CORRUPTION IN VIETNAM

CORRUPTION IN VIETNAM

In 2011, Vietnam ranked 112 out of 183 countries in German-based Transparency International’s Corruption Perceptions Index (a big number is bad, a low number is good). In 2004, it tied with several nations for 102nd place. In 2003, Transparency International ranked Vietnam 100 out of 133 nations for corruption according to surveys of business people, academics and risk analysts. Only Indonesia and military-ruled Myanmar fared worse in the seven Southeast Asian countries listed. In 2002, the organization ranked Vietnam as the second-most corrupt nation in Southeast Asia, behind Indonesia, and 16th-worst on a worldwide list of 102 countries.

Corruption has risen in inverse proportion to the economy’s standing. In Transparency International’s 2012 Corruption Perceptions Index, Vietnam fell to 123rd place out of 176 nations from 112th place in 2011, a worse standing than Sierra Leone and Belarus. The World Economic Forum’s latest Global Competitive Index, Vietnam fell 10 places to 75th, lagging behind Uruguay and Ukraine. [Source: William Pesek, Bloomberg, May 10, 2013]

One businessman told Newsweek, "there's a persistent niggling of foreign businesses. Officials don't have just one hand out. They're octopi. They stick out eight." Another businessman told Time, "To get a hotel site in the provinces [of China] you have to make a one time payment of $300,000 to the local commander. In a place like Vietnam they nickel and dime you to death." Singapore's former leader Lee Kuan Yew complained foreign investments are "being held to ransom" by bribe-hungry officials. A former North Vietnam officer said, " Hell is reserved for crooks, but there are so many of them in Vietnam, it’s full."

According to the summary of a Transparency International paper on corruption: "In spite of improvements over the past years, corruption is still considered widespread throughout the country and Vietnam still lags behind other Asian countries in terms of control of corruption and most governance indicators. Corruption affects different sectors such as health, education, construction, land management as well as natural resources and the extractive industries. The private sector is also affected by cumbersome legislation, which provides both incentives and opportunities for corruption. [Source: Transparency International paper entitled "Overview of corruption and anti-corruption in Vietnam", January 27, 2012, transparency.org ]

In December 2005, Reuters reported: "Nearly a third of government employees in Vietnam say they would take a bribe if offered, according to an unprecedented survey by the Communist Party as it tries to stamp out pervasive corruption. The survey, by the party's Internal Affairs Committee and made public yesterday, lists the "top 10" most corrupt government offices and institutions, with land and housing registration offices leading the pack. The poll in seven cities and provinces, and three ministries, found 32.6 percent would accept a bribe. [Source: Reuters, December 2, 2005]

Corruption is a major source of discontent among Vietnamese and also a common complaint of foreign investors. Farmers have staged public demonstrations against corruption involving questionable land deals and land claimed by the Catholic church. In 1997, hundred of villagers were arrested and the town of Dong Hung (55 miles south of Hanoi) was closed off to journalists after a series of protests over corruption and the unequal distribution of wealth.

Nepotism, Favoritism and a Lack of Morals in Vietnam

Stanley Karnow wrote in Smithsonian magazine: "Officials routinely favor wives and other relatives with contracts for supplies, that, by no coincidence, are purchased by party and government bureaus. The son-in-law of one top figure, for example, has the franchise to import the computers used by the party and government."

One woman told the New York Times, "People who work in the government can do anything they want. They don’t have any rules. They have their own rules They can change them anytime...Some of them have five or six children. They run large stores or work in government companies or joint ventures. They grow more rich and powerful as time goes on." A businessman told the New York Times, "The Communists control the big companies...The Communist party people, the government officials are the rich ones. They get rich from bribes and state trading companies." Often times people from the south or members of families that had anything to do with the Americans or the South Vietnamese government are penalized for these contacts.

Bill Hayton of the BBC News wrote: "The head of Vietnam's ruling Communist Party has criticised the lack of morals among many of the party's members. Speaking at a specially convened meeting, General Secretary Nong Duc Manh said some members showed too much individualism. The meeting follows a series of graft scandals, which have damaged the party's reputation over the past year. Mr Manh told party members that a slipping of moral standards could paralyse the party. He advised them to follow the example of their country's founder, Ho Chi Minh. [Source: Bill Hayton, BBC News, February 2, 2007 ~^~]

"Manh pointed a finger at those who he said were letting the party down. "Improving revolutionary morals must go along with giving up individualism," he said. This campaign follows a series of revelations in the local media about corruption scandals and poor administration, and comes as Vietnam begins the process of choosing a new National Assembly. Mr Manh promised to build socialism in what he called the Vietnamese way - believed to be the first time the party has used such wording - an echo of a similar phrase used by Chinese Communists. His speech comes at a time of deep internal discussion within the Party about its future structure and role, something which could have significant consequences for the way the country is governed. "~^~

Corruption and Business in Vietnam, See Problems Doing Business in Vietnam, Secrecy and Corruption Make It Difficult for Outsiders to do Business in Vietnam.

Leader of Vietnam Says He Was Offered Bribes While in Power

In 2005, AFP reported: Former Vietnam communist party chief Le Kha Phieu—the former leader of Vietnam—"revealed he was offered envelopes stuffed with thousands of dollars while in office, in an unprecedented denunciation of corruption. "I say frankly that there were people who came to see me to offer me money — 5,000 or 10,000 dollars — not a small amount," Phieu, who was communist party general secretary from 1997 until 2001, said in an interview with the Tuoi Tre daily. "It happened when I was a member of the politburo, and it increased when I became general secretary," he told the newspaper. "They would come to see me to give me money but they would not give it (directly) to me." [Source: Agence France Presse, May 26, 2005 ~*~]

"Phieu said the money was often left behind along with a bouquet of flowers on a table. He named no one, but it is the first time a leader of his stature has admitted to have personally been offered bribes. Phieu, who criticised what he termed complacency over corruption in an unusually strong attack on current leaders, appeared to sink the knife in deeper with his latest remarks. "I narrate this story in order to say that there are many such practices (inside the regime) and that some people see it as something natural or normal," he said. "I am really sad about it and the situation today seems unchanged." ~*~

Phieu said that "corruption is not an isolated case but permeates the whole network from top to bottom and bottom to top." Phieu was widely acknowledged to have lost his job after a strong anti-graft drive and for having set up close surveillance of politburo members. "This practice touches not just those in office but also their families, and we ought to ask them to be more vigilant," Phieu said. ~*~

Analysts were not as surprised by the content of the remarks as by the form it took. "It confirms what everyone knows already," said a foreign diplomat. "It is good that Vietnam's communist party starts to really have a look at it." "For a long time, corruption was oiling the wheels, and it did not hold back the country's development. Today the problem is more serious," said a foreign businessman in Vietnam. He added that the authorities were "not able to control the phenomenon". Phieu's statements, he said, may represent the view of a politburo fringe that was seeking stronger steps. ~*~

Vietnam Detects 584 Corruption Cases in 2007

China People’s Daily reported: In 2007 Vietnam "discovered 584 cases of corruption with involvement of nearly 1,300 people, which caused total losses of over 865 billion Vietnamese dong ($54.1 million U.S. dollars), the local newspaper Pioneer reported. Most of the cases were detected through denouncements, inspection, auditing, and information provided by press agencies and people, the newspaper quoted the country's Central Anti-Corruption Steering Committee as reporting. The number of corruption cases being prosecuted in 2007 for the charges of abusing power while conducting official duty, and receiving bribes rose over 66 percent against 2006, the newspaper said. "We consider corruption a challenge to the existence of the Vietnamese government," Vietnamese Prime Minister said at a business roundtable between key cabinet members and international business leaders in Hanoi capital in January. To fight corruption, Vietnam is striving to improve its legal systems and promote the life of public servants. [Source: The People's Daily, February 12, 2008]

Those involved include policemen, military officers, customs officials, banking clerks and one judge, local newspaper Saigon Liberation quoted head of the Government Inspectorate Tran Van Truyen as saying. The authorities have prosecuted 420 people, disciplined 48 others, and reclaimed cash of 8.2 billion VND ($512,500 dollars), and 26,532 square meters of land, he said, in the first six months of 2007. [Source: Xinhua - July 12, 2007]

Ten Greatest Corruption Cases in Vietnam in 2006

Tuong Nhi wrote in Thanh Nien: "The Government Inspectorate of Vietnam has selected its 10 biggest corruption scandals uncovered in 2006. They are: 1) The million-dollar gambling case involving Bui Tien Dung, former General Director of PMU 18 in the Communications and Transport Dao Dinh Binh ( See Below). 2) State officials of Do Son town in northern Hai Phong City involved in a massive landgrab case pocketed billions of dong (VND1 billion = $62,036). However, the city court in August sentenced three of four officials involved to pay merely VND50,000 (US$3.1) each. The lenient verdict left the public seething, forcing Prime Minister Nguyen Tan Dung to step in. He instructed authorities to appeal the lenient court verdict and told investigators to look into the role of the judges who had heard the case to find out if the Hai Phong city government had interfered. [Source: Tuong Nhi, Thanh Nien, January 4, 2007]

3) Public houses turned into state officials’ private residences. The cases were unveiled by the media in Vietnam; thereby raising a national public protest. Le Duc Thuy, Governor of the State Bank of Vietnam, in late 2004 fulfilled the formalities to buy the public house on Ly Thai To Street and received the ownership certificate for that house after only seven days. After the case was disclosed by media, he was forced to return the house to state ownership. Meanwhile, Hoang Van Nghien and Phan Van Vuong, former chairman and vice chairman of Hanoi People’s Committee, applied to buy two public villas they were leasing, at prices far lower than market value. However, after the case was unveiled the city refused the housing purchases.

4) The bogus Rusalka project in central Khanh Hoa province, in which the investor, Nguyen Duc Chi, swindled investors out of US$10 million. Some provincial officials were found to have persuaded the local government to issue a land use certificate for the Rulsalka beach resort project even though the project promoter had not paid the fees and rental, or signed a lease contract. The promoter was Rus-Invest-Tur, a Russian-invested tourism company, whose director Nguyen Duc Chi was arrested in 2005 for fraud. The certificate, which said Chi had the right to use 43.6 hectares of prime beach front in the popular resort town of Nha Trang, enabled him to dupe many people and banks to secure loans. He duped two state-owned companies of more than $10 million. Following his arrest, he had admitted to paying $700,000 bribes to Khanh Hoa province officials.

5) Nguyen Lam Thai’s involvement in dubious post office equipment procurement with 38 post offices of cities and provinces nationwide. Thai bribed leaders of local post offices in many localities to sign contracts to purchase postal equipment at inflated prices, causing the loss of VND45 billion ($2.81 million) to the State. 6) Mac Kim Ton, former education director cum central legislator’s fraudulent case within the education sector. Ton was originally suspended from head of northern Thai Binh province’s education department in July 2006 for allegedly helping a woman named Tran Thi Anh pocket more than US$25,000 commission for brokering shady computer deals for his agency. Ton was arrested July 21 for his involvement in the scandal, orchestrated by Anh, who was prosecuted in June for abusing his position and power for personal gain and illegally seizing State property. The education director, also an ex-member of the lawmaking National Assembly [legislator], had earlier introduced freelancer Tran Thi Anh [later arrested] as a state official who would help broker a computer procurement contract for the department. Anh then abused her false status to broker shady contracts worth VND4.2 billion (US$261,763) supplying computers to Ton’s department and more than 40 schools in Thai Binh province.

7) Wrongdoings at the national flag carrier Vietnam Airlines saw the state owned corporation finance ineligible children of leaders to study abroad. Vietnam Airlines also had to pay EUR5.2 million (US$6.85 million) in fines for violating a contract signed with a hired foreign expert. 8) Afforestation land in Hanoi’s outlying district of Soc Son had been sold, mostly for Hanoi’s city dwellers to build villas, farms and restaurants. 9) Officials skimmed off aid money for Huong Son district residents in northern Ha Tinh Province. The case took place in 2004, but was only brought to the light in 2006. 10) Fraudulence in senior high school graduation exams in 2006. Teacher Do Viet Khoa blew the whistle on fellow invigilators at exams in northern Ha Tay Province, kick-starting a movement on saying ‘no’ to cheating in education. The brave teacher was awarded the certificate of merit by the Ministry of Education and Training.

Government Corruption in Vietnam

In May 2005, five senior officials in the northern port city of Haiphong were fired for their involvement in a land corruption scandal in which they claimed land for themselves which had been designated for the poor.

In 2007, former Deputy Trade Minister Mai Van Dau was accused of accepting bribes from garment and textile companies to allow them to exceed export quotas in 2003 when annual exports to the United States were capped at US$1.7 billion, he said. Police have said Dau received bribes of US$6,000, according to state media. Thirteen others, including his son, a former ministry employee, are also accused in the scandal, state media have reported.

In February 2006, Associated Press reported: "Two Vietnamese officials were sacked and stripped of their Communist Party membership for allegedly embezzling 80 million dong (US$5,000) from state funds earmarked to fight bird flu, an official said. Phan Bach Tuyet, head of the Agriculture Department of An Phu District in southern An Giang province, and accountant Van Van Phet allegedly embezzled money earmarked for equipment to try to contain the spread of bird flu in 2004 and 2005, said Lam Minh Giang, chairman of the district People's Committee. The month before four village officials in Hanoi's suburban District of Dong Anh were arrested for allegedly collaborating with poultry farmers to inflate the number of birds being culled. [Source: Associated Press, February 8, 2006]

In February 2004, ABC Radio Australia News reported: "A court in Vietnam has begun hearing the trial of 27 customs officers accused of corruption. The officers are accused of extorting money from traders taking goods across Vietnam's northern border with China. Among the defendants are Be Ngoc Trinh, customs chief in the northeastern province of Lang Son, charged with dereliction of duty for ignoring the activities of his staff at the Tan Thanh border checkpoint. Prosecutors allege the 26 customs officers at Tan Thanh, one of Vietnam's biggest border crossings with China, took hundreds of thousands of dollars in bribes from traders over a two-year period. The extortions were discovered in June 2001.[Source: ABC Radio Australia News, February 07, 2004]

See Combating Corruption

Corruption at State-Owned Companies

Well-connected state-owned enterprises have been allowed to run up massive debts while producing little of value, dragging down the economy. Corruption, mismanagement and inefficiency at state-run companies -- a pillar of the communist country's economy -- are seen as fuelling longstanding economic woes. Two former top executives at scandal-hit national shipping company Vinalines were sentenced to death in December 2013 for embezzlement, as the group almost collapsed under some $3 billion of debt.

In October 2013, Thanh Nien reported: Hanoi will hold a trial on a multimillion dollar graft case at the state-owned shipping giant Vinalines as well as the case of its former head Duong Chi Dung, who fled the country last year, and the case of Asia Commercial Bank losing more than VND1.4 trillion ($66.26 million) to illegal securities purchases and illegal deposits by six former executives in 2009 and 2011.Ho Chi Minh City will hold a trial on a scam at state-owned Vietinbank in which 23 people, most of them employees, allegedly swindled nearly VND4 trillion ($190.6 million) in 2010 and 2011. It will also hear the VND20 billion ($948,000) embezzlement case involving Vietnam Food Industries Joint-Stock Company. It's former chairman, a former deputy general director and three of their subordinates will be tried. [Source: Thanh Nien, October 29, 2013]

According to the U.S. Department of State: In September 2011 the Supreme People’s Court in Hanoi concluded its investigation into the August 2010 allegations of misappropriation in the shipbuilding conglomerate Vinashin and found that nearly VND 900 billion (approximately $43 million) had been misappropriated. The court charged Chief Executive Officer Pham Thanh Binh and eight others--board members Tran Quang Vu and Tran Van Liem, former subsidiary general directors Nguyen Van Tuyen and Nguyen Tuan Duong plus To Nghiem, Trinh Thi Hau, Hoang Gia Hiep, and Do Dinh Con--with “deliberately acting against state regulations and economic mismanagement, causing serious consequences.” These offenses are punishable by up to 12 years in prison. At year’s end the accused awaited trial as well as additional investigation on other, related charges. [Source: 2011 Human Rights Reports: Vietnam, Bureau of Democracy, Human Rights, and Labor,U.S. Department of State; 2011 Country Reports on Human Rights Practices Report, May 24, 2012 ***]

In June a court convicted Tran Van Khanh, the former director general of Vietnam General Corporation of Agriculture Materials, of “abusing powers while performing official duties” and sentenced him to five years’ imprisonment. Specifically, in 2003-04 Khanh illegally sold company fertilizer to individuals outside of working hours and rented company vehicles to private individuals, from which he pocketed more than VND 3 billion (approximately $140,000). ***

In May the former governor of the State Bank of Vietnam, Le Duc Thuy, retired from his position after coming under investigation for allegedly taking bribes from the Reserve Bank of Australia currency supplier (Securency). It was claimed that, for the exchange of an undisclosed amount of money, Thuy helped Securency win banknote supply contracts during the period 2002-09 and that Securency deposited funds for Thuy into an overseas account belonging to a member of the government’s public security bureau, Colonel Luong Ngoc Anh. An investigation continued at year’s end. ***

See Oil Companies

Vietnam’s Ministry of Transportation Gambling and Bribery Scandal of 2006

In 2006, Vietnam Transport Ministry was embroiled in a scandal year that allegedly involved millions of dollars in funds skimmed from infrastructure projects to pay for luxury cars and gambling on European soccer matches. The transport minister resigned and several in his ministry were arrested. Senior transport ministry officials were charged with supervising the use of millions of dollars of World Bank aid money and lost up to $7 million by betting on European football matches. A total of 17 affiliated institutions and 40 individuals involved in the case have been disciplined. The Government had to consider and adjust the official development assistance (ODA) capital management mechanism. [Source: Tuong Nhi, Thanh Nien, January 4, 2007]

Matt Steinglass of Voice of America reported: "Dao Dinh Binh, head of Vietnam's ministry of transportation, finally took the step that citizens and government leaders had been demanding since last week: he resigned. Binh is the highest-ranking victim yet of the so-called PMU-18 affair, a gambling and corruption scandal that has implicated numerous senior officials at a transportation ministry unit in illegal betting rings, bribes, and fraud running into the tens of millions of dollars. [Source: Matt Steinglass, Voice of America, April 4, 2006 |-|]

The scandal first became public in January, when Bui Tien Dung, head of the ministry's Project Management Unit 18, or PMU-18, was arrested for allegedly betting $1.8 million on soccer matches. Police said an office computer showed that up to 200 other employees had been betting as well. Dung was alleged to have spent his winnings on girlfriends, and to have passed some of the money on to his boss. One official says police are looking into a series of farms and villas owned by Dung. Vietnamese newspapers have published stories detailing fraud and malfeasance at PMU-18 on a vast scale. Two-point-eight million dollars are said to have disappeared on one highway project alone. On another project, 13 out of 21 brand new bridges were found to be defective. |-|

Local investigators estimated that Dung had made total bets of over $7 million on foreign soccer games, including English and Spanish ones, for a long time before his arrest in January. As a result, Transport Minister Dao Dinh Binh has resigned, and Deputy Transport Minister Associated Press reported: "Three Vietnamese government officials, including Bui Tien Dung and former Deputy Transportation Minister Nguyen Viet Tien, and six other men were tried on charges of gambling and bribery The case surfaced when police alleged Dung and three accomplices bet US$768,000 on European soccer matches, the official Vietnam News Agency reported. Dung allegedly put down US$760,000 of the total, reports have said. Dung then allegedly paid a bribe of US$68,000 to cover it up, the state-controlled news organization said. [Source: The Associated Press - July 24, 2007]

Bui Tien Dung was general director of the unit, which is in charge of implementing and overseeing infrastructure construction projects with funds coming from either the state budget or official development assistance, Police investigated allegations of corruption involving millions of dollars earmarked for construction projects. The money was largely development aid given by the World Bank and Japan. Earlier, World Bank officials announced they had found some irregularities with aid distributed at the provincial level, but concluded no misuse of funds was uncovered in the two projects Dung's department had managed. The scandal is one of Vietnam's biggest corruption cases and has dominated newspaper and television headlines.

Bui Tien Dung was prosecuted for four charges, namely, gambling; intentionally acting counter to state regulations in economic management, resulting in severe consequences; receiving bribery; and giving bribery. He was sentenced to 13 years in jail by Vietnam's Supreme Court. The court also sentenced Nguyen Van Hong, former manager of Thang Long Real Estate and Commercial Co, to six-years in prison for running the gambling operation. Former police lieutenant colonel Nguyen Dinh Toan was given two-years for taking bribes from Dung. The court also ordered Dung to pay a fine of 1.168 billion dong (over US$72,700). Nguyen Viet Tien has been detained for his responsibility for the scandal, and his mismanagement, respectively. Tien has been prosecuted for two charges: intentionally acting counter to state regulations in economic management, and lacking responsibility, resulting in severe loss in state assets. [Source: Thanh Nien - November 17, 2007]

Gangster Trial Reveals the Extent of Corruption in Vietnam

Ben Stocking wrote in the Mercury News, "It's Watergate meets Bonnie and Clyde: a tale of murder, gambling, prostitution and cops on the take -- with a reach that extends close to the highest levels of government. And depending on how you view it, the trial of Vietnam's most notorious gangster is either proof of the Communist Party's commitment to rooting out corruption -- or merely evidence of how corrupt the party has become.[Source: Ben Stocking, The Mercury News, February 24, 2003 \=\]

In the 55-day trial in Ho Chi Minh City, Vietnamese mob boss Nam Cam led a procession of 155 defendants, including 13 former police officers, three former prosecutors and three high-ranking Communist Party members accused of protecting him. Nam Cam and a dozen of his confederates faced the death penalty. The trial's first and last day was broadcast live on national television, drawing millions of Vietnamese viewers Many Vietnamese were less angry at the gangsters accused of murder than they are at the officials accused of protecting them. "They are even worse than Nam Cam,'' said Phan Trung Thanh, 57, a Hanoi resident who plans to follow the trial closely. "They should have worked for the party and the people, but they were attracted by the devil's money.'' \=\

Three high-ranking party members — including two members of the powerful Central Committee — were accused of accepting bribes or gifts in exchange for keeping quiet about Nam Cam's allegedly extensive criminal enterprises, which centered on illegal casinos in Ho Chi Minh City. Also among the 155 defendants are hit men accused of gunning down a rival gang leader in a coffee shop and hacking up an honest cop with machetes on a Saigon street. \=\

For the Communist Party, which routinely launches moralistic campaigns against "social evils'' such as gambling and prostitution, the entire affair has been more than just embarrassing. "They've known for a long time that corruption could undermine the legitimacy of the Communist Party,'' said Carl Thayer, a Vietnam expert who teaches at the Australian Defence Force Academy. "It's frightening to them. They have to act.'' Past corruption cases in Vietnam have involved financial crimes, which have become more tempting to commit since Vietnam began opening its economy in 1986. This is the first time that high-level officials have been accused of consorting with gangsters. \=\

Three senior officials, including two from the party's elite Central Committee, were shown on national television in striped prison jumpers. They were imprisoned for up to 10 years for taking bribes. Xinhua reported: Seventeen Vietnamese Communist Party members "were sentenced for their involvement in the Nam Cam case. Nam Cam received the death sentence for murder, assault, gambling and illegal emigration organization, criminals support, bribery and usury. Of the 17 sentenced party members, several held important positions like former Deputy Minister of Public Security Bui Quoc Huy, former deputy head of the People's Supreme Procuracy Pham Si Chien, and former director of the Voice of Vietnam radio station Tran Mai Hanh. Huy was found guilty of neglecting his duty, resulting in major negative consequences. Chien and Hanh were both convicted for receiving bribes from Nam Cam. [Source: Xinhua, April 21, 2006]

AFP reported: "A member of the ruling Vietnamese Communist Party's inner circle— Mr Truong Tan Sang, the 10th-ranking member in the 15-strong Politburo—was officially reprimanded by the Central Committee for 'dereliction of duty' while party chief in Ho Chi Minh City from 1996 to 2000. 'Sang failed to instruct enforcement agencies to investigate or prevent the criminal activities of Nam Cam and his underlings and committed mistakes in personnel affairs,' the Nhan Dan newspaper said. Mr Sang, a high-flyer from the southern province of Long An who was elevated to the Politburo in 1996, is the most senior figure to be formally punished in connection with the affair. Although a reprimand is the first rung on the punishment ladder for cadres, analysts say it could be the first step towards further action against the 53- year-old and other senior party members suspected of involvement. 'It remains to be seen whether the party has the stomach for continuing the investigation,' said Mr Carl Thayer, a Vietnam watcher at the Australian Defence Force Academy. [Source: Agence France Presse - January 25, 2003]

See Nam Cam Under Crime in Vietnam

Vietnam's Ex-banker Gets Life over $230 Million Fraud Case

In January 2014,AFP reported: “A Vietnamese court on Monday sentenced a former banker to life in prison for a fraud involving more than $230 million, one of the communist country's largest-ever such cases. Huynh Thi Huyen Nhu, 37, was convicted alongside 22 other defendants who were given sentences of up to 20 years in prison after a three-week trial ended on Monday, a clerk at the People's Court in the southern metropolis of Ho Chi Minh City told AFP. [Source: AFP, January 27, 2014]

Nhu raised some $231 million in loans from individuals, companies and other banks when she worked for the state-run Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank). She claimed to be raising funds on the bank's behalf, the Tuoi Tre newspaper reported. Nhu forged some 200 documents and hired other people to counterfeit the official stamps of Vietinbank and other companies in order to obtain the loans, the report said. The court ordered Nhu to return all the money she had stolen, it added.

Nhu had racked up debts by making a series of disastrous investments in real estate and then "turned to swindling" in order to repay her debts, it said. The judge dismissed her lawyer's argument that former employer Vietinbank should take responsibility and compensate clients for their losses, VNExpress reported. "(Nhu) was the gang leader who took all responsibilities and Vietinbank knew nothing about her fraudulent acts," the report said.

Small Scale Corruption

Ben Stocking wrote in the Mercury News, "Ordinary Vietnamese confront petty corruption everywhere they turn — from teachers who charge money to place students at the front of crowded classrooms to traffic cops happy to tear up a ticket for a small sum.[Source: Ben Stocking, The Mercury News, February 24, 2003 ==]

In December 2005, Reuters reported: "Nearly a third of government employees in Vietnam say they would take a bribe if offered, according to an unprecedented survey by the Communist Party as it tries to stamp out pervasive corruption. The survey, by the party's Internal Affairs Committee and made public yesterday, lists the "top 10" most corrupt government offices and institutions, with land and housing registration offices leading the pack. The poll in seven cities and provinces, and three ministries, found 32.6 percent would accept a bribe. The most common bribe was to overcome "delays" in the processing of paperwork, according to the survey. This was a particular problem at land and housing offices, where home owners often paid extra for faster service. Traffic police, customs and tax officials were also major abusers. Vietnam has enjoyed rapid economic growth since it began market-oriented reforms in 1986 but foreign investors say graft is a major hindrance to doing business in the country. Vietnam's parliament passed the country's first anti-corruption law this week. It requires officials and their relatives to declare their assets. [Source: Reuters, December 2, 2005]

Low wages and below-market prices have created out of control corruption, which pervades into all areas of everyday life. Bribes are necessary to secure a position in a respected school or university and more bribes are necessary to graduate. Extra fees also have to be paid for licenses, permits and permission to leave the country. Businessman complain they have to grease the palms of "every Tom, Dick and Harry" from customs inspectors to dockhands." Bribes are especially common around Tet.

On why corruption is so entrenched in Vietnam, Stocking wrote: "Many observers attribute the corruption to the poverty that persists in Vietnam, where per-capita income is about $420 a year. Many government officials earn low wages, and they have a hard time keeping up with the emerging entrepreneurial class, whose members sometimes engage in conspicuous consumption. "In cities in particular, bureaucrats on fixed incomes must be very frustrated with the growing wealth disparities,'' said Zachary Abuza, a professor at Simmons College in Boston and an expert on Southeast Asia." ==

Police Corruption in Vietnam

Police in Vietnam are viewed as corrupt. In many cases they are paid so little they must accept bribes to feed their families. A Time correspondent reported seeing a taxi driver at a pagoda pray before the Goddess of Treasury to get corrupt policemen off his back. He said gangster use security police instead of thugs to collect on overdue bills. One restaurant owner told the International Herald Tribune, the police "come every day. They say they are collecting taxes, but they put the money in their wallet." If he complains "they follow you, step by step and question you in the middle of the night, or take you away."

Ben Rowse of Agence France Presse wrote: "Vietnam's notoriously corrupt police demand bribes from bar owners to remain in business on a regular basis -- as one local manager of a popular drinking hole put it: "We have to pay every month to keep our licence, we have to pay to play loud music, we have to pay to stay open late." In 2002 when the Hale Club opened for business to lure people from the police- and government-connected New Century club in Hanoi, few were surprised when two months later it was forced to close by police for a variety of alleged offences. It subsequently reopened but with noticeably more modest ambitions. [Source: Ben Rowse, Agence France Presse, August 20, 2002 <<>>]

In 2006, Reuters reported: "The head of Vietnam's police investigation unit has lost his job amid suspicion of involvement in a corruption scandal that has rocked the ruling Communist Party, a state-run newspaper reported on Tuesday. The daily Tuoi Tre (Youth) said Police Major-General Cao Ngoc Oanh had been "relieved of his post" and would be re-assigned, the latest in a series of officials to be fired over the scandal at a big-budget road building unit. [Source: Reuters, July 11, 2006]

Corrupt Policewoman Jailed

In June 2007, Deutsche Presse Agentur reported: "A court in Vietnam has sentenced a senior police officer to 15 months in prison for hiring a gang to demolish a man's house with hammers and crowbars, a court official said. The People's Court of Hanoi declared Nguyen Bich Thuy, 47, guilty of taking part in an illegal demolition, after a two-day trial that ended Thursday, said Nguyen Huu Chinh, a judge of the court. "Thuy pleaded guilty, and showed remorse," Chinh said. [Source: Deutsche Presse Agentur, June 1, 2007 +=+]

"Thuy was a Lieutenant Colonel in the capital city's police force when she was arrested in July, 2006. Police said she had accepted a bribe of roughly $5,000 from home-owner Tran Viet Son in exchange for organizing a crew of men to demolish the house of his neighbor, Nguyen Viet Dung, with whom he had a property dispute. According to local press reports, Thuy collaborated with a local gangster named "Highway" Ngoc, who collected a team of 30 men with wrecking tools. The demolition took place at night. By the time police arrived the next morning, half of the house had been destroyed. +=+

"Ten other people involved in the illegal demolition were given sentences of between 18 months' probation and four years in prison. Thuy was a well-regarded officer in the city police force's investigations unit for 20 years, according to local media. She had received awards from Vietnam's prime minister, the Ministry of Public Security and the People's Committee of Hanoi. Police corruption cases have become increasingly prominent in Vietnam in the last year. In February, seven Hanoi police officers were jailed for protecting a heroin trafficking ring. Last September, a prosecutor in Tien Giang province was arrested for accepting a bribe, after the woman who bribed him complained he failed to get results. And in early 2006 several police officers were accused of taking money to help officials involved in a corruption scandal in Vietnam's Transportation Ministry." +=+

Vietnam Teachers Taking 'Exam Bribes'

In November 2007, the BBC reported: “A group of 26 teachers and education officers are being tried in Vietnam accused of taking bribes from pupils. The defendants have been charged with accepting tens of thousands of dollars from more than 1,700 students in return for improving their results. The trial, in the southern Bac Lieu province, comes after a government campaign against rampant cheating. Last year dozens of students were caught with mobile phones concealed in their clothes during exams. Court official Tran Van Khang told Thanh Nien newspaper that the defendants are charged with accepting bribes totalling 533 million dong ($33,000). [Source: BBC News, November 27, 2007 />/]

Police were alerted to the alleged mass fraud in June 2006, when a teacher was arrested and accused of taking bribes from 11 students in return for passing them, the paper reported. Exam results for the province were rechecked and the declared scores were found to be significantly higher than the actual figures, Thanh Nien said. Vietnam has had recurring difficulties with exam cheating and falsified results. Hoang Nguyen, from the BBC Vietnamese Service, says the problems are partly due to a trend known as "achievement syndrome", where district officials stand to lose their jobs if exam results are poor. />/

“A video emerged last year of a classroom of students apparently making telephone calls and helping each other with questions during their university entrance exams. Education minister Nguyen Thien Nhanh later announced a crackdown on cheating and the falsification of exam results, and an end to achievement syndrome. />/

Combating Corruption in Vietnam

AFP reported: “Vietnam's leaders have pledged to tackle corruption amid rising public anger, leading to a recent series of high-profile trials of former officials and bankers for corruption, fraud and embezzlement. In November 2013, a former banker and his business associate at a large state bank were sentenced to death for embezzling $25 million. Two former top executives at scandal-hit national shipping company Vinalines were sentenced to death in December for embezzlement, as the group almost collapsed under some $3 billion of debt. [Source: AFP, January 27, 2014]

According to the summary of a Transparency International paper on corruption: The Vietnamese "government has taken a number of steps to address governance and corruption challenges. The Anti-Corruption Law, adopted in 2005, criminalises several types of corruption, establishes asset disclosure requirements for governmental officials, and whistle-blower protection. A number of institutions which aim to fight corruption are now in place, including the Office of the Central Steering Committee for Anti-Corruption, the Government Inspectorate, the People's Procuracy, and the State Audit of Vietnam. However, the sources consulted, as well as the Vietnam Government, acknowledge that these efforts have not brought about expected results, particularly due to a large implementation gap and lack of enforcement. In addition, as civil and political freedoms are limited, the capacity of media and civil society organisations to hold government accountable for its actions and decisions is restricted. [Source: Transparency International paper entitled "Overview of corruption and anti-corruption in Vietnam,"January 27, 2012, transparency.org ]

Since the early 1980s, 20,000 state employees have been disciplined for corruption. In 2007. Xinhua reported: "To combat corruption more effectively, Vietnam is taking such measures as encouraging public participation in the fight, rotating cadres in sensitive sectors and strictly dealing with corruption cases. Ministries and sectors conducted 346 inspection cases in 2006, detecting economic wrongdoing worth 6,267 billion VND (roughly 391. 7 million dollars), nearly 4.2 million dollars, and 395,890 euros (over 475,000 dollars), according to the inspectorate. Meanwhile, the Ministry of Public Security investigated 7,772 economic crimes, of which 338 corruption cases were prosecuted. [Source: Xinhua, July 12, 2007]

Ben Stocking wrote in The Mercury News, Various international donors, from the World Bank to the United Nations to the U.S. Agency for International Development, are funding an array of projects aimed at strengthening Vietnam's legal system and making its government more open and responsive. "Vietnam can't succeed economically unless it has clean, effective government,'' said Jordan Ryan, the director of the U.N. Development Program office in Vietnam. The work of these groups, however important, will seem mundane alongside the sordid spectacle that will unfold in Ho Chi Minh City this week. [Source: Ben Stocking, The Mercury News, February 24, 2003]

David Fullbrook wrote in the Asia Times, “Corruption adds costs, but it also makes many bureaucrats and state firm managers wary of making a good decision for fear of triggering a corruption investigation. Thus, they tend to take time, a long time, to decide anything - and then preferably not alone. "It's to a greater extent than you'd ever see in Thailand or even Myanmar," the energy executive says. "There's also a lot of investigations into corruption in state-owned companies, especially construction and infrastructure. While it's good to have these anti-corruption drives, it's made the top management of these companies extremely reluctant to approve new deals, make things go forward because they don't want to be open to charges of corruption." Transparency, or rather the lack of it, is a problem for Vietnamese and foreign investors alike. "I think transparency is a huge issue. We, as a shipping company, can't even get shipping figures," says a European logistician who requested anonymity. [Source: David Fullbrook, Asia Times, December 2, 2004 ==]

Anti-Corruption Laws in Vietnam

According to the U.S. Department of State: The law provides criminal penalties for official corruption; however, the government did not always implement the law effectively, and officials sometimes engaged in corrupt practices with impunity. The anticorruption law allows citizens to complain openly about inefficient government, administrative procedures, corruption, and economic policy. However, the government continued to consider public political criticism a crime unless the criticism was controlled by authorities. Attempts to organize those with complaints to facilitate action are considered proscribed political activities and subject to arrest. Senior government and party leaders traveled to many provinces, reportedly to try to resolve citizen complaints. Corruption related to land use was widely publicized in the press, apparently in an officially orchestrated effort to bring pressure on local officials to reduce abuses. [Source: 2011 Human Rights Reports: Vietnam, Bureau of Democracy, Human Rights, and Labor,U.S. Department of State; 2011 Country Reports on Human Rights Practices Report, May 24, 2012 ***]

By government decree various government officials must annually report by November 30 the real estate, precious metals, and “valuable papers” they own; money they hold in overseas and domestic bank accounts; and their taxable income. The government must publicize these asset declarations only if a government employee is found “unusually wealthy” and investigation or legal proceedings are needed. In addition to senior government and party officials, the decree applies to prosecutors, judges, and those at and above the rank of deputy provincial party chief, deputy provincial party chairperson, deputy faculty head at public hospitals, and deputy battalion chief. Due to a lack of transparency, it was not known how widely the decree was enforced. ***

In January 2000, Reuters reported: “Vietnam's amended Penal Code makes graft involving some $35 a criminal offence. Pham Van Hung, a senior official from Vietnam's National Assembly, said the amendments had cut to 500,000 dong ($35.60) from five million dong ($356) the amount of money that made corruption a criminal offence. "This reflects the state's stringent policies on graft," Hung said. [Source: Reuters, January 21, 2000]

Crackdown on Corruption in Vietnam

The fight against corruption is a constant theme of official declarations, as leaders are said to be worried the problem is hurting the party's image. Periodically there are arrests and denouncements but for the most part these are superficial and yield few long-lasting results. A major campaign against corruption was launched with much fanfare in May, 1999. A couple years later a high-ranking government official admitted the campaign hadn’t made much difference. At that time no senior government official had ever been publically accused of corruption or stripped of his position because of corruption. Several have been sacked from their posts for "mismanagement" but it is not unusual for them later to reclaim their positions.

In 2000, Huw Watkin wrote in the South China Morning Post, " Communist Party Secretary-General Le Kha Phieu lashed out at corruption and self-interest in the ruling party. Phieu has spearheaded a purge of the party that by the end of last year saw the disciplining of 1,500 members, including several senior officials and a deputy prime minister. One thousand other cadres and businessmen had also been charged with corruption, but the momentum of the purge has since faltered. Supreme People's Court vice-president Trinh Hong Duong told the National Assembly on that only 333 party members had been indicted for corruption by the end of March this year, with only eight punished with criminal sanctions. "The number of corruption cases has decreased when compared to the same period last year, but in fact corruption has not decreased . . . it has become more sophisticated and the corrupt are in stronger [relationships] with each other than ever before," Mr Duong said. [Source: Huw Watkin, South China Morning Post, May 20, 2000]

In 2003, Ben Stocking wrote in The Mercury News, "Top leaders regularly state that creating a clean, responsive, open government is a top priority. "The party and the state of Vietnam are clearly aware of the threat of corruption and consider it a national disaster,'' Phan Thuy Thanh, Foreign Ministry spokeswoman, said. "Those who cover up crime or guard criminals will be severely punished,'' said Phan Xuan Bien, deputy director of the Culture and Ideology Department of the Ho Chi Minh City Communist Party. While many Western observers working in Vietnam think the government's commitment is genuine, others question its depth. "They talk a good game, but when it comes to implementation, they don't have the political will to go the whole nine yards,'' said one Western diplomat, noting that the government hasn't initiated prosecutions in other parts of the country despite rumors of illegal activity. [Source: Ben Stocking, The Mercury News, February 24, 2003]

According to the U.S. Department of State: According to an annual report by the Vietnamese government’s Anticorruption Steering Committee released in June 2011, state agencies initiated preliminary investigations into 100 cases of corruption-related crimes, an increase of approximately 5 percent compared with the same period during the previous year. There were 185 suspects, an increase of 3 percent, and authorities brought 97 cases to the court of first instance. According to the annual report of the Office of the Inspectorate General, it investigated 220 cases of corruption/fraud involving 449 individuals during the year, a majority of which continued under investigation at year’s end. [Source: 2011 Human Rights Reports: Vietnam, Bureau of Democracy, Human Rights, and Labor,U.S. Department of State; 2011 Country Reports on Human Rights Practices Report, May 24, 2012 ***]

Communist Vietnam Launches Massive Corruption Crackdown in 2004

In December, 2004, Associated Press reported: "They would have once been untouchable—a father and son duo with influential jobs in the Trade Ministry. But their alleged involvement in a multimillion dollar corruption scam has put them at the center of an unprecedented house cleaning by Vietnam's communist rulers set on rooting out graft among their own. Deputy Trade Minister Mai Van Dau and son Mai Thanh Hai were jailed recently as part of a crackdown on officials who siphon riches from the state— a practice widely known about but rarely publicly addressed in the past by the ruling Communist Party. The crackdown comes as Vietnam tries to burnish its economic credentials in its bid to enter the World Trade Organization.[Source: Associated Press, December 1, 2004 *\*]

"Dau and Hai were jailed for allegedly receiving up to US$1 million in bribes for handing out quota allotments for textile and garment shipments to the United States. A dozen other suspects were also arrested. Government-controlled media have widely reported the case, making fun of the father's name by branding him "mai van giau," or rich forever, and accusing the pair of living a playboy lifestyle in a million-dollar villa and changing cars as often as ordinary Vietnamese change clothes. Analysts say Vietnam's action indicates the government is trying to send a strong public message that the country is cleaning up its act. "For the past decade, the Communist Party has viewed corruption as a major threat to its legitimacy," said Carlyle Thayer, a Vietnam expert at the Australian Defense Force Academy. "In the past, the big cases were notable by the infrequency of them. But now it's ministers, vice ministers and with publicity." Graft is openly acknowledged in Vietnam, but action to curb it was rarely visible in the past. As the country moves toward a market economy, its communist leaders say fighting corruption is a top priority. *\*

"As countries develop, they go through a period of extended corruption," said Klaus Rohland, World Bank country coordinator in Vietnam. "Much more so if you transition from a socialist economy to a market economy because your development is faster than the building up of the institutions that would be the checks and balances for your economic development. Despite criticism that it's not moving fast enough, Vietnam has publicly taken down several high-ranking officials recently—actions that would have been unheard of a decade ago. In March 2003, 155 people were put on trial in the country's biggest-ever criminal case involving crime boss Truong Van Cam, better known as Nam Cam (See Above).Three senior officials, including two from the party's elite Central Committee, were shown on national television in striped prison jumpers. They were imprisoned for up to 10 years for taking bribes. */*

"Other graft cases include two vice agriculture ministers who received suspended sentences last year for embezzling US$4.7 million in a scandal that also caused their boss to be fired. Sixteen executives from affiliates of Vietnam's oil and gas giant and 10 others, including the director of a Vietnam Airlines' affiliate, have also been arrested recently in connection to three separate scams which officials say caused losses of more than US$16 million. Top leaders, who in the past have deflected tough questions about corruption, have now started admitting there are problems. "I think that any effort to fight corruption will only benefit trade," Deputy Prime Minister Vu Khan told foreign business leaders last week. "It will not create any cloud over the sky but rather make the sky clearer." */*

Nearly 40,000 Party Members Disciplined in Vietnam in 5 Years

In April 2006, Xinhua reported: "Nearly 40,000 members of the Communist Party of Vietnam (CPV) have been disciplined over the past five years, local media reported Friday. The CPV Central Committee, its Political Bureau, and the CPV Secretariat (9th tenure) alone disciplined 114 party members, including 12 members of the committee, in the five-year period, Young People newspaper reported. [Source: Xinhua, April 21, 2006 ////]

Among the nearly 40,000 people, 17 were sentenced for their involvement in Vietnam's most notorious criminal case: Nam Cam. In 2003, the gang leader, Truong Van Cam, alias Nam Cam, received the death sentence for murder, assault, gambling and illegal emigration organization, criminals support, bribery and usury. Of the 17 sentenced party members, several held important positions like former Deputy Minister of Public Security Bui Quoc Huy, former deputy head of the People's Supreme Procuracy Pham Si Chien, and former director of the Voice of Vietnam radio station Tran Mai Hanh. Huy was found guilty of neglecting his duty, resulting in major negative consequences. Chien and Hanh were both convicted for receiving bribes from Nam Cam (See Nam Cam case). ////

Vu Quoc Hung, vice chairman of the Commission for Inspection under the CPV Central Committee, said: "Degradation in morality and lifestyle, resulting in bureaucracy, corruption, wastefulness and people pestering among a considerable number of party members are still progressing very seriously." Degradation in morality and lifestyle, opportunism and individualism tend to be found in more state cadres and party members, he said. ////

Changing Vietnam Media Wages War Against Graft

In April 2006, Reuters reported: "Bold headlines and mugshots of a cabinet minister quitting in a corruption scandal, readers criticising leaders and a government refusal to release a "cyber-dissident"."I think there are no limitations on our coverage, it's very good," said Tuoi Tre (Youth) daily's Xuan Trung, one of several journalists who asked party officials pointed questions about bribery and graft. [Source: Reuters, April 13, 2006 ^*^]

"Some papers were aggressive in covering a multi-million dollar bribery and football match betting scandal that led to Transport Minister Dao Dinh Binh resigning and the arrest of a deputy minister. Thanh Nien (Young People) carried articles on myriad schemes involving gifts, mistresses, use of cars and houses and millions gambled with public money from a road and bridge building unit. The scandal provided lively material for newspapers, radio and TV more accustomed to publishing bland announcements about industrial projects, official events and diplomatic ties. ^*^

"Each year local media becomes more responsible and more objective," said Adam Sitkoff, executive director of the American Chamber of Commerce Hanoi chapter. "Corruption is one public policy issue that it takes on best." While intensively covering the scandal since December, the media in February began receiving sharp comments on the Party's main political document prepared for the Congress. There was a notable increase in public comment in media than previous years, political analysts said, some on corruption and others on policy. "What's new is the electronic media and the sheer volume of it was exceptional," said longtime Vietnam observer Carl Thayer of the University of New South Wales in Canberra, Australia. But like its neighbour China, the Hanoi government is wary of the Internet for sociological and political reasons. ^*^

Anti-Corruption Website in Vietnam

In 2007, Deutsche Presse Agentur reported: Vietnam "launched a special website for citizens to report cases of corruption with the click of a mouse, an official said. The site at www.chongthamnhung.thanhtra.gov.vn is part of the government's avowed campaign to fight rampant corruption that the Communist Party views as a threat to its very survival. "The website is one of the efforts to push the anti-corruption movement ahead," said Ha Trong Cong, office director of the Government Inspection Agency. "The website provides information related to corruption and is also a portal for people, businesses and agencies to exchange legal information on corruption and to denounce activities of corruption to relevant agencies," he said. [Source: Deutsche Presse Agentur, June 28, 2007 :::]

"The site has sections explaining what constitutes corruption and provides a form to send complaints to specific agencies, including major municipalities, the National Assembly and even the Communist Party Central Committee. Complainants must provide their names, email address and telephone numbers - anonymous complaints are not accepted, Cong said. The website also reports on cases of graft uncovered: So far this year, there have been 3,589 inspections that found violations worth 92.2 million dollars and 513 hectares of illegally confiscated land. Corruption is rampant in Vietnam as the country in transition from a command economy to free-market reforms has been showered with investment money. :::

"The Communist Party itself listed fighting corruption as one of the most serious threats to its continued rule during last year's party congress, and Prime Minister Nguyen Tan Dung, installed by the party last year, has promoted anti-graft campaigns as one of his signature issues. A survey in late 2005 showed up to 80 percent of Vietnamese people believe the government is corrupt and 30 percent of officials themselves admitted that they would take a bribe if offered." :::

Vietnam Graft-buster Arrested for Corruption in Petrovietnam Probe

In February 2006, AFP reported: "A senior Vietnamese anti-corruption inspector has been arrested on charges of bribery and abuse of power, as part of a continuing probe into the state-owned oil and gas giant PetroVietnam, police said. They arrested Bui Xuan Bay, who was then deputy head of the anti-corruption taskforce. Several other senior inspectors were also arrested as part of the same scandal. Bay had allegedly changed the contents of the inspection and received 27 million Dong (1,600 dollars) as bribes. Bay has also been suspended from Communist party membership. [Source: Agence France Presse, February 22, 2006 <~>]

In October 2005, "the head of the taskforce, Luong Cao Khai, was also arrested in the same case. PetroVietnam has been shaken by several graft scandal in recent years. Last October, seven officials received sentences ranging from four years to life imprisonment for falsifying a 17-million dollar contract that resulted in millions of dollars in losses to state coffers. The communist regime has vowed to stamp out rampant corruption. Critics, however, say that many high-ranking officials have acquired de facto immunity from prosecution." <~>

Execution of People Charged with Corruption

In January 1998, three former businessmen convicted of corruption were publicly executed in front of thousands of people in outskirts of Ho Chi Minh City. They were awakened from their cells at dawn at Saigon's Chi Hoa Prison, offered a cigarettes and a last meal of chicken, steamed buns and a soft drink, and allowed to write a final note. One of the men was Pham Huy Phuoc, the head of the flamboyant but bankrupt Tamexco trading company. He threw away millions of dollars of government money in gambling losses and bought a luxurious mansion for his girlfriend.

In April 2003, the head of a state-run food company was sentenced to death for embezzling $900,000 from his company between 1996 and 1999. In September 2006, a Vietnamese businessman was given death before a firing squad for cheating people out of $475,000 in a property scam. In 2006, Phung Long That, a former anti-smuggling investigator, was executed for accepting bribes and helping to smuggle $70 million worth of goods.

In July 2003, a businessman and a banker were executed for their involvement in a scheme to fraudulently obtain $200 million in loans using false contacts and overvalued property. ABC News Radio Australia reported: "Tang Minh Phung, 47, a businessman, and Pham Nhat Hong, 60, a banker, were shot dead by firing squad in southern Ho Chi Minh City after their appeals for clemency were rejected by President Tran Duc Luong, the Vietnam News daily said. The two men - along with three others - were found guilty of using false contracts and overvalued properties to secure state loans beginning in 1993, the report said. The others were also sentenced to death but it was unclear when or if they would be executed. Capital punishment for economic crimes are less common than for other offences such as drug trafficking in communist Vietnam. But the country has become increasingly concerned about corruption and graft. [Source: ABC News Radio Australia, July 14, 2003]

Vietnam Sentences Six to Die in a $260 Million Graft Scam

In August, 1999, seventy-seven people were arrested in connection with a $280 million corruption scandal. Six were sentenced to death. Six received life in prison sentences. The corruption scheme involved setting up a dummy company that tok in millions in bank loans. Also in 1999, 74 people, including 33 customs officials and employees of a trading company, were arrested for corruption. All were convicted. Two were sentenced to death.

Reuters reported: "A court in southern Vietnam sentenced six people to death and six more to life in prison on for their involvement in the country's biggest corruption scandal, witnesses said. The presiding judges said before sentencing the total of 77 defendants in the case, which revolved around two firms called Minh Phung and EPCO and caused losses of $280 million, that they wanted to make clear graft would not be tolerated. Dozens of relatives who had gathered inside the grounds of the Ho Chi Minh City People's Court to hear the verdicts broadcast via loudspeakers wailed after the death sentences were read out, the witnesses said. [Source: Reuters, August 4, 1999 ^^^]

"Police imposed tight security around the building, but prison trucks ferrying the black and white-garbed defendants off to jail after the verdicts struggled to get past thousands of onlookers inside and outside the court gates, they said. "This is a serious case and caused serious consequences. Those involved should be punished harshly to serve as a warning to others,'' one of the judges said over the loudspeaker. ^^^

"Prosecutors had sought six death sentences and life terms for eight defendants in a case which involved shady credit deals to shore up business transactions during the mid-1990s. The scam caused losses of $280 million that were mainly borne by local banks on loans used for land speculation, and stunned a nation where annual per capita income is only $300. Minh Phung group, with interests from textiles to property, was a shining star in Vietnam's nascent private sector. EPCO was once a partially state-owned trading firm. The operations of both firms have largely been curtailed. ^^^

"Witnesses said those sentenced to death were Tang Minh Phung, head of the Minh Phung company and Lien Khui Thin, head of EPCO. Other defendants condemned to death were banking executives Pham Nhat Hong and Nguyen Ngoc Bich, along with Nguyen Tuan Phuc, an executive from EPCO, and Nguyen Xuan Phong, a senior official from a local state company. Apart from those six jailed for life, other defendants received a range of terms, while a dozen got suspended sentences and several were freed because their sentences were less than time already served in detention. ^^^

"Prosecutors had charged executives from Minh Phung and EPCO along with 18 bankers and numerous government officials with offences ranging from fraud to stealing state assets. One man sentenced to life in jail was Le Minh Xu, a former official from a police export-import firm in Ho Chi Minh City. Xu has already been sentenced to life in jail for his involvement in the country's biggest smuggling case, which saw goods worth $71.3 million brought illegally into Vietnam. Those sentenced are entitled to appeal the verdicts, although Vietnamese higher courts generally uphold decisions made in big graft and smuggling trials. ^^^

Vietnamese Woman Sentenced to Death for Embezzlement

In April 2004, Reuters reported: "An appeal court in Vietnam has upheld the death sentence against the director of a state-run company for embezzling millions of dollars in a major corruption scandal, but two former ministers had their jail terms suspended. After two weeks of hearings, the Supreme People's Court in Hanoi ruled that the death penalty handed down to La Thi Kim Oanh, the 48-year-old disgraced director of an investment and marketing company, should stand. Oanh was convicted of misappropriating $4.7 million and causing losses of 2.2 million dollars to state coffers from 1995 until her arrest in June 2001. The company was under the control of the Ministry of Agriculture and Rural Development. Dressed in green and white prison pyjamas, Oanh, who contested the embezzlement charges but admitted to mismanaging state funds, remained expressionless as the televised verdict was read out. [Source: Agence France Presse, April 5, 2004 \>\ ]

"She has seven days in which to appeal for presidential clemency -- her last chance to escape the firing squad. The appeal court's verdict had been widely expected, as the communist regime, in a bid to restore its moral and ideological legitimacy, has vowed to stamp out rampant corruption. However, the three-panel bench commuted the three-year prison term handed down to Nguyen Thien Luan, a former deputy agriculture minister convicted of aiding and abetting Oanh, to a suspended two-year sentence. The court said the decision was based on the 62-year-old's "sincere testimony" and his achievements while holding office. Another former deputy minister, Nguyen Quang Ha, 66, also had his three-year sentence commuted to a suspended sentence due to his age, high blood pressure and his family's contribution to Vietnam's revolutionary cause. The court also reduced by one year the four-year prison term for a ministry official, but another bureaucrat and three company executives had their original sentences — ranging from four to 15 years — upheld. \>\

The scandal revolved around a series of contracts awarded by the agriculture ministry to Oanh's company. With the aid of nine letters -- seven signed by Ha and two by Luan -- she was able to raise 8.4 million dollars from four state-run banks to fund four projects in advance of the eventual release of ministry funds. However, only a small amount of this money was spent on the projects. Oanh has admitted that the rest was irresponsibly spent on company expenses such as overseas fact-finding missions, and illegal "gifts" to officials from various ministries and provinces. The alleged recipients denied her claims in court. \>\

In 2004, ABC Radio Australia reported: "Vietnam's agriculture minister, Le Huy Ngo, has reportedly tendered his resignation following a major corruption scandal involving ministry officials. Vietnamese state media reports say Mr Ngo has sent a letter of resignation to the prime minister, Phan Van Khai. Reports say Mr Khai last week gave Mr Ngo a formal warning over dereliction of duty and poor management and suggested that he step down. The warning came after La Thi Kim Oanh, a former director of a state-run investment and marketing company under the ministry's control, had her death sentence for corruption upheld on appeal. [Source: ABC Radio Australia, April 28, 2004]

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, Vietnamtourism. com, Vietnam National Administration of Tourism, CIA World Factbook, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Global Viewpoint (Christian Science Monitor), Foreign Policy, Wikipedia, BBC, CNN, Fox News and various websites, books and other publications identified in the text.

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© 2008 Jeffrey Hays

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