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UNCLAS SECTION 01 OF 13 TOKYO 001505 
 
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 07/02/09 
 
Index: 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule  (Nikkei) 
 
4) Prime Minister Taro Aso in surprise move promises visiting UN 
Secretary General Ban that Japan will join UN Standby Arrangements 
System to assist PKO  (Mainichi) 
 
5) Supreme Court finds Foreign Ministry official Masaru Sato, now 
best-selling author, guilty of misuse of state funds for foreign aid 
project on Russia-held northern island  (Sankei) 
 
6) Possible deployment of Ground Self-Defense Force troops to 
Okinawa's Yonaguni could set off Chinese reaction  (Tokyo Shimbun) 
 
Aso administration on the ropes: 
7) Prime Minister Aso only makes 2 changes in cabinet after big 
fanfare about shuffle of party and cabinet lineups, with popular 
Miyazaki governor's name omitted  (Mainichi) 
8) The prime minister who can't make a decision as Aso caves in to 
party pressure to limit his changes in lineup  (Sankei) 
 
9) Aso increasingly isolated in the ruling party as he gives up on 
major shuffle of personnel  (Nikkei) 
10) Meanwhile, move in the LDP to "topple Aso" speeds up  (Nikkei) 
11) Split in the LDP gets even worse  (Nikkei) 
12) Three opposition parties considering filing a no-confidence 
motion in the Diet against the prime minister  (Nikkei) 
 
DPJ's Hatoyama in trouble: 
13) Details of shady political contributions received by Democratic 
Party of Japan (DPJ) President Hatoyama's office revealed  (Yomiuri) 
 
14) Source of shady donations may be been Hatoyama himself. (Sankei) 
 
15) Hatoyama says he played out his responsibility with explanation 
and apology but will his money and politics scandal go away? 
(Yomiuri) 
16) LDP and Komeito set up project team to look into fraud in 
Hatoyama's political funding  (Yomiuri) 
 
DPJ's agenda: 
17) DPJ attacks wasteful projects in LDP-drafted budget, such as 
useless dam and lavish hall to display anime cartoons  (Asahi) 
18) But fiscal resources envisioned by the DPJ in its own creative 
budget plan have largely evaporated during the economic slump 
(Yomiuri) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: Mainichi: Yomiuri: Nikkei: 
Prime minister gives up on shuffling top LDP officials, just adding 
two as new cabinet members, due to strong opposition from within 
LDP: His power base further declines 
 
Sankei: 
Prime minister forgoes shuffling of LDP executives, giving in to 
Mori's persuasion 
 
 
TOKYO 00001505  002 OF 013 
 
 
Tokyo Shimbun: 
Aso adds only two new cabinet ministers: Yoshimasa Hayashi as state 
minister for economic and fiscal policy; Tomoo Hayashi as National 
Public Safety Commission chairman 
 
Akahata: 
Anonymous donations to DPJ President Hatoyama top 300 million yen 
over 10 years 
 
2) EDITORIALS 
 
Asahi: 
(1) Cabinet appointments: Miscalculation after much fuss 
(2) False political donations to DPJ President Hatoyama: How 
irresponsible 
 
Mainichi: 
(1) Personnel changes by Prime Minister Aso turn out to be "much ado 
about nothing" 
(2) Political funds donation scandal: What can we put our trust in? 
 
Yomiuri: 
(1) False donations to DPJ President Hatoyama: Investigations and 
explanations both insufficient 
(2) Two new cabinet members added: Far from being able to buoy up 
administration 
 
Nikkei: 
(1) Aso's power base further declines 
(2) Concern remains, although business confidence has improved 
 
Sankei: 
(1) Cabinet roster change: Prime minister missed opportunity to 
produce revival measures 
(2) Budget request guidelines: Minimum spending disciplines should 
be observed 
 
Tokyo Shimbun: 
(1) Prime minister gives up on major personnel changes: Can he 
dissolve the Lower House? 
(2) Economy and state finance: Bank of Japan should continue 
vigilance 
 
Akahata: 
(1) Budget request guidelines compiled earlier than usual year in 
preparation for Lower House dissolution for snap election: It is 
inconvenient 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, July 1 
 
NIKKEI (Page 2) (Full) 
July 2, 2009 
 
07:47 Took a walk around his official residence. 
10:01 Attended an Upper House plenary session. 
11:02 Attended an awards ceremony for safety contributions, with 
Consumer Affairs Minister Noda. Later met Cultural Affairs Agency 
Deputy Director General Takashio. 
12:49 Met Chief Cabinet Secretary Kawamura. 
14:02 Handed the People's Honor Award to actress Mitsuko Mori, with 
 
TOKYO 00001505  003 OF 013 
 
 
Kawamura and Shionoya. Later, met with Mori. 
14:20 Met Kawamura. 
15:55 Met Kawamura. 
16:03 Attended a meeting of the Council on Economic and Fiscal 
Policy. Economy, Trade and Industry Minister Nikai stayed behind. 
Attended a cabinet meeting. 
16:53 Attended a meeting of the Overseas Economic Cooperation 
Conference. Kawamura and deputy chief cabinet secretaries Matsumoto 
and Asano stayed behind. 
17:52 Met Parliamentary Defense Secretary Takeda and others. Later 
met Kawamura. 
18:50 Met UN Secretary General Ban Ki-moon. 
19:48 Attended a joint press conference. Later hosted a dinner party 
for Ban. 
21:36 Returned to his official residence. 
 
4) Prime Minister Aso: SDF to join UNSAS 
 
MAINICHI (Page 2) (Full) 
July 2, 2009 
 
Prime Minister Taro Aso met last evening with UN Secretary General 
Ban Ki Moon at the Prime Minister's Official Residence (Kantei). The 
two agreed that North Korea's possession of nuclear weapons is 
unacceptable. They also confirmed the importance of fully and 
effectively implementing UN Security Council Resolution 1874, 
including additional sanctions against North Korea, which defiantly 
conducted nuclear test twice. 
 
Aso stated for the first time that the government will allow the 
Self-Defense Forces (SDF) to participate in the UN Standby 
Arrangements System (UNSAS) in order to more actively take part in 
UN peacekeeping operations (PKO). The UNSAS was established to 
promote efficient peacekeeping operations. Participating countries 
register information in advance such as the number of personnel able 
to participate in PKO. Japan has not joined the system. The SDF will 
provide logistical support in six areas such as medical services, 
transportation, and communications. 
 
5) Sato to be convicted 
 
SANKEI (Page 25) (Abridged) 
July 2, 2009 
 
The Supreme Court has dismissed a final appeal made by Masaru Sato, 
49, a former Foreign Ministry chief analyst currently on leave 
facing indictment for malfeasance and other charges against an 
international entity associated with the Foreign Ministry. Sato will 
now be convicted with the first and second instance court rulings 
that sentenced him to a prison term of two years and six months with 
a four years' stay of execution. The Supreme Court's third petty 
bench made the decision under the date of June 30. Sato, after he 
has been convicted, will automatically lose his employment status 
with the Foreign Ministry under the National Civil Service Law. He 
will also receive no retirement payment. 
 
According to the first and second instance court rulings, Sato in 
2000 had the Assistance Committee, an outfit of the Foreign 
Ministry, make illicit disbursements totaling about 33 million yen 
for Japanese scholars and others to participate in international 
society meetings, and he caused damage to the committee. In 
addition, the committee held bidding in March that year for a diesel 
 
TOKYO 00001505  004 OF 013 
 
 
power generation facility to be built on the island of Kunashiri. At 
that time, Sato leaked information to Mitsui & Co., Ltd. (Mitsui 
Bussan) regarding the estimated contract price and disturbed the 
committee's operation. 
 
Sato yesterday responded to a Sankei Shimbun interview, in which he 
decried the Foreign Ministry for "making someone else carry the 
can." Sato seemed unconvinced that he should be branded as a 
'criminal' who damaged the Foreign Ministry for being a 'capable 
diplomat.' He provoked the Foreign Ministry, saying: "In the court 
trial, I was hesitant and could not say what happened with the 
northern territory issue and what happened to the Foreign Ministry's 
secret funds. I will unveil those facts." 
 
6) Defense Ministry mulls deploying ground troops to Yonaguni, but 
concern exists that China might react sharply 
 
TOKYO SHIMBUN (Page 1) (Abridged) 
July 2, 2009 
 
The Defense Ministry has firmed up its intention to study deploying 
Ground Self-Defense Force troops to Yonagunijima, one of Japan's 
southwestern Nansei Shoto outer islands near Japan's sea border, a 
top-level official of the ministry revealed yesterday. This is 
linked to the ministry's troop deployment review shifting Japan's 
northern defense, which was postured against the former Soviet Union 
as a hypothetical enemy, to the Nansei Shoto islands. The ministry 
wants to reflect this deployment review in its national defense 
program guidelines to be revised late this year. However, 
Yonagunijima is situated near the archipelago of Senkaku isles, to 
which China has been claiming territorial rights. Given this, China 
is likely to react sharply. 
 
In Japan's southernmost island prefecture of Okinawa, the GSDF 
currently garrisons the 1st Combined Group in Naha. The Naha-based 
ground troupe will be raised to the status of a brigade at the end 
of this fiscal year, based on the current defense guidelines that 
have set forth the defense of Japan's outlying islands. Its troop 
strength will be reinforced from about 1,800 to 2,100. However, the 
Sakishima Islands, which include Yonagunijima, are situated about 
500 kilometers away from Okinawa's main island. The Defense Ministry 
therefore decided to study deploying troops to Yonagunijima. 
 
On June 30, Yonaguni Town Mayor Shukichi Hokama visited Defense 
Minister Yasukazu Hamada and handed a petition to Hamada for GSDF 
deployment to his island. "Yonagunijima is a frontier island and is 
important for Japan's national defense," Hamada told Hokama. With 
this, Hamada indicated that he would positively consider the 
petition. Hamada also told the mayor that he would shortly visit the 
town of Yonaguni. 
 
7) PM Aso's leadership weakened further: Only two new ministers 
appointed; Gives up on appointing Higashikokubaru 
 
MAINICHI (Top play) (Abridged) 
July 2, 2009 
 
Prime Minister Taro Aso decided on July 1 on two additional 
appointments to the cabinet to reduce multiple portfolios for 
incumbent ministers, naming Liberal Democratic Party (LDP) House of 
Councillors member and former Defense Minister Yoshimasa Hayashi as 
state minister for economic and fiscal policy, and LDP Deputy 
 
TOKYO 00001505  005 OF 013 
 
 
Secretary General Motoo Hayashi as chairman of the National Public 
Safety Commission and minister of state in charge of Okinawa and 
Northern Territories and disaster management. The idea of appointing 
Miyazaki Governor Hideo Higashikokubaru to the cabinet as a dramatic 
measure to buoy the administration in preparation for the next House 
of Representatives election was abandoned, and changes were limited 
to these two lackluster appointments. Aso has also given up on 
revamping the LDP executives due to opposition in the party. His 
leadership has been weakened further. It is now uncertain whether he 
will go ahead and dissolve the Lower House for a general election 
after the Tokyo Metropolitan Assembly election on July 12. 
 
The confirmation ceremony for the new cabinet members will take 
place on July 2. Since Minister of Finance and Financial Services 
Shoichi Nakagawa resigned in February and Minister of Internal 
Affairs and Communications Kunio Nakagawa was replaced in June, 
Kaoru Yosano has been the minister in charge of finance, financial 
services, and economic and fiscal policy, while Tsutomu Sato holds 
the portfolios of minister of internal affairs and communications as 
well as the chairmanship of the National Public Safety Commission. 
 
After the announcement of the cabinet appointments on July 1, Aso 
explained to reporters: "The ceiling (cabinet approval of the budget 
request guidelines for the next fiscal year) has been taken care of 
today, and we have come to a point at which the main business that 
the current cabinet has to deal with has come to an end. I had 
always intended to make additional appointments to reduce the 
multiple portfolios." Regarding whether he had considered appointing 
Higashikokubaru, he said: "Not at all. I never considered it." As 
for the appointment of LDP executives, he told reporters: "I don't 
think anybody has ever heard me say anything about revamping the 
party executives," denying there had been any plans to do so. 
 
However, the prime minister's aides had been coordinating to appoint 
the popular Higashikokubaru as a cabinet minister in a dramatic 
last-ditch measure to boost Aso's leadership since his cabinet is 
suffering from low support ratings, before the Lower House election. 
As a step in this process, when Election Strategy Council Chairman 
Makoto Koga asked Higashikokubaru to run in the general election, 
Higashikokubaru had set a number of conditions, such as making him a 
candidate for LDP president. It is believed that the plan to appoint 
Higashikokubaru was abandoned because of backlash against these 
conditions in the party. 
 
8) Indecisive prime minister: Revamp of LDP executives, major 
cabinet reshuffle abandoned, bowing to Mori's persuasion 
 
SANKEI (Top play) (Abridged) 
July 2, 2009 
 
On the evening of June 30, Prime Minister Taro Aso was sitting in 
front of former Prime Minister Yoshiro Mori in a room at Hotel Okura 
in Toranomon, Tokyo, close to the Prime Minister's Official 
Residence (Kantei). 
 
The prime minister was still persistent about a cabinet reshuffle 
and revamping the Liberal Democratic Party (LDP) executives, saying: 
"I would like to change the present mood somehow..." but Mori 
replied brusquely: "Now is not the time to revamp party officials. 
They have worked very hard under the guiding principle of 'policies 
rather than political maneuvering.' They have not wavered on this so 
you should appeal to the people with this lineup." 
 
TOKYO 00001505  006 OF 013 
 
 
 
Aso talked about his plan to appoint Election Strategy Council Vice 
Chairman Yoshihide Suga as secretary general, but Mori rejected this 
flatly. He pressed Aso to limit cabinet appointments to filling 
vacancies and even postpone this to next week. Without the support 
of the largest faction, the Machimura faction, the administration 
will be in serious trouble. Aso had no choice but to follow Mori's 
wishes. Making the appointments on July 1 was his bare minimum 
"resistance." 
 
Revamping the cabinet and the LDP leadership had been a pending 
issue for Aso, but this went into motion after former Prime Minister 
Shinzo Abe visited the Kantei on the evening of June 24. Before 
that, Abe had had a secret meeting with Suga and Seiji Suzuki, Diet 
Affairs Committee chief in the House of Councillors, at a hotel in 
Tokyo. The three agreed that: "If nothing is done about the present 
situation, the LDP may suffer a crushing defeat in the Lower House 
election. The only way to blow away the adverse wind is to revamp 
personnel before the Tokyo Metropolitan Assembly election." They 
came up with a plan the centerpiece of which is naming Minister of 
Health, Labor and Welfare Yoichi Masuzoe, who is regarded as a 
possible successor to Aso, as the secretary general. 
 
At first, the prime minister had abhorred the "outlandish tactic" of 
a cabinet reshuffle while the Diet is in session, but he eventually 
became interested due to Abe's zealous persuasion: "If you go ahead 
with this (Masuzoe's) promotion, this will eliminate dissatisfaction 
among the mid-ranking and junior party members, and the atmosphere 
in the party will change dramatically. Please do think about it." 
 
However, there was an unexpected twist to the story. A cameraman of 
a commercial TV station took shots of Abe entering the Kantei. 
 
On the next day, June 25, there was a hornet's nest in the LDP. "Abe 
must have instigated a cabinet reshuffle." Since Abe was also known 
as an advocate of early Diet dissolution, rumors about a "surprise 
Diet dissolution on July 2" began to spread. Junior and mid-ranking 
party members who have weak political bases were shocked by the 
rumor of Diet dissolution on July 2. Former Secretary General 
Hidenao Nakagawa, leader of the anti-Aso forces, now openly asked 
the prime minister to resign. The main reason behind the momentum 
for "advancing the presidential election" is actually to stop Diet 
dissolution. 
 
9) Prime Minister becomes increasingly isolated in LDP; Gives up 
plan to shuffle party executives 
 
NIKKEI (Page 3) (Excerpts) 
July 2, 2009 
 
Prime Minister Taro Aso had attempted to shuffle the Liberal 
Democratic Party (LDP) executive lineup, but he was forced to give 
it up yesterday after encountering strong resistance from within the 
party. What caused the schism between Aso and the LDP executives 
over the Prime Minister's failed attempt to shuffle the executive 
lineup to deepen to this extent with the next House of 
Representatives election approaching? Aso's aborted plan exposed his 
fragile footing that does not allow him to even shuffle the LDP 
executive lineup. Moves to unseat Aso might gain momentum. 
 
Former Prime Minister Mori: Any attempt at this point will be 
counterproductive 
 
TOKYO 00001505  007 OF 013 
 
 
 
Former Prime Minister Yoshiro Mori of the Machimura faction held 
talks with Prime Minister Aso for over two hours at a Tokyo hotel on 
the night of June 30. In the session, Mori pressed Aso to give up 
his plan to make changes to the LDP executive lineup, saying: "All 
those members have put the economy before the political situation. 
If we are to conduct election campaigns by playing up our 
achievements, it is natural to do so under the current party setup. 
Changing LDP executives will be counterproductive." This apparently 
prompted Aso to reconsider his plan. 
 
Aso had been dismissive of making changes to his cabinet and the LDP 
executive lineup up until mid-June. Back then, an Aso aide said, 
"The cabinet's achievements will be called into question in the 
Lower House election, so the Prime Minister cannot afford to change 
the cabinet ministers." 
 
Aso's frame of mind began to change when his cabinet's support 
ratings plummeted after the dismissal of Yukio Hatoyama as internal 
affairs and communications minister and the LDP became restless as a 
result. Former Prime Minister Shinzo Abe and Election Strategy 
Council Vice Chairman Yoshihide Suga, who are close to Aso, advised 
the Prime Minister to carry out a major cabinet shuffle to play up 
his decisiveness and keep up this momentum with Lower House 
dissolution for a general election with the aim of containing the 
"dump Aso" movement. 
 
Aso held a press conference at the Japan National Press Club on June 
25 in which he left some room for a shuffle of the LDP executives, 
saying, "Many people offer me all sorts of advice and I simply 
listen to them." The Prime Minister's side wanted to find a 
breakthrough with personnel changes but wanted to avoid a cabinet 
shuffle. Then surface a compromise plan of combining a minor LDP 
executive shuffle and the appointment of additional cabinet 
ministers. 
 
10) "Dump Aso" move to gain momentum 
 
NIKKEI (Page 3) (Abridged slightly) 
July 2, 2009 
 
Prime Minister Taro Aso's aborted plan to make personnel changes is 
certain to accelerate the ongoing moves in the ruling party to oust 
Aso. Depending on how the July 5 Shizuoka gubernatorial election and 
the July 12 Tokyo Metropolitan Assembly election turn out, calls for 
Aso's resignation might grow stronger. 
 
A Liberal Democratic Party (LDP) lawmaker revealed this shocking 
finding: "According to the LDP's latest survey, if a Lower House 
election is called (now), the LDP will not able to garner 150 
seats." 
 
Lower House member Taku Yamamoto of the Machimura faction is leading 
a signature collection drive to hold a general meeting of LDP Diet 
members from both chambers on July 13, the day after the Tokyo 
election. A person concerned explained the aim: "If the ruling bloc 
loses the Tokyo poll, we will pursue the Prime Minister's 
responsibility. If an emergency motion is submitted, the LDP 
presidential election planned for September can be moved up." 
 
If there are requests from at least one-third (128 persons) of the 
LDP lawmakers, a meeting of all LDP lawmakers must be held within 
 
TOKYO 00001505  008 OF 013 
 
 
seven days. An anti-Aso group member said with confidence: "Due to 
the Prime Minister failure to make personnel changes, collecting 
signatures will become easier." 
 
At the same time, there is a possibility that the Prime Minister 
will opt for Lower House dissolution immediately after the Tokyo 
poll. The political situation is becoming tense. 
 
11) Aso's abortive personnel plan deepens schism in LDP 
 
NIKKEI (Page 1) (Excerpts) 
July 2, 2009 
 
Eiji Sakamoto, senior writer 
 
Despite his big talk about personnel changes, Prime Minister Taro 
Aso yesterday announced that he would only add two new ministers to 
his cabinet. His plan to shuffle the LDP executive lineup and his 
cabinet ahead of the next House of Representatives election was 
foiled by ruling party executives. To begin with, the Prime Minister 
did not answer the question what was the purpose of making personnel 
changes. 
 
It has been a week since the Prime Minister said that Lower House 
dissolution for a snap general election would occur in the 
"not-too-distant future." At the root of a series of tumultuous 
events seems to be the LDP's strong alarm that they cannot fight the 
election if this situation persists, given the Aso cabinet's 
plummeting support rating. 
 
Lawmakers close to Aso advised him to dissolve the Lower House after 
coming up with an appealing lineup that can turn the election to the 
LDP's advantage. In reality, the Aso administration is under 
increasingly adverse circumstances and the schism in the LDP over 
the basic strategy for the next Lower House election has decisively 
deepened. 
 
Aso aides' desire was evident to replace the top three LDP 
executives and cabinet ministers who have often been exposed to the 
media. Even the option of giving a portfolio to Miyazaki Gov. Hideo 
Higashikokubaru was talked about. The Machimura faction, the largest 
faction in the LDP that has been supporting the Prime Minister, 
balked at the idea of replacing Secretary General Hiroyuki Hosoda, 
pressing Aso to give up on making changes to the LDP executives. 
 
Meanwhile in the LDP, a move pressing the Prime Minister for his 
resignation became evident on the back of a growing mood for an 
early Lower House dissolution. The internal conflict entered the 
"danger zone" with former Secretary General Hidenao Nakagawa's 
pressing Aso in late June for an "honorable decision." 
 
Asked by the press corps last evening about his decision to add two 
ministers to his cabinet, Aso simply said, "It was to achieve a 
closure of sorts." He looked sweaty and exhausted. 
 
Some ruling party members now describe the Aso cabinet as a lame 
duck, and his administration seems to be on the verge of collapse. 
 
12) Three opposition parties considering a no-confidence motion 
against Aso cabinet 
 
NIKKEI (Page 2) (Full) 
 
TOKYO 00001505  009 OF 013 
 
 
July 2, 2009 
 
The leaders of three opposition parties -- the Democratic Party of 
Japan (DPJ), the Social Democratic Party (SDP), and the Peoples New 
Party (PNP) -- met last evening at a Chinese restaurant in Tokyo. 
The opposition leaders discussed whether to submit to the Diet a 
no-confidence motion against the cabinet of Prime Minister Taro Aso, 
which has been in turmoil. Although they were in agreement that it 
would be worthwhile filing such a no-confidence motion, they stopped 
short of that and only confirmed that the three parties will now 
hold secretary general-level consultations on the appropriateness of 
a no-confidence motion and the timing of a submission. 
 
The opposition parties aim to further undermine the ruling 
coalition, where moves to oust Aso are actively going on, by 
submitting a no-confidence motion against the cabinet. But chances 
are slim that nearly 100 lawmakers from the ruling camp, the number 
necessary for adopting a motion, will support the no-confidence 
motion. If the motion is voted down, it would mean the Diet places 
trust in Prime Minister Aso and the oust Aso movement would not be 
justifiable. 
 
Therefore, the opposition parties' expectation is that the ruling 
parties will have to go into the House of Representatives election 
under Aso's lead, which will be an advantage for them. In 
yesterday's meeting, the SDP and PNP proposed submitting a 
no-confidence motion, citing the opposition should have Aso take 
responsibility. 
 
However, DPJ Deputy President Naoto Kan mentioned that should a 
motion be adopted, Prime Minister Aso and his cabinet would resign 
en masse. There is a view in the DPJ that such would not be good for 
submission of a motion will propel the drive to remove Aso (in the 
Liberal Democratic Party (LDP)). DPJ Secretary General Katsuya Okada 
said: "I wonder if the submission would lend a hand to (the move to 
unseat Aso)," indicating a cautious stance. 
 
Prior to the opposition meeting, asked by reporters about the 
possibility of a no-confidence motion, DPJ President Yukio Hatoyama 
said in the Diet building: "It is important to carefully examine the 
necessity of (such a submission)." 
 
13) DPJ Hatoyama office deletes donations by 70 individuals in fund 
reports from 2005 to 2007 
 
YOMIURI (Page 34) (Slightly abridged) 
July 2, 2009 
 
It has been reported that Democratic Party of Japan (DPJ) President 
Yukio Hatoyama's fund management body called Yuai Seikei Konwakai 
(Fraternal Politics and Economics Discussion Council) had made false 
statements in its fund reports. The Hatoyama group has corrected the 
contents of the reports as of yesterday, deleting (a total of 17.71 
million yen of) donations from 70 individuals, out of those from 88 
people reported as individual donations over the three years from 
2005 to 2007. Such fund reports are available for general public 
perusal at the Ministry of Internal Affairs and Communications. 
 
In the rewritten fund reports, the donations from 70 individuals 
were deleted, with no correction made to the amounts of the 
individual political donations recorded in the reports each year. 
The number of individuals recorded as donators decreased from 69 in 
 
TOKYO 00001505  010 OF 013 
 
 
the initial report to 18 in the rewritten one in 2005, from 51 to 13 
in 2006, and from 64 to 16 in 2007. 
 
As a result, the total sum of individual political donations 
significantly shrank, and the ratio of a donation of less than 
50,000 yen, the so-called anonymous donation that is not required to 
be reported in a fund statement, sharply increased. Of 167.55 
million yen reported as individual donations over the three years, 
anonymous donations boosted to 14.3 million yen, or to 62 PERCENT 
of the total from 56 PERCENT  before corrections were made. 
 
In correcting the reports, the deleted 17.71 million yen of 
individual donations were treated as "lending" from Hatoyama. In the 
2007 report, 97.71 million yen was reported as money lent by 
Hatoyama to the fund organization. 
 
It has been revealed through the Hatoyama side's investigation that 
193 cases involving about 90 individuals, worth 21.77 million yen, 
over the four years until 2008 were false statements. 
 
14) Source of donations made to DPJ President Hatoyama was Hatoyama 
himself? 
 
SANKEI (Page 5) (Excerpts) 
July 2, 2009 
 
A survey by the ruling parties' project team, which is investigating 
the issue of Democratic Party of Japan (DPJ) President Yukio 
Hatoyama's political donations, found on July 1 that 42 Hokkaido, 
city and town assembly members (including former members) in 
Hatoyama's constituency had personally donated a total of about 16.5 
million yen to the DPJ Hokkaido No. 9 general branch, headed by 
Hatoyama, over five years from 2006 through 2007. 
 
All the donations were made on December 25 each year. It is possible 
that the donations might have been made according to the plan since 
all of the donors contributed the same amount. The project team 
believes that Hatoyama himself might have been the funding resource 
for those donations, which could fall under violation of the 
Political Funds Control Law or fraud, as a senior LDP member put 
it. 
 
According to the survey conducted by the project team, the personal 
political fund donations in question were made by four Hokkaido 
Assembly members and 38 members of 16 municipality assemblies. All 
Tomakomai City Assembly members donated 264,000 yen. All Noboribetsu 
City members donated 168,000. One Hokkaido Assembly member 
contributed 640,000 yen in one donation. 
 
The names of deceased persons and individuals who claimed that they 
had never made such donations were used in political funds reports 
of Hatoyama's own fund management organization called Yuai Seikei 
Konwakai (Fraternal Politics and Economics Discussion Council. 
Concerning this, Hatoyama explained during a press conference on 
June 30 that he himself was the source of the funds falsely listed 
on the statements. As such, the project team pointed out that there 
is a strong possibility that Hatoyama was also the source of 
personal donations made by local assembly members. 
 
The Political Funds Control Law limits personal donations to 
branches of political parties to 10 million yen a year. For this 
reason, the ruling parties suspect that Hatoyama handed his own 
 
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funds to the local assembly members and had them contribute to the 
DPJ general branch he heads as personal donations so as to conceal 
the details of the actual operations. 
 
Yoshitaka Murata, chairman of the project team stressed during a 
press conference: "Mr. Hatoyama has yet to fully fulfill his 
accountability. Tax exemption is applied to political donations. 
However, if the donations were false, it means that those assembly 
members received money to which they were not entitled." 
 
15) DPJ members trying to put end to Hatoyama case, emphasizing he 
demonstrated accountability 
 
YOMIURI (Page 4) (Full) 
July 2, 2009 
 
Speaking before reporters in the Diet Building yesterday, Democratic 
Party of Japan (DPJ) President Hatoyama indicated that he fulfilled 
his responsibility to explain about the issue of falsified 
statements in the fund reports of his fund management organization. 
He said: "I explained everything that I know and offered an apology 
yesterday." He added: "I would like to make utmost efforts to bring 
about a change of government now," indicating he had no intention to 
step down. 
 
The party leadership hoped to put an end to the issue with 
Hatoyama's press conference on June 30. 
 
Secretary General Okada said in a general meeting of House of 
Councillors members yesterday: "We decided to accept Mr. Hatoyama's 
explanation at a party executive meeting (on June 30). Ruling party 
members have made various remarks on this issue, but (Mr. Hatoyama) 
acknowledged his fault and demonstrated his accountability." His 
remark solicited no objection in the meeting. 
 
Acting President Kan emphasized in a press briefing: "The 
president's explanation was satisfactory, including his apology." 
Upper House Diet Affairs Committee Chairman Susumu Yanase commented 
in a press conference: "I was convinced by Mr. Hatoyama's 
explanation. He fulfilled his responsibility to explain." 
 
16) LDP, New Komeito set up project team to uncover details of 
Hatoyama's false donation statements 
 
YOMIURI (Page 4) (Excerpts) 
July 2, 2009 
 
The Liberal Democratic Party (LDP) and the New Komeito set up a 
project team yesterday to clear up the truth of false statements in 
fund reports by Democratic Party of Japan (DPJ) President Yukio 
Hatoyama's fund management organization. It has been found that 
21.77 million yen was falsely reported in the reports for four 
years. Seeing this is a serious crime, the team intends to demand 
Hatoyama to appear as an unsworn or sworn witness before the Diet. 
 
The team said that Hatoyama's fund management body had received 
individual donations totaling 430 million yen from 2002 to 2007, 
pointing out this fact was contradictory to his secretary's 
explanation that he had made the falsified statements because 
individual donations were too small. 
 
The team also listed these questionable points: (1) Local assembly 
 
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members in Hatoyama's electoral district made donations to the 
party's branch on Dec. 25 every year from 2003 until 2007; and (2) 
donations of less than 50,000 yen each case, in which the disclosure 
of the donators is not required, accounted for about 60 PERCENT  for 
the five years from 2003. 
 
Members of the government and the ruling parties yesterday harshly 
criticized Hatoyama's involvement in the political-fund scandal. New 
Komeito Secretary General Kitagawa emphasized in a press conference 
yesterday: "The two successive heads of the political party eager to 
take over the reins of government have been suspected of being 
involved in politics-and-money scandals." Prime Minister Aso also 
said in reference to an explanation by Hatoyama's secretary that the 
falsified reported donations actually came from Hatoyama: "It is 
inconceivable that a lawmaker leaves several tens of millions of yen 
to a secretary." 
 
The ruling camp has decided to take up this issue at a meeting of 
the House of Representatives' special committee on establishment of 
political ethics and amendments to the Public Offices Election Law 
and on other occasions. 
 
17) DPJ gives examples of useless government projects in plan to cut 
wasteful use of tax money 
 
ASAHI (Page 1) (Excerpts) 
July 2, 2009 
 
The main opposition Democratic Party of Japan (DPJ) yesterday 
generally decided on the public works projects to be abolished as a 
commitment in its manifesto (set of campaign pledges) for the next 
House of Representatives election. During the first four years after 
taking over the reins of government, the DPJ will suspend the 
construction of Kawabe dam (Kumamoto Prefecture) and Yanaba dam 
(Gunma Prefecture) and halve the public works under direct 
government control. The DPJ will freeze the implementation of the 
construction of a facility to promote Japanese modern culture, which 
is incorporated in the government's supplementary budget for fiscal 
¶2009. By reducing the wasteful use of tax money by carrying out 
reforms of the subsidy system and the amakudari (golden parachute) 
practice, the DPJ aims to secure fiscal resources worth 9.1 trillion 
yen. 
 
The DPJ's draft plan stipulates that soon after assuming the helm of 
government, the implementation of the fiscal 2009 extra budget, 
including costs for the construction of the facility to promote 
Japanese modern culture and expenditures for repairing government 
and other public offices, will be frozen. 
 
According to the draft, through such measures as halving the works 
direct under control of government in four years since fiscal 2010, 
1.3 trillion yen of the public works spending will be saved and 1.1 
will be saved by reviewing the personnel costs, including a cut in 
the salaries of civil servants. 
 
Moreover, the DPJ will abolish unnecessary corporations, after 
reviewing the government's disbursement to independent 
administrative institutions and public service corporations, as well 
as negotiated contracts. The DPJ believes that 6.1 trillion yen will 
be saved. The DPJ aims to reduce eventually 9.1 trillion in wasted 
tax money. 
 
 
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The DPJ's draft plan was compiled by the party's Manifesto 
Preparation Examination Committee, based on the examination from 
April to June of government projects including in the fiscal 2009 
initial budget. 
 
18) DPJ trims funding resources to finance its manifesto from 20.5 
trillion yen to 17 trillion yen due to recession 
 
YOMIURI (Page 2) (Full) 
July 2, 2009 
 
The final draft plan for funding resources to finance the Democratic 
Party of Japan's (DPJ) manifesto for the next Lower House election 
was revealed on July 1. The party had initially estimated the amount 
needed in the fourth year after seizing power at 20.5 trillion yen. 
However, taking a decline in tax revenues due to the economic crunch 
and a decrease in so-called hidden funds or surpluses in special 
accounts into consideration, it has revised down that amount to 17 
trillion yen, by slashing the use of hidden funds by 2 trillion yen 
and an estimated increase in tax revenues due to a revision to the 
special tax measure by 1.5 trillion yen. 
 
Following the revision, the DPJ has also revised the timetable to 
implement policy proposals and their specifics to be included in the 
manifesto. Specifically, it has eliminated 3.5 trillion yen in the 
cost to reform the pension system featuring the establishment of a 
minimum guarantee pension system with a senior party member citing 
that it is possible to carry out the reform, even if the timetable 
to secure funding resources for it to the fifth year or later after 
the party take the reins of government. 
 
It plans to implement other key policies, such as the abolition of 
the provisional tax rates, such as the gas tax rate and toll-free 
highways, in order of precedence. Funding resources to finance the 
manifesto are estimated at 7 trillion yen in the initial yen, 10 
trillion yen in the second year, 13 trillion yen in the third year 
and 17 trillion yen in the fourth year. 
 
The DPJ plans to include in the manifesto a roadmap that shows the 
timetable to implement those proposals, as well as measures to 
secure specific funding resources. 
 
ZUMWALT