Vietnam’s campaign against corruption notched a significant victory earlier this month with the removal of a top Politburo official for “very serious mistakes and violations” while he was chair of PetroVietnam, the state-owned oil and gas company. But analysts say that there is a more complicated story behind the rare Politburo sacking—just the fourth in Vietnam’s history and the first for corruption—that involves personal and factional maneuverings at the top levels of the ruling Communist Party.
Dinh La Thang, once a rising star in Vietnam’s government, was dismissed from the 19-member Politburo, Vietnam’s top decision-making body, on May 7. Three days later, the party announced that he had also been sacked from his post as party secretary of Ho Chi Minh City, Vietnam’s largest city and commercial hub. Thang’s firing was accompanied by an unusual public censure from the party for his running of PetroVietnam, one of the country’s largest state-owned enterprises.
Thang was chairman of the board of PetroVietnam from 2005 until his appointment as transport minister in 2011. A relatively colorful figure in the staid world of Vietnamese politics, he was catapulted into the Politburo and appointed the party chief of Ho Chi Minh City at the last national party congress in January 2016.
Observers of Vietnamese politics say that Thang’s firing signaled the power now wielded by Nguyen Phu Trong, the party’s secretary-general, who has promised to root out “unethical” behavior at the highest levels of government.
Zachary Abuza, a Southeast Asia expert who teaches at the National War College in Washington, D.C., says that the noose had been tightening around Thang for some time. “Thang had plenty of enemies, and it’s very clear that party conservatives had been going after him via his protégés for a couple of years now,” he says.
The purging of Thang, known for his headline-grabbing populist announcements during his time in charge of Ho Chi Minh City, appears to be just one part of a complex investigation involving multiple people and various subsidiaries of PetroVietnam. Allegations first surfaced last September on Facebook, where Vietnamese journalist and blogger Huy Duc published articles accusing Thang of responsibility for huge losses while in charge of the energy giant.
Though Vietnamese state media remained silent about the allegations at the time, internal party investigators announced last month that they had examined the case and held Thang responsible for “serious” violations. In particular, the party watchdog accused Thang of allowing PetroVietnam to make loans to Ocean Bank, a troubled local financial institution, which had resulted in “serious losses” to the firm.
In a briefing paper on Thang’s removal, Carlyle Thayer, a Vietnam expert based at the Australian Defense Force Academy in Canberra, wrote that the corruption and mismanagement issues at troubled PetroVietnam had become “too big to ignore.” Since Vietnam criminalizes individuals causing severe losses to the state, “it was only a matter of time that the anti-corruption investigation would move up and expose Thang’s failure to exercise due diligence,” Thayer added.
Complicating the story is the fact that Thang was known to have had close links to former Prime Minister Nguyen Tan Dung, who left office after a failed bid to replace Trong as party secretary-general at the party congress in January 2016. The 73-year-old Trong subsequently emerged from the conference with his power and prestige enhanced, while Dung was effectively forced to retire from political life.
Abuza suggests that Thang’s firing, while possibly justified on legal grounds, could have been motivated by a desire to discredit Dung and go after his remaining allies in the party. “In the opaque world of Vietnamese politics, going after the protégés and the clients is how you go after senior leaders,” he says.
At the same time, though, Thang has been given a “soft landing,” retaining his position on the party’s powerful Central Committee and being appointed as vice-head of the body’s commission on economics. This suggested that the case was “much more political” than a simple anti-corruption case, according to Abuza.
Corruption and mismanagement remain significant challenges for Vietnam, dogging the country throughout a remarkable economic emergence in which it has registered world-leading growth rates and lifted millions out of poverty. At a local meeting in 2012, Trong told reporters that “so many party members have gotten richer so quickly, leading a lavish life that is miles away from that of the workers.”
Much of this appears to have been laid at the door of former Prime Minister Dung. During his time in office from 2006 to 2016, Vietnam saw impressive economic growth tainted by major corruption scandals. Among the most notable involved Vinashin, a state-owned shipbuilder that chalked up a $4.5 billion debt and defaulted on $600 million in loans—a disaster that prompted Moody’s to downgrade Vietnam’s sovereign credit rating in late 2010.
Tuong Vu, a political science professor at the University of Oregon, says that on Dung’s watch, corruption metastasized, reaching up to the Politburo level and “leading to the loss of state assets, billions of dollars, and a lot of public outcry.”
In addition to Thang, four other PetroVietnam officials have already been punished or disciplined as part of an investigation into business violations between 2009 and 2015. Nguyen Xuan Son, the group’s former chairman and official Communist Party representative, was expelled from the party and arrested in July 2015 for “deliberately acting against the State’s regulations on economic management,” amid other charges.
The public spotlight on PetroVietnam, stoked by frenzied public discussions on social media, made it necessary for the party to make an example of Thang. “They’re never going to free up the media, so the only thing they really can do to win the people’s trust is to make a very bold statement,” Abuza says of the firing.
But it was also an example of how anti-graft efforts are limited and shaped by the complex web of patron-client ties and political factionalism that exists behind the Communist Party’s gold-stamped façade. Abuza points out that large scandals occurring on Dung’s watch, such as the Vinashin debacle, had left the prime minister unscathed, largely due to his political capital and deep networks in the party—networks that the relatively junior Thang lacked.
However, the government’s anti-corruption drive will likely fall short as long as the government fails to reform its remaining state-owned enterprises, the focus of many of the recent scandals. Vu doubts the tactic of taking down a few key officials to scare others into line will succeed, given that state-owned enterprises—and the state’s broader control of large segments of the economy—will continue to offer opportunities for self-enrichment to those with the right connections.
Abuza agrees, given that Vietnam is currently “trapped between the plan and the market”—a situation that was likely unsustainable in the long run. “As long as you have that, and you don’t have a free media, and there’s very little transparency, and the party’s legally above the constitution,” he says, “this isn’t going to change.”
Published by World Politics Review, May 22, 2017
