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RUCNDT/USMISSION USUN NEW YORK 4029

UNCLAS SECTION 01 OF 12 TOKYO 000504 
 
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 03/05/09 
 
INDEX: 
 
(1) Ozawa's fund-managing group, Rikuzan-kai, tainted with 
allegations (Sankei) 
 
(2) Systematized illegal donations: Tokyo Public Prosecutors Office 
establishes criminal case with statute of limitation into 
consideration (Yomiuri) 
 
(3) Anatomy of the DPJ: Retaining Ozawa in his post a foregone 
conclusion (Sankei) 
 
(4) Futenma airfield should be relocated elsewhere outside Okinawa 
Prefecture: Maehara (Ryukyu Shimpo) 
 
(5) F-22 pullout set for mid-April (Ryukyu Shimpo) 
 
(6) Kasumigaseki's reckless actions during a time of political 
turmoil; Controversial Foreign Ministry officials with history have 
regained power (Shukan Bunshun) 
 
(7) Prime Minister's schedule, March 4 (Nikkei) 
 
ARTICLES: 
 
(1) Ozawa's fund-managing group, Rikuzan-kai, tainted with 
allegations 
 
SANKEI (Page 23) (Full) 
March 5, 2009 
 
The special investigation squad of the Tokyo district Public 
Prosecutors Office arrested a person who was in charge of accounting 
for Democratic Party of Japan (DPJ) President Ichiro Ozawa's 
political fund-management association, Rikuzan-kai. The body is 
found to have received donations, estimated at a total of nearly 200 
million yen, from Nishimatsu Construction Co., a second-tier general 
contractor, through its dummy political groups. The murkiness of 
activities by Rikuzan-kai was also pointed out many times in the 
past. This is not the first time for the association to be suspected 
of receiving donations from a suspicious company. Prosecutors will 
look into the data seized from its office and also investigate its 
past allegations. 
 
Construction interests 
 
Ozawa was called the late Kakuei Tanaka's favorite disciple. Even 
after leaving the Liberal Democratic Party, he has maintained his 
influence as a lawmaker representing the interests of the 
construction industry. According to investigators, Rikuzan-kai 
reportedly was known as the window for donations from Nishimatsu, as 
well as other shady general contractors. 
 
In connection with a tax-evasion case involving Mizutani Kensetsu, a 
second-tier general contractor based in Mie Prefecture, which 
developed into former Fukushima governor's bribery case, it was 
revealed that Rikuzan-kai had received a total 240,000 yen from two 
executives of Mizutani in 2004 and 2005. Mizutani was also founded 
to have contributed a total of 3.5 million yen to the DPJ's Iwate 
Prefecture 4th constituency general office in 2003 and 2004. 
Further, it was unveiled that Tekken Kensetsu Corp. in Tokyo, whose 
officials were under summary indictment over bid-rigging for 
 
TOKYO 00000504  002 OF 012 
 
 
projects ordered by the Defense Facilities Administration Agency, 
had donated 250,000 yen to Rikuzan-kai in 2004. 
 
Following a bribery case involving general contractors exposed from 
1993 through 1994, Kajima Corp. was found to have made contributions 
to Ozawa, who chaired Shinseito at that time. Rikuzan-kai was 
regarded as one of the receptacles for political donations, and 
other political parties called for summoning Ozawa to testify as a 
sworn witness before a Diet session. 
 
Defense interests, as well 
 
Besides close ties with Nishimatsu Construction Co., Ozawa also took 
over defense interests from the late former LDP Vice President Shin 
Kanemaru when he retired from the political world. The defense 
interests he inherited include the Japan Strategic Research Center, 
a think tank that was regarded as a base for vested interests. 
 
Further more, Rikuzan-kai was revealed to have received 500,000 yen 
to 2.5 million yen in shady donations every year between 1995 and 
1999 from defense trading firm Yamada Corp., whose former employees 
were arrested on bribery charges involving former Vice Defense 
Minister Takemasa Moriya in 2007. 
 
Prosecutors yesterday searched Ozawa's office in Oshu City, Iwate 
Prefecture. The 4th constituency general office, which is housed in 
it, received donations amounting to 3.5 million yen between 2000 and 
¶2006. A person connected with political circles said: "This proves 
that Mr. Ozawa continued to be influential as a lawmaker lobbying 
for the interests of the defense industry even after he became an 
opposition party member. 
 
Real estate business 
 
It came to light in 2007 through its political funding report that 
Rikuzan-kai had acquired 13 real estate properties for approximately 
1.02 billion yen in Tokyo. This case focused much attention on 
Rikuzan-kai. It was also unveiled that the association had earned a 
total of 9.8 million yen in rental income by the end of 2006 by 
renting two condominiums that purchased with political funds. The 
Political Funds Control Law bans using political funds for other 
purposes than three purposes, including deposit. Rikuzan-kai 
explained at that time: "The purpose of the renting is not asset 
management," but the group had to announce plans to push up the 
selling of such properties. In the wake of this case, the said law 
was revised in June 2007 to ban fund-management groups from 
purchasing real estate. 
 
Rikuzan-kai, which has slipped through the meshes of regulations, is 
indisputably a political organization that always has been at the 
center of Ozawa's money-driven politics. 
 
(2) Systematized illegal donations: Tokyo Public Prosecutors Office 
establishes criminal case with statute of limitation into 
consideration 
 
YOMIURI (Page 2) (Full) 
March 5, 2009 
 
Democratic Party of Japan (DPJ) President Ichiro Ozawa's secretary 
was arrested on suspicion of violating the Political Fund Control 
Law involving the party's political fund management body 
 
TOKYO 00000504  003 OF 012 
 
 
Rikuzan-kai. Ozawa during a press conference on March 4 criticized 
public prosecutors, saying, "The investigation is strikingly 
unfair." Public prosecutors have launched compulsory investigation 
amid a murky political situation. What is the intent of the 
investigation, which Ozawa described as unusual? 
 
Shrewd system 
 
Tatsuya Sakuma, chief of the Tokyo Public Prosecutors Office 
investigation squad on the 3rd announced the arrests of persons 
involved in the case, including Takanori Okubo, treasurer of 
Rikuzan-kai and Ozawa's first state-funded secretary. Explaining the 
reason for the launching of the raids, Sakuma said, "Assessing the 
shrewd trick of using fictitious organizations, the nature of the 
donations and the motives from an overall viewpoint, we have reached 
the decision that the case cannot be overlooked." 
 
The amount of falsely listed donations comes to 21 million yen. In 
major cases similar to the present case, such an amount topped 100 
million yen. The amount involved in the case this time is rather 
small. 
 
The donations in question were made under the guise of two political 
organizations headed by former Nishimatsu Construction officials. 
Employees and their families became members of those organizations 
and paid membership fees. However, regarding income from membership 
fees, the Political Funds Control Law only requires the statement of 
total amounts, making it impossible to trace the donation resources. 
The method used by the company goes against the purport of the law, 
which is designed to improve the transparency of political funds. 
One senior public prosecutor underscored, "This is a highly 
unscrupulous case in terms of systemized illegal corporate donations 
having been made for a long period of time." 
 
Ozawa during a press conference on the 4th said, "The DPJ's fund 
management organization has accepted those donations with the 
understanding that they were provided by political organizations. 
However, it was found that Rikuzan-kai provided receipts when 
receiving the donations, raising the suspicion that the DPJ had 
recognized that the donations from the political organizations were 
effectively from Nishimatsu Construction. 
 
Ozawa will likely be asked to give more accounts. 
 
Why at this timing? 
 
Ozawa was also furious over the timing of the launching of the 
investigations: "The investigation has been conducted at a time when 
the next House of Representatives election is a hot topic. That's an 
unfair exercise of state power both politically and legally." To 
Ozawa, who aims for a change of administration, the launching of the 
investigation at this time appears to be intended to obstruct 
campaign. 
 
However, public prosecutors made an issue of the statue of 
limitations. The statute of limitations on the offense of recording 
falsehoods is five years under the Political Funds Control Law. Of 
the donations worth 21 million yen, over which arrests were made, 
the statute of limitations on offense of receiving 7 million yen in 
2003 will run out at the end of this month. The investigation squad 
noted that postponing the investigation was not an option. Another 
senior public prosecutor stressed: "We have found illegal activities 
 
TOKYO 00000504  004 OF 012 
 
 
on such a major scale. We cannot afford to overlook the case." 
 
There is also a public prosecutor who took the view that the 
investigation squad wanted to avoid making an impact on issues that 
affect people's lives. The fiscal 2009 budget bill was enacted at a 
Lower House plenary session on February 27, suggesting that public 
prosecutors had been waiting for the best moment for the launching 
of the investigation into the case until then. 
 
(3) Anatomy of the DPJ: Retaining Ozawa in his post a foregone 
conclusion 
 
SANKEI (Pages 1 and 2) (Abridged slightly) 
March 5, 2009 
 
In the wake of the arrest of his first state-paid secretary on 
suspicion of receiving donations from Nishimatsu Construction Co., a 
second-tier general contractor, in violation of the Political Funds 
Control Law, Democratic Party of Japan (DPJ) President Ichiro Ozawa 
held a press conference at party headquarters yesterday. In it, 
Ozawa announced his intent to continue to serve as DPJ president, 
saying: "The donations have been dealt with appropriately," and, 
"There is no reason to offer an apology." 
 
About the issue of whether he should resign, Ozawa said: "I have 
nothing to be blamed for, and I am not thinking of taking any action 
because of it." He also harshly criticized the investigation by the 
special investigation squad of the Tokyo District Public Prosecutors 
Office, saying: "The unprecedented investigation, now underway at a 
time when the next House of Representatives election is being talked 
about, is an unfair exercise of state power, politically and 
legally." 
 
An emergency executive meeting was held at DPJ headquarters 
yesterday morning. In it, Ozawa explained about the fact that his 
first state-paid secretary had been arrested by the special 
investigation unit of the Tokyo District Public Prosecutors Office. 
Bowing deeply, he also said, "I am terribly sorry for causing 
trouble at a time like this." Everyone looked grim, with the 
exception of House of Councillors Diet Affairs Chairman Susumu 
Yanase who applauded. 
 
"I felt uncomfortable as I saw him applause in such circumstances," 
a senior DPJ lawmaker said later on. 
 
The scandal that hit the party's "election face" has caused tumult 
in the DPJ, which was preparing to take over the reins of government 
through the next Lower House election. Deputy President Naoto Kan 
also looked stern in the meeting. 
 
After the executive meeting, Ozawa held a press conference. There, 
he did not offer an apology either to the public or other DPJ 
lawmakers over the scandal involving his secretary. That was not 
all. He did not show up at a Lower House members' meeting that took 
place in the Diet building immediately before a Lower House plenary 
session yesterday afternoon. 
 
This drew a disapproving reaction from within the party, with a 
former cabinet minister saying, "I think he is angry with the 
approach of investigative authorities, but still, he should have 
offered an apology to his colleagues and supporters who are really 
worried about him." 
 
TOKYO 00000504  005 OF 012 
 
 
 
"I will fight" 
 
Completely indifferent to the commotion in the party, Ozawa remains 
bullish even after the scandal broke out. 
 
Prosecutors searched Ozawa's Tokyo office on the night of March 3. 
Lower House member Tomohiro Ishikawa, who served as Ozawa's 
secretary in the past, called on Ozawa at his office later that 
night. Seeing Ishikawa, Ozawa said: "I will fight. I have done 
things fairly. Please give my best regards to everyone." Prior to 
the investigation, Ozawa played a game of go with the party's 
supreme advisor, Kozo Watanabe, for about two hours at a hotel near 
the Diet building. 
 
The game took place after the media had reported that prosecutors 
would search the Ozawa office. After the game, Watanabe said to his 
aide: "If I had been in Mr. Ozawa's shoes, I would have been 
insecure." 
 
Later in the day, the People's New Party deputy head Shizuka Kamei 
placed a call to Ozawa and complained that the investigation was a 
plot by the government. In response, Ozawa said: "I think so, too. 
I'm not thinking of quitting. This is an unfair display of state and 
prosecution power. The allegations against my secretary will be 
cleared away. He will not be indicted." 
 
Efforts to calm the storm 
 
Ozawa remained firm in the press conference. Where does that 
confidence come from? 
 
In addition to his rage over the prosecutors' "unjust" 
investigation, Ozawa takes pride that he has demonstrated strong 
leadership in bringing the helm of government within the reach of 
the DPJ. Ozawa, who has declared that he would stake his political 
life on the next Lower House election, cannot afford to throw away 
his last big job of paving the way for toppling the Aso 
administration and disbanding the LDP. 
 
Keeping in mind that the Upper House begins discussing the fiscal 
2009 budget on March 5, Vice President Hajime Ishii, too, declared a 
total showdown. Deciding as early as March 3 that Ozawa would stay 
on, Ozawa aides and the party leadership contained moves to unseat 
Ozawa. A group of junior and mid-level members, including Vice 
President Seiji Maehara and former Policy Research Council Chairman 
Yukio Edano, who are keeping themselves at arm's length with Ozawa, 
had planned to meet at a Tokyo hotel on the night of March 3. They 
called off the event on short notice. 
 
Naoto Kan, who does not conceal his eagerness to become Ozawa's 
successor, ordered a group of DPJ lawmakers led by himself not to 
make unnecessary moves. 
 
Vice President Katsuya Okada, a major candidate for the DPJ 
presidency, was asked by several junior and mid-ranking members to 
forgo his plan to visit Southeast Asia on March 8-13, but he did not 
give his nod in approval. Okada is apparently trying to keep his 
distance from the race in the party for the post-Ozawa era. 
 
Junior members, who had bluffed on the night of March 3 that the 
Ozawa era was over and that they would fight the next election under 
 
TOKYO 00000504  006 OF 012 
 
 
Okada, kept silent on March 4. 
 
"We don't want to be referred to as ones who ousted President Ozawa. 
A person close to Mr. Ozawa should put a bell on him," a mid-level 
member said anemically. 
 
The prevailing view in the pro-Ozawa group is that there is no one 
but Ozawa who can spearhead the drive to achieve a change of 
government. Ozawa, who led the DPJ to an overwhelming victory in the 
2007 Upper House election, has laid the foundation for a change in 
administration with his unique election strategy. Through his 
nationwide political tours, Ozawa has encouraged prospective DPJ 
candidates to forge human relations via unassuming daily 
activities. 
 
Ozawa, who boasts outstanding fundraising power in the political 
community, has presented a number of problems associated with the 
handling of his political funds in the past. 
 
For instance, an office-expense scandal came to light in which 
Rikuzankai under the supervision of the arrested Ozawa secretary 
purchased pieces of land and condominiums in central Tokyo worth1 
billion yen with political funds, including political party 
subsidies, and registered them all in the name of Ozawa. 
 
A senior DPJ member took this view: "When he defended former LDP 
Vice President Shin Kanemaru, Mr. Ozawa dealt with the matter in a 
similar manner. The press conference he held was the wrong step; it 
has simply ignited the investigation unit." 
 
A suspended sentence 
 
Secretary General Yukio Hatoyama attended a DPJ lawmakers' meeting 
last night in which he underline the importance of party unity for 
the sake of taking power. But in reality, most members, including 
the party leadership, are set to watch quietly how the investigation 
unfolds. 
 
"The prosecutors are serious. There will be another critical event," 
a mid-level member said apparently in anticipation of Ozawa's 
resignation. The party's endorsement to keep Ozawa as its leader is 
a suspended sentence, so to speak. 
 
A veteran DPJ lawmaker noted discouragingly: "I really don't want to 
see Mr. Ozawa, the destroyer, end up destroying our party. But for 
now, we just have to trust his explanation." 
 
(4) Futenma airfield should be relocated elsewhere outside Okinawa 
Prefecture: Maehara 
 
RYUKYU SHIMPO (Page 2) (Full) 
March 5, 2009 
 
Seiji Maehara, vice president of the leading opposition Democratic 
Party of Japan (Minshuto), has been elected in the current Diet 
session to preside over the House of Representatives Special 
Committee on Okinawa and Northern Issues. The Ryukyu Shimpo 
interviewed him to hear his views regarding Okinawa's base issues 
and development. 
 
-- The DPJ is upholding its policy of relocating Futenma airfield 
elsewhere outside Okinawa Prefecture or Japan. Will the DPJ 
 
TOKYO 00000504  007 OF 012 
 
 
incorporate this policy in its manifesto? 
 
Maehara: It has already become a policy of the DPJ. I think it will 
be a part of the manifesto. However, there is a counterpart to deal 
with in diplomatic negotiations, so we will have to negotiate with 
the United States. I've been taking part in the Futenma issue since 
SACO (Japan-U.S. Special Action Committee on Okinawa), and I think 
I'm one of those concerned. Even now, I still have a strong feeling 
about Futenma. 
 
-- There has been no progress in the relocation of Futenma airfield. 
What do you think is the major reason? 
 
Maehara: From the start, it was impossible to plan on relocating 
Futenma airfield to Camp Schwab. It's wrong to reclaim that 
beautiful sea. The sea is deep, so it will take time and money. 
Besides, we're also concerned about the environment. 
 
-- Where do you think Futenma airfield should be relocated? 
 
Maehara: We've got to do this issue when we take the reins of 
government, so I can't say now. 
 
-- Somewhere outside Okinawa Prefecture or Japan? 
 
Maehara: That's it. 
 
-- Is it realistic to relocate Futenma airfield somewhere outside 
Okinawa Prefecture? 
 
Maehara: We're committed (in the DPJ's Okinawa vision), so we will 
take a hard and fast stance in negotiating with the United States. 
Our basic stance is to close down the dangerous Futenma airfield as 
early as possible. The package (of plans to relocate Futenma 
airfield and move U.S. Marines in Okinawa to Guam) is a factor in 
place, so the question is how to work out good ideas. 
 
-- What about the Guam pact? 
 
Maehara: We're against it. Although most of those committing crimes 
are line troops, they're just going to relocate the headquarters. It 
would be better to move the line troops rather than to move the 
headquarters. This way of thinking is close to stationing troops 
during emergencies. 
 
-- But the DPJ has yet to decide on its policy 
 
Maehara: Maybe they're considering relations with the United States. 
We're against the pact, but we are not anti-U.S. We could review the 
pact. 
 
-- After U.S. military bases in Okinawa are gone, would you like to 
increase the Self-Defense Forces' presence instead? 
 
Maehara: There are too many bases in Okinawa. In the future, the 
south will be important. However, we're not thinking of increasing 
Okinawa's burden. 
 
-- What do you think about development in Okinawa? 
 
Maehara: We'd like to plan a landfill from Naha Airport to build one 
more runway. Okinawa should create an environment for more tourists 
 
TOKYO 00000504  008 OF 012 
 
 
from abroad. We will also take steady backup measures so Okinawa can 
stand on its own in the agricultural area as well. In terms of land 
size alone, Japan ranks 60th in the world. But when including its 
exclusive economic zone, Japan ranks sixth. This depends largely on 
Okinawa, which is a prefecture of islands. From this perspective, we 
should allocate the budget. 
 
(5) F-22 pullout set for mid-April 
 
RYUKYU SHIMPO (Page 2) (Full) 
March 5, 2009 
 
The U.S. Air Force's 18th Wing Operations Group Commander Col. 
Ronald Banks clarified yesterday that the F-22 fighter jets, 
temporarily deployed to the U.S. Kadena Air Base, would withdraw in 
mid-April. The commander explained this to Kadena Town's Mayor 
Tokujitsu Miyagi when the mayor visited Kadena Air Base yesterday to 
lodge a protest with the base against the intensification of noise 
around the base and to reduce noise and remove aircraft from 
outside. 
 
According to Miyagi, Banks said: "The F-22 fighter jets will 
withdraw from Kadena Air Base in the middle of next month (April). 
Kadena Air Base is strategically important, so if we are ordered, we 
will receive all types of aircraft as our task. We cannot control 
the types of aircraft to be deployed." Miyagi quoted the commander 
as explaining: "In the next two to six weeks, there will be some 
change in their deployment to Kadena Air Base. The F-15 fighter 
planes will also go to Thailand for training." 
 
Banks said nothing about whether the F-22s will take off in the 
early morning when returning to their base in the United States, 
according to Miyagi. 
 
The F-22s have been temporarily deployed to Kadena Air Base since 
their arrival on Jan. 10. The U.S. Air Force said the F-22s were on 
a training mission to the base for about three months. 
 
According to Kadena Town's statistics, aircraft noise exceeding 70 
decibels was read out 1,918 times in the town's Yara district over a 
period of 11 days from Feb. 16 through Feb. 26 and 174 times a day 
on average. 
 
(6) Kasumigaseki's reckless actions during a time of political 
turmoil; Controversial Foreign Ministry officials with history have 
regained power 
 
SHUKAN BUNSHUN (Pp. 42 - 44) (Full) 
March 5, 2009 
 
By Kazuo Yamaguchi, journalist 
 
With his cabinet's support rates sharply plunging, Prime Minister 
Taro Aso has been trying to use diplomacy in three areas -- a summit 
meeting with U.S. President Barack Obama, the issue of ownership of 
the Russia-held four northern islands off Hokkaido, and the cases of 
abductions of Japanese nationals by North Korea -- to boost his 
administration's popularity. There is even information that secret 
negotiations with North Korea on the abduction issue are being 
carried out. 
 
However, there is concern that Aso in his rush to gain popularity 
 
TOKYO 00000504  009 OF 012 
 
 
might make major diplomatic concessions that would damage national 
interests. The reason is because a number of Foreign Ministry 
officials who had once been reprimanded and came under heavy media 
attack for their misconduct, have regained influence one after the 
other. 
 
The cabinet met on Feb. 23 to approve the appointment of Deputy 
Minister Masaharu Kono as ambassador to Russia. Kono is one of the 
officials with a tainted past. Reporters accompanying the Emperor's 
visit to the United States in 1994 and the Imperial Household Agency 
all snubbed him for using his personal video camera to film the 
Emperor and the Empress, completely ignoring his official job. 
 
Shukan Bunshun, a weekly magazine, carried an article about the 
'video incident' in its issue dated July 7, 1994. Imperial Household 
Agency officials still bitterly talk about the incident, with one 
official saying: 
 
"The Imperial couple appeared exhausted from the record fierce heat. 
The Emperor in particular was not in good physical condition due to 
the time difference. Kono, who should have been giving consideration 
to the Emperor's condition since he was an accompanying official, 
fascinated himself all day with making a video." 
 
On this matter, Kono was given a strong warning. If such was done in 
the prewar period, the official would have been replaced for an 
insulting and disrespectful act. Despite the incident, Kono has 
climbed the career ladder, serving in such posts as director general 
of the Foreign Policy Bureau and deputy minister. He now has landed 
an ambassadorial portfolio. 
 
Yasuo Saito, Kono's predecessor, is now serving as ambassador to 
France, his most precious assignment. However, his reputation in 
Moscow was not good. A correspondent in Moscow said: 
 
"Ambassador Saito cannot speak Russian. Since he often enjoyed golf, 
tennis, and karaoke, he was called the ambassador for golf, tennis 
and karaoke. Reporters criticized him for suggesting holding a 
karaoke singing contest to Japanese reporters soon after a Japanese 
fisherman had been shot to death by a Russian border patrol. The 
incident occurred immediately after he has assumed his ambassadorial 
post." 
 
Kazuyoshi Umemoto, who had made a cataclysmic gaffe during Prime 
Minister Junichiro Koizumi's visit to North Korea in 2002, was 
picked last December as director general of the North American 
Affairs Bureau, a key post. He was previously a minister at the 
Japanese Embassy in London. 
 
(In 2002) the Koizumi-led delegation to North Korea sent Umemoto, 
who had served as director of the Northeast Asia Division, to 
Pyongyang as head of its preparatory team. On Sept. 17, Umemoto met 
Mr. and Mrs. Hasuike, Mr. and Mrs. Chimura and Kim Hye Gyong, the 
daughter of Megumi Yokota, who the North Koreans say is dead. 
 
Umemoto was criticized for meeting them without bringing any camera 
and tape recorder. After returning home, he failed to clearly 
explain his meeting in Pyongyang to abductee families. Two days 
later, he hurriedly returned to London, his duty station. I wonder 
if such a person can carry out diplomatic activities in the United 
States, taking the lead in talks with the administration of 
President Barack Obama. 
 
TOKYO 00000504  010 OF 012 
 
 
 
A reporter attached to the Foreign Ministry said: "It has been the 
practice for the Foreign Ministry to promote its officials involved 
in scandals after waiting until things simmer down." A typical 
example is that Haruhisa Takeuchi was promoted to ambassador to 
Israel last October from director general of the Intelligence and 
Analysis Service. 
 
Takeuchi, when he was director of the Management and Coordination 
Division, was reprimanded with a pay cut in connection with a 
scandal in the ministry. The scandal involved the embezzlement of 
secret diplomatic funds by Katsutoshi Matsuo, who headed the now 
defunct Overseas Visit Support Division. 
 
Matsuo was sentenced to seven and a half years in prison after being 
found guilty of embezzling from so-called discretionally diplomatic 
funds. He reportedly was released from the Maebashi Prison late last 
year before completing his prison term. "Although there is a rumor 
that he went to the Philippines after being released from the 
prison, his whereabouts has not been confirmed," a Foreign Ministry 
source said. 
 
Another reporter attached to the Foreign Ministry said: 
 
"Out of a total of 1 billion yen in secret slush funds, prosecutors 
discovered 500 million yen had been used, but they never found out 
how over 400 million yen had been spent. Matsuo alone accepted the 
guilt and was tried and sent to prison." 
 
Based on its own investigation, the Foreign Ministry reprimanded 16 
senior officials, including then Foreign Minister Yohei Kono, for 
having betrayed public confidence. However, since then, the 16 have 
been promoted, as if nothing had happened. 
 
Successive Management and Coordination Division directors' 
supervisory responsibility was called into question. Those division 
directors include: Mitoji Yabunaka, who was reprimanded with a 
three-month pay cut, has risen to the top post of administrative 
vice minister; Hideaki Domichi was promoted to ambassador to India; 
and Kojiro Shiojiri was named ambassador to Indonesia. Takeuchi was 
the last person among the successive directors to be promoted. 
 
Regarding the secret funds scandal as organized embezzlement, 
prosecutors interrogated then Deputy Vice Minister Tomoyuki Abe, 
then Management and Coordination Division Director Takeuchi and then 
Financial Affairs Division Director Masato Kitera. However, they all 
skipped the planned Diet testimony, since they were suddenly 
admitted to hospital. The incident was called 'suspicious 
hospitalization.' 
 
The reporter attached to the Foreign Ministry said: 
 
"Of the three, as Kitera alone seemed to have become neurotic, and 
he continued to stay away from office, taking a leave of absence for 
a long time. There was even a rumor that he would be incapacitated. 
Last year, however, he became director general of the International 
Cooperation Bureau. Ministry officials were surprised." 
 
Incidentally, Abe has been reprimanded three times for such 
irregularities as paddling expenses for limousine bills of the 
secretariat for the 2000 Kyushu-Okinawa summit. Nevertheless, Abe 
has served in such posts as ambassador to Turkey. The past misdeed 
 
TOKYO 00000504  011 OF 012 
 
 
of Shinsuke Sugiyama was exposed, when he was named director general 
for global issues, an ambassador-level post, in the final days of 
the Fukuda administration. 
 
Shukan Post, a weekly magazine reported in 1997 on a slush fund 
embezzlement scandal involving Foreign Ministry personnel. The 
weekly alleged that a senior ministry official had pocketed 200 
million yen from secret diplomatic funds for two years from 1993 and 
that the money had been used for entertainment expenses and for 
dealing with the media. 
 
At that time, the weekly carried the article without naming the 
official. However, Lower House member Muneo Suzuki revealed in a 
book titled Executor of Shadowy Power (published in 2005 by 
Kodansha) that Sugiyama, secretary of then Administrative Vice 
Minister Kunihiko Saito, was the person in question. The reporter 
attached to the Foreign Ministry said: "If all the bad officials 
were removed when the Sugiyama embezzlement scandal was discovered, 
the Matsuo scandal would have been prevented." 
 
However, since prosecutors did not take any action in 1997, Sugiyama 
continued to advance in his career. 
 
Kyoji Komachi was promoted to ambassador to Thailand in the last 
days of the Fukuda administration, even though he had been 
admonished in 2003 for misuse of taxi vouchers. 
 
I recall former Foreign Minister Yoriko Kawaguchi's remarks that the 
Foreign Ministry's personnel appointments defy conventional wisdom. 
 
 
(7) Prime Minister's schedule, March 4 
 
NIKKEI (Page 2) (Full) 
March 5, 2009 
 
09:37 
Met at the Kantei with Cabinet Councilor Toyota and Ambassador to 
ASEAN Katori, attended by Vice Foreign Minister Yabunaka, Vice METI 
Minister Mochizuki, Foreign Ministry's Asian and Oceanian Affairs 
Bureau Director General Saiki, and METI Trade Policy Bureau Director 
General Okada. 
 
10:32 
Attended an Upper House Budget Committee meeting. Later, met Upper 
House Budget Committee's first director Iwanaga. 
 
10:52 
Met Japan International Cooperation Agency President Sadako Ogata, 
with Sasae present. 
 
11:29 
Met "Peach Girls" in Koga City, Ibaraki Prefecture, Mayor Shirato, 
and others, with Lower House member Keiko Nagaoka present. Later, 
met Deputy Chief Cabinet Secretary Uruma. 
 
13:02 
Attended a Lower House plenary session. 
 
14:15 
Arrived at his private office in Nagata-cho. 
 
 
TOKYO 00000504  012 OF 012 
 
 
14:36 
Met New Komeito Vice President Higashi at the Kantei. 
 
15:16 
Met Chief Cabinet Secretary Kawamura. Followed by Foreign Ministry's 
Director General for Global Issues Sugiyama, METI Industrial 
Technology and Environment Bureau Director General Suzuki, and 
Environment Ministry's Global Environment Bureau Director General 
Terada. 
 
16:04 
Met Ocean Policy Headquarters Executive Secretary Oba. Followed by 
Waseda University President Katsuhiko Shirai and Ritsumeikan 
University President Toyoomi Nagata. 
 
17:33 
Met Pacific Islands Forum Chairman Talagi. 
 
18:56 
Dined with Election Strategy Vice Chairman Suga at a Japanese 
restaurant at the Hotel New Otani. 
 
20:40 
Went to a pub in the Hotel New Otani with Deputy Chief Cabinet 
Secretary Konoike. 
 
22:16 
Returned to his official residence. 
 
ZUMWALT