Vietnam targets families of public officials in anti-corruption drive

By Dien Luong   August 21, 2016 | 02:45 pm PT
Vietnam targets families of public officials in anti-corruption drive
A roadside bike repairman fixes an inner tube for a customer on a street in Hanoi. Corruption has eroded public confidence, created social backlash, widened the rich-poor gap and hampered Vietnam's development, a deputy prime minister has said. Photo by AFP/Hoang Dinh Nam
The anti-corruption bill looks to scrutinize the assets of their spouses, minor children.

Of the one million public officials required to disclose their assets in 2015, only five were found to have made false declarations. Over the past decade, Vietnam has disciplined a mere 17 officials for making false financial disclosures.

At first glance, these rosy findings appear to give the country an almost squeaky-clean corruption record. But in fact, Vietnam's poor international corruption ranking has chipped away at investors and public confidence.

In 2014, Transparency International’s Corruption Perceptions Index, an international standard gauge of government malfeasance, ranked Vietnam 119 out of 175 countries and territories; the country was ranked 116 in 2013 and 123 a year earlier. Its position has barely budged, moving to just 112 in 2015.

Vietnam’s officials often bristle at negative international assessments of its domestic affairs, saying they fail to reflect the real picture here. But corruption is indeed serious enough for the country’s leadership to use strong words when they speak of the problem.

“The fight against corruption has failed to achieve its target,” Truong Hoa Binh, the deputy prime minister in charge of the anti-corruption drive, said at a meeting in July to review Vietnam’s Anti-Corruption Law. “Corruption remains complicated in a number of sectors, eroding public confidence, creating social backlash, widening the rich-poor gap and holding back our country’s development.”

Authorities have repeatedly acknowledged that Vietnam’s financial disclosure laws, billed as one of the most powerful tools for tackling corruption, have remained all but toothless. In an explicit gesture to restore shattered public trust, Vietnam is amending its Anti-Corruption Law after a decade of implementation. Notably, the bill looks to require the spouses and minor children of a wide range of public officials to disclose their incomes and assets.

It is not rare for Vietnam’s top echelons to admit that some senior Communist Party members and their wives and children have failed to behave in an exemplary manner. Over the past years, several legislators have been even more forthright, publicly accusing many bureaucrats of funneling their ill-gotten gains, obtained in the form of houses, land and cars, to family members and close relatives.

In a high-profile case, in 2014 Tran Van Truyen, the chief of the Government Inspectorate (the top government agency tasked with fighting corruption) between 2007 and 2011, was rebuked by the Communist Party for trying to conceal his outsized real estate holdings.

Financial reports showed that Truyen, who made less than $9,000 a year as the Government Inspectorate chief, had hundreds of thousands of dollars in cash in addition to significant holdings of property and stock. According to inspectors, several of Truyen’s houses and apartments were registered under the names of his wife and daughter, who did not reside there but rented them out to others.

Vietnam’s most recent Governance and Public Administration Performance Index has confirmed that personal relationships and informal payments “still play an important role for those who wish to pursue public sector careers”.

According to the index, over the past five years, “nepotism and corruption in public sector employment have become a systemic problem”. The index, considered the largest national governance and public administration performance monitoring tool in Vietnam, has surveyed nearly 75,000 citizens annually since 2009.

It is in this context that analysts welcome the proposed requirement targeting family members of public officials, saying it is the first step in the right direction.

“The move shows that the Party wants to step up its fight against corruption,” said Le Hong Hiep, a Vietnam analyst at the ISEAS-Yusof Ishak Institute in Singapore, which studies social, political and economic trends in the region. “It may serve as a warning to corrupt officials and provide the legal basis for handling the transfer of their ill-gotten wealth to family members,” he said.

But still, questions arise over its feasibility in a country with a poor record of implementing its own laws.

“The big question is how the Party is going to enforce it,” Hiep said. “The problem for Vietnam's fight against corruption is not the lack of regulations, but the lack of enforcement mechanisms,” he said.

“So far the requirement for officials to declare their own assets has proven ineffective, and it's unlikely that the new regulation will make a difference.”

The elephant in the room

Vietnam made it mandatory for public officials to submit financial disclosure forms in 2007. In 2013, an amended government decree widened the categories of officials falling under the purview, requiring around one million officials to declare their incomes and assets worth more than the equivalent of $2,400, including cash, gifts, savings, stocks and vehicles – held both inside and outside the country.

But the annual outcomes of these financial disclosures have always stood in stark contrast to Vietnam’s poor international corruption ranking. Just last week, Ho Chi Minh City, the country’s economic hub, reported that over the past decade, only one low-level official was found to have made a false declaration.

One of the most glaring pitfalls in the process is that financial disclosures are not made available for public review, analysts say. Instead, each official’s finances are submitted for “the approval of the heads of the respective agencies” during an annual review process. The verification process is carried out only when there is a promotion or an appointment, or a complaint that involves a public official.

That poses another problem. Every year these agencies must process roughly a million financial disclosure reports. Given the number of people filing disclosures and the nature of the exercise, verifying the declarations is a tall order, according to analysts.

The amended bill seeks to plug several of these loopholes. Public officials would not be required to disclose their assets on an annual basis, but only when they are nominated for election, appointment or re-appointment and promotion at public agencies, or when “there is an increase of VND200 million (US$8,900) or more” in their assets and incomes.

It also plans to make electronic transactions mandatory for state officials making transactions worth over VND20 million (US$896) in a bid to monitor clandestine asset movement.

But still, the bill does not seek to make financial disclosures available for public review. This means that corruption could continue with impunity, analysts say. 

Meanwhile, public confidence in the anti-graft campaign has been on the wane.

The 2015 Governance and Public Administration Performance Index found that a much lower percentage of respondents (34 percent in 2015 compared to 40 percent in 2014) agreed that provincial leaders are serious about combating corruption.

According to the index, very few victims of bribery requests (less than 3 percent) denounced corrupt acts by local government officials. At the same time, the tolerance of bribes surged, with victims of corruption saying they would not denounce a case unless the bribe asked for reached VND24 million ($1,100). Vietnam’s annual average income was around $2,100 last year, according to the World Bank.

“Such findings reflect that people tend to tolerate more of corruption,” said Do Thi Thanh Huyen, the policy analyst of the UNDP in Vietnam and the task manager of the Governance and Public Administration Performance Index research.

To make matter worse, a number of independent studies have confirmed that the practice of giving and receiving bribes is so common in Vietnam that it is understood to be a routine part of doing business.

Hoang Nhu Lam, who runs a ceramics business in the southern province of Binh Duong, said such findings no longer come as a surprise to him.

“To many businesses, bribery has remained a way of life,” Lam said. “You just cannot do away with a practice that has become entrenched in society."

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