January 18, 2008; Volume 04, Number 03

of the

Japan Considered Podcast

[Listen to the audio file by clicking here]

Clink Links Below for Today's Topics

Introduction
Cabinet Approval Polls Following the Two-Thirds Lower House Over-Ride Vote
Further Comments on the Future of Japan’s Political Party System
Significance of Government Funding of Elections
Inauguration of a New Political Reform Group: Sentaku
Interview with Gregg Rubinstein of GAR Associates, Washington, D.C.
Moriya’s Role
Is This Investigation of Political Corruption Unusual?
Any Substantial Effect on Relations with the United States?
Significance of Upper-Level JMOD Personnel Changes
Effect of the JMOD Procurement Corruption Scandal on the LDP’s Defense Caucus
Concluding Comments

Good Morning. From Beautiful Spring Valley. In the Midlands of South Carolina. Today is Friday again, January 18th, 2008. And you are listening to Volume 04, Number 03, of the Japan Considered Podcast.

Introduction

Beautiful, yes. But cold as the dickens! This morning it was only in the mid-thirties outside. Now, that’s cold here. Yesterday was rainy. And some folks even reported snow flakes over night. Well, just catching up with the rest of the country, I guess.

I’m Robert Angel. Creator and maintainer of the Japan Considered Project. And creator and host of this Podcast. This week I’ve got a special treat for you. Gregg Rubinstein of GAR Associates in Washington, D.C. did indeed agree to join us for this program. I interviewed him via SkypePhone yesterday afternoon. He commented on the whole Ministry of Defense procurement corruption scandal. Providing us with some valuable background on this critical issue. An issue we’re going to hear a lot more about in the weeks and months to come.

In addition, we’ll take a look at the Fukuda Cabinet’s public approval ratings. After the two-thirds Lower House over-ride last week. And then return briefly to the question of significant realignment of Japan’s political party system. Lots to consider. So let’s get right to it.

 

Cabinet Approval Polls Following the Two-Thirds Lower House Over-Ride Vote

Last week's program was put together just hours after the two-thirds Lower House over-ride vote was taken on the new anti-terror bill. So, there wasn't time for the various communications media companies to publish the results of their polls. I promised to update you when the information arrived.

Well, it's arrived. The major media companies did indeed wait for the two-thirds vote to pass the Lower House before doing their polls. Rather than immediately after Fukuda's return from China, for example. And, as usual, the results were all over the lot. The conservatively-leaning Fuji-Sankei's poll reported a drop in support for the Fukuda Cabinet from 41.1 percent to 36.6 percent. And an increase in opposition from 40.3 percent to 47.3 percent.

Yomiuri, also conservative-leaning, but not quite as reliably as Fuji-Sankei, reported a drop in support for the Fukuda Cabinet from 52.5 percent to 45.6 percent. And an increase in opposition from 40.3 percent to 47.3 percent.

NHK announced that their polling efforts immediately following the vote showed that public approval of the Fukuda Cabinet had fallen 8 percent, to 43 percent. While disapproval rose 11 percent, to 44 percent.

The LDP-allergic Asahi’s poll taken on January 11th and 12th reported that the Fukuda Cabinet's public approval rating had risen slightly since mid-December. From 31 percent to 34 percent. But that it was still very low.

And so on.

Well, what are we to make of these disparate public opinion polling results. First, a general point. Once more we see that conduct and reporting of public opinion polls in a democracy, like Japan, is a highly "political" process. That is, such polls are used, with varying degrees of transparency, to influence political outcomes. As well as to inform the public. No surprise there, I suppose. But something we should keep in mind as we receive and evaluate the information. Timing of the surveys; wording of the questions; selection of the sample. And more. All used to make the result "come out right." Then, of course, there's the way the results are reported.

Second, a point more specific to this most recent wave of polls. I've read carefully through the published results of six or seven media companies' polls. All but one of them indicates that public approval of the Fukuda Cabinet continues to erode. But, nothing dramatic. No evidence that the two-thirds over-ride vote shocked and alienated Japan’s attentive public. This too is important. Since we’re likely to hear more about this topic during the current Diet session. With opponents of the current ruling coalition predicting dire consequences should the over-ride vote be used again. And ruling coalition supporters describing it as an unfortunate necessity, given the opposition’s intransigence. I’ll try to keep you posted.

Further Comments on the Future of Japan’s Political Party System

Last week we began our long-delayed consideration of the future of Japan’s political party system. Thanks to all of you who’ve taken the time to e-mail commentary and suggestions on this important topic. Your efforts are very much appreciated. I’m trying to respond to each message directly. And I’ll continue consideration of this important topic in the weeks and months to come.

Not much time today. Since most of the program will be devoted to Gregg Rubinstein’s comments on the Ministry of Defense procurement corruption scandal. But briefly, responding here to some of your comments.

No, I didn’t mean by the lengths of the two lists to imply, subliminally, that significant party system realignment is more likely. The “pushing against” list was shorter. But it included some very powerful points. Don’t under-estimate the appeal of membership in a political party that has survived – and flourished – since 1955! Especially if your family has been involved for generations. Don’t under-estimate the significance of the intense battle inevitable for the honor of leading the “reform” forces this time around. There really is no obvious front-runner.

But, as important, don’t under-estimate the possibility of something dramatic happening. And happening some time this year. Here, briefly, are a few more points I think we should consider as we watch these events unfold in the weeks and months to come.

Significance of Government Funding of Elections

One point I probably should have mentioned last week is the importance of government funding of elections now. Part of the dramatic election system reforms passed by the short-lived Hosokawa government at the beginning of 1994. I don’t have the exact figure at hand. But the total government disbursement now amounts to between 25 and 30 billion yen. That’s a lot of money! Even the LDP, long the darling of Japan’s generous business community, relies nearly 60 percent on this government funding for election costs! At least that portion they report! And only the Communists refuse it.

As we discussed on a past program, these funds are distributed quarterly to the political parties. Not to incumbent Diet members, or candidates. But to the parties. According to a complex formula based on performance in the last election. Sooo, two things come to mind. First, a new party would have a more reliable source of funding than in the past. Legal funding! Not the sort of funding that makes incumbent Diet members jump every time the door bell rings. I’m not so sure about the second point. Not having read the regulations for some time. But expectation of this government funding should make it easier to form a new political party before, rather than after, dissolution of the current Diet. To be better positioned for the next allocation of government funding. That is, if the new party’s government funding formula is based on the past performance of the individual members. Something we’ll have to look into. Please send an e-mail if you have more reliable information on this point. To RobertCAngel@gmail.com. I can use some help with this point.

Inauguration of a New Political Reform Group: Sentaku

Just one more point before we move to Gregg Rubinstein’s commentary on the MOD scandal. According to today’s edition of Asahi Shimbun, a new political reform group is being organized by incumbent and former governors from around Japan. Names mentioned in the report include the very popular incumbent Miyazaki Prefecture governor, Hideo Higashikokubaru, former Mie prefecture Governor Masayasu Kitagawa, and several others. According to Asahi’s report, the group’s formation was triggered by the efforts of DPJ leader Ichiro Ozawa and Prime Minister Fukuda to form a grand cabinet alliance. And the sense that the Diet has become too self-interested. Too self-centered. Paying too little attention to the interests of the general public and to non-metropolitan Japan.

The group calls itself “Sentaku,” for short, written in hiragana. Now, the word “sentaku” in Japanese can be written in kanji to mean either “washing” or “choice.” A nice play on words. Works both ways! And when written in hiragana, it could be either.

This new group may not amount to anything at all. But then again, it may! According to the Asahi article, they’ll hold an inaugural press conference in Tokyo on Sunday, the 20th. Where they plan to explain their plans, and call upon Diet members from both the LDP and Opposition Parties to join them. Again, this may be just a flash in the pan. But I’ll keep an eye peeled for new developments.

A couple of points we can consider even now. Asahi’s article is the first I’ve heard of the group. In fact, Asahi thought enough of it to include a parallel article in their English language edition today. That suggests to me that the new group isn’t right-leaning, or politically conservative. Perhaps it’s more interested in promoting “political reform,” or “seiji kaikaku,” than in promoting an ideological perspective. If so, that would make it even more interesting, in this context.

In contrast, recently Takeo Hiranuma has been suggesting he may try to form a new political party. One that’s genuinely conservative. What he calls a “healthy conservative” party. This too is another indication of movement toward political realignment, I guess. But, judging from the reports on Hiranuma’s ideas that have been circulating in the Japanese weekly political press for a while now, Hiranuma is more interested in creating an ideologically conservative party than he is in anything we might describe as genuine “political reform.”

Hiranuma, you’ll recall, is from Okayama. He was a senior member of the LDP. And once served as METI Minister. However, he ran afoul of Koizumi’s postal reform proposals. And got himself expelled from the LDP in 2005. Now he’s an independent member of the Lower House. But he maintains close relationships with many of the LDP’s most senior members. So perhaps his new conservative party would have appeal for some of the LDP’s more conservative members.

However, judging from past experience with realistic “political reform” appeals, I suspect that a less ideologically oriented group would have a better chance of attracting incumbent Diet members. And also have a better chance of appealing to Japan’s attentive public. Therefore, we’ll have to keep a close watch on the “Sentaku” group to see if they have anything going for them. The initial report is promising, though. I’ll try to keep you posted.

Interview with Gregg Rubinstein of GAR Associates, Washington, D.C.

Now, I know you’re anxious to hear what Gregg Rubinstein has to tell us about the substance of the Ministry of Defense procurement corruption scandal. So let’s get right to it. This interview was recorded yesterday afternoon. Fresh off the SkypePhone!

RCA: Today is Thursday, January 17th, and once again we’re joined on the SkypePhone by Mr. Gregg Rubinstein of GAR Associates, in Washington, D.C. Thanks for joining us again today.

GAR: My pleasure.

RCA: I wonder if you could take some time to sort out this whole Ministry of Defense procurement scandal for us. First, what actually has happened here, Gregg?

GAR: Well, Bob, this procurement scandal is an issue that’s pretty much been at the center of my activity since last autumn. So, let me just make a few brief comments about how this came about.

Of course, it’s not just one incident. It’s more or less a culmination of things that have been developing for years. In some stuff I’ve written I’ve call it “the perfect storm.”

The main elements are as follows. First, there’s the issue of structural corruption in defense procurement. Now, we all know that corruption is likely in any contracting activity when politicians and government officials alike are hands-on stake-holders. And probably even more so when you have a very closed and collusive activity of the sort that characterizes defense business in Japan. Anybody who’s dealt with these issues in Japan knows about payments hidden in production procurement costs, and retirement sinecures for ex-officials. The famous practice of “amakudari.” All of this has been embedded in Japan’s defense world throughout the postwar period. So, that’s the base.

Then there’s the issue of funding pressure. Yes, there’s been a politically-imposed one-percent GNP ceiling on defense spending for many years. But despite that, Japanese economic growth through the early 1990s continued to support defense budgets that managed to fill out equipment tables, and nourish all vested interests, and generally keep everyone happy.

The problem is that over the past ten years especially, declining procurement outlays have slowly drained this defense funding swamp. Doing that there’s been increasing exposure of abuse of procurement practices. And, there’s been a whole series of defense procurement scandals over the last ten years. Prosecutions, bureaucratic reorganizations, various government-industry studies – I’ve even forgotten how many – of more effective procurement. All with pretty marginal effect. The point is, without a focusing incident, something so big that directly involved key government and political figures, there was never going to be enough heat to ignite a real fire. And that’s where the current scandal comes in. The Moriya scandal, in other words.

Moriya’s Role

Now, much has been written about the influence of this particular figure. This JMOD vice minister. He has been a larger-than-life figure in defense politics and procurement issues for many years. Mainly because of his close ties to Japan’s political world. Revelations about Moriya’s relations with the trading company, Yamada Corp., are, I think, noteworthy. Not just in saying “Oh, there’s corruption.” That’s old news. But in the degree of this abuse. It really was egregious. Moriya’s plans to protect himself in retirement by placing trusted subordinates in key JMOD positions were all set in place. But then they were undone by sudden changes in JMOD leadership last summer. You commented about this considerably in earlier programs. The sudden retirement of Kyuma. His replacement by Koike. Her replacement, in turn. All of this resulted in not only Moriya leaving JMOD under a cloud, but in most of his cronies going with him.

Now, the man might still have escaped entrapment had he laid low. But as we know, that’s not his style. On the contrary, he went on the offensive. And his public posturing encouraged ever-closer scrutiny by various circling media and political sharks, who were already scenting blood on defense-related scandals. And this, I think, is what triggered an eruption that’s been building for years.

Is This Investigation of Political Corruption Unusual?

RCA: Is this really any different from the earlier instances of corruption and political reform that we’ve seen in the past? Is this really a bigger deal?

GAR: I think, yes, it is a bigger deal. You’ve seen two kinds of reactions to the scandal since last autumn. One is near-panic. A lot of blabbering, especially in this country, over how fall-out from the scandal will obstruct security relations with Japan, will obstruct JMOD evolution, and generally screw up what’s been, on the whole, a fairly progressive dialogue on alliance building.

The other reaction is just the opposite. Sort of what, in a way, you were referring to. That is, dismissal of current actions as more of the same. It’s a well-known pattern. You have some people resign. You have some people prosecuted. You have yet another panel develop yet another list of the same recommendations. And then you go back to business as usual.

Now, as I said, I think those two points of view are both understandable, given the past. But I don’t really share them. I think in the case of “business-as-usual” and “evolution of security relationships,” you sometimes find yourself in situations where things have to get worse before they can get better.

What I mean by that in the case of the Moriya scandal is that events may finally be generating attention to defense procurements; not only among the usual suspects, but what you refer to so well as Japan’s “attentive public,” that simply will not tolerate further business-as-usual cover-ups. I think you’re going to find that much harder to do here. There’s too much that’s in the open. Too many people are involved. Too many questions are being asked.

What I think is that momentum generated by this scandal may finally mean that on-going changes to JMOD procurement organization are, in this case, matched by serious attention to implementing outdated practices. And these practices can extend to everything from everything to how JMOD procures equipment to the sort of relationship it has with the international defense community. Including defense-industrial cooperation.

Any Substantial Effect on Relations with the United States?

RCA: Well, that’s interesting. Doesn’t that all raise the question of how this actually will change Japan’s defense relationship with the United States?

GAR: Certainly it does in terms of encouraging somewhat more open and transparent dialogues on a lot of practices that have not been given much exposure. Particularly in the procurement world. It’s going to encourage on-going consideration of movement from – well, from ineffective licensed production programs. Projects that are terribly expensive; very protracted in length, that wind up in reinventions of outdated equipment. Or at least, mature equipment. All with pay-offs along the way. And subsidies to local industry, etc., etc. You see a good deal of that in so-called indigenous defense procurement as well. If you accept that there isn’t going to be any significant increase in overall defense budgets in the future, the money is simply going to have to be allocated more rationally.

Now, it’s certainly true that inefficiency in defense procurement isn’t a unique Japanese phenomenon. Defense procurement is inefficient by definition. Everywhere. All governments with interests in defense industrial bases are going to protect them, and subsidize them, to some degree. We do it. The Europeans do. Just about, as I said, everyone else does. In Japan, the degree of this occurrence has been unique. And has been pretty well hidden from public scrutiny. I think there’ll be less of that in the future.

And with that, goes some fairly major effects on how the U.S. and Japan are going to do defense business in the future. How they’re going to consider future requirements and base, perhaps, future procurement programs on requirements analysis. We’ve talked about this before, in terms of roles, missions, and capabilities. I think, in a way, procurement reform is going to reinforce that process.

RCA: But nothing that would affect the overall, meaningful aspects of the bilateral relationship, are there?

GAR: No. I don’t think so. I think in the end, as painful as it is now, I think this ultimately is a healthy development, that’s going to put this part of our security relationship – that is, the defense acquisition and industry matters – on a somewhat more open, somewhat more transparent footing. And, as I said before, going to reinforce the evolution of our roles, missions, and  capabilities dialogue, to identify future defense programs by what they need to do for alliance matters. And how they can best be procured. Rather than simply subsidizing inefficient producers and all of the vested interests that accompany that.

RCA: Individual vested interests are the ones that, it sounds to me, like are going to be disadvantaged. Both in the United States and Japan.

GAR: Yes, and I realize that what I said before is a statement as much of hope as it is of real expectation. There’s no interest like a vested interest. And all of these cozy arrangements, and so on. Encrusted attitudes toward defense procurements are not going to go away easily. But, as I say, we may have turned a corner now, in terms of exposure of a lot of these issues. And the moving of consideration of them from literally behind closed doors to more the realm of public debate. And that, I think, has almost got to be good.

Significance of Upper-Level JMOD Personnel Changes

RCA: Yes, that does sound good. You know, I’m reading recently in the Japanese press about fairly significant upper-level personnel changes in the Ministry of Defense. Do you think any of this is significant?

GAR: Well, I think we talked a couple of months ago about some of the shifts in JMOD personnel that accompanied Moriya’s departure. The return of a number of people who were not Moriya’s cronies, and who had been exiled to various prefectural offices to watch local defense facilities affairs. And other government offices not directly connected with JMOD. These people have come back. And I think you can look at the reassignments made this week, prompted by Minister Ishiba, as sort of Stage Two of that process. There’s no question now that the Moriya cronies are gone. Either out of the Ministry altogether, or at least marginalized. If you look at the key Internal Bureau appointments now: Defense Policy Bureau; Operations; even Finance and Equipment. You can see that they’re all part of the next wave.

RCA: Do you think this will bring in more effective, competent people? Or will that be a cost of cleaning it up.

GAR: I think there’s no question that there’s been a watershed in movement toward this particular group of key officials now. When we discussed this earlier, I think I noted that although there’s been a change of only perhaps five years in terms of age and seniority between this group and the Moriya cronies, there’s a real change in experience and perspective. We’re really dealing with people now whose experience lies more in the post-Cold War than the Cold War period. And who have quite a different view of how JMOD should do what it does. How it should relate to the rest of the government. And how it should relate to us. And I think on the whole, the competence level is higher.

RCA: And they’re JMOD proper people, right?

GAR: Yes, these are all career JMOD types.

RCA: I can remember talking to you in Tokyo back in the 1970s about all this. You’ve probably forgotten. You mentioned to me about the Ministry of Finance people who came. The MITI people who came. And how ….

GAR: And the ex-policemen, and all the rest of that. That hasn’t disappeared. But you see much less of that now. And you’re going to see less in the future. METI will continue to have some footholds in the equipment and procurement-related areas. Which is not surprising, given their direct interest in Japan’s defense industry. And you will see Foreign Affairs continue to have a little bit of a foothold in that area of the JMOD infrastructure. Something like that. And there will be other individual examples of that, throughout the internal bureau structure. But the day when administrative vice ministers were routinely outside appointments, as were the directors-general of the Policy Bureau, etc. – that is gone, I think, and is not going to come back.

Effect of the JMOD Procurement Corruption Scandal on the LDP’s Defense Caucus

RCA: That’s really interesting information. I’ve again taken more of your time than you agreed to give. But I’ve got one more question that you may just hang up on. But on this program we talk about politics. I wonder what you think about the degree to which this whole procurement scandal will spread into the Parliament and parliamentarians, the so-called Bouei-Zoku-type people. What do you think?

GAR: That’s almost a trick question. There’s no question that the Bouei-Zoku, or Defense Caucus members, have been at the very center of a lot of abuse of procurement practices. Pork-slicing, again, is a universal phenomenon. And a lot of the Bouei-Zoku membership has been identified and self-selected for its particular interest in this area. So it’s not surprising, particularly given Moriya’s unusually close connections to the LDP political structure, that this scandal is going to spread outwards to cover some of these people as well. In fact, it’s already starting to.

RCA: Well, we’ve seen Kyuma’s name come up a number of times. But aren’t there many, many more than just him involved in this?

GAR: Kyuma is a particular example. There are several others who are senior members of the Defense Caucus. You’re right. There are a number of Dietmen – and not just from the LDP – who have their fingers in it. The degree of involvement is relative. But again, I hope that one result of this scandal is going to be that Diet consideration of various defense programs is not going to be limited to ritual votes on the budget. And, as I say, certain key Diet members carving out slices of pork for their own interests. There’s going to be more interest in the substance of not only the general policies, but also major acquisitions. What’s being bought, and why.

RCA: That makes sense. Once again, Gregg, I’m most grateful for your contribution to the Japan Considered Podcast. I really appreciate your help, and your expertise.

GAR: My pleasure, Bob.

RCA: Talk to you again, Gregg.

Concluding Comments

Well, there you have it. It’s hard to fine better commentary and analysis on Japan’s defense relationship with the United States, and on Japan’s military establishment. Gregg is widely recognized in both Washington and Tokyo as one of the best informed and most reliable voices. He actually knows what’s going on. And he calls it just as he sees it. We’re lucky to get him to come on the program.

Concluding Comments

That’s all we have time for this week again. Thanks for joining us. It’s been a while since we’ve gone out with a bluegrass clip. So this one had better be good. Well, it is. The unforgettable John Duffey joins us with a taste of “Here Today; Gone Tomorrow.” I’ll put a link in the program transcript to the album from which it comes, “Always in Style.” Click on over, buy one, and improve your life.

[bluegrass clip]

Goodbye All. Until next week.