Cablegate: Daily Summary of Japanese Press 09/20/07

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UNCLAS SECTION 01 OF 13 TOKYO 004397

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 09/20/07

Index:

(1) Government: UN antiterrorism resolution clearly reflects UN
wishes for continued refueling operation

(2) Foreign Minister Machimura welcomes adoption of UNSC resolution,
refers to maritime interdiction component

(3) LDP presidential race: Eight faction heads secretly coordinating
formation of new cabinet and party leadership

(4) Poll on LDP presidential election, political parties

(5) Poll on Abe cabinet, political parties, LDP race, MSDF refueling
mission

(6) DPJ set to continue opposing Indian Ocean mission even if new UN
resolution adopted

(7) Seiron (Opinion) column: DPJ President Ozawa's cosmopolitan
sensibility questionable

(8) New Komeito calls for postponing goal to bring primary balance
into black: Putting on show of attaching importance to regional
districts with eye on next Lower House election; Prevailing view in
LDP is negative

(9) International fraud groups likely to be behind suspects for
allegedly opening bank accounts in Saitama, Chiba for money
laundering

ARTICLES:

(1) Government: UN antiterrorism resolution clearly reflects UN
wishes for continued refueling operation

NIKKEI ONLINE (Full)
13:51, September 20, 2007

The UN Security Council has adopted a resolution that includes words
of appreciation for the multinational maritime interdiction
operations (MIO). The government has taken this as indicating that
the international community clearly welcomes the continuation of the
Maritime Self-Defense Force's refueling operations on the Indian
Ocean. Chief Cabinet Secretary Kaoru Yosano in this morning's press
conference said: "It is significant that Japan's refueling
operations have gained extremely high praise from the UN Security
Council members. The United Nation's desire that operations continue
is now clear."

Referring to the Democratic Party of Japan's (Minshuto or DPJ)
adamant opposition to continuing such operations, Yosano stated: "I
think DPJ President Ichiro Ozawa believes in a UN-centered
diplomacy. (Such thinking) must be practiced by respecting the UN's
wishes, while operating within our constitutional restrictions." He
thus expressed hopes for the DPJ to turn around its opposition to
continuing the refueling mission based on the new UN resolution.

Foreign Minister Nobutaka Machimura also told the press this
morning: "I would like to see (the DPJ) become more sensitive to
international efforts and wishes." Defense Minister Masahiko Komura
took this view: "No member voted against the resolution, with all

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valid votes approving it. If this is not international opinion, what
is?"

(2) Foreign Minister Machimura welcomes adoption of UNSC resolution,
refers to maritime interdiction component

ASAHI ONLINE NEWS (Full)
September 20, 2007, 12:27 p.m.

Speaking to reporters at the Foreign Ministry this morning about the
United Nations Security Council (UNSC) adopting a resolution making
mention of the maritime interdiction operation (MIO), Foreign
Minister Machimura said: "Japan welcomes the adoption of the
resolution. The judgment has again been made that it is necessary
for Japan as a responsible member of the international community to
continue its mission." Machimura revealed that in the recent
Japan-Australia foreign ministerial held on the sidelines of the
Asia-Pacific Economic Cooperation (APEC) conference in Australia
early this month, Japan asked the US' cooperation on the adoption of
a new resolution.

Russia abstained from voting. In this regard Machimura noted: "The
important thing is that the resolution has been adopted. This fact
does not reduce any aspect of the significance of the resolution."
Defense Minister Komura, as well, stressed the effectiveness of the
resolution at a press briefing this morning, saying: "(The
effectiveness of the resolution) has not been lost in any way. No
member voted against the resolution. The valid votes numbered 14,
and all votes were in favor of the resolution. If that doesn't speak
for the will of the international community, what does?"

Chief Cabinet Secretary Yosano sought to check the DPJ's opposition
at a press briefing this morning when he said: "The UNSC resolution
has recognized the importance of the past refueling operations,
praised the activities of foreign countries, and declared the need
for the operations to be continued. It reflects the UN's desire."

(3) LDP presidential race: Eight faction heads secretly coordinating
formation of new cabinet and party leadership

YOMIURI (Page 4) (Full)
September 20, 2007

While former Chief Cabinet Secretary Yasuo Fukuda taking the lead in
the ongoing campaign for the ruling Liberal Democratic Party (LDP)
presidential election, many LDP lawmakers are now interested in the
roster of the party's new executives, as well as the lineup of the
new cabinet ministers, which will be picked after the Sept. 23
presidential race. Fukuda has taken a cautious stance toward a
large-scale change of the current cabinet, citing the Diet being in
session. However, each faction has high hopes for a large-scale
change in the cabinet lineup. Faction heads have begin to hold
discussions behind closed doors.

Fukuda indicated on Sept. 16 that in case he became prime minister,
it would be difficult to drastically reshuffle the cabinet members.
He stated: "Since the Diet is in session, new ministers will have to
take the floor to answer questions. So I won't be able to make big
changes."

After the new cabinet is inaugurated on the 25th, the new prime
minister is expected to deliver a policy speech on the 28th. The new

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cabinet ministers will be besieged with questions. With the issue of
the "politics and money" scandals still alive, the new prime
minister will not have sufficient time to carry out a thorough
background check on the members of his cabinet.

Many in the LDP think that Chief Cabinet Secretary Yosano should be
replaced by a person close to Fukuda. Machimura faction members have
rumored that Hiroyuki Hosoda or Nariaki Nakayama should be named
chief cabinet secretary.

A senior LDP member with close ties to Fukuda proposed retaining
most ministers of the Abe cabinet and reshuffling the cabinet after
the current extraordinary Diet session ends or before next year's
regular Diet session is convened. Fukuda appears to be inclined to
accept such a view.

However, it remains to be seen if the tide will turn as Fukuda
hopes.

"Secretary General Koga, congratulations," a House of Councillors
member said in a Koga faction meeting last night to Makoto Koga.
Many in the faction seemed to be expecting Koga to become secretary
general.

The Koga faction's position is that the secretary general's post
should be given to the faction since the thinking is that it created
the trend of backing Fukuda in the party leadership race.

The Tanigaki faction, which proactively worked to set up a support
system for Fukuda in cooperation with Koga and other members,
predicts that this is a good chance for it to get one of the three
key LDP posts.

Each faction's desire for cabinet posts is strong. In order to play
up its desire for cabinet posts, one faction included its members
waiting to enter the cabinet in a list of LDP lawmakers recommending
Fukuda to run in the presidency.

A person close to Fukuda is concerned that if he accepts the
requests from various factions, he will inevitably be criticized by
the media for granting rewards.

Former Prime Minister Yoshiro Mori, honorary chairman of the
Machimura faction, and former Secretary General Hidenao Nakagawa has
begun coming into contact with faction heads and senor members. They
seem to be trying to find a middle ground, while listening to their
requests, but coordination seems likely to stall.

(4) Poll on LDP presidential election, political parties

ASAHI (Page 3) (Full)
September 17, 2007

Questions & Answers
(Figures shown in percentage, rounded off. Bracketed figures denote
proportions to all respondents.)

Q: Which political party do you support now? (Figures in parentheses
denote the results of a survey taken Sept. 13.)

Liberal Democratic Party (LDP) 32 (30)
Democratic Party of Japan (DPJ or Minshuto) 24 (28)

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New Komeito (NK) 1 (3)
Japanese Communist Party (JCP) 2 (2)
Social Democratic Party (SDP or Shaminto) 1 (1)
People's New Party (PNP or Kokumin Shinto) 0 (0)
New Party Nippon (NPN or Shinto Nippon) 0 (0)
Other political parties 0 (0)
None 35 (30)
No answer (N/A) + don't know (D/K) 5 (6)

Q: Are you interested in the LDP presidential election? (Figures in
parentheses denote the results of a survey taken Sept. 8-9, 2006.)

Yes 69 (63)
No 29 (35)

Q: Yasuo Fukuda and Taro Aso have announced their candidacies for
the LDP presidential election. Which one do you think is appropriate
for the next prime minister? (One choice only)

Yasuo Fukuda 53
Taro Aso 21

Q: (For those who picked Fukuda) Why?

Because his policies and ideals are good 17 (9)
Because he's stable 62 (33)
Because he's friendly 17 (9)

Q: (For those who picked Aso) Why?

Because his policies and ideals are good 36 (8)
Because he's stable 22 (5)
Because he's friendly 34 (7)

Q: Which type do you think is better for the next prime minister?
(One choice only)

Decisive type to push ahead 31
Coordinative type to listen well to others 62

Q: What would you like the next prime minister to pursue first? (One
choice only)

Pensions 32
Social divide 30
Foreign, security policies 16
Fiscal reconstruction 19

Q: Prime Minister Abe has been positive about constitutional
revision. Would you like the next prime minister to take over this
stance?

Yes 45
No 45

Q: Would you like the next prime minister to take over Prime
Minister Abe's education reform policy?

Yes 63
No 28

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Q: Prime Minister Abe has taken over Prime Minister Koizumi's reform
drive. This weighs economic growth and competition. Would you like
the next prime minister to take over this reform drive?

Yes 54
No 36

Polling methodology: The survey was conducted from the afternoon of
Sept. 15 through the evening of Sept. 16 over the telephone on a
computer-aided random digit dialing (RDD) basis. Respondents were
chosen from among the nation's voting population on a three-stage
random-sampling basis. Valid answers were obtained from 1,152
persons (65 PERCENT ).

(5) Poll on Abe cabinet, political parties, LDP race, MSDF refueling
mission

SANKEI (Page 5) (Abridged)
September 18, 2007

Questions & Answers
(Figures shown in percentage, rounded off.)

Q: Do you support the new Abe cabinet?

Yes 20.0 (38.0)
No 68.7 (42.9)
Don't know (D/K) + Can't say which (CSW) 11.3 (19.1)

Q: Which political party do you support?

Liberal Democratic Party (LDP) 30.5 (28.2)
Democratic Party of Japan (DPJ or Minshuto) 25.9 (30.9)
New Komeito (NK) 4.9 (5.6)
Japanese Communist Party (JCP) 3.1 (2.3)
Social Democratic Party (SDP or Shaminto) 1.6 (1.1)
People's New Party (PNP or Kokumin Shinto) 0.5 (0.2)
New Party Nippon (NPN or Shinto Nippon) 0.5 (0.6)
Other answers (O/A) 1.0 (1.6)
None 30.5 (28.3)
D/K + Can't say (C/S) 1.5 (1.2)

Q: How do you evaluate Prime Minister Abe and his cabinet on the
items listed below?

His cabinet's performance
Yes 21.5
No 69.5
D/K+CSW 9.0

His cabinet's personal character
Yes 60.0
No 31.8
D/K+CSW 8.2

His leadership
Yes 7.5
No 85.1
D/K+CSW 7.4

Foreign policy
Yes 40.2

TOKYO 00004397 006 OF 013

No 45.1
D/K+CSW 14.7

Education reform
Yes 25.3
No 58.6
D/K+CSW 16.1

Economic policy
Yes 14.3
No 69.8
D/K+CSW 15.9

Efforts for constitutional revision
Yes 26.7
No 58.3
D/K+CSW 15.0

Response to pension issues
Yes 26.9
No 65.7
D/K+CSW 7.4

Response to politics-and-money issues
Yes 12.0
No 80.3
D/K+CSW 7.7

His political approach
Yes 10.1
No 76.3
D/K+CSW 13.6

Timing for his resignation
Yes 11.0
No 82.1
D/K+CSW 6.9

Reason for his resignation
Yes 18.7
No 66.7
D/K+CSW 14.6

Q: Which candidate do you support in the LDP presidential election?

Yasuo Fukuda 55.9
Taro Aso 28.1
D/K+CSW 16.0

Q: What do you think is important for the post-Abe leader?

Confidence
Yes 69.1
No 22.1
D/K+CSW 8.8

Experience, actual results
Yes 64.1
No 29.5
D/K+CSW 6.4

TOKYO 00004397 007 OF 013

Friendliness
Yes 54.2
No 38.1
D/K+CSW 7.7

Leadership ability
Yes 74.1
No 19.2
D/K+CSW 6.7

Freshness
Yes 33.0
No 57.1
D/K+CSW 9.9

Policy expertise
Yes 68.4
No 19.5
D/K+CSW 12.1

Public mindset
Yes 66.0
No 25.2
D/K+CSW 8.8

Q: Who do you think is most appropriate for the next prime
minister?

Yasuo Fukuda 27.7
Junichiro Koizumi 15.0
Yoichi Masuzoe 13.2
Taro Aso 10.3
Yuriko Koike 0.9
Kaoru Yosano 0.3
Other ruling party lawmakers 2.0
Ichiro Ozawa 12.2
Other opposition party lawmakers 3.9
None 12.1
D/K+CSW 2.4

Q: What would you like the next prime minister to pursue first?

Pensions 27.7
Social divide 27.2
Tax reform, including consumption tax 10.2
Politics and money 10.1
Education reform 8.3
Global warming 5.9
Constitutional revision 3.3
Security 2.8
North Korea 2.5
D/K+C/S 2.0

Q: When would you like the House of Representatives to hold its next
election?

Within the year 28.3 (28.3)
Next year 46.0 (46.2)
The year after next 22.5 (22.3)
D/K+C/S 3.2 (3.2)

Q: Do you support continuing the Maritime Self-Defense Force's

TOKYO 00004397 008 OF 013

refueling activities in the Indian Ocean?

Yes 48.7
No 39.1
D/K+CSW 12.2

Q: Do you think you are a floating voter with no party in particular
to support?

Yes 57.5 (52.0)
No 38.6 (44.6)
D/K+CSW 3.9 (3.4)

(Note) Figures in parentheses denote the results of the last survey
conducted in August.

Polling methodology: The survey was conducted Sept. 15-16 by the
Sankei Shimbun and Fuji News Network (FNN) over the telephone on a
computer-aided random digit dialing (RDD) basis. For the survey, a
total of 1,000 persons were sampled from among males and females,
aged 20 and over, across the nation.

(6) DPJ set to continue opposing Indian Ocean mission even if new UN
resolution adopted

SANKEI (Page 1) (Abridged slightly)
September 20, 2007

The government used to always be on the defensive in dealing with
the Democratic Party of Japan (Minshuto or DPJ) on the propriety of
the Maritime Self-Defense Force's refueling operations in the Indian
Ocean, but yesterday, it finally switched to an offensive posture.
The government is specifically trying to continue the refueling
operations by taking advantage of a yet-to-be-adopted new UN
Security Council resolution on Afghanistan (TN: adopted on Sept. 20,
Japan time). The resolution includes words of appreciation for the
US-led Operation Enduring Freedom (OEF), including the MSDF
operations. A senior Foreign Ministry indicated that the new
resolution is intended to weaken the DPJ's logic behind its
opposition to an extension of the refueling mission.

The government began making serious efforts in late August,
immediately after Prime Minister Abe reshuffled his cabinet. Foreign
Minister Nobutaka Machimura telephoned the foreign ministers of 13
countries, including such permanent UNSC members as the United
States, Britain, and France, and asked for their support and
cooperation for an extension of the Antiterrorism Special Measures
Law to let the MSDF continue their refueling operations.

But the DPJ has no intention of changing its opposition to a
continued MSDF mission.

Upon being briefed yesterday by a senior DPJ lawmaker on the new
resolution, President Ichiro Ozawa said: "We are talking about a
violation of the Constitution here. They cannot deceive us with a
thank-you resolution." In other words, he does not recognize a UN
resolution of appreciation as an official UN resolution! Ozawa and
the DPJ's official view is that an explicit UN resolution is
necessary for engaging in refueling services. Ozawa thinks that
Japan is militarily supporting America's war. Diet Affairs Committee
Chair Kenji Yamaoka also indicated that a resolution expressing
appreciation would not be enough to change the DPJ's standpoint.

TOKYO 00004397 009 OF 013

The DPJ's persistent opposition is attributable to Ozawa's security
beliefs and the decision that the general public shares his view. In
fact, in opinion polls until late August, the majority of
respondents voiced opposition to an extension. But "approval" has
been increasing in recent polls. This spells trouble for the DPJ,
which has been sensitive about public trends.

Asked about changing public opinion at a press conference on Sept.
18, Ozawa said: "We must keep a watchful eye on public trends. We
also publicly pledged in our manifesto to (oppose the MSDF mission),
and that will not change."

This was followed by the UN resolution of appreciation. As seen in
Policy Research Committee Chair Masayuki Naoshima's comment, "I
didn't know about the resolution until just recently," the DPJ did
not expect the new UN resolution. The UN resolution designed to
benefit those who favor the extension of the anti-terror law would
naturally affect public opinion.

The DPJ is unlikely to turn around its policy course, however. There
seems no one in the DPJ willing to confront Ozawa, who led the party
to a landslide victory in the July House of Councillors election.
Even Deputy President Seiji Maehara, who has been keeping himself at
arms' length from Ozawa, indicated at a Sept. 11 meeting that he
would ultimately follow the party's decision.

Meanwhile, former Chief Cabinet Secretary Yasuo Fukuda and LDP
Secretary General Taro Aso, who are vying for the LDP presidency,

SIPDIS
held their joint press conference at the Foreign Correspondents'
Club of Japan yesterday. In the session, both Fukuda and Aso
indicated that they would seek the DPJ's support for continuing the
refueling operations. But specific steps remain unclear, such as
whether to introduce new antiterrorism legislation to the current
extraordinary Diet session. The Diet would effectively be out of
session until the nation's 91st prime minister is determined after
the LDP presidential election.

The LDP is tied up in its presidential race, while the DPJ is
adamantly refusing to budge even an inch. And meanwhile, the clock
is ticking toward the Antiterrorism Law's deadline of Nov. 1, when
the SDF would have to leave the Indian Ocean.

(7) Seiron (Opinion) column: DPJ President Ozawa's cosmopolitan
sensibility questionable

SANKEI (Page 13) (Abridged)
September 20, 2007

Tadashi Nishihara, president of the Research Institute for Peace and
Security

Southwest Eurasia now center of post-Cold War political changes

Prime Minister Abe's abrupt announcement on Sept. 12 of his
intention to step down has caused a significant political vacuum in
Japanese politics. Whether Japan can set a course for the Maritime
Self-Defense Force (MSDF) to continue its refueling mission in the
Indian Ocean has become doubtful. Continuing the refueling mission
is not necessarily an "international commitment," but the
international community strongly hopes that Japan will continue
refueling. The MSDF's refueling operation is part of the

TOKYO 00004397 010 OF 013

international mission aimed at interdicting terrorism. If Japan puts
a halt to the refueling service, it will be taken to mean that Japan
has failied to honor its responsibilities to the international
community. The major opposition Democratic Party of Japan (DPJ) and
particularly its president, Ichiro Ozawa, must be keenly aware of
the seriousness of the matter.

With the end of the Cold War, the perception of many governments and
scholars was that the major wave of political change had shifted
from Europe, where the United States and the Soviet Union had long
confronted each other, to East Asia. In actuality, however, changes
occurred in the Middle East, Southwest Asia, Central Asia, the
southern part of Russia and Islamic nations. After the end of the
Cold War, major military conflicts have occurred in those regions,
as seen in the Gulf War, the campaigns against al-Qaeda and the
Taliban, the Iraq war, terrorism by Islamic radicals in Chechnya
against the Russian government, and conflicts between Israeli forces
and the Hezbollah in Lebanon.

In South Asia, India and Pakistan have declared they possess nuclear
weapons. In fact, nuclear technology was passed on by Dr. Khan of
Pakistan to Libya, Iran, and North Korea via international
underground organizations. There is also the likelihood that Iran's
nuclear technology will spread to other Islamic nations.

The security environment in Southwest Eurasia has been increasingly
deteriorating. There is no prospect in sight for security to improve
in the region because of the expanded armed conflicts in Afghanistan
and Iraq.

Worsened security environment

A worst-case scenario for the region is that with the national
border between Afghanistan and Pakistan in effect vanishing. The
Taliban will eventually control both countries and establish a kind
of a "Taliban" state. Given the recent administrative mismanagement
and corruption of the Musharraf government in Pakistan, we cannot
rule out the possibility of Islamic radicals coming to power in that
country.

Ozawa needs to inspect refueling

Sea lanes are important for Japan. Japan's concern about sea lanes
is that Iran may intimidate foreign vessels passing through the
Strait of Hormuz by launching missiles. Should an Islamic extremist
government be established in Pakistan, maritime safety in the Indian
Ocean would be further threatened.

In the Indian Ocean and the Arabian Sea, terrorist elements,
weapons, munitions, narcotics, and secret caches of money are
carried by small boats. Some of them may be carried to Afghanistan
or Pakistan, from which they may next be transported to Somalia in
Africa. Some may go to Afghanistan via Iran. Given this situation,
it is important for the MSDF to play the role of providing
information about suspicious boats navigating in nearby seas in
addition to refueling vessels from friendly countries. The DPJ has
charged the MSDF with its refueling vessels from friendly countries
taking part in the Iraq War. Although those vessels' major mission
would be to crack down on the flow of weapons, munitions, narcotics,
and terrorist elements to Afghanistan via Pakistan, but in doing so,
they should have spotted suspicious boats heading for Iraq. But the
DPJ is insisting that a clear distinction should be made between

TOKYO 00004397 011 OF 013

vessels engaged in operations in Afghanistan and those for the Iraq
war. Those who can make this kind of claim are only those who do not
know actual situations there.

Ozawa has driven Prime Minister Abe, an advocate for the war on
terror, into resigning. If Ozawa is going to call for a halt to the
MSDF's refueling mission, he should first inspect the scenes of the
refueling. Next, he should visit NATO headquarters in Belgium and
meet with representatives of the multinational force (namely, the
International Security Assistance Force composed of troops from 37
countries) fighting against terrorists, and suffering a number of
casualties in so doing. Can Ozawa have the courage to declare before
them that Japan will put a halt to the MSDF's refueling mission for
the sake of Japan's national interests and for the sake of the
international community?

(8) New Komeito calls for postponing goal to bring primary balance
into black: Putting on show of attaching importance to regional
districts with eye on next Lower House election; Prevailing view in
LDP is negative

NIKKEI (Page 2) (Full)
September 20, 2007

The New Komeito yesterday called for the postponement of the
government goal of bringing the primary balance of the central and
local governments into the black by fiscal 2011, creating a great
sensation in the government and the Liberal Democratic Party (LDP).
With an eye on the next Lower House election, the New Komeito wants
to give the impression that it is attaching importance to regional
districts. It is motivated by the desire to use this policy shift as
a bargaining chip in talks with the LDP. The prevailing view in the
LDP is negative toward a postponement. However, with some positive
toward the idea, a settlement line on the issue has yet to be
found.

Card for power-sharing talks

The New Komeito strongly feels that the public has rejected the
structural reform policy. It is increasingly alert to the prospect
that if it faces the next Lower House election without correcting
that policy, it could become an opposition party. The Finance
Ministry has decided to compile a budget on a single-year basis with
the aim of turning the primary balance into the black. The New
Komeito's idea is that if the goal to bring the primary balance into
the black is put off, it would be possible to deal with budgetary
funds in a flexibly manner, including boosting funds for public
work-related expenses.

Another aim is to set higher barriers against power-sharing talks
with the LDP on Sept 24. Former Chief Cabinet Secretary Yasuo Fukuda
and Secretary General Taro Aso, both are running in the LDP
presidential race, are calling for talks with the DPJ, but they have
never referred to the coalition relationship with the New Komeito.
The New Komeito is apparently motivated by the desire to obtain
fruit for other policies, while playing the card of postponing the
goal to bring the primary balance into the black.

The New Komeito's strategy is to secure the consent of the LDP
regarding the postponement of an increase in the elderly's share of
medical expenses due to be implemented in Apr. 2008 and the
equalization of the distribution of revenues from two corporate

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taxes (residence tax and enterprise tax), which are concentrated in
urban areas.

Chief cabinet secretary expresses displeasure

However, there are no opinions overtly welcoming the New Komeito's
request coming from the government and the LDP. Chief Cabinet
Secretary Kaoru Yosano expressed displeasure during a press

SIPDIS
conference on Sept. 19, noting, "We have set the goal of restoring
fiscal health. The government is not in a position of commenting on
that." Internal Affairs Minister Hiroya Masuda also told reporters:
"The government is promoting measures to bring the primary balance
into the black. We must abide by that policy."

Many LDP members are also negative toward the New Komeito's request
with one noting, "Putting off the goal would mean breaking our
pledge to the public," Since Fukuda and Aso advocate the
continuation of Koizumi reform, they cannot afford to indicate a
flexible stance to the New Komeito's request in their LDP
presidential election campaigns.

However, some said, "The proposal is effective as a trial balloon."
Despite the crushing defeat suffered by the ruling camp, the
government has firmly maintained the spending restraint policy in
budget request guidelines for the fiscal 2008 draft budget,
following this fiscal year, by cutting public work-related
appropriations by 3 PERCENT . Makoto Koga, chairman of the Koga
faction, pointed out, "We should look into the possibility of
revising budget request guidelines as well."

Curveball for DPJ

The New Komeito's call for putting off the goal to bring the primary
balance into the black came as a curveball for the DPJ, which has
come up with a proposal for putting on hold a consumption tax hike.
Policy Research Committee Chair Masayuki Naoshima during a press
conference the same day made a brief comment, "Our goal of bringing
the primary balance into the black in fiscal 2011 remains
unchanged." He steered clear of making any in-depth statement. His
comment indicates that the DPJ has judged that it would not be wise
to get involved in the funding issue concerning achieving fiscal
soundness.

(9) International fraud groups likely to be behind suspects for
allegedly opening bank accounts in Saitama, Chiba for money
laundering

ASAHI (Page 39) (Full)
September 20, 2007

Authorities have unearthed members of two groups for allegedly
opening bank accounts that were used for money laundering by
overseas criminal gangs. In this case, it has been found that the
money remitted from abroad was money involved in "case number 419,"
a well-known international fraud case. Japanese banks were used for
laundering large sums of money fraudulently obtained overseas. It is
highly likely that one or more overseas crime groups are behind the
groups unmasked by the Saitama and Chiba prefectural police
departments.

The two unearthed domestic groups - composed of Nigerians and
Japanese - have been found to be connected to each other. The two

TOKYO 00004397 013 OF 013

police departments intend to prosecute this as a criminal case under
the Organized Crime Punishment Law.

It has been revealed that the two groups opened about 140 accounts
at city banks, regional banks, and credit cooperatives in Tokyo,
Chiba, and Saitama since late 2004 under false company names or
personal names. Approximately 2 billion yen was remitted from the
US, Canada, Britain, Germany, Australia, and Switzerland. There
reportedly was a case in which 60 million yen was remitted at a
time.

According to an investigation by the US Federal Bureau of
Investigation (FBI), rich persons abroad were deceived and sent
money to such Japanese banks as fees for lawyers in connection
succession to property. Wealthy persons were found to have been
victims in the 419 fraud case.

Promptly after money was transferred from overseas, the two groups
drew out it at banks or convenience stores and then sent the money
to other bank accounts in the US, Canada, Britain, or China.
Authorities suspect that they drew out money upon receiving
notification on the phone from fraudulent groups in the US, Canada
and other countries.

The investigation was launched in response to a financial
institution in the US asking a bank in Saitama Prefecture in the
spring 2005 to freeze an account, saying that the account was
suspected of being used in a fraud case. Last November, there was a
contact to the Chiba Prefectural Police Headquarters from a
petroleum company in South Africa saying: "The company was about to
be the victim of a fraud. The bank designated as the payee is in
Chiba."

As a result of investigation based on the information, the Saitama
Prefectural Police arrested Asabor Felix Steve, 40, a Nigerian, and
the Chiba Prefectural Police arrested Christopher Ariri Noguchi, 39,
a Nigerian who obtained Japanese citizenship last year.

The two suspects for alleged involvement in a money laundering
scheme came from the same region in Nigeria and are executives at
the same travel agency in Toyoshima Ward, Tokyo. Both reportedly got
in touch with each other by cell phone. Since their modus operandi
were very much like, the two police headquarters suspect that the
two groups were moving under the instruction of the same fraud
group.

SCHIEFFER

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