Cablegate: Japanese Morning Press Highlights 03/14/07

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TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03/14/07

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule

Security ties:
4) Japan, Australia sign security agreement as first step toward
international framework
5) Japan, Australia summit meeting strengthens comprehensive
strategic relationship, links it to US
6) US has been pushing for Japan, Australia to sign security pact

7) LDP policy council puts off final approval of missile-defense
guidelines

WWII comfort-women issue:
8) Kantei (Prime Minister's Official Residence), LDP panel agree
that for time being there will be no re-investigation of
comfort-women issue
9) US media turns deaf ear to Prime Minister Abe's "sincere apology"
for WWII comfort-women issue
10) Australia's Prime Minister Howard in meeting with Abe praises
Kono Statement and Japan's apology to former WWII comfort women
11) US Rep. Honda, cosponsor of House resolution calling for Japan
to apologize for WWII comfort-women issue, treated as a hero in
South Korea

12) Foreign Ministry's diplomatic blue book this year focuses sharp
criticism of North Korea's nuclear weapon test, expresses concern
for China's arms buildup

ROK ties:
13) Foreign Minister Aso to visit South Korea on March 31
14) ROK refuses to recognize Japan's planned fisheries survey in EEZ

15) Former Prime Minister Koizumi expresses desire to resume
diplomatic activities, focusing on Middle East peace process

Money politics:
16) Prime Minister Abe will not remove Agriculture Minister Matsuoka
from cabinet despite Diet clamor over fake office expenses
17) Ruling and opposition camps alike calling for accountability on
part of Matsuoka for political fund office's fake expenses
18) Minshuto (Democratic Party of Japan) lawmaker Nakai also faked
political office records, claiming utilities expenses when they
actually were zero

Articles:

1) TOP HEADLINES

Asahi, Mainichi, Yomiuri & Sankei:
ANA plane's emergency landing: Front landing gear did not extend

Nihon Keizai:
Mitsubishi Heavy Industries awarded the construction of two nuclear
reactors in US by Texas Electric

Tokyo Shimbun:
Spring labor offensive: Management to come up with reply today;
Toyota settles labor-management negotiations with 1,000-yen wage
hike; Leading electric-appliance firms likely to agree to hike wages

TOKYO 00001096 002 OF 012

1,000 yen

Akahata:
Japan-Australia EPA to deal a big blow to Japanese farmers, JCP
lawmaker Kami says, calling for suspension of talks on EPA

2) EDITORIALS

Asahi:
(1) Matsuoka scandal: His insincere attitude intolerable
(2) Chirac's retirement: He countered US unipolar domination

Mainichi:
(1) ANA plane's emergency landing: People can't fly with peace of
mind
(2) Nikko Cordial remains listed: Swift action, transparent criteria
essential

Yomiuri:
(1) Japan-Australia security declaration: Bilateral cooperation for
stability in East Asia
(2) Successful emergency landing: What's wrong with this common type
of plane?

Nihon Keizai:
(1) Firms have responsibility to protect personal information
(2) More strategic implications in strengthened Japan-Australia
relations

Sankei:
(1) Nikko Cordial remains listed: Transparency needs to be improved
under clear standard
(2) Leaks of personal information: Delay in legislation also a
problem

Tokyo Shimbun:
(1) Minimum wage: Debate needed for shrinking wage gaps
(2) Nikko Cordial not to be delisted: Was this decision too
lenient?

Akahata:
Educational reform bills: Time to halt the implementation of bad
revised law

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, March 13

NIHON KEIZAI (Page 2) (Full)
March 14, 2007

09:01
Attended a cabinet meeting. Foreign Minister Aso stayed on.
Afterward, handed a letter of appointment of the National Public
Safety Commission to Graduate University for Advanced Studies Prof.
Mariko Hasegawa in the presence of National Public Safety Commission
Chairman Mizote and Chief Cabinet Secretary Shiozaki. Shiozaki
stayed on.

10:00
Met at Kantei with Shiozaki, his deputy Matoba, Advisor Koike, and
others, followed by Deputy Chief Cabinet Secretary Suzuki.

TOKYO 00001096 003 OF 012

11:24
Met Senior Vice Health Minister Takemi in the presence of Suzuki.
Afterward met Lower House Special Research Committee on the
Constitution Chairman Nakayama.

12:33
Met Koike.

13:00
Attended an Upper House Budget Committee session.

17:32
Met Australian Prime Minister John Howard at the Kantei.

18:36
Signed a Japan-Australia joint declaration, and held afterward a
joint press conference.

19:20
Had a photo session with Prime Minister Howard and his wife.
Afterward hosted a dinner party for them.

4) Abe, Howard sign joint security declaration

NIHON KEIZAI (Page 2) (Abridged slightly)
March 14, 2007

Prime Minister Shinzo Abe and Australian Prime Minister John Howard
signed yesterday a joint declaration on enhanced cooperation in UN
peacekeeping operations, counterterrorism measures, security, and
other fields. It is Japan's first security declaration with a
country other than the United States. The declaration is seen as a
first step toward the creation of an international security
framework.

The declaration lists nine areas for cooperation, including: (1)
cross-border crimes, (2) counterterrorism measures, and (3) disaster
relief. It also incorporates joint training exercises between
Japan's Self-Defense Forces and the Australian military. Also
specified in the declaration is a plan to establish a security
consultative committee of foreign and defense ministers of both
countries (a 2+2) to draw up action plans through regular
cabinet-level dialogues.

Although both Japan and Australia are major allies of the United
States, bilateral relations have not been deep. Given the unstable
situation in Iraq and constant international terrorist attacks, the
need for joint responses to threats gave impetus to the two
countries adopting the joint declaration.

"Enhanced strategic cooperation among Japan, the United States, and
Australia will contribute to peace and stability in the region,"
Prime Minister Abe said in a joint press conference. Abe eyes
expanding security cooperation to include India in the future.

The question is the declaration's applicable scope. During last
year's LDP presidential race, Abe underlined the need for strategic
dialogues with countries sharing similar values, such as the United
States, Europe, Australia, and India. It is obvious that one of the
aims is to tighten the noose around China, which has been pursuing a
military buildup.

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Japan and Australia are aware, however, that excessively irritating
China is not wise. In the joint press conference, Prime Minister
Howard said: "China must not regard the joint declaration as
hostile." Abe also expressed Japan's desire to strengthen relations
with China.

5) Abe, Howard sign Japan-Australia security declaration to
strengthen bilateral strategic relations

MAINICHI (Page 2) (Abridged)
March 14, 2007

Prime Minister Shinzo Abe held a meeting with visiting Australian
Prime Minister John Howard for about one hour at his official
residence yesterday. In the session, the two prime ministers signed
a Japan-Australia joint declaration prescribing bilateral
cooperation for stability in the Asia-Pacific region and
international contributions. They also agreed to draw up an action
plan to implement the joint declaration and to hold regular meetings
of the foreign and defense ministers of the two countries (2+2).

Commentary

The Japan-Australia joint security cooperation declaration signed
yesterday by Abe and Howard is aimed at the two countries' joined
efforts for stability in the Asia-Pacific region. It is Japan's
first joint security declaration sealed with a country other than
the United States. The joint declaration is expected to indirectly
assist Washington's recent priority of enhancing cooperation among
Japan, the United States, and Australia.

Australian troops' mission in Iraq included providing security to
Japanese Ground Self-Defense troops in the southern Iraqi city of
Samawah. In the wake of Pyongyang's nuclear test last year,
Australia also independently banned port calls by North Korean
vessels. Japan and Australia have steadily forged cooperative
relations. A senior Foreign Ministry official described Australia as
the most dependable country after the United States. Along with
Japan, Australia is also "the last bastion" for the United States,
which finds itself increasingly isolated on the diplomatic front.

In an effort to step up trilateral cooperation, Japan, the United
States, and Australia launched a trilateral foreign ministerial
strategic dialogue last year. The Japan-Australia security
declaration calling for bilateral cooperation in international
contribution and other areas differs in context from the US-Japan
Security Treaty. Yet, the bilateral declaration is certain to
supplement the Japan-US and US-Australia alliances and help
strengthen one side in the Japan-US-Australia triangle.

Efforts to strengthen the ties among the three countries based on
shared values might be taken as an attempt to tighten the noose
around China. Prime Minister Abe brushed aside such a concern,
raised in an Australian television interview on March 12.

6) Japan, Australia sign a joint security declaration to form a
"quasi-alliance," backed by US

YOMIURI (Page 2) (Excerpts)
March 14, 2007

TOKYO 00001096 005 OF 012

Shuhei Kuromi; Eki Niii, Sydney

The joint security declaration between Japan and Australia on
security cooperation, signed yesterday by Prime Minister Abe and
Australian Prime Minister Howard, is intended to strengthen
bilateral ties to the level of the relationship being a
"quasi-alliance." The declaration is an important document for the
security of the Asia-Pacific region. One reason why Japan and
Australia have now strengthened their partnership is because both
countries have become "close" in terms of cooperation in a number of
areas. There also is an awareness of the possibility of creating a
framework of security cooperation among Japan, the United States,
and Australia.

Japan and Australia's moving closer is backed by the United States.
Japan and Australia both rely on their separate alliances with the
US to guarantee their security. US Vice President Cheney's recent
visits to the two countries underscored the strengthening ties among
the three countries. Given that Japan and Australia have
consistently backed the US in the Iraq war and that the relationship
between the US and South Korea has worsened recently, there seems to
be the aim of shifting the weight of security cooperation in the
Asia-Pacific region from the previous one among Japan, the US, and
South Korea to a new one among Japan, the US, and Australia.

For the Abe administration as well, the strengthened relationship
between Japan and Australia appears to have a number of "pluses."

Abe has emphasized the need to buttress relations with Australia and
India before he came into office. The close partnership with
Australia is likely to give momentum to the idea of creating a
framework of cooperation among Japan, the US, Australia, and India
in the future. Given that Howard has been taken a hard-line stand
toward North Korea in dealing with the so-called Peninsula issues,
the close partnership between Japan and Australia may forestall
South Korea and China, analysts noted. The joint declaration
mentioned Japan-Australia cooperation on North Korean issues,
including the abductions of Japanese nationals.

7) LDP policy discussion panel delays giving approval for MD
guidelines

SANKEI (Page 5) (Full)
March 14, 2007

The ruling Liberal Democratic Party (LDP) yesterday held a meeting
of its Policy Deliberation Commission, in which it decided to delay
approving the emergency guidelines for taking action to destroy
ballistic missiles and the like. The guidelines were approved by a
joint session of the party's national defense-related divisions, but
in the meeting yesterday, some members, including Gen Nakatani and
Tokuhiko Akagi, raised objections to the guidelines, arguing:
"Missiles can arrive within a few minutes. Authority should be
regularly entrusted to someone instead of setting a length of the
term." If the guidelines are not approved at a Policy Deliberation
Commission meeting set for March 20, the cabinet will be forced to
delay giving approval to the guidelines.

8) No reinvestigation into wartime comfort women issue for time
being, Kantei, LDP panel agree

MAINICHI (Page 5) (Full)

TOKYO 00001096 006 OF 012

March 14, 2007

Former Education and Science Minister Nariaki Nakayama, chairman of
the Group of Lawmakers to Think about the Future of Japan and
Historical Education, a Liberal Democratic Party (LDP)
parliamentarians' league, and Deputy Chief Cabinet Secretary Hakubun
Shimomura yesterday met at LDP Headquarters. During the meeting they
agreed to put on hold a reinvestigation into the wartime comfort
women issue for the time being. The lawmakers and the Prime
Minister's Official Residence (Kantei) have been thrusting at each
other, but Policy Affairs Research Council Chairman Shoichi Nakagawa
stepped in to act as mediator.

During the meeting, in which Nakagawa also participated, Nakayama
and Shimomura shared the view that the party and the government
should give priority to making a joint effort to avoid the situation
of the US House of Representatives adopting a resolution seeking an
apology from the Japanese government on the comfort women issue.

9) US media ignores prime minister's apology over comfort women
issue

ASAHI (Page 4) (Full)
March 14, 2007

Yoshiyuki Komurata, Washington

Major US media companies have hardly responded as of March 12 to
Prime Minister Abe's statement expressing his sincere apology over
the comfort women issue. They probably take the prime minister's
statement as just an expression of the government's conventional
view. Since the prime minister plans to visit the US in late April,
the US Congress, out of consideration for Japan, might delay taking
a vote on a resolution critical of Japan over the issue.

In an NHK interview, the prime minister emphasized, "We have
expressed sincere apologies, and my feeling is exactly the same."
Chinese newspapers prominently reported on this statement as an
"apology." Some take the view that it may have been intended to
avoid problems ahead of the planned visit to Japan by Premier Wen
Jiabao in April.

In contrast, US media interest has cooled. Some press companies
reported what the prime minister said, but only briefly.

According to Reuters, Representative Mike Honda of the Democratic
Party, who submitted a resolution on the issue, commented on March
12 on the prime minister's statement: "His words are encouraging,
and it is gratifying for him to recognize the unfathomable pain of
the women involved." But he added, "The prime minister's comment is
personal and is not the government's official apology," while
stressing the importance of the Japan-US alliance. He indicated that
a vote is likely to be taken after the prime minister visits the US
in April.

10) Australian prime minister hails Abe's positive comment on
comfort women issue

ASAHI (Page 4) (Full)
March 14, 2007

Visiting Australian Prime Minister John Howard said regarding the

TOKYO 00001096 007 OF 012

wartime comfort women issue during a meeting with Prime Minister Abe
yesterday:

"Although Australians are sensitive to the issue, I welcome your
positive comment regarding continuing to feel a sense of remorse and
pledging to uphold the Kono statement."

Prime Minister Abe replied:

"There is no change in the stance of upholding the Kono statement
and continuing to feel apologetic toward comfort women who were
mentally hurt."

11) South Koreans taking nationalistic pleasure in US resolution
critical of Japan over comfort women issue, treating Honda as hero

SANKEI (Page 7) (Excerpts)
March 14, 2007

Katsuhiro Kuroda, Seoul

South Koreans are getting excited over the so-called comfort women
issue again. The media, among others, are getting extremely
agitated, carrying articles welcoming a resolution critical of Japan
now under debate in the United States Congress that include these
expressions: "The former Japanese military's coercion of young women
into sexual slavery is now the target of not only Asian but global
anger," (Munhwa Ilbo on March 9); "Build a global network to apply
pressure to Japan," (Chosun Ilbo on March 9); and "Japan's diplomacy
is sending it into isolation" (Dong-A Ilbo). South Korean newspapers
are taking "nationalistic pleasure" in criticizing Japan almost
every day.

In South Korea, former comfort women have been treated as a sort of
"national heroines" as the unilateral victims of Japanese
imperialism. That country has refused to accept any Japanese claims
or explanations contrary to their image, such as that evidence does
not exist to prove coercion or that reviewing the Kono statement is
necessary.

Some people suggest that the issue of "coercion" be taken up as a
theme for joint research of Japanese and South Korean history. For
South Koreans, though, the "comfort women card" is valuable.
Denouncing "Japan's immorality," they can teach a lesson with these
remarks: "Because of its distorted history, Japan, though an
economic power, has not been fully accepted by the international
community. Japanese people must be aware of this fact" (Munhwa Ilbo
on March 3).

In order for South Korea to demonstrate its moral superiority to
Japan, that country has made coercion by the Japanese state on the
comfort women issue an absolutely necessary condition. A diplomatic
source in Seoul said that because of this, South Korea insisted that
it "will not be able to convince our people as long as Japan does
not acknowledge the government's coercion" during Japan-South Korea
diplomatic talks in 1993. Following the talks, Japan issued the Kono
statement. That is why civic groups and the media in South Korea
repeatedly use the word "coercion" when discussing the comfort women
issue. South Korea's official perception of history is that coercion
was involved in everything that took place during Japanese rule that
is now inconvenient.

TOKYO 00001096 008 OF 012

For South Koreans, "coercion" is an issue that will affect their
racial self-respect. On this point, they cannot make any
concession.

The belief that the US Congress has come in on their side has
heartened South Koreans. Congressman Mike Honda, a
Japanese-American, has been prominently introduced as a pro-Korean
hero in the South Korean media.

12) Diplomatic Bluebook criticizes nuclear test by North Korea, says
"China's military power remains opaque"

YOMIURI (Page 4) (Full)
March 14, 2007

The Ministry of Foreign Affairs presented at a joint meeting of
foreign relations-related subcommittees the draft Diplomatic
Bluebook for fiscal 2007. The draft criticized the nuclear test
conducted by North Korea last October noting that it is a serious
threat to the peace and security of not only Japan but also of East
Asia and the international community and absolutely impermissible.
Regarding energy aid to the North as decided at the recent six-party
talks, the draft said that Japan would not take part until
Japan-North Korea relations, including the abduction issue, make
progress.

It also noted that the modernization of China's military power and
the increase in its national defense expenses remain opaque and that
the nation should act based on the rules of the international
community, including on the provision of foreign aid. As a new
stance of Japan's diplomacy, the draft stressed a policy of forming
an Arc of Freedom and Prosperity intended to encourage
democratization in the area covering Northern Europe, Central Asia,
the Middle East, and Northeast Asia.

13) Coordination underway for Aso's visit to South Korea on March
31

MAINICHI (Page 2) (Full)
March 14, 2007

Foreign Minister Taro Aso yesterday began finalizing a plan to make
a two-day visit to South Korea starting on March 31 to hold talks
with Foreign and Trade Minister Song Min Soon. A strategic dialogue
took place on March 12 between vice foreign ministers of the two
countries. Aso eyes cabinet-level dialogues, as well, to confirm the
two countries' close cooperation on responses to the six-party talks
on the North Korean nuclear programs and other matters. The upcoming
visit will be Aso's second trip to South Korea following the one
last October.

Aso is expected to reiterate Japan's position of continue upholding
the Kono Statement on the so-called comfort women issue in view of
South Korea's concern over a call in the Liberal Democratic Party
for a review of the statement.

14) ROK refuses to allow Japan to survey fishing ground, claiming it
is "our country's EEZ"

ASAHI (Page 2) (Full)
March 14, 2007

TOKYO 00001096 009 OF 012

Itohiro Makino, Seoul

The Japanese government applied twice, at the end of January and
last weekend, to South Korea for permission to survey a fishing
ground in a part of the Sea of Japan to determine seawater
temperature, the tidal current, and other data, but the South Korean
government refused to allow Japan to do so, the Asahi Shimbun
learned yesterday. This was revealed to the Asahi Shimbun by a South
Korean official at the Maritime & Fisheries Ministry.

According to that official, South Korea examined Japan's application
but concluded that the oceanic area where Japan plans to conduct the
survey is within South Korea's exclusive economic zone (EEZ). South
Korea has not made it clear where the location is. The official said
South Korea has decided not to allow Japan to conduct a survey
within South Korea's EEZ because Japan's exploration comes within
the purview of a scientific marine survey.

15) Former Prime Minister Koizumi to resume diplomatic activities;
Expresses enthusiasm for Middle East peace efforts

MAINICHI (Page 5) (Full)
March 14, 2006

Former Prime Minister Junichiro Koizumi, a ruling Liberal Democratic
Party member, expressed his intention to resume diplomatic
activities, which he had refrained from doing after leaving office.
He made the remark at an inaugural meeting on March 12 of the
private-sector think-tank International Public Policy Research
Center. Director Naoki Tanaka revealed Koizumi's remark to reporters
yesterday.

Koizumi reportedly quietly sought to constrain Prime Minister Shinzo
Abe, who has gradually parted ways with him by allowing former LDP
members who opposed postal privatization to return to the party.
According to Tanaka, Koizumi, who serves as an advisor to the
center, stated in a speech: "I visited 48 countries during my five
years and six months in office, but there are still things I was
unable to fulfill." Since Koizumi has said that he wants to speak
out about security in the Middle East, he plans to come up with
measures to promote peace in the Middle East peace efforts the first
half of next year.

At a House of Representatives Budget Committee session on March 9,
Abe indicated he had parted ways with the Koizumi policy approach,
saying: "Mr. Koizumi was drastic medicine, but I am like Chinese
medicine that works gradually. So, I would like to take measures
that will produce a gradual effect." Some LDP lawmakers assume that
Koizumi's declaration to restart his diplomatic activities is an
expression of his annoyance with Abe.

16) Prime Minister Abe has no intention to call on Agriculture
Minister Matsuoka to resign over utility and water scandal

YOMIURI (Page 2) (Full)
March 14, 2007

Asked yesterday at an intensive session of the Upper House Budget
Committee about the issue of Agriculture Minister Toshikatsu
Matsuoka's political fund management organization having booked huge
utility and water expenses in the politician's funds reports, Prime
Minister Shinzo Abe stressed again that he had no intention of

TOKYO 00001096 010 OF 012

dismissing him or asking him to resign. Abe stated: "(Matsuoka is)
well versed in agricultural policy. I want him to do his best to
obtain public confidence by fulfilling his duty." He then
continued:

"In order to improve the transparency of both revenues and
expenditures (of political funds), I ordered the Liberal Democratic
Party to discuss the issue with an eye on a review of the Political
Funds Control Law to come up with measures."

Matsuoka rejected again requests to disclose the details of utility
and water expenses, saying:

"I have reported based on the law. Since the issue is intertwined
with the application of the law, I want the parties and
parliamentary groups to decide what contents of political funds
reports should be disclosed. If they make a decision, I will follow
it."

17) Agriculture Minister Matsuoka's utility and water expenses: Call
for accountability heard in government, ruling camp; Opposition
considering filing criminal complaint

NIHON KEIZAI (Page 2) (Full)
March 14, 2007

Voices calling for Agriculture Minister Toshikatsu Matsuoka to take
accountability for his utility and water expenses have begun to be
heard in the government and the ruling camp. Matsuoka has dodged
questions on the issue, but since the contradictions in his
explanations have been pointed out, he is refusing to give detailed
accounts on the matter. The Democratic Party of Japan (DPJ or
Minshuto) and the rest of the opposition camp are stepping up their
offensive. Opposition parties are in agreement on a policy of
summoning him as a witness in the event that he refuses to step down
at an early date. They are also considering filing a complaint
against him.

The opposition camp is making an issue over the utility and water
expenses worth approximately 28.8 million yen, which his political
funds management organization booked for five years starting in
2001. The office is located in the Lower House Members' Office
Building, which is free of utility charges. As such, Matsuoka's
explanations have been called contradictory. Akiko Santo of the
Liberal Democratic Party (LDP) during intensive deliberations on
agriculture and food safety at the Upper House Budget Committee
meeting yesterday asked Matsuoka, "We want you to correct your
attitude so that you can focus on your work."

However, Matsuoka refused to disclose the breakdown of the financial
statements of his funds management organization, noting, "I would
like to report on what was included in the financial reports once
each party sets standards for such." He also brushed aside calls for
his resignation.

Prime Minister Shinzo Abe defended Matsuoka, noting, "He has
reported the expenses according to laws and ordinances." He
repeatedly used the words "according to laws and ordinances" during
the Budget Committee meeting yesterday. In response to a sarcastic
question at a press conference, "Do you think a bottle of water that
costs 5,000 yen is expensive?" Chief Cabinet Secretary Yasuhisa
Shiozaki said, "It depends on the person."

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However, many members of the government and the ruling parties are
concerned that the issue could have an adverse effect on the unified
local elections in April and the Upper House election in July. State
Minister for the Declining Birthrate Sanae Takaichi said, "I myself
do not understand that explanation." Toranosuke Katayama, secretary
general of the LDP members in the House of Councillors, also said,
"It is better to use language that is easily understandable for the
public."

There is a small gap in the stance of the DPJ between the Lower and
Upper Houses in pursuing Matsuoka. The question-and-answer session
at the Budget Committee meeting lasted an hour and a half, but the
DPJ spent only 10 minutes on the issue. DPJ member Hirokazu Shiba
all of a sudden visited Matsuoka's office and asked staff members
there to reveal its heating appliances. During the meeting of the
Lower House Diet Steering Committee, he apologized for his "reckless
action."

Acting DPJ head Naoto Kan said, "It's tough on the premier if we
keep going after Matsuoka." However, some ruling party members
suggested that the DPJ is likely to back off due to a suspected
political funds issue involving former Upper House Vice President
Giichi Tsunoda.

18) Minshuto's Nakai found to have falsified political funds report
for 2005 by claiming 2.86 million yen for utilities, when expenses
were actually zero

MAINICHI (Page 1) (Slightly abridged)
March 14, 2007

The office of House of Representatives member Hiroshi Nakai, a
former Justice Minister who belongs to the main opposition party
Minshuto (Democratic Party of Japan), revealed yesterday that the
lawmaker's political management organization had falsified Nakai's
political fund report for 2005, claiming expenses of 2.68 million
yen for utilities despite that money being paid out for other
expenses such as telephone bills and flowers. The case may violate
the Political Funds Control Law under the category of falsifying
fund reports. The accountant admitted that Nakai's political
management group had falsified funds reports for at least several
years, noting, " Though no money was spent for utilities, it had
been the practice for the organization to declare such expenses. We
want to correct the political funds reports."

Although Nakai's political fund management organization called
"Kowa-kai" has only one office in a Diet members' building, which is
free of utilities expenses, it listed 18.5 million yen in such costs
for five years from 2001 to 2005 -- 2.34 million yen for 2004 and
5.46 million yen for 2003.

The accountant revealed:

"The utilities expenses for 2005 included telephone fees to Mie
Prefecture, his home constituency, the cost of flowers for
congratulations and condolences, membership fees for parliamentary
groups, and tax payments. Since I took over the job (from a
predecessor), the organization falsified funds reports at least for
several years."

Nakai said:

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"I don't know anything about it. My secretary (accountant) has told
me that he has listed them just as his predecessor did and that he
will now correct them. Since we have receipts, what we did was not
in violation of the law."

The Political Funds Control Law stipulates that politicians who
falsified their political fund reports can be sentenced up to five
years' imprisonment and fined up to 1 million yen.

SCHIEFFER

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