JAPANESE MORNING PRESS HIGHLIGHTS



JAPANESE MORNING PRESS HIGHLIGHTS

March 29, 2002

AMERICAN EMBASSY, TOKYO

PUBLIC AFFAIRS SECTION

OFFICE OF TRANSLATION AND MEDIA ANALYSIS

(03-3224-5360, tokyoots@)

TODAY’S FEATURES

Top headlines 2

Editorials 2

Prime Minister's daily schedule 3

U.S., Japan, ROK's TCOG meeting early next month to discuss abduction issue for first time 3

Political money scandals:

-- Even Koichi Kato's credit card and health insurance paid from political funds 4

-- Koichi Kato being investigated by Tokyo prosecutors for tax evasion 4

-- LDP's Kato will likely resign Diet seat after he testifies 5

-- Koichi Kato told faction aide he has made up his mind to quit the Diet 5

-- Prime Minister Koizumi orders restriction on political donations from public-works-related companies 5

-- Former SDP lawmaker Tsujimoto hospitalized for fatigue 5

JDA chief Nakatani tells Diet that new emergency legislation will target mass terrorism 6

Metropolitan police set up new unit to guard the Prime Minister's new official residence 6

Okinawa's anger unabated despite guilty verdict in airman rape case 6

Foreign aid:

-- Ruling coalition secretaries general asked by Palestinian representative not to seek 10 percent cut in the ODA budget 7

-- New system of tied ODA loans to be introduced to rescue Japan's general contractors 7

Seasoned Japan hand, Robert Orr, takes over cockpit at Boeing, Japan 8

Japan's automakers reaping the benefits of recovering U.S. economy 8

Unemployment in February stayed about the same at 5.3 percent 8

Kyoto Protocol to be presented to the Diet today for ratification 8

(MHIX020329)

TOP HEADLINES

Asahi:

No evidence that Koichi Kato spent money for living expenses from his bank account; Credit cards' charges also paid from bank account for political funds [Translation below]

Mainichi:

Lawmaker Kato to resign from the Diet; LDP, Minshuto agree to summon Kato to testify before the Diet as early as next week

Yomiuri:

Kato's political fund-management organization found to have allegedly created false receipts and altered information in accounting books in transferring 90 million yen to his personal bank account

Nihon Keizai:

Japanese automakers' profit exceeds U.S. auto manufactures'; Toyota's sales to soar 1.1 trillion yen; Automobiles of the three leading companies selling well in U.S. market [Translation below]

Sankei:

Tokyo District Public Prosecutors Office to investigate Kato on suspicion of tax evasion; 97 million yen regarded as "miscellaneous income" [Translation below]

Tokyo Shimbun:

Kato conveys senior member of the former his faction decision to quit Diet seat [Translation below]

(02032901kn)

EDITORIALS

Asahi:

(1) Kato problem: We really can't stand political corruption

(2) Professional baseball: Japan's professional baseball should make efforts to contact with world baseball

Mainichi:

(1) Fresh allegations against Kato: He must immediately take responsibility

(2) Medical advertisement: We should become wise consumers who select hospitals on our own

Yomiuri:

(1) Allegations against lawmaker Kato: We will not allow him to avoid giving an account

(2) Opening of professional baseball games: We want to see speedy games

Nihon Keizai:

(1) Growing responsibility for university management by "public national university corporations"

(2) Kato should quickly resign from the Diet

Sankei:

(1) Allegations against Kato: Sophism no longer works

(2) Turning national universities to public corporations: National universities should be aware of being in mega-competition age

Tokyo Shimbun:

(1) Suspicions of Kato: He is responsible for revealing the truth

(2) Arab summit talks: They must make efforts to bring peace to the Middle East

(02032902kn)

Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, March 28

NIHON KEIZAI (Page 2) (Full)

March 29, 2002

|10:04 |Met with Comprehensive Science and Technology Council member |

| |Imura and Cabinet Office Policy Control officer Okuma at his |

| |residential office (Kantei). Then met with Tokyo Governor |

| |Ishihara. Prime ministerial assistant Makino and Urban |

| |Revitalization Headquarters executive secretary Ogawa were |

| |present. |

|11:30 |U.S. Hudson Research Institute executive director London. |

|12:06 |Met with Hoshuto head Noda and Transportation Minister Ogi. |

| |Deputy Chief Cabinet Secretaries Abe and Ueno were present. |

|14:00 |Met with Vice Finance Minister Muto, Vice Finance Minister for |

| |International Financial Affairs Kuroda, Budget Bureau Director |

| |General Hayashi and International Affairs Bureau Director |

| |General Mizoguchi. Then met with Deputy Chief Cabinet Secretary|

| |Furukawa. |

|15:10 |Interview by the New York Times |

|16:15 |Met with Economic and Fiscal Policy Minister Takenaka, Assistant|

| |Deputy Chief Cabinet Secretary Takeshima and Cabinet Office |

| |Policy Control officer Kodaira. Takenaka remained. |

|16:47 |Attended a meeting of the Comprehensive Science and Technology |

| |Council. |

|17:43 |Attended a meeting of the Administrative Reform Promotion Head |

| |Office. Then met with Vice Public Management Minister Kanazawa |

| |and Postal Services Planning and Control Bureau Director General|

| |Dan. |

|18:45 |Returned to the residential quarter of the Kantei. |

|19:35 |Met with New Komeito head Kanzaki and New Conservative Party |

| |head Noda at Akasaka Prince Hotel. The secretaries general of |

| |the three ruling parties were present. |

|21:15 |Arrived at the residential quarter of the Kantei. |

(02032904yk)

FOREIGN RELATIONS

"Abduction problem" to be discussed in early April among bureau director general-level officials of Japan, U.S. and South Korea

SANKEI (Page 1) (Excerpt)

March 29, 2002

Japan, the United States and South Korea have decided to hold bureau director general-level talks to discuss in early April ways to solve the problem of Japanese citizens believed to have been abducted by North Korean agents, it was learned yesterday. This is the first case for the three countries to discuss the matter. The aim is to give indirect assistance to Japan for the Japan-North Korea Red Cross societies' talks that are expected to resume in mid-April. Another purpose is to send out a message to North Korea that the abduction problem does not concern Japan and North Korea alone and that Japan, the United States and South Korea are determined to work closely to solve the problem.

Health, Labor and Welfare Minister Chikara Sakaguchi is expected to hold talks with North Korean Public Health Minister Kim Su Hak on March 30 in Singapore. Regarding this cabinet ministerial, Foreign Minister Yoriko Kawaguchi commented at an Upper House Committee on Foreign Affairs and Defense yesterday, "(The minister) is expected to convey Japan's severe mood (regarding the abduction problem) to the North Korean side." She thus indicated that Health and Welfare Minister Sakaguchi would seek a forward-looking response to the abduction issue of North Korea.

In the meantime, Sakaguchi at yesterday's Upper House Health and Welfare Committee session expressed his determination to take up the abduction problem in addition to the issue of atomic-bomb victims living in North Korea to appeal Japan's strong stance. He said, "There is a humanitarian side to this problem. I want to make clear Japan's viewpoint."

(02032903st)

POLITICS & SCANDAL

Lawmaker Koichi Kato's allowance account shows no record of withdrawal for living expenses; Political funds account used for settlement of bills from credit card companies

ASAHI (Top Play) (Lead para.)

March 29, 2002

In connection with the problem of former Liberal Democratic Party (LDP) Koichi Kato's (62) misappropriating political funds, related sources revealed that he withdrew money from his bank account for donations from political funds control organizations to pay rent, bills from credit card companies and health insurance premiums. The sources also said that there is no record of withdrawal of money for living expenses from his other bank account that receives lawmaker's allowances. Mr. Kato recently remarked, "It has never occurred to me to have the political organization pay my living expenses." This remark is now being questioned.

(02032903yk)

Tokyo District Public Prosecutors Office to investigate Kato on suspicion of tax evasion; "Miscellaneous income" totaling 97 million yen used mostly for his personal purposes rather than for his office

SANKEI (Top play) (Excerpt)

March 29, 2002

A funds management organization led by Saburo Sato – currently under arrest for tax evasion – transferred nearly 100 million yen to a personal bank account of Koichi Kato (61), a former secretary general of the Liberal Democratic Party. Regarding this problem, the Tokyo District Public Prosecutors Office decided yesterday to start a full-scale investigation into Kato on suspicion of violating the Income Tax Law and the Political Funds Control Law. A series of "influence peddling" incidents has now escalated into a criminal investigation involving an incumbent lawmaker. Kato's resignation from the Diet seems inevitable.

According to an informed source, Kato's funds management organization Shakai Keikaku Kenkyukai (Shakeiken) has been transferring about 1.6 million yen per month into Kato's personal bank account since 1997. The money was used to cover rent for his apartment in Tokyo's Aoyama district.

Kato is believed to have received over 97 million yen in total.

Kato has admitted through his lawyer that the money from Shakeiken covered the rent for his apartment. However, Kato explained the nature of the money in this way: "The apartment is my political base. It is my home and my office. I have treated the rent as part of my political activities expenses." In the meantime, tax authorities, who regard the apartment as a living space, do not think the rent falls under political activities expenses.

The prosecutors office, too, has concluded that Kato should have handled the 97 million yen from Shakeiken as his miscellaneous income. Kato is now strongly suspected of having tried to hide income. Kato is also believed to have failed to properly oversee Sato, who kept false records.

(02032901st)

Kato may resign from Diet after giving testimony

SANKEI (Page 1) (Excerpt)

March 29, 2002

Liberal Democratic Party Diet Affairs Committee Chairman Tadamori Oshima held talks with his Minshuto (Democratic Party of Japan) counterpart Hiroshi Kumagai in the Diet building yesterday afternoon. In the session, Oshima indicated that former LDP secretary general Koichi Kato, who has resigned from the party, would testify before the Lower House Budget Committee. In response to the opposition camp's vehement call for Kato's testimony, the LDP is likely to let him take the witness stand as early as next week. Kato's resignation from the parliament seems inevitable amid growing calls from within the ruling coalition. There is an observation that Kato will resign from the Diet after giving testimony.

(02032902st)

Koichi Kato tells senior former Kato member he has made up mind to resign from the Diet

TOKYO SHIMBUN (Top play) (Lead paragraph)

March 29, 2002

Following the revelation of his alleged misappropriation of political funds to cover his apartment rent (Minami-Aoyama in Tokyo), Koichi Kato, who has already left the Liberal Democratic Party (LDP), made up his mind yesterday to resign from the Diet. He conveyed the same day his determination to do so to a senior member of the faction, which was formerly headed by Kato. He intends to announce his resignation after he gives his account on the allegations at a Lower House Budget Committee session in unsworn or sworn testimony. However, calls for his resignation at an early time are strong in the ruling parties. He therefore will likely to be pressed to announce his resignation before he gives his explanation about the allegations against him.

(02032903kn)

POLITICS

Prime Minister instructs regulations to be tightened on financial donations from public works contractors

NIHON KEIZAI (Page 1) (Excerpt)

March 29, 2002

During a meeting of the three ruling party heads last night, Prime Minister Junichiro Koizumi instructed the participants to tighten regulations on political donations to political parties or politicians from public works contractors. Pointing out that the Public Offices Election Law prohibits contractors from providing election funds, the prime minister suggested that the coverage of the law should be expanded. New Komeito head Takenori Kanzaki and Hoshuto head Takeshi Noda indicated understanding. The three heads agreed that the three parties would discuss specific measures.

(02032902ys)

Tsujimoto hospitalized for fatigue from overwork

NIHON KEIZAI (Page 2) (Full)

March 29, 2002

It has been learned that former Social Democratic Party (SDP) policy chief Kiyomi Tsujimoto, whose resignation was approved yesterday at the Lower House plenary session, is now in a hospital in Tokyo for fatigue from overwork. She was admitted to the hospital soon after a press conference on the evening of March 26 in which she announced her resignation from the Diet. A senior SDP member said, "She needs about two weeks of medical treatment for mental and physical fatigue."

(02032904kn)

DEFENSE & SECURITY

Emergency legislation: Large-scale terrorism also covered

MAINICHI (Page 5) (Full)

March 29, 2002

Defense Agency Director General Gen Nakatani indicated in a meeting of the House of Representatives Security Affairs Committee yesterday that large-scale terrorism also would be within the applicable scope of emergency defense legislation. Nakatani stated: "There is a split of opinion as to whether the Sept. 11 terrorist attacks in the United States was a war or terrorism. How do we recognize the fact that more than 4,000 lives were lost there? In the end, it's up to the Diet's approval. But there are cases that are applicable and not applicable [to emergency defense legislation]."

(02032903im)

MPD plans security force for premier's new official residence

MAINCIHI (Page 5) (Full)

March 29, 2002

The Tokyo Metropolitan Police Department (MPD) will launch a security task force on April 1 for the prime minister's new official residence. The new office building for the prime minister is larger than the old official residence, and it will also have a crisis management center. The MPD therefore aims at beefing up its security of the prime minister's new official residence and will also prepare equipment to cope with terrorist attacks using nuclear, biological, and chemical (NBC) weapons. The prime minister's official residence has been guarded with a total deployment on its grounds of about 60 police officers from the MPD Kojimachi Police Station. The security task force is made up of those from riot squads or special assault teams (SAT). Their average age is 30, more than 10 years younger than now. The MPD also plans a 30% increase in its staffing of security police (SP) officers escorting the prime minister.

(02032902im)

Okinawa rape case: When will Okinawa's anger reach breaking point?

TOKYO SHIMBUN (Page 11) (Excerpt)

March 29, 2002

"It's strange that U.S. servicemen who have assaulted civilians outside the base are protected under privileges." A resident of Okinawa Prefecture has raised this question. In Okinawa, where there has been a series of incidents involving U.S. servicemen such as injury cases and arson attacks, people are calling for a revision of the Japan-U.S. Status of Forces Agreement (SOFA). However, the government remains reluctant to do so, only willing to consider "operational improvements" to the SOFA. Okinawa is now growing more irritated because the government will not move toward a revision of the SOFA. Okinawa therefore has proposed its own amendments.

"U.S. military personnel (who caused an incident) tend to skip town. So, we're just saying we want all criminals turned over. They should realize that we're not asking for too much." Seiichi Oyakawa, chief of the Okinawa governor's office for base issues, voiced his dissatisfaction with these words.

The U.S. military at first refused to hand over U.S. Air Force Senior Staff Sgt. Timothy Woodland, accused of raping a local woman, pointing to problems about human rights and Japanese police's investigative procedures.

Therefore, Okinawa's prefectural and municipal assemblies filed protests and adopted resolutions seeking to revise the SOFA. Okinawa citizens demanded that the U.S. military not allow its personnel to go out from the bases, and called for the U.S. forces to pull out. However, their angry voices did not reach the central government. Recently, Foreign Minister Yoriko Kawaguchi just reiterated that the government would make efforts for operational improvements. Justice Minister Mayumi Moriyama remarked that the U.S. military turned over the suspect earlier than she had expected, and her remarks further chafed Okinawa's populace.

(02032901im)

FOREIGN AID

PLC chairman calls on Japan to withdraw decision to cut ODA

NIHON KEIZAI (Page 2) (Full)

March 29, 2002

The secretaries general of the three ruling parties met yesterday afternoon with Palestinian Liberation Council (PLC) Chairman Clay [TN: phonetic]. In the meeting, the chairman requested that Japan withdraw its decision to cut its official development assistance (ODA) budget by 10 percent. The three secretaries general promised, "If the Palestinians peacefully end terrorist activities and make efforts to bring peace to the Middle East, our three parties pledge not to reduce assistance."

(02032905kn)

Tied-loan system to be introduced; Might be criticized as aimed to save major construction companies

ASAHI (Page 11) (Full)

March 29, 2002

The government announced yesterday a plan to establish a new yen-loan system to replace the current special yen-loan system. The special loan system, which was set up in 1998 with the aim of assisting Asian economies hit by the currency crunch and of buoying up the Japanese economy, will be completed in June. Under the new system, tied loans – with the use of more than 30 percent of technology developed by Japanese firms such as general construction companies and Japanese materials as the condition – will be offered.

The new system will be applied starting in July for projects to construct bridges, ports and dams. Up to 85 percent of the total construction cost will be provided with a low interest (now, 0.95 percent) and with the repayment period being 40 years. These terms are more remunerable than those of untied loans.

The government explained: "Japan's advanced technology will be transferred to developing countries through projects." It aims to popularize "Japan's assistance" by offering tied-loan conditions.

Reflecting criticism of tied loans as "benefiting only Japanese companies, about 70 percent of the yen loans are untied loans. Some observers might criticize the new system as "measures to save major construction companies."

(02032903ys)

TRADE

Robert Orr, president of Boeing-Japan, spearheading aviation business battle

YOMIURI (Page 8) (Full)

March 29, 2002

A parallel runway at Narita Airport is soon to open on a provisional basis. Robert Orr (49), who became president of Boeing-Japan in February, says, "Japan's demand for aircraft will continue to grow." He previously served as vice president for Japan operations of Motorola of the United States. He has lived in Japan for a total of 16 years. He showed his enthusiasm about his new post when he said, "I will take the lead in the sales of aircraft, visiting bureaucrats and businessmen whom I know from the past." He will draw on his rich personal connections and long career in Japan.

Japan's aviation industry is a good customer for Boeing. Japan Air Lines has 89 Boeing-747 aircraft. All Nippon Airways has 52 Boeing-767 aircraft. However, Airbus Industry, a leading European aircraft manufacturer, is steadily beefing up its sales strategy. Orr's hobby is scuba diving, but he will have to put that off for now for his days will be busy with the business of air wars, leaving him no time for underwater walks.

(02032901yk)

Three Japanese automakers' profits top U.S. Big Three's owing to sales leaps in U.S.; Toyota posts 1,100 billion yen profit

NIHON KEIZAI (Top Play) (Lead paragraph)

March 29, 2002

The consolidated profits of Toyota Motor Corp., Honda Motor Co., and Nissan Motor Co. topped that of the U.S. Big-Three automakers for the first time in night years. Their consolidated profits in the fiscal 2001 business term increased by 30 percent over the previous fiscal year to 1,300 billion yen. The U.S. Big Three automakers will post a loss of over 700 billion yen. The Japanese automakers strong performance is attributed to a surge in sales in the U.S. market – the largest market in the world – as well as to streamlining efforts such as reducing production costs. Helped also by the yen's recent depreciation, they are bolstering their international competitiveness.

(02032901ys)

LABOR

February jobless rate hovered at 5.3 percent

MAINICHI (Page 1) (Full)

March 29, 2002

A labor force survey conducted by the Labor Ministry revealed yesterday that the percentage of fully unemployed wage earners (seasonably adjusted figure) in February marked 5.3 percent – the same level as January. The result will be formally announced on March 29. The jobless rate had continued to worsen or level off for 11 consecutive months and reached a 5.5 percent high last December. However, the January figure improved by 0.2 percentage points over the previous month.

(02032902yk)

ENVIRONMENT

Ratification approval draft for Kyoto Protocol to be presented to the Diet today

YOMIURI (Page 2) (Excerpt)

March 29, 2002

A draft ratification approval for the Kyoto Protocol, which aims at preventing global warming, and a bill amending the law to promote measures to counter global warming, which is related to the Protocol, will be approved by the Koizumi Cabinet today and immediately submitted to the Diet. The Hoshuto (New Conservative Party) yesterday joined other ruling parties in approving the package. The party had been considering such factors as the cost of trading estimated emissions volume with Russia, which has a surplus in the reduction of its greenhouse gases. On related laws, a special measures bill on new energy and a bill amending the energy conservation law have already been submitted, and the new protocol-related bill will bring the number of such bills to three.

(02032901bb)

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