Covid corruption rears its ugliest head in Vietnam

Vietnam was once lauded for an exemplary Covid response but massive official corruption since has turned plaudits to brickbats.

Vietnam has arrested foreign ministry, tourism, air, medical and manufacturing officials and expelled them from the ruling Communist Party amid multi-million dollar corruption scandals which are testing Hanoi’s reliability in the US Indo-Pacific Economic Framework and Centers for Disease Control.

Corrupt officials allegedly pocketed US$240 million by suckering frightened Vietnamese into paying inflated fees for government-arranged Covid-19 repatriation flights from abroad and cumbersome permits. They also allegedly price-fixed emergency pandemic health care and equipment.

“The anti-corruption campaign is causing increasing uncertainty and anxiety among the [Vietnamese Communist Party] rank and file,” the Australian Defense Force Academy’s New South Wales University professor emeritus Carlyle Thayer said in an interview.

“Steering committees for each of Vietnam’s 68 administrative units are expected to be more proactive in rooting out economic corruption.

“This raises the possibility of factional in-fighting at the national and local level,” said Australia-based Thayer who returned from Vietnam two weeks ago.

“The US Indo-Pacific Economic Framework (IPEF) provides an opportunity for both sides to work together, to address the issues of corruption.

“Vietnamese participation in the IPEF will be viewed as an opportunity to link international commitments to domestic reform,” Thayer said.

Vietnam’s other international partners are also concerned.

“The scandals definitely affect Vietnam’s standing with governments, financial and development institutions, and the private sector,” said Bangkok-based Kasit Piromya, executive board member of ASEAN Parliamentarians for Human Rights (APHR).

“It also undermines the standing of the CPV (Communist Party of Vietnam),” he said in an interview.

“The US and other investors and trading partners of Vietnam must be more firm on governance anti-corruption measures and the rule of law,” said Kasit, who was Thailand’s foreign minister from 2008-2011.

US President Joe Biden launched the IPEF on May 23, gathering Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam.

The White House said among the IPEF’s “key pillars” is the “criminalization of bribery in accordance with UN standards…to strengthen our efforts to crack down on corruption.”

Communist Party chief Nguyen Phu Trong, 77, won a third five-year term at the start of 2021 in part on a tough, ongoing anti-corruption platform.

“This anti-corruption fight is still very hard,” Trong said at the time.

When Covid-19 first swept Southeast Asia in 2020, Vietnam was praised for efficiently fighting the virus with mass testing, strict lockdowns and fast medical treatment.

But in 2021, Vietnam’s “demand for medical devices has been skyrocketing, giving rise to more corruption opportunities,” warned international law firm Baker McKenzie’s Global Compliance News.

When the country’s infection rate rose from 1,500 in 2020 to 10 million during the first months of 2022 – including 43,000 fatalities – testing kits suddenly became unusually expensive.

In response, the government’s “blazing furnace” anti-corruption crackdown accused more than 60 officials of price-fixing, including at the foreign and health ministries.

Officials were also arrested at the Ministry of Science and Technology, the Military Medical Academy, the government-owned Viet A Technologies, Hanoi’s Center for Disease Control (CDC) and local health departments.

Hanoi’s CDC director Truong Quang Viet was busted on June 10 for “violating regulations on bidding, causing serious consequences” and inflating Covid test kit prices, police said according to Vietnam’s Tuoi Tre News.

“Several officials – including high-ranking military generals, and directors of provincial branches of the [Hanoi] Center for Disease Control – have been arrested or placed under criminal investigation for their involvement in the case,” VnExpress reported.

Viet’s predecessor, former Hanoi CDC director Nguyen Nhat Cam, was imprisoned for 10 years in 2020 for similar corruption involving Covid-19 testing equipment, causing the government to lose $233,000.

US Vice President Kamala Harris launched a US CDC Southeast Asia Regional Office in Hanoi in August 2021, partly to work with Vietnam’s provincial CDC.

“The US CDC has a long-standing presence in Southeast Asia, including a CDC Vietnam Country Office which has worked with the government of Vietnam for almost 25 years to address shared health priorities,” the US Embassy in Vietnam said in June.

No corruption evidence or allegations have publicly appeared involving the US CDC’s new regional office or American citizens.

In 2020, the US CDC said its Vietnam Country Office staff included eight “U. Assignees” and 60 “locally employed.”

In March, “US CDC provided training on Covid-19 testing, biosafety and sample collection at Vietnam’s provincial CDCs and hospitals in 34 of Vietnam’s 63 provinces,” it said.

Bribes, however, allegedly convinced Vietnam’s health officials to supply overpriced Covid test kits to the Hanoi CDC and several hospitals.

In January, Phan Quoc Viet – general director of Viet A, which manufactured the swab kits – “admitted” to paying $35 million in bribe “bonuses” to health and hospital officials, VnExpress reported.

“In April 2020, the company was licensed by the Ministry of Health to distribute Covid-19 test kits,” reported Vietnam News.

“Since then, it has supplied the test kits to [Vietnam’s] Centers for Disease Control and other medical facilities in 62 provinces and cities across the country.”

Various officials allegedly resold kits for public use for $20 – a 45% increase over their normal price – reaping millions of dollars in illicit profits.

Meanwhile, Viet A’s PCR kits were hailed as a successful joint venture with the Military Academy of Medicine. Viet A finagled a government medal, awarded for its entrepreneurial role.

Suspicions emerged, however, after the World Health Organization (WHO) said Viet A’s kits were “not eligible for WHO procurement.”

That conflicted with a Science and Technology Ministry boast in April 2020 that the WHO approved the kits. The Viet A director claimed nearly a dozen countries wanted to buy them.

Investigators discovered Viet A also allegedly lied by stating it locally manufactured at least three million rapid test kits in 2021, which were actually cheap imports from China.

In June, officials kicked Health Minister Nguyen Thanh Long and Hanoi Communist Party Chairman Chu Ngoc Anh out of the party and charged them with corruption.

The two allegedly violated Party and government regulations, “causing severe consequences, losses to the money and assets of the State, undermining the Covid-19 fight, causing social unrest, and affecting the reputation of the Party, the Health Ministry, and Science Ministry,” Hanoi’s Politburo and Secretariat said.

Long, a 56-year-old northerner, became health minister in November 2020 and was assigned to protect Vietnam from Covid-19. He also headed the Central Committee for Health Care.

Hanoi-born Anh, 57, was minister of science and technology during 2016-2020 before being elected Hanoi Communist Party chairman, coinciding with the capital’s worsening Covid-19 spread.

To tackle the corruption, the Communist Party’s powerful Central Inspection Committee proposed to the Politburo in April that the entire Party Committee of the Science and Technology Ministry from 2016-2021 be disciplined, according to VnExpress media.

The Inspection Committee proposed the same mass discipline for all Health Ministry Party Committee members from 2016-2021.

Bribery allegations also flew sky high. In April, the Public Security Ministry arrested Deputy Foreign Minister To Anh Dung and two others allegedly linked to exorbitantly priced air tickets for emergency repatriation flights.

Vietnam flew more than 200,000 citizens home from more than 60 countries and territories.

Dung, 58, arranged air tickets for Vietnamese in various countries, including poor migrant workers who lost overseas jobs due to Covid’s economic havoc.

Others needed to fly back urgently to Vietnam to help stricken relatives.

In May, the previous deputy foreign minister was jailed for four years for selling counterfeit medicine.

In March, security officials arrested Binh Air Services and Tourism Trading Co’s General Director Nguyen Dieu Mo for allegedly paying bribes for favors.

Some Foreign Ministry consular officials had been arrested for “seeking personal gain” by allegedly funneling bribes to license companies to organize repatriation flights, the Public Security Ministry said.

The Communist Party’s Central Committee declared in May that new anti-corruption steering committees would be established in all provinces, to root out of illegal activity on local levels.

By Richard S Ehrlich – Asia Times – July 26, 2022