party (LDP) following the Nov. 2 meeting between Fukuda 
and Ozawa: "Fukuda said that the Bush administration told him it was 
displeased with Ozawa's hard-lined stance toward the antiterrorism 
special measures law and prior to his visit to the U.S., he asked 
about Ozawa's intentions.  At the time, the topic of the Yamada 
Corporation seems to have come up.  There would be a deadlock if 
Kyuma were to be arrested, for it would come out that the scandal 
scheme was something that came out of the U.S. force realignment 
plan that the U.S. dreamed up as it pleased. If that were the case, 
the Japan-U.S. relationship would deteriorate. He said that the only 
way to put a lid on the scandal was to form a grand alliance." 
 
USFJ realignment bid-rigging scheme by Japan, US political and 
business circles 
 
What then is this scandalous scheme, Fukuda referred to? 
 
We present here the testimony of related sources and material that 
has come into our hands. If we were to sum it all up, the story goes 
back to last year in September. At that time, a delegation of top 
executives from the Shaw Group, a large plant development company 
founded by retired military officers, came to Japan. They had 
prepared a plan that described in detail the USFJ realignment, which 
the Japanese government had not yet approved. 
 
Although the large framework of the USFJ realignment was agreed on 
by the Japan-U.S. Security Consultative Committee (2-plus-2) on May 
last year, the Japanese government had promised to cough up 3 
trillion yen, including footing the bill for the transfer of 8,000 
U.S. Marines from Okinawa to Guam. This plan for paying for the 
construction of a U.S. base facility within the United States was 
attacked in the Diet by the opposition as "selling out our 
country." 
 
A source in the Defense Ministry stated: "The Shaw Group is a 
company that backs the Bush administration. It earned its reputation 
for petroleum projects in Iraq after the war. In the project to 
relocate Marines to Guam, Bechtel, the world's largest construction 
company, and other firms have announced they wished to participate, 
so channels are being created between Japan and the U.S., and moves 
are going on behind the scenes to gain the advantage with their 
respective plans." 
 
The Shaw Group executive team came to Japan only four months after 
the final realignment agreement had been reached. At the time, it 
was still unclear who would be in charge of sending out bids for 
contract orders or even how the Japanese side would fund the 
projects. The Shaw Group approached influential political and 
business figures. The U.S. military was categorized as the 
organization to put out the orders, and the Japanese side was 
presented with the difficult choice of the fiscal burden and making 
sure that Japanese and U.S. companies had their fair shares. The 
same source said: "In accordance with this request, the Japanese 
 
TOKYO 00005589  011 OF 016 
 
 
side began in secret to carefully consider the realignment plan as 
it was restated." 
 
A set of those documents exists. On the flow chart on page one, the 
U.S. military is listed as the contracting source for the Guam 
relocation project, and a completely unknown Japanese company, ODC, 
K.K., is listed as the subcontractor. Under that are arrows pointing 
to three areas, civil engineering, housing, and construction. Under 
those categories, civil engineering was assigned to a top class 
general contractor headquartered in Tokyo; housing would be assigned 
to an Osaka-based home builder, one of Japan's best, and so forth. 
 
A source in the Tokyo District Prosecutors Office noted: "The 
Defense Ministry held a briefing for companies interested in the 
realignment projects this August. This kind of international 
bid-rigging was going on already a year before that. The special 
investigators have already confiscated documents from the related 
parties. We were surprised that the farcical realignment plan was 
already making its way about." 
 
According to testimony and documents obtained, after the top 
executives of the Shaw Group came to Japan, the movements of Kyuma 
became extremely active. First, since there was strong resistance 
that the money for Japan's share would have to come out of the 
defense budget, he came up with the scheme of placing matters under 
the government's lead and creating a special account in the Japan 
Bank for International Cooperation (JBIC) for funding the project. 
 
In addition, in order to camouflage that the project was being 
ordered by the U.S. military, a special-purpose enterprise (SPE) was 
established as an independent company. Here is where the funding 
from the JBIC would go, and capital would also be solicited from 
private-sector companies, the plan being to pool the money. The SPE 
was visibly placed under the control of such US firms as the Shaw 
Group. 
 
A general construction company manager said: "Around that time, 
working behind the scenes on the Shaw Group's behalf were Japanese 
lobbyists who had hailed from the Finance Ministry. They were 
approaching large general contractors and the like saying, 'The 
government and big business leaders are on board, so we would like 
you to invest with peace of mind. If you do, you will receive a 
construction order from the U.S. military. But some of the general 
contractors were concerned this might be a new type of fraud. 
 
However, the forming of a "council of government and ruling parties 
concerned with the review of the force structure of U.S. forces in 
Japan and the like," which had 19 names listed under it, including 
then Chief Cabinet Secretary Shiozaki at the top and then high-level 
government officials, as well as the three top executives of the 
Liberal Democratic Party and the New Komeito, it seemed clear that 
the government had given its seal of approval to the series of 
schemes. 
 
The council held its first meeting last year on Dec. 15. It 
announced the drafting of a bill to promote realignment that would 
include a system of subsidies for local communities totaling 100 
billion yen in order to promote realignment projects that were being 
resisted by protest movements among local residents. At the time, 
one of the council members, expecting a press conference by Kyuma, 
happily said, "In proposing the bill, we need to make a clear stance 
that the central government is handling the USFJ realignment. This 
 
TOKYO 00005589  012 OF 016 
 
 
will be a plus for the Japan-U.S. relationship." 
 
A source in the Tokyo District Prosecutors Office said: "The one who 
was active in responding to the Shaw Group's request and did the 
spade work for creating the council was Kyuma." The scandal then 
developed as follows: 
 
"I would like you to pay attention to the date of the announcement, 
Dec. 15. Ten days before, on the evening of the 5th, Kyuma secretly 
met with Shiozaki at an exclusive Japanese restaurant (fugu-ryouri) 
in Tokyo. Also present at the dinner meeting was Naoki Akiyama, the 
executive director of the Japan-U.S. Peace and Cultural Exchange 
Council, who served as the contact person for the two. At the time, 
there was suspicion that the secret information had been leaked that 
the Japanese government would agree to the realignment plan. In 
actuality, even though Miyazaki had just come up with his company 
Nihon Mirise, ODC, which was the subcontractor of the Shaw Group, 
signed a contract entrusting it with the work, and in late November, 
it began to circulate to companies as it pleased a plan that was 
born in America." 
 
The special investigation unit indicated that it intended to ferret 
out from Moriya, who had intimate knowledge of the internal workings 
of the USFJ realignment, and Miyazaki, the way that Kyuma was 
maneuvering in the background. 
 
Ozawa's true intention is to rescue Kyuma 
 
Meanwhile, Ozawa from around the time of his meetings with Prime 
Minister Fukuda became sensitive to the trail the investigation was 
taking. The background of this stems from the time when Ozawa was 
LDP secretary general. At the time of the Gulf war, when Japan 
provided $9 billion in financial assistance to the multinational 
force, the one who was running about working as his flunky was 
Kyuma. An LDP lawmaker observed: "During the Papa Bush 
administration, Ozawa built a close relationship with then Secretary 
of State George Shultz, who had been a top executive at Bechtel 
Corp. For that reason, Ozawa did not want to see the USFJ 
realignment agreement collapse. Indeed, he and Kyuma, who was close 
to the Shaw Group, were like two peas in a pod." 
 
Regarding the financial aid (for the Gulf war), a number of 
allegations have been rumored linked to those around Ozawa, but the 
one who intensely knows the inside story is Kyuma. One lawmaker who 
came from the former Keiseikai faction (which Ozawa hailed from) 
said: "For Ozawa, the arrest of Kyuma would be inconvenient, indeed. 
In his desire to rescue Kyuma lies the real intention of holding off 
an investigation." 
 
Even though they are from different parties now, Ozawa and Kyuma 
both back the giant American company. In the history of the 
splitting of the LDP, there is a dark unfathomable area. In order to 
understand what that entails, one has to probe deep into the meaning 
to each side of the term "grand alliance." The "don" of the defense 
policy clique (boei-zoku) in the LDP, Shin Kanemaru, was also 
Kyuma's and Ozawa's mentor (when they were young politicians). 
Kanemaru, along with Ryuzo Sejima and others, established the Japan 
Center for Strategic Research. It became a central spot for LDP 
defense policy specialists, uniformed officers from the Defense 
Agency, and defense industry executives could gather together. Ozawa 
eventually inherited the post of chairman. However, in 1993, 
Kanemaru was arrested for possession of improper assets, and the LDP 
 
TOKYO 00005589  013 OF 016 
 
 
then split apart. After that, Ozawa and his followers left the party 
and formed a coalition with (Prime Minister) Morihiro Hosokawa. 
After the collapse of the administration, the research center left 
the LDP. 
 
At that point, the defense policy clique in the LDP linked up with 
Akiyama and his Japan-U.S. Cultural Promotion Society. Akiyama was 
formerly a flunky for Kanemaru, and he also served as a secretary to 
LDP lawmaker Tamisuke Watanuki (now head of the splinter party 
People's New Party). He was always a person who moved about in the 
background. 
 
With the defense policy clique between split into ruling and 
opposition camps, Akiyama allowed them to come together by joining 
his society. National policy had to be reunified, was the view of 
the defense policy specialists. The DPJ's Seiji Maehara and even New 
Komeito lawmakers could join, making the defense specialists one 
group again. An LDP lawmaker noted: "Akiyama's group came to be 
known as an influential organization, even appointing to its board 
such American defense specialists as former Defense Secretary Cohen 
and former Deputy Secretary of State Armitage. Even Shinzo Abe and 
Yasuo Fukuda were added. Only Ozawa was left to be invited to join 
in. In other words, under the flag of the Japan-US security 
relationship, the defense specialists in the various parties could 
reorganize and unite." 
 
Ozawa group and LDP defense policy clique would form a new party 
 
At a meeting of the DPJ that called strongly for Moriya to be 
summoned as a sworn Diet witness, when it came to come up questions 
that would be posed to the witness, a member of the Ozawa group in 
the party - the Isshinkai - had two questions: ask him to tell the 
truth and a question that would benefit the party's interests and 
strategy. He warned that it would be dangerous to ask questions that 
went too far into the Yamada Corp. incident. The lawmakers in this 
group were surprised when the party members in their Diet questions 
probed into the political trail. That is when the idea of a grand 
alliance erupted, said one DPJ lawmaker. 
 
However, the Upper House of the Diet has many DPJ members from the 
progressive wing, and they would not give up their pursuit (of the 
political trail). That is why on Dec. 15, Upper House lawmaker 
Keiichiro Asao elicited from Moriya the testimony that "Mr. Kyuma 
was at the dinner party with Mr. Akiyama." This was criticized by 
DPJ lawmakers in the Lower House as having gone too far. This is 
because if the Akiyama group is poked into, DPJ blood would be 
spilled. The anti-Ozawa group within the DPJ has given up on 
maintaining a two party system that could go in and out of 
alliances. The following concept has been hammered out: 
 
"The pro-American Seiwakai members in the LDP (86 members, led by 
Chief Cabinet Secretary Machimura) and the former Takeshita faction 
members who now form the Ozawa group in the DPJ (Isshinkai group of 
35 members) will merge to form a new LDP. The Kochikai or 
non-defense policy types in the LDP (51 members led by Makoto Koga) 
will merge with the anti-Ozawa group in the DPJ to form a new DPJ. 
(TN: Unclear how many this would be, since there are other groups 
like Seiji Maehara's 25 member one who could go either way.) These 
two groups will lead the political realignment." 
 
The dilemma is that the more Kyuma and Akiyama are pursued on the 
defense scandals, the more the political distortion that exists will 
 
TOKYO 00005589  014 OF 016 
 
 
come out. This could become the driving force for political 
realignment in the near future. 
 
The investigation into the Yamada Corp. since Moriya's arrest will 
first expose Moriya's interests. By that is meant the case of 
collusion among Moriya, the Naha Defense Facilities Administration 
Bureau chief, who was in his camp, lawmakers from the local area, 
and local businesses. They colluded to try to grab a monopoly on the 
relocation project. 
 
Because Moriya had teamed up with lawmakers from the local area, 
invading Kyuma's Okinawa interests and rupturing the Kyuma-Moriya 
line, Kyuma's scheme will not lead to his arrest. The special 
investigators have formed a separate team to probe into Kyuma, and 
they are slowly getting to the inner core, but Chief Prosecutor 
Keichi Tadaki is not about to investigate political circles. Prime 
Minister Fukuda and Tadaki have had a long partnership relation 
since Fukuda was chief cabinet secretary and Tadaki was 
administrative vice minister of justice. His giving "political 
consideration" to the case is unavoidable. Although the head of the 
special investigation unit, Hiroyuki Yagi, has said he hopes to 
investigate the case, with his resignation in one hand, the reality 
is that treading on a political trail is a risky business. 
 
(7) TOP HEADLINES 
 
Asahi: 
Abnormal change on earth: Island in Bangladesh moves 20 kilometers 
in 50 years due to torrential rains, floods, soil degradation, soil 
deposit 
 
Mainichi: 
Random shooting in Sasebo City: Gunman Magome had 2,700 bullets; 
Aimed to kill  four of his friends? 
 
Yomiuri: 
Arrested lieutenant commander leads limit of Aegis destroyer leaked 
 
Nikkei: 
Raw material makers to manufacture high-performance products in 
China; Shift from export-oriented policy; New strategy to come with 
boosted demand 
 
Sankei: 
From mistrust in pension to mistrust in politics: Gap in premier's 
statement from public opinion 
 
Tokyo Shimbun: 
Public support rating for Fukuda cabinet dips to 35 PERCENT  in 
nationwide telephone survey; 57 PERCENT  see government resignation 
of overall settlement of pension issue as breach of policy pledge 
 
Akahata: 
Tracking daily workers dispatched by Goodwill: 1,000 people 
transported by bus to workplaces 
 
(8) EDITORIALS 
 
Asahi: 
(1) Proposal for hopeful society: Three pillars to maintain class-A 
industrial clout; Livelihood-related services industry should be 
made linchpin for strengthen people's defense; Assume offensive, by 
 
TOKYO 00005589  015 OF 016 
 
 
improving financial system, developing goods-making technology 
 
Mainichi: 
(1) Fiscal reconstruction by local governments: Residents should 
strengthen vigilance for getting local finances healthy again 
(2) Expanded funds supply is only emergency measure to deal with 
Subprime loan fiasco 
 
Yomiuri: 
(1) Ruling parties' annual tax code revision guidelines: Talks with 
opposition camp holds key to whether they are realized or not 
(2) Bank of Japan "Tankan" short-term business survey report: What 
will become of real economy following sZf9x("|Titis C 
suit 
(2) IHI marred investor confidence 
 
Sankei: 
(1) Seventy years since Massacre of Nanjing: Send message to correct 
mistaken historical evidence 
(2) Major league and drugs: Use pinch as opportunity 
 
Tokyo Shimbun: 
(1) Thoughts at beginning of week: Three excellent plans for 
integration of Europe 
 
Akahata: 
(1) Measures on soaring crude oil prices: Effective measures to deal 
with serious damage 
 
(9) Prime Minister's schedule, December 14 
 
NIKKEI (Page 2) (Full) 
December 15, 2007 
 
08:42 
Chatted with New Komeito leader Ota in Diet building. Met with 
Education Minister Tokai. 
 
09:00 
Attended cabinet meeting. Welfare Minister Masuzoe and Chief Cabinet 
Secretary Machimura remained the office. Met again with Machimura. 
 
SIPDIS 
 
09:33 
Met at Kantei with Vice Foreign Minister Yachi. 
 
10:19 
Met with Economic and Fiscal Policy Minister Ota, Assistant Deputy 
Chief Cabinet Secretary Saka, Cabinet Office directors general 
Fujioka and Matsuoka. Ota remained in the office. 
 
10:59 
Met with China-Japan Friendship Association Chairman Song Jian. 
 
13:02 
Attended Lower House plenary session. 
 
14:49 
Met at Kantei with Vice Defense Minister Masuda, followed by 
Financial Services Agency Director General Sato and Planning and 
 
TOKYO 00005589  016 OF 016 
 
 
Coordination Bureau chief Mikuniya. 
 
15:35 
Met with Lower House member Taro Nakayama. 
 
16:15 
Interviewed by the cabinet's reporters' club. Met with Machimura. 
 
17:25 
Met with Administrative Reform Minister Watanabe. Attended Economic 
and Fiscal Policy Council meeting. 
 
20:38 
Videotaped TV talk show at TBS center in Akasaka. 
 
21:52 
Returned to his private residence in Ozawa. 
 
Prime Minister's schedule, December 15 
 
NIKKEI (Page 2) (Full) 
December 16, 2007 
 
Morning 
Spent time at his private residence in Nozawa. 
 
12:54 
Met University of Tokyo Prof. Yoshikawa at Grand Prince Hotel 
Akasaka. 
 
16:04 
Toured "Eco Products 2007" at Tokyo Gig Site in Ariake, Tokyo. 
 
17:15 
Met with secretaries at Grand Prince Hotel Akasaka. 
 
19:17 
Returned to his private residence. 
 
Prime Minister's schedule, December 16 
 
NIKKEI (Page 2) (Full) 
December 17, 2007 
 
Spent the whole day at his private residence in Nozawa. 
 
SCHIEFFER