A Foreign Ministry official has admitted padding state-paid hotel bills during Asia-Pacific Economic Cooperation meetings in Japan in 1995, police sources said Wednesday.

The latest embezzlement scandal to hit the tarnished ministry reportedly involves more than 70 million yen.

The official has been identified only as a 56-year-old assistant director at the ministry's European Affairs Bureau.

Police sources said investigators within the Metropolitan Police Department are checking for corroborative evidence before issuing an arrest warrant against the official and a 51-year-old sales manager at the Hotel New Otani, the venue used during the 1995 APEC meetings.

Investigators suspect another two people were also involved in the operation.

Police have been interrogating the Foreign Ministry official since Thursday. Investigators suspect he embezzled the funds by getting the Hotel New Otani executive to send padded hotel bills to the Foreign Ministry.

The money that had been fraudulently obtained from the government was stashed at the hotel in question.

The New Otani manager, also under police interrogation, is suspected of embezzling 40 million yen of the stashed funds. The sources said he has admitted pocketing the money.

Police believe the Foreign Ministry official used around 5 million yen for private ends.

He is thought to have used Hotel New Otani more than 50 times for private purposes since early 1995, using the embezzled funds to pay for his visits.

According to investigators, the official claimed the hotel bills were padded in order to cover unexpected outlays.

Police suspect, however, that the assistant director padded the bills primarily for personal gain, noting that the expenses he incurred when he took a female guest to the hotel were paid from the padded funds.

While the main 1995 APEC meetings took place in November in Osaka, APEC held a preparatory meeting in Tokyo the previous month. The Hotel New Otani was the venue on both occasions.

Official blackmailed

SAITAMA (Kyodo) A 54-year-old unemployed man was arrested Wednesday on suspicion of extorting 10.5 million yen in cash from a Foreign Ministry employee, police said.

According to investigations, Kenji Takayanagi, a resident of Minato Ward, Tokyo, knew that the 40-year-old ministry employee from Saitama city had been a member of a dating club four to five years earlier.

Takayanagi is suspected of using this knowledge to extort the money and also attempting to extort more, police said.

Takayanagi allegedly called the employee 16 times from late March to mid-July and blackmailed him into transferring the funds to a bank account.