Parallels between Mr. Fukuda and Mr. Abe in the Polls; Stargazing; and Lots of Footnotes on North Korea, Refueling Resumption Bill, Etc.

The Abe Cabinet’s public poll numbers* had slipped steadily since its inauguration in 2006 September until opposition outnumbered support for the first time in 2007 February. However, as the political financing scandal epidemic more or less subsided** and the ruling coalition managed to pass the budget and enact much of its legislative agenda, the Abe Cabinet’s numbers recovered in April and appeared to stabilize there. But then, the DPJ finally broke through with the 50 Million mislaid public pension accounts. The Abe Cabinet’s numbers took a huge hit, from which they never recovered. True, the DPJ’s numbers did not rise in similarly dramatic fashion, but the LDP’s numbers fell, and that’s what mattered. The pension accounts scandal devastated the ruling coalition in the July Upper House election and mortally wounded the Abe Cabinet (on life support, then clinically dead, for the last two months of its existence). Does the story sound familiar?

Some of the 15-16 December poll numbers in the latest Kyōdō Tsūshin wire service report can only be interpreted in light of the initial rage at the cavalier way in which the Prime Minister and his Chief Cabinet Secretary (charged jointly with the Health, Labor and Welfare Minister to clean up the management mess at the Social Insurance Agency) tried to brush off the latest revelations***. As the anger subsides and if nothing more occurs to further erode trust, the Fukuda Cabinet will recover a good portion of the support it dropped. But a sense of betrayal will linger in the public’s mind, bringing a new fragility to the Fukuda Cabinet. All innocence has been lost; with it, much of Mr. Fukuda’s margin of error.

What, then, are the factors that will have a major effect on the Fukuda administration’s fate?

You can forget about his 27-2829 December trip to China. There will be no surprises; the dispute over the East China Sea gas fields will be resolved, if ever, on the occasion of President Hu Jintao’s visit to Japan next spring****. If there is no solution available on that occasion, then Mr. Fukuda should be polite, but firm in rejecting Chinese claims.

ADD: On the other hand, if they do decide to settle it, there's no reason why they can't do it on this occasion. If they do, it will certainly be a nice feather in the Prime Minister's cap. Chinese leaders tend to gift tributaries... (20 December)

On North Korea, no meaningful progress will be made on the abductees, in the sense that no new information will surface from the North Korean side*****. This is unlikely to be a problem for Mr. Fukuda unless the Bush administration decides to take North Korea off the list of state sponsors of terrorism, which in turn is unlikely to happen unless North Korea comes clean on its uranium enrichment program and its plutonium and plutonium bomb stockpiles******.

You can forget about the refueling resumption bill, too, which will be adopted by a supermajority override on 12 January or thereabouts. What the Kyōdō Tsūshin poll says is that the public is angry at the Prime Minister and his Ministers’ handling of the pension accounts revelations and is taking it out on the refueling bill*******. It’s not about the bill itself. In fact, pushing the bill to its ultimate conclusion will not damage Mr. Fukuda in the public eye; to the contrary, it will be somewhat helpful, as a show of decisiveness.

National security brings me to the uglier face of the defense controversy: the Moriya and Co. scandals. I’ve said before that the coalition can weather the scandal if it is limited to Yamada Yōkō but that all bets are off if indictments spread to other businesses. I should have qualified that by saying that criminal proceedings against LDP members would cause problems commensurate with the number and statuses of such politicians. I think that the Fukuda administration can even weather the singular implication of Fukushirō Nukaga, his Finance Minister. But for that, he needs to act decisively in the face of a variety of contingencies. ********.

I had thought that the tax bill would be a major theater of contention on the chess board. Now, I am not quite so sure. There is open dissent in the DPJ on the most important and problematic item among the time-limited tax measures: the ten-year old “temporary” supercharge on the gasoline tax. Specifically, it has been revealed that some road-construction-happy DPJ Diet members are circulating an open letter opposing the DPJ pledge to eliminate the supercharge and to put the remainder in the general budget, and threatening to vote against a DPJ bill to that effect. But even if the threats prove hollow and the wayward DPJ road tribe toes the party line, it is my belief that the odds are overwhelmingly in favor of both sides coming to a compromise. It is important for the Fukuda administration not to lose its nerve as the deadline approaches.

So, as far as the major issues that come to my mind are concerned, Mr. Fukuda should be able to make his way to the Hokkaidō Summit. That alone should firm up support for his Cabinet. But this will more likely than not require a certain firmness and decisiveness － a ruthlessness, actually － that his predecessor Mr. Abe was not able to muster. Can he? That is essentially the point that Tobias raises here. So, will he or won’t he? Only God knows. And if another good friend (of mine, not Mr. Fukuda) Shisaku is God, then Mr. Fukuda is as good as dead.

* AKyōdō Tsūshin report is recovered here. The graph can be compared with the one in this report on the Fukuda Cabinet. The blue and red lines trace support and opposition respectively.

** It helped that some of the negative press spilled over to the DPJ side, most notably on party leader Ichirō Ozawa and his less-than transparent real estate transactions and other political financing mysteries.

*** I posted on it here, in case anyone needs a reminder. No? Oh well.

**** My best guess is a joint development agreement that covers areas beyond both edges of the disputed waters. That way, neither side compromises its position on the dispute, while allowing development of resources that should be commercially viable only for the Chinese market. If it happens, you read it here first.

***** The Japanese side is demanding the following:

1) Account for all the abductees.
2) Return remaining survivors.
3) Punish the people responsible.

Barring regime change, it is hard to imagine these demands being fulfilled. If the North Korean claims are true, then the Japanese side is demanding that the other side prove a negative. To do so to with any measure of satisfaction, the North Korean side would have to offer a degree of transparency and access that the North Korean regime cannot provide. If, as is likely, they are lying, they still face the accounting issue. Besides, there is no way that they can admit the truth now, since they would then have to proceed to the third Japanese demand, which in turn would raise the transparency and access issue all over again.

These are non-negotiable. Agreeing to anything that does not hold out hope for fulfillment of these demands means that you are grabbing the third rail with your bare hands. So you can see why the American authorities can’t get a coherent answer when they ask the Japanese administration to tell them what it means by “progress” with regard to the prospective delisting of North Korea as a state sponsor of terrorism.

****** In the unlikely event that North Korean side does declare its nuclear stockpile, I’m sure that the Bush administration will move to delist North Korea. The Japanese authorities will acknowledge the matter gracefully; they have no choice. It will be useful to remind the Japanese public that Japanese sanctions against North Korea were first linked to the abductees issue (to the best of my knowledge) in 2006 October, when restrictions were tightened in response to the North Korean nuclear test. Thus, if there is meaningful progress toward actual destruction of the stockpile (as opposed to mere declaration), Japan will be rightfully expected to begin rolling back those sanctions. But that is a bridge that will not be reached in the foreseeable future.

******* It is instructive that the Yomiuri poll, taken only a week before the Kyōdō Tsūshin poll, showed only a slight decline in support numbers for the refueling resumption bill. Some of the support must be casual and more a vote of overall confidence than an expression of a preference for that particular policy objective. I would rephrase this accordingly if I were to write it now.

******** Specifically, Mr. Fukuda needs a　color-coded contingency plan with a clear red line beyond which he will dismiss Mr. Nukaga.

Finance Minister Nukaga Seems to Be in the Clear and the Refueling Bill Continues on Course for a Supermajority Override

When even the Asahi says (English translation available tomorrow) that forcing Fukushirō Nukaga, the LDP “defense tribe” member and current Finance Minister, to testify under oath in the Upper House is a bad idea, well then, it is a bad idea. The lack of a plausible motive for dissembling about a dinner in honor of James Auer should have set off warning signs in the minds of DPJ leaders. Now, Mr. Nukaga has provided a relatively secure alibi for his presence elsewhere during the said dinner, as well as five of the eight people (not including a hypothetical Mr. Nukaga) corroborating his absence. As if that were not enough, Takemasa Moriya, who gave two extraordinary Yomiuri interviews for a total of seven hours on the 14th and 24th, stated:

“I kept saying, ‘(My memories) may be wrong,’ ‘I don’t want to cause inconvenience.’ But since they insisted, ‘Talk’… (Finance Minister Nukaga, etc. [ed. Akio Kyūma])) said, ‘I didn’t go’, I then became worried that I could have been mistaken.

The public had been led to believe that the DPJ had corroborating testimony on its side. Now, it turns out that what it had all along was a seating diagram and other bits of information coaxed out of Mr. Moriya himself, whose memory appears to be a few megabytes short of my PC. This is not on the order of the fake email that took down then DPJ leader Seiji Maehara, but it will be an embarrassment at best for the DPJ.

One plausible explanation for the DPJ’s continued insistence that Mr. Nukaga be called to testify on 3 December (it claims to want to question Mr. Moriya separately as part of the UH committee proceedings, in jail after he is arrested later today) is that they want to delay deliberations on the refueling bill as much as possible, partly to force the LDP to extend the current Diet session for another 30 days or so, partly because they want as much time as possible to get their own act together on their own ineffectual proposal. I have been surprised that the DPJ does not appear to be going after the allegations of potential influence peddling by Mr. Nukaga coming from Nobumasa Ōta. Perhaps it has good reasons to avoid its 2004 UH candidate Mr. Ōta, whom they pointedly did not endorse for a second try this year. I am also mystified as to why they are not throwing all their resources at attacking the overall procurement process, given the spread of corruption charges beyond the Defense Facilities Administration Agency scandals (2006) that left the MOD itself relatively untouched. Perhaps the DPJ does have something up its sleeve to spring on the unsuspecting LDP － say give names of LDP politicians who were on the take list at Yamada Yōkō and could be shown to have reciprocated with pressure on the bureaucracy － in which case they’re doing a very good job of hiding it*. Barring such surprises though, insisting on questioning Mr. Nukaga is a losing proposition, from which only LDP intransigence that would allow the DPJ to claim they are being forced to give it up so that the business of statecraft can go on can give them a face-saving out.

But so far, this is a mere sideshow blown up to unwarranted proportions. The broader issue of military procurement reform is in the capable hands of Nobutaka Machimura Chief Cabinet Secretary, though the formidable defense otaku and Defense Minister Shigeru Ishiba will surely play a major role in the process. The DPJ needs to play a critical, but constructive, role here if it is to be seen as the reasonable, responsible party capable of taking the reins from the ruling coalition.

As for the main event politically, that is, the refueling bill, my assessment here remains unchanged, that a supermajority override and a motion of some kind, more specifically a censure vote, is a done deal; unless, of course, the opposition loses its nerve and forgoes the motion. After all, there will be few, if any, better occasions for the Fukuda administration to test the waters of supermajority override than a measure that has a modest majority or a sizable plurality (depending on which poll you believe) of support among a relatively informed and also relatively indifferent public. That way, you can avoid any risk of setting off an unforeseen catastrophe that would － admittedly in the most implausible of circumstances － force the Prime Minister to call a snap election** that the ruling coalition is sure to lose. And pulled off successfully, like most things, it will be easier the second time around and beyond.

*There’s potential blowback at Ichiro Ozawa, who received from Yamada Yōkō (and has now returned) almost three times as much political funds than Mr. Nukaga did. This is reminiscent of the political financing reporting controversy, which, among other things, revealed a string Mr. Ozawa’s real estate acquisitions with political funds, as well as a resurrection of the mysterious transfer of funds to Mr. Ozawa’s political coffers just before his Liberal Party was merged into the DPJ (2003), as I posted here. Having someone who embodies the old-school LDP at the helm has a downside.

**There is some talk from the LDP, some of them in positions of responsibility, about an early snap election following a censure motion. I have no access to those people, but I think that they are blowing smoke. The public will not like being asked for a new four-year mandate on the basis of a difference of opinion on a matter as esoteric and other-worldly as “right thing to do” around the Afghan war zone, so the chances of losing the two-thirds majority will be even higher. Mr. Ozawa would exit the scene, since there is little chance of the DPJ winning more seats than the LDP (the new, lower bar of success for the DPJ), but that would be a mixed blessing, and far from the clear upside that the LDP needs to justify taking a plunge.

Then what is the purpose of all the talk? Some of it could be genuine fear that public opinion might turn against them if they exercise the supermajority. But I doubt it, given the peripheral nature of the issue to the real concerns of the public. More importantly, I believe that there are at least a couple of matters motivating the party leadership to do it:

1) Keep the coalition members, most notably New Kōmeitō, in line. There is nothing an incumbent likes less than an early election, and the NK is particularly wary of going to the Sōkagakkai so soon after the September Upper House election, moreover after an override vote on an issue that does not have the full-hearted support of its rank-and-file.

2) Keep the DPJ on its toes. That helps in several ways, like tempting the DPJ to overplay its hand, which it is doing on the Auer-dinner, he-said, he-said trivia.

The Tokyo Special Investigations Department Has Gone into Action on the Yamada Yōkō Affair

To a Japanese public used to watching beleaguered CEOs, politicians, and top bureaucrats scurrying away from persistent TV reporters and their camera crews, it must have been a refreshing sight to see a calmly serious Takemasa Moriya in his civvies, holding an impromptu news conference in front of his doorsteps. Not that he appeared to be very forthcoming in the snippets that I caught, as he begged off, stating that he was being questioned by the Defense Ministry. I went to bed, thinking that Defense Minister Ishiba better get hold of Donald Rumsfeld's interrogation manual, get to the bottom of things, then do everything in his power to set things right. Mr. Moriya was sure to be grilled in the Diet, and it is usually the case that the conclusions of 'internal investigations' invariably fall apart in the light of serious third-party scrutiny. You don't want to be caught between lame excuses and harsh realities, nor do you want to cede the initiative to the opposition. And Prime Minister Fukuda should start showing face himself if he wants to salvage the refueling operations and shore up long-term prospects for his administration.

And then I get up, go out, pick up the morning paper, and the front page is emblazoned with the headline:

Yamada Yōkō's US Subsidiary Investigated

Yomiuri has found out that the Public Prosecutors Office has been receiving judicial assistance from US authorities in investigating the US subsidiary for accounting irregularities. According to the report (citing multiple Yamada Yōkō sources) a former head of the US subsidiary built a multimillion dollar slush fund, some of which the sources suspect was used to entertain JSDA officials visiting the US as well as US vendors. The former US subsidiary head was a close associate of the former Yamada Yōkō executive who had treated Mr. Moriya to golf and meals excursions, and was one of the people who joined hands with him to form Nihon Mirise. Ominously, the Special Investigations Department of the Tokyo Local Public Prosecutors Office is in charge of the case. This particular Special Investigations Department (Osaka and, since 1996, Nagoya have one each as well) handles most major economic and political crime investigations, as well as large tax evasion cases.

At a minimum, this guarantees that the issue will be in the public eye for the duration of this Diet session. I think that the chances of the Fukuda administration retaking the initiative on the refueling extension bill have diminished substantially.

Incidentally, running alongside this story on the same front page is yet another revelation (not yet online) in an ongoing medical scandal, where a pharmaceutical company and the Ministry of Health, Labor and Welfare has failed to act on information that could have led to early treatment for victims of drug-induced hepatitis. This falls on the shoulders of Yoichi Masuzoe, the MHLW Minister who is already charged with cleaning up the public pension records.

When it pours, it pours.