Cablegate: Daily Summary of Japanese Press 12/28/06

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UNCLAS SECTION 01 OF 06 TOKYO 007174

SIPDIS

SIPDIS

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

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 12/28/06

INDEX:

(1) Futenma relocation: JDA top official transmits revision of
V-shaped plan to prefecture that would be within scope of Japan-US
agreement; Plan is to move toward the weed beds; Proposes plan
100-meters from shore

(2) JDA considering revising plan for Futenma relocation; Proposes
to local heads moving site 100 meters into sea

(3) Malfunctioning Team Abe: Leader nowhere in sight

(4) Three months of Abe administration: No prospects in sight for
settlement of abduction issue

(5) Editorial: "Resignation dominos" reveals weakness of Abe
administration

ARTICLES:

(1) Futenma relocation: JDA top official transmits revision of
V-shaped plan to prefecture that would be within scope of Japan-US
agreement; Plan is to move toward the weed beds; Proposes plan
100-meters from shore

RYUKYU SHIMPO (Top play) (Full)
December 28, 2006

With Okinawa Governor Hirokazu Nakaima opposed to the plan to build
a V-shaped runway for the relocation of Futenma Air Station, the
Defense Agency (JDA) as of Dec. 27 has informally transmitted to the
prefecture its thinking that "although a settlement was reached in
Japan-US consultations, there is a possibility of revising the plan
within that scope." The prefecture appreciated the government's
stance and has begun to give positive consideration to accepting the
relocation of Futenma Air Station to the shores of Camp Schwab. A
top official at JDA last evening said: "There is no need to stick to
the (original) plan. (The runway) need not be on the seaside; if we
move it over in the direction of the shallow seaweed bed, it would
be easier to build than in a deeper area. It would be better to
change to the restricted water area." The official indicated that
JDA was thinking of moving the runway site to within the water area
where seaweed is growing on the opposite side of Oura Bay that is
next to Camp Schwab. JDA has proposed the plan as a trial balloon to
some of the heads of towns and villages in the northern part of the
main island of Okinawa.

JDA Director General Kyuma as of Dec. 27 has transmitted his
thinking to some local heads in Okinawa, saying, "If the prefecture
will accept it, a minor revision (of the current V-shaped runway
plan) would be all right with me."

A senior JDA official on the evening of the 24th, just prior to the
meeting of the Futenma Airfield Relocation Measures Council, met the
local heads from the northern part in the city and showed them the
plans for moving the runway 100 meters. The plans put the runway up
against Nagashima Island that is off Henoko Point.

At the meeting, a top JDA official said: "It is impossible when the
environmental aspect is considered. We should follow the thinking of
the previous JDA director general." He took a negative view toward
moving the location into the sea. Governor Nakaima and Nago City
Mayor Shimabukuro were not present at the meeting.

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The trial-balloon plan, drafted by officials in JDA, reflected the
wishes of Director General Kyuma. However, JDA denies that it has
proposed the new plan to local authorities in Okinawa.

Regarding the plan to move the location into the sea, a local
government head from the northern part of the island pointed out:
"It would seem to have a slim chance of implementation, since the
reason for considering locating the runway on the shoreline was to
avoid an (environmental) protest movement." Governor Nakaima said:
"I haven't heard about it. It might be a bit too impractical. I have
not yet had the chance to evaluate it."

A top prefectural official took the view that reaction to the
revision would be positive if three provisions were fulfilled: 1) it
would not affect the residents living nearby by noise or other
problem; 2) there would be a minimum destruction of the environment;
and 3) the efficacy of the relocation were guaranteed.

The reason why Director General Kyuma indicated his intention to
make minor changes (in the plan) seems to be out of consideration
for the opposition by Governor Nakaima, as well as the concerns by
the residents of Nago City and vicinity about noise from the US
military aircraft destroying their living environment.

(2) JDA considering revising plan for Futenma relocation; Proposes
to local heads moving site 100 meters into sea

MAINICHI (Page 1) (Full)
December 28, 2006

In connection with the issue of relocating the US forces' Futenma
Air Station to the shoreline of Camp Schwab (Nago City, Okinawa
Prefecture), it has been learned that the Defense Agency (JDA) has
proposed to some local heads in the northern part of Okinawa
Prefecture a revision of the shoreline plan that would move the
facility about 100 meters seaward. Since Governor Hirokazu Nakaima
will not change his mind about opposing the shoreline plan, it
appears that JDA has begun to consider a revision of the plan that
would elicit Okinawa's concurrence to the relocation. This would be
the first time for the government to propose a change in the plan.

According to an informed source, early this month, JDA officials met
informally with some of the heads of local governments in the
northern part of the main island of Okinawa and showed them the
plans for relocating the site of the V-shaped double runway about
100 meters seaward. Neither the governor nor the major of Nago City,
Yoshikazu Shimabukuro, were present. One of the local heads present
said, "I took it from what they said that the agency was at the
stage of studying it."

Governor Nakaima at a press conference said this about the shoreline
plan: "There needs to be some fine-tuning now as to how far it can
be changed." He hinted that with changes in the plan, his stance
might turn toward accepting the relocation.

(3) Malfunctioning Team Abe: Leader nowhere in sight

MAINICHI (Page 5) (Abridged slightly)
December 27, 2006

At the Japanese restaurant Kakyoutei in Akasaka, Tokyo, on the night
of Dec. 13, Chief Cabinet Secretary Yasuhisa Shiozaki spoke to House

TOKYO 00007174 003 OF 006

of Representatives member Yasutoshi Nishimura and other junior
lawmakers:

"The issue of shifting tax revenues for road projects to the general
budget has now been settled. We have to continue pushing ahead with
reforms. I want you to give me your ideas."

On the night of Dec. 11, Shiozaki dined with Senior Vice Finance
Minister Shigeyuki Tomita, a member of the New Komeito, the ruling
Liberal Democratic Party's (LDP) junior coalition partner, and other
lawmakers at the Japanese restaurant Sato in Akasaka. One of the
attendees asked: "I believe that it has been decided that most tax
revenues earmarked for road construction will be used for general
purposes. Isn't that so?" Shiozaki replied: "Your are right, but the
public does not understand that."

After Abe decided to reinstate postal rebels into the LDP, the Prime
Minister's Official Residence (Kantei) proposed using tax revenues,
including the gasoline tax, that are now used for highway projects,
for general purposes instead, in a bid to avoid the public criticism
that the reform drive was losing momentum. Faced with strong
resistance by LDP lawmakers connected to road construction
interests, the Kantei has had to make significant concessions to the
ruling coalition. Shiozaki, who worked as a kind of "control tower"
in coordinating views between the Kantei and the ruling camp, bore
the brunt of the criticism.

A source connected with the Finance Ministry expressed displeasure:

"Mr. Shiozaki told us that the Finance Ministry's groundwork was not
enough. But we were unable to lay the groundwork for the road
construction tax issue since the Kantei was not tough enough in
laying out its plan. We did not know with whom we should confer.
When working on the issue under Mr. Shiozaki's instruction,
different persons told us different views."

Team Abe, made up mainly of junior and mid-level lawmakers,
including five special advisors to the prime minister, lacks the
strategic ability to implement policies, as it was seen in handling
the road tax revenues issue. The team does not function well because
its skills to coordinate views with the ruling coalition and the
Kasumigaseki are limited.

Shiozaki asked Special Advisor on Public Relations Hiroshige Seko
around the time when criticism was growing in the ruling camp: "I
have to go talk to the LDP. I may come under heavy fire. I want you
to support me." Seko reportedly declined to back him up, saying, "I
cannot do anything unless you tell me your strategy and what the
common ground is."

Of course, there were issues that were resolved under Kantei
leadership. One of them is the policy that political parties
continue to refrain voluntarily from receiving donations from banks.
Shiozaki met on the night of Dec. 16 secretly with LDP Secretary
General Hidenao Nakagawa to ask him to agree to continue this
policy.

Shiozaki told Nakagawa:

"The prime minister thinks that the exercising of self-restraint
should be continued. The leading banks which got public funds to
expose non-performing loans will be unable to pay taxes for five or
six years more on average. Do you think we can get the public

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understanding for donations from such banks?"

Nakagawa responded:

"What is the Kantei trying to do? An Upper House election will be
conducted next year. I think it is all right to accept donations
because they are legal. Unless we receive donations from leading
banks, regional banks will not contribute money."

Three days later, Nakagawa announced that the LDP had decided to
accept Shiozaki's request followed by the prime minister's
instruction. He reportedly decided on that policy line during his
meeting with Shiozaki. A government official felt easy about
Nakagawa's announcement, thinking that this would not boost public
support ratings, but one potential cause for a sliding support rate
has now disappeared.

The previous government was composed of Koizumi's aides and called
"Koizumi's store." Sources connected with the government call Team
Abe a "department store." One source said:

"Various specialty stores in the department store are making effort
to boost their own sales, but they don't consider sales of the whole
store. I don't know who is holding up the government."

(4) Three months of Abe administration: No prospects in sight for
settlement of abduction issue

NIHON KEIZAI (Page 2) (Full)
December 27, 2006

"There was no progress," Foreign Ministry's Asian and Oceanian
Affairs Bureau Director General Kenichiro Sasae plainly told Shigeru
Yokota, the father of Megumi, an abduction victim, and others in the
Cabinet Office building yesterday. Sasae, with a note in his hand,
reported on the results of the latest round of six-party talks, in
which he participated as Japan's chief delegate.

The six-party talks held in Beijing for five days starting on Dec.
18 ended without any positive results. No bilateral talks were held
between Japan and North Korea, either. Teruaki Masumoto, chief of
secretariat of the Association of the Families of Victims Kidnapped

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by North Korea, said in a strong tone, "Even if North Korea doesn't
show up, the six-party talks should be held once a month," but Sasae
would not commit himself.

Prime Minister Shinzo Abe has designated the settlement of the
abduction issue as his top priority task. His resolute posture
toward North Korea being highly appreciated, Abe was awarded the top
post in the government. If the nuclear standoff with North Korea
lasts much longer, the image of his government may be seriously
undermined.

In an effort to avoid clashing head on with North Korea, China and
South Korea have taken a conciliatory stance toward it. Foreign Vice
Minister Shotaro Yachi stressed, "Japan will continue to apply
pressure while keeping the door open to negotiations." But Japan has
already taken economic sanctions independently, so it has now a
limited hand to use against the North.

Although Japan's relations with China and South Korea were strained
over former Prime Minister Junichiro Koizumi's annual visits to
Yasukuni Shrine, Abe's surprise visits to these two countries in

TOKYO 00007174 005 OF 006

October, just after his assuming office as prime minister,
contributed to improving ties to a considerable extent. Even so,
these two Asian countries have yet to apply pressure on North Korea.
A government source said, "There is no other way but to ask the US
to work on China and South Korea to make a policy shift."

On the night of Dec. 16, on the eve of the start of the latest
six-party talks, Yoshiyuki Inoue, a secretary to the prime minister
(for political affairs), and Assistant Deputy Chief Cabinet
Secretary Hiroyasu Ando invited United States Assistant Secretary of

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State Christopher Hill, chief US nuclear negotiator, to a Japanese
restaurant in Yaesu, Tokyo.

Inoue explained to Hill about the prime minister's enthusiasm toward
the abduction issue and sought his understanding about Japan's
willingness to take up the issue during the six-party talks. Hill
reportedly replied, "I want you to convey to the prime minister
these words of mine, 'I fully understand Japan's position. Don't
worry."

Former Prime Minister Koizumi, based on his strong personal ties
with President Bush, succeeded in establishing a "honeymoon
alliance" with the US. The Abe administration is also aiming to
build such a relationship of trust with the US.

But the US government, preoccupied with the Iraq issue, could change
its current policy toward North Korea. Some government officials
voiced concern about "possible mutual compromises between the US and
North Korea." Yachi asked US officials behind the scenes not to make
a policy switch.

Should no breakthrough occur in the ongoing standoff between the US
and North Korea, talks on the nuclear issue would remain at a
standstill. However, if the two countries find common ground, a
nuclear crisis would surely recede. In that case, Japan might find
itself isolated.

A senior Foreign Ministry official said, "Even if North Korea scraps
its nuclear programs and heads toward democratization, Japan will
not normalize diplomatic ties with the North as long as the
abduction issue remains unresolved. We must let Pyongyang fully know
this point."

Can Japan draw China and South Korea over to its side while
enhancing cooperation with the US? As it stands now, there are no
prospects are in sight for the Abe administration to live up to its
public pledge.

(5) Editorial: "Resignation dominos" reveals weakness of Abe
administration

TOKYO SHIMBUN (Page 5) (Full)
December 28, 2006

The government of Prime Minister Shinzo Abe has disclosed its
weakness just three months after it was inaugurated. Following the
Government Tax Commission chairman, the state minister in charge of
administrative reform resigned. In hindsight the prime minister's
responsibility for appointing them is now being questioned. It will
take a long time before the government is able to recover public
confidence in it.

In addition to administrative reform, Genichiro Sata was also in

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charge of reform of the public servant system, regulatory reform and
the regional bloc system (doshusei). All the more because these
issues will become major campaign issues in next year's House of
Councillors election, Sata's resignation has dealt a terrible blow
to the Abe government.

Sata, who is now serving in his sixth term in the House of
Representatives, joined the cabinet for the first time (three months
ago). The reason for Sata being forced to resign is the allegation
that one of his political support organizations submitted fraudulent
funding reports of political contributions.

The political group reportedly claimed 78 million yen in expenses,
including utilities, for an office for which there was no record of
a lease.

At a press conference Sata gave a pointless explanation.

According to Sata, he confirmed that the political group had paid
rent and expenses for political activities and that the office had
existed. He also admitted that the political group engaged in
inappropriate accounting of political contributions. He said that he
would resign to take responsibility for causing public
misunderstanding and distrust.

However, he did not disclose the details about the inappropriate
accounting of reported political funds, as well as the amount of the
political donations. He also did not unveil the details of the
actual expenses. The political group submitted the false political
funds reports from 1990 to 2000. It is said that the statute of
limitations has run out legally, but it can't be helped that Sata's
qualification to be a politician has been called into question since
he failed to fulfill his accountability for the scandal.

Sata reportedly was appointed a cabinet member because of his
efforts to support Abe in the September presidential election of the
Liberal Democratic Party (LDP). Abe appointed many cabinet members
as a reward for backing him in the election. It can be said that the
reward-oriented appointment has now come back to haunt the Abe
administration. The prime minister must regret not going through a
background check for Sata.

It was fortunate for the prime minister that Sata made up his mind
to step down two days after the disclosure of the scandal. The Prime
Minister's Official Residence and the ruling LDP placed priority on
preventing the opposition's pursuit of the government in the regular
Diet session to be convened in January, as well as adverse effects
on next year's unified local elections and on the Upper House
election. The price of mismanagement is high.

Some other cabinet ministers are suspected of being involved in
money scandals. Cabinet members, including Sata's replacement,
should prepare themselves for a chain of resignations, causing
"public misunderstanding and distrust."

There is concern about the government's lack of a sense of tension.
The public must be fed up with pitiful political knockabouts. The
prime minister's words -- "a beautiful country" or "an assertive
politician" -- have a hollow ring. He should not assume that the
political atmosphere will change for the better next year.

DONOVAN

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