Search

 

Cablegate: Japanese Morning Press Highlights 06/15/06

VZCZCXRO9416
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #3289/01 1660215
ZNR UUUUU ZZH
P 150215Z JUN 06
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 3227
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/COMUSJAPAN YOKOTA AB JA//J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/COMPATWING ONE KAMI SEYA JA
RUEHNH/AMCONSUL NAHA 9342
RUEHFK/AMCONSUL FUKUOKA 6729
RUEHOK/AMCONSUL OSAKA KOBE 9967
RUEHNAG/AMCONSUL NAGOYA 6643
RUEHKSO/AMCONSUL SAPPORO 7871
RUEHBJ/AMEMBASSY BEIJING 2790
RUEHUL/AMEMBASSY SEOUL 8961
RUCNDT/USMISSION USUN NEW YORK 0744

UNCLAS SECTION 01 OF 13 TOKYO 003289

SIPDIS

SIPDIS

DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST
DIVISION; TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS
OFFICE; SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY
ADVISOR; CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06/15/06


Index:
1) Top headlines

2) Editorials

3) Prime Minister's daily schedule

4) Koizumi-Bush summit statement to stress the alliance in a
global setting

5) Prime Minister Koizumi: Timing of SDF from Iraq will be a
"comprehensive decision"

6) Fukuoka governor accepts the final report of the USFJ
realignment

7) Yokosuka mayor goes along with deployment of nuclear-powered
US Navy carrier

8) Yokosuka sailor arrested for molesting teenage girl

9) ROK foreign minister announces sea-bottom survey next month
around disputed Takeshima isles

10) Indonesia delays signing of exchange of notes with Japan on
provision of "weapons" -- patrol boats -- under foreign aid
program

11) METI minister meets ASEAN security-general in Tokyo to
discuss East Asian economic partnership agreement

12) No end to consumer distrust of US beef as government ends
public hearings in 10 cities to gauge public views on restarting
imports

13) In deciding to resume US beef imports, Japan plans to ban
only those companies that commit risk-material violations

14) Finance Ministry panel's proposals to include hike in
consumption tax, dedicated tax for social security

15) US' Public Company Accounting Oversight Board (PCAOB) asks
FSA to let it independently oversee the Japanese auditors

16) Diet ends on June 18 with residue of disgruntlement among
lawmakers desiring extension of session

17) Minshuto (Democratic Party of Japan) weakens call for
resignation of BOJ Governor Fukui for investment in scandal-
ridden Murakami Fund

18) Mori faction now likely to unite around Shinzo Abe as its LDP
presidential candidate

19) Survey of LDP local chapters shows 23 ready for Abe-Fukuda
presidential race in the fall

Contents:
1) TOP HEADLINES

Asahi:
Japan Obstetrics and Genecology Association survey shows nation

TOKYO 00003289 002 OF 013


has only 3,000 delivery facilities - about half of government
data

Mainichi:
Salary-based bid-rigging and amakudari system established by DFAA
Construction Department: A firm accepting a councilor for 15
million yen a year is allowed to place an order worth 800
million, a 12-million-yen bureau chief comes with 600-million-yen
order, a 10-million-yen department chief with a 400-million-yen
order

Yomiuri:
Government to establish amakudari watchdog body in Cabinet Office
to check irregularities

Nihon Keizai:
Government, LDP eye lowering drug prices next spring to reduce
government's contrition by 100 billion yen; Prices may be lowered
up to 10 PERCENT yearly

Sankei:
Health, Labor and Welfare Ministry: Childbirths could drop to
430,000 in 2050 - 40 PERCENT of current level

Tokyo Shimbun:
Fiscal panel calls for consumption tax hike strictly for social
security payments

2) EDITORIALS

Asahi:
(1)Diet session to end: 150 days a disappointment
(2)EEZ demarcation: Japan, South Korea need clear rules to avoid
critical situation

Mainichi:
(1)Elderly people deserve good medical care
(2)BOJ Gov. Fukui must disclose assets

Yomiuri:
(1)DPJ shouldn't act out of partisan interests
(2)High court overturns district court's absurd ruling on
protection of news sources

Nihon Keizai:
(1)Consumers deserve improved housing code
(2)Japan, South Korea must conduct talks persistency

Sankei:
(1)"Big-boned" policy guidelines must reflect fiscal panel report
(2)Elevator accidents: Grater safety awareness imperative

Tokyo Shimbun:
(1)BOJ Gov. Fukui must resign
(2)Japan must underline need for scientific whaling at IWC
meeting

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, June 14

NIHON KEIZAI (Page 2) (Full)

TOKYO 00003289 003 OF 013


June 15, 2006

10:45
Met at Kantei with ambassador to Madagascar.
11:05
Met with Shimada, special advisor to the Cabinet Office.
11:32
Met at LDP headquarters with Chief Cabinet Secretary Abe,
Secretary General Takebe, and LDP Upper House Secretary General

SIPDIS
Katayama.
12:09
Met at Kantei with Deputy Chief Cabinet Secretary Nagase.
13:03
Attended a meeting of secretaries general of LDP prefectural
chapters.
13:28
Arrived at Kantei.
15:15
Met with Internal Affairs and Communications Minister Takenaka,
followed by Science and Technology Minister Matsuda, and lawmaker
Hiroyuki Abe, member of the Council for Science and Technology
Policy.
16:05
Met with Vice Foreign Minister Yachi. Met afterwards with Science
Council of Japan Chairman Kurokawa and Chief of Secretariat
Nishigahiro.
17:57
Attended party for the late Prime Minister Takeshita at Akasaka
Prince Hotel.
18:35
Attended at Kantei a meeting of the Council for Science and
Technology Policy.
19:36
Dined with commentator Naoki Tanaka, Canon Chairman Fujio
Miterai, and Toyota Motor Chairman Hiroshi Okuda at Garden Court
in New Otani Hotel.
21:21
Returned to his official residence.

4) Japan, US to mention Japan-US alliance in the world in a joint
statement to be released after bilateral meeting, first summit
statement in 10 years

SANKEI (Page 5) (Excerpts)
June 15, 2006

The Japanese and US governments are now in the final stage of
coordination aimed at releasing a joint statement to be released
after the upcoming summit meeting between Prime Minister
Junichiro Koizumi and US President George W. Bush. The statement
will position the Japan-US alliance in a global context, several
government sources revealed. This will be the first joint Japan-
US summit statement in 10 years, since the April1996 one released
by Prime Minister Ryutaro Hashimoto and President Bill Clinton
after their talks in Tokyo. Japan would like to use this summit
as an occasion to sum up Prime Minister Koizumi's diplomatic
efforts by highlighting to the rest of the world the significance
of the Japan-US alliance now and in the future.

The joint statement, in stressing the global importance of the
alliance, will go one step beyond the previous Hashimoto-Clinton
document that mentioned the bilateral alliance as "playing a key

TOKYO 00003289 004 OF 013


role for peace, stability, and prosperity in the Asia-Pacific
region." It also will underscore such commonly shared values as
freedom and democracy.

Both Japan and the US have agreed in principle to include a
policy of emphasizing human rights in the planned joint
statement. The Japanese government also wants to somehow stress
in the statement the need to resolve the North Korea abduction
issue. In addition, the statement is likely to mentions progress
and cooperation in Japan-US economic relations.

The statement will be concise and have a stronger political
message than the previous one. It will seek to discourage China,
North Korea, and Iran from their respective military buildups.

5) Gov't to consider all factors in deciding on timing for GSDF
pullout from Iraq: Koizumi

MAINICHI (Page 2) (Full)
June 15, 2006

Prime Minister Junichiro Koizumi told reporters at his office
yesterday evening that he would consider all factors in deciding
on when to withdraw Ground Self-Defense Force troops currently
deployed to Iraq. "I'm not wedded to the idea (of withdrawal
during my term)," Koizumi added. The premier then ruled out the
possibility of visiting Iraq.

6) Fukuoka gov. accepts final report on USFJ realignment

MAINICHI (Page 2) (Full)
June 15, 2006

Fukuoka Prefecture yesterday held a meeting of its assembly over
the final report on the planned realignment of US forces in
Japan, including a plan to relocate US military aircraft training
to the Air Self-Defense Force's Tsuiki base in Fukuoka
Prefecture. In the session, Fukuoka Governor Wataru Aso stated:
"The realignment is a matter of Japan's security policy. In
addition, we also should consider the wishes of people in Okinawa
Prefecture to alleviate their base-hosting burden. I'm not
thinking of asking the government to retract the plan." The
governor also said he would ask the government for specific
measures concerning the relocation of training flight missions.

7) Yokosuka mayor accepts nuclear carrier deployment

SANKEI (Page 3) (Full)
June 15, 2006

The city of Yokosuka, Kanagawa Prefecture, held a plenary meeting
of its municipal assembly yesterday over the US Navy's planned
deployment of a nuclear-powered aircraft carrier to its Yokosuka
base in the prefecture. In the session, Yokosuka Mayor Ryoichi
Kabaya clarified his intention to accept the US Navy's plan to
deploy the USS George Washington, a nuclear-powered aircraft
carrier, to Yokosuka in two years. "I think it would be
unavoidable to let a nuclear-powered aircraft carrier enter
port," the mayor stated before the assembly. Now that the mayor
has accepted the nuclear carrier deployment plan, Yokosuka will
be the first homeport in Japan for a nuclear-powered US flattop.


TOKYO 00003289 005 OF 013


In response, the Japanese and US governments will hold a meeting
of their joint committee today and will reach a basic agreement
on berth dredging in the port of Yokosuka for a nuclear carrier's
port entry. After that, the government will ask Yokosuka City for
permission to start dredging work.

Kabaya also stated, "I will ask the Japanese and US governments
to ensure the safety of local residents and dissolve their
anxieties." With this, the mayor has indicated that Yokosuka will
hold consultations on safety assurances, including a mutual
antidisaster assistance agreement with the US Navy.

The Japanese and US governments agreed in October last year to
replace the USS Kitty Hawk, a conventional aircraft carrier
currently deployed to Yokosuka and expected to be mothballed in
2008, with a nuclear-powered aircraft carrier. However, Kabaya
opposed the deployment of a nuclear carrier to Yokosuka and
called for the US Navy to deploy the USS John F. Kennedy, another
conventional flattop. In April this year, however, the US
government accounted in writing for the safety of nuclear
carriers. Kabaya then hinted at his intention to accept the
nuclear carrier deployment plan. On June 12, the mayor met with
Foreign Minister Taro Aso. After that, the mayor indicated his de
facto acceptance of the deployment plan. "The government assured
safety," he said.

Kabaya won the mayoral election in June last year with a campaign
pledge to call for the US Navy to continue its deployment of a
conventional aircraft carrier. In October last year, the city's
municipal assembly also resolved unanimously to call for the US
Navy to retract its nuclear carrier deployment plan.

Later in the day, Chief Cabinet Secretary Shinzo Abe met the
press and appreciated the mayor's acceptance of the nuclear
carrier deployment plan. "I appreciate the mayor for his
understanding of the government's position," Abe said.

8) US sailor held for molesting high school girl in Yokosuka

MAINICHI (Page 31) (Full)
June 15, 2006

Yokosuka police in Kanagawa Prefecture arrested a US sailor
yesterday on the spot for molesting a 15-year-old high school
student.

Danny Joseph Valerie, 47, a Yokosuka-based petty officer second
class of the US Navy, is suspected of touching the first-year
private high school girl's breast and kissing her at around 7:55
p.m. when she was talking to a friend at a square in front of
Yokosuka Chuo Station on the Keihin Kyuko line of Keihin Electric
Express Railway Co. in the city of Yokosuka, Kanagawa Prefecture.
Valerie was drunk and has denied the allegations.

9) ROK foreign minister: "We will conduct a marine current survey
around Takeshima/Dokdo next month"; Tensions may heighten again
if survey is conducted

ASAHI (Page 2) (Excerpts)
June 15, 2006

Tadahisa Takatsuki, Seoul

TOKYO 00003289 006 OF 013

At a news conference yesterday, South Korean Minister of Foreign
Affairs and Trade Ban Ki Moon, speaking of the planned marine
current survey in waters around Takeshima/Dokdo islets, stated:
"Conducting a marine current survey within our territorial waters
is our legal right. Japan cannot ask us to stop the survey." He
thus revealed his intention to conduct the survey as planned.

10) Indonesia postpones signing an ODA agreement on Japan's offer
of patrol boats; Jakarta opposed to limited use of boats only for
antiterrorism and antipiracy

YOMIURI (Page 2) (Excerpts)
June 15, 2006

Etsunari Kurose, Jakarta

The Japanese government had decided to offer three patrol boats
in grant aid to Indonesia, treating this offer as an exception to
the three principles banning weapons exports. A signing ceremony
on an agreement on this offer was held yesterday, but the signing
of the document was postponed at the last minute at the request
of the Indonesian government, which stated an objection to the
contents of the agreement. This development involving the ODA-
related agreement is extremely unusual because that agreement was
prepared as part of official development assistance (ODA), and
the conditions for the agreement were closely examined before the
agreement took shape.

According to an official concerned, the two governments have
agreed on limiting the use of patrol boats for such purposes as
dealing with terrorism at sea and pirates, in view of Japan's
three principles banning weapons exports.

However, at the signing ceremony held in Jakarta yesterday, a
senior Indonesian Foreign Ministry official asked Japanese
Ambassador to Indonesia Shin Ebihara to alter the current wording
to a more general expression like "activities relating to
maritime safety." Japan rejected this request, and the two
governments began coordinating on the wording again, but it is
difficult for Japan to make concessions, as this is a very
delicate matter that could violate the three principles on
weapons exports. No prospect of both sides reaching accord has
come into sight yet.

A Japanese Embassy official commented: "They could have discussed
the contents beforehand. We have no idea why they changed their
mind today."

11) East Asia EPA; ASEAN secretary general during talks with METI
minister indicates forward-looking stance toward discussing issue
with ASEAN member nations

TOKYO SHIMBUN (Page 8) (Excerpts)
June 15, 2006

Minister of Economy, Trade and Industry Toshihiro Nikai yesterday
met with visiting Association of Southeast Asian Nations (ASEAN)
Secretary General Ong Keng Yong at a Tokyo hotel. In response to

SIPDIS
Nikai's proposals for signing an East Asian region economic
partnership agreement (EPA) and setting up an organization for
economic cooperation (OECD) and develop in that region, the

TOKYO 00003289 007 OF 013


secretary general noted, "The proposal is worth considering. I

SIPDIS
would like to discuss the issue with ASEAN member nations."

12) Public hearings in 10 cities on US beef imports end, but
doubts raised about demands

TOKYO SHIMBUN (Page 8) (Excerpts)
June 15, 2006

The Ministry of Health, Labor, and Welfare and the Ministry of
Agriculture, Forestry, and Fisheries yesterday ended public
hearings held with consumers in 10 cities across the nation on US
beef imports. The government has already reached agreement with
the US on a timetable for inspections of US plants with licenses
to ship beef to Japan before resuming imports and will decide as
early as next week to reopen its market to US beef. The first
shipment is expected to arrive in late July. Domestic importers,
though, are somewhat perplexed, as high demand in US beef cannot
be anticipated due to public distrust in its safety. Related
industries, including retailers and the food-service industry,
are likely to be slow to move.

Measures

"Why is the US unable to take the same BSE preventive measures as
Japan?" In a public hearing in Tokyo yesterday, one participant
asked the above question. Similar views were presented in other
places.

In an effort to erase public distrust in the safety of US beef,
the Japanese and US governments discussed plans to set rules on
the assumption of problems occurring after trade is resumed, like
a violation of safety procedures. But such rules were put on the
backburner due to opposition from the US, which wanted to avoid
taking time to set rules.

Japan's decision to restart US beef imports apparently came under
pressure from US legislators, with an eye on the upcoming midterm
election. The Japanese government would like to obtain
understanding from consumers with such measures as prior
inspections, but consumer distrust is unlikely to be easily
cleared away.

Perplexity

"The situation is quite different from when imports were resumed
in December of last year, as there have been few inquiries about
US beef," a responsible member of the Japan Meat Trade
Association said with a tone of puzzlement.

A spokesperson for Ito-Yokado Co. said: "We have no plan to put
US beef on our store shelves until consumers regain confidence in
the safety of the product." Zensho Co., the operator of the
Sukiya chain, has categorically said: "We will not use US beef
until such measures are taken as the complete removal of
specified risk materials, the imposition of strict feed
restrictions, and the implementation of blanket BSE testing."

Another reason for the export association's mixed feelings is the
1,000 tons of meat worth about 1 billion yen stored in freezers
or refrigerators across the nation since it could not clear
customs following the imposition of a second ban on Jan. 20 of

TOKYO 00003289 008 OF 013


this year. Once imports are resumed, the stored beef will be the
first shipment, but their prices will inevitably fall. The
association asked the US government to buy back the product, but
the request was turned down.

Expectations

The Beef Barbecue Industry Association is waiting for an import
resumption. An association member commented: "There is latent
demand for US beef. There are people seeking low-priced,
delicious beef." However, many beef barbeque chains are still
undecided as to whether to use US beef, even if the government
decides to resume imports.

Restaurant chain Yoshinoya D&C Co. plans to put its signature
gyudaon (beef bowl) back on the menu 6-8 weeks after Japan
resumes US beef imports. The prices of the parts used for beef
bowls are expected to be higher than those before December 2003,
and the import volume is also likely to be smaller. Given this,
the company intends to "offer the beef bowl for a limited time,"
according to a spokesman.

13) US beef imports: Government considering embargo on products
from meat processing plants that have violated export conditions
in event of inclusion of SRM in resumed US beef shipment to avoid
total embargo

YOMIURI (Page 1) (Full)
June 15, 2006

It was learned yesterday that in the event of a possible
inclusion of specified risk materials (SRM), a material banned in
Japan as a BSE risk, in US beef shipments, Japan will in
principle impose an embargo on products only from the
slaughterhouses that shipped them. Several government sources
revealed this. The government will likely decide to resume US
beef imports after discussions with the US, making it a condition
that the Japanese side conducts prior inspections of US
meatpackers. It will clarify guidelines for imposing an embargo
by that time.

The government this January placed a total ban on US beef imports
when vertebral columns were found in shipments, based on the
supplementary item included in the report compiled by the Cabinet
Office's Food Safety Commission. The item stipulates that it is
necessary to temporarily suspend imports if a serious situation
in which risks against humans cannot be ruled out occurs.
However, there have been some critical views on this for being
vague.

For this reason, the government will confer on this issue with
the US and set guidelines, including that a total ban will be
placed only in the event of a serious violation of the bilateral
agreement, making it a principle that an import ban be placed
only on a meat processing plant that has violated the agreement.
However, some government officials take the position that the GOJ
will not be able to obtain understanding from the public unless a
total ban is imposed in the event of export violation.

The South Korean government has indicated a policy of postponing
the resumption of US beef imports slated for early this month,
following the finding of problems in inspections of US

TOKYO 00003289 009 OF 013


meatpackers. In response to this move, a proposal that Japan
should resume imports after conducting inspections of US
meatpackers has been floated. In that case, a delay in the
drafting of guidelines is likely to occur.

14) Fiscal System Council proposes turning consumption tax into
special purpose tax to appropriate revenues for social welfare

TOKYO SHIMBUN (Top Play) (Excerpts)
June 15, 2006

The Fiscal System Council (an advisory panel reporting to the
Finance Ministry) yesterday presented to Finance Minister
Sadakazu Tanigaki an opinion paper on unified reform of
expenditures and revenues, which sets a direction for fiscal
reconstruction. The report pointed out the need to increase the
consumption tax, noting that since social security expenditures
are bound to increase due to the low birth rate and the graying
society, it is important to secure stable funding that is
relatively less affected by the health of the economy. It
referred to the idea of turning the consumption tax into a social-
welfare-dedicated tax by mentioning that appropriating increased
revenues from such a hike for the payments of social security
benefits will be meaningful from the standpoint of obtaining
understanding from the people.

The report stressed that social security expenses, which account
for more than 40 PERCENT of general-account spending, will
expand at a rate exceeding economic growth. In view of the
prospect that the proportion of money spent on basic pension
plans will increase by fiscal 2009, the report underscored the
need to secure specific and stable funding resources (tax
revenues), thereby strongly indicating the need to hike the
consumption tax.

Regarding other social-welfare-related spending items, the panel
proposed a revision to the system of additional payments of
welfare benefits to families of mothers and children and the
abolition of government spending on unemployment benefits.

Regarding local finances, an issue that is equally important to
the social security issue, the report pointed out that the
primary balance, which indicates fiscal soundness, of the central
government is in the red, while that of local governments is in
the black.

For a revision to the system of tax allocation to local
governments, under which a fixed amount of revenues from national
taxes, such as the income tax, are distributed to local
governments, the report proposed that such a revision should be
made in a way to lead to a reduced national burden, including a
cut in the legal rate.

15) US supervisory board ready to oversee Japanese audit firms;
FSA proposes firms' briefings in US

ASAHI (Page 1) (Excerpts)
June 15, 2006

The Public Company Accounting Oversight Board (PCAOB) - a private-
sector, non-profit corporation to oversee accounting firms in the
US - has started arrangements with the Financial Services Agency

TOKYO 00003289 010 OF 013


(FSA) to implement its own inspections of Japanese audit firms.
According to informed sources yesterday, PCAOB has asked Japan to
allow it to start by the end of this year on-site inspections
into 12 corporations registered with it, including ChuoAoyama
PricewaterhouseCooper and other three major corporations. The
FSA, however, based on the view that "their sovereignty might be
infringed," has proposed that the targeted audit firms would
visit the US to explain their management systems. The agency
plans to hold talks with PCAOB executive members.

PCAOB was established based on the Sarbanes-Oxley Act in July
2002, set off by a series of scandals involving Enron and other
firms. As measures to prevent such scandals, the corporation has
been tasked with overseeing the business contents of accounting
firms in the preparation of informative and independent audit
reports.

Foreign accounting firms overseeing listed companies in the US
are required to register as members of PCAOB. In the US, many
foreign firms have been listed on the US market, including Sony
Corp. and Toyota Motor Corp. If public confidence of foreign
accounting firms is undermined, there may be an adverse impact on
the US securities market. As of June, 1,669 auditing firms in
about 80 countries have registered with PCAOB.

PCAOB has made the same request to countries other than Japan and
has already carried out on-site inspections of accounting firms
in Britain and Canada in cooperation with local authorities. In
the case of Japan, since public confidence in the audit
corporation system has crumbled in the wake of the scandal
involving ChuoAoyama and heavy administrative punishment imposed
on it, PCAOB has judged it necessary to immediately conduct
inspections.

16) Ruling camp decides not to extend current Diet session; LDP,
New Komeito members dissatisfied with Koizumi going over parties'
heads

TOKYO SHIMBUN (Page 2) (Full)
June 15, 2006

The ruling Liberal Democratic Party (LDP) and its junior
coalition partner New Komeito confirmed in a meeting yesterday of
their secretaries general and Diet affairs committee chairmen a
policy of not extending the current Diet session, which will
close on June 18. The ruling camp has made this decision in
compliance with the wishes of Prime Minister Junichiro Koizumi,
who had rejected the possibility of an extension. LDP lawmakers
representing educational-policy interests (bunkyo-zoku), who
called for an extension to pass such important bills as education
reform bill through the Diet, and New Komeito members are
increasingly dissatisfied with Koizumi, who ordered Diet
management decisions to the ruling parties going over their
heads.

On May 30 Koizumi made a final decision not to extend the current
session. The educational clique immediately reacted strongly to
his decision because they were eager to pass the bill revising
the Basic Education Law through the Diet during the current
session.

On June 1 successive education ministers called at the Prime

TOKYO 00003289 011 OF 013


Minister's Official Resident to directly ask Koizumi to extend
the session. They told the prime minister: "Why don't you crown
your glory with the passage of education reform legislation?"
Koizumi simply replied, "I don't have no such intention."

One former education minister said angrily, "We could not
continue to say anything more. It is unbelievable that so many
crucial bills have been left untouched."

The LDP and New Komeito agreed on June 2 to make a decision this
week as to whether an extension would be needed or not and to
seek a minor extension if prospects for passage of key bills were
in sight.

On June 7, however, Chief Cabinet Secretary Shinzo Abe and LDP
Secretary General Tsutomu Takebe already agreed not to extend the

SIPDIS
session.

Moreover, prior to the meeting of secretaries general and Diet
affairs committee chairmen, Koizumi met yesterday with LDP
executives, including Takebe, in which they confirmed that the
session would not be extended.

17) Minshuto hesitant about demanding Fukui's resignation over
Murakami Fund investment in wake of e-mail fiasco

ASAHI (Page 4) (Excerpts)
June 15, 2006

Minshuto (Democratic Party of Japan) executives are cautious
about pursuing Bank of Japan Governor Toshihiko Fukui's
responsibility for investing 10 million yen in the Murakami Fund.
Some mid-level and junior members are eager to even demand
Fukui's resignation, however. Having learned a bitter lesson from
the recent fake e-mail fiasco, the party leadership apparently
fears that the Fukui case will escalate into a "witch hunt"
involving the entire political community, as was the case with
the unpaid national pension premium scandal in 2004. But
depending on how the Upper House Budget Committee session today
turns out in trying to find out facts, the largest opposition
party may bolster its pursuit.

The Diet affairs chiefs of Minshuto, the Japanese Communist
Party, and the Social Democratic Party reached an agreement
yesterday to demand Fukui's attendance at today's Upper House
Budget Committee session and out-of-session hearings as well as
to pursue Prime Minister Koizumi's responsibility for appointing
him to the post. But not all opposition party executives share
the same view.

For instance, Minshuto Secretary General Yukio Hatoyama said in
his speeches yesterday in Sapporo and Yokohama: "The BOJ governor
have been raking in from a high-yield fund while people were
suffering from the zero interest rate. Such is morally absurd."
Minshuto policy chief Takeaki Matsumoto also said yesterday: "I
think Mr. Fukui will decide on his course of action
independently." Neither Hatoyama nor Matsumoto mentioned Fukui's
resignation.

Minshuto Diet affairs chief Kozo Watanabe insisted on June 13
that Fukui must resign. But in an apparent reversal of his
previous stance, Watanabe only said yesterday: "The matter must

TOKYO 00003289 012 OF 013


be elucidated from the people's viewpoint." In stark contrast to
Watanabe, SDP head Mizuho Fukushima crisply said in a press
conference yesterday: "We will demand Mr. Fukui's resignation."

A Minshuto Diet affairs executive also commented: "It's better
not to jump at a juicy story of this sort. We just had our e-mail
flop." Some Minshuto members think their party should focus only
on finding out facts for the time being.

18) Many Mori faction members support Abe as candidate for LDP
presidency

NIHON KEIZAI (Page 1) (Full)
June 15, 2006

Senior members of the largest faction in the Liberal Democratic
Party (LDP) got together last night at a Tokyo hotel to discuss
measures for the LDP presidential election in September.
Attending the meeting were former Prime Minister Yoshiro Mori,
who heads the faction, and Nobutaka Machimura, secretary general
of the faction. Based on the perception that many faction members
support Chief Cabinet Secretary General Shinzo Abe, the senior
members agreed that they should run a united candidate in a drive
to prevent a split in the faction. They also confirmed that if
former Chief Cabinet Secretary Yasuo Fukuda decides to run in the
race, the faction would go along with his decision.

LDP Diet Affairs Committee Chairman Hidenao Nakagawa, Koji Omi,
and Seishiro Eto attended the meeting. They did not ask Abe and
Fukuda to attend the session.

After the discussion, Machimura told reporters, "We shared the
same view that the majority of the faction wanted it to run a
unified candidate." The senior members also agreed to maintain
the unity of the faction, while waiting for decisions by Abe and
Fukuda. Another senior member told reporters, "Many in the party
support Mr. Abe."

Mori is expected to meet Prime Minister Junichiro Koizumi to
discuss the matter. Koizumi has expressed that there is no need
for the faction to run a unified candidate, saying, "There is no
way to prevent a person, who wants to run, from running in the
election." Abe also stated a similar view to Koizumi. In order to
avoid the faction from splitting, Mori expects either Abe or
Fukuda will give up the idea of running the race on his own
decision.

19) Survey of LDP presidential race: 23 prefectural chapters
expect face off between Abe, Fukuda; Abe wins nine supporters,
Fukuda six

MAINICHI (Page 1) (Excerpts)
June 15, 2006

The Mainichi Shimbun has conducted an opinion survey of all
Liberal Democratic Party (LDP) prefectural chapter secretaries
general on the upcoming LDP presidential election. In the poll,
23 party officials -- nearly half of the total -- said they would
like to see a showdown between Chief Cabinet Secretary Shinzo Abe
and former Chief Cabinet Secretary Yasuo Fukuda. Both candidates
belong to the Mori faction. In contrast, only 11 secretaries
general favored producing a single candidate through talks.

TOKYO 00003289 013 OF 013


Fourteen people, the largest number, also cited the correction of
the social disparity as the most important campaign issue. Nine
people said Abe was most fit to become the next prime minister,
followed by Fukuda with six, and Foreign Minister Taro Aso with
five.

The survey was conducted between June 7 and 12. Responses came
back from 41 regional secretaries general. In an LDP presidential
election, local votes are allocated based on the number of rank-
and-file party members. Prefectural secretaries general are
believed to have strong voices toward local organizations, as
former prefectural assembly members with abundant experience
usually take on such posts.

SCHIEFFER

© Scoop Media

 
 
 
World Headlines

 

OECD: COVID-19 Crisis Puts Migration And Progress On Integration At Risk, Says

Watch the live webcast of the press conference Migration flows have increased over the past decade and some progress has been made to improve the integration of immigrants in the host countries. But some of these gains may be erased by the COVID-19 pandemic ... More>>


Pacific Media Watch: How Pacific Environmental Defenders Are Coping With The Covid Pandemic

SPECIAL REPORT: By Sri Krishnamurthi of Pacific Media Watch Pacific Climate Warriors - creative action to trigger better responses to climate crisis. Image: ... More>>

Reporters Without Borders: Julian Assange’s Extradition Hearing Marred By Barriers To Open Justice

After monitoring four weeks of evidence in the US extradition proceedings against Wikileaks publisher Julian Assange, Reporters Without Borders (RSF) reiterates concern regarding the targeting of Assange for his contributions to journalism, and calls ... More>>

OHCHR: Stranded Migrants Need Safe And Dignified Return – UN Migrant Workers Committee

The UN Committee on Migrant Workers has today called on governments to take immediate action to address the inhumane conditions of migrant workers who are stranded in detention camps and ensure they can have an orderly, safe and dignified return to ... More>>