Major Corruption Trial Shakes Ho Chi Minh City

More fuel for Trong’s ‘Fiery Furnace’

By: David Brown

The trial of Vietnam’s richest woman and scores of her associates was launched early this month in her hometown, Ho Chi Minh City. It is a show trial, a public sensation, and the inevitable last act in a drama that has been unfolding for years. Truong My Lan is the chairwoman of Van Thinh Phat, a secretive real estate colossus that from 2001 to 2016 gained title to a great deal of property in prime city locations, typically assets seized many years earlier from the wreckage of the former South Vietnamese regime. Through intermediaries, Lan also gained control of and reportedly looted Saigon Commercial Bank.

Van Thinh Phat’s spectacular rise coincided with the long tenure of Le Thanh Hai, who became known as “Boss Hai,” as secretary of Ho Chi Minh City’s Communist Party branch, whose rise was chronicled in Asia Sentinel on June 9, 2020. Both Lan and her management team and Hai and some of his closest associates in the city party and government were Vietnamese citizens of Chinese ancestry, the current iteration of a commercial culture that has flourished in Vietnam’s southern metropolis, as in many other Southeast Asian cities, for hundreds of years. 

During Vietnam’s “American war,” Hai was a Viet Cong hitman. Postwar, he headed the Ho Chi Minh City ‘Revolutionary Youth’ organization and then was appointed chief of District 5, that is, Cholon, the city’s Chinese quarter. Twenty years later, Hai had climbed to the top of the Communist Party branch in Ho Chi Minh City and was considered a close ally of two-term prime minister Nguyen Tan Dung.

Cozy and corrupt relationships are anathema to Nguyen Phu Trong, the Vietnamese Communist Party’s General Secretary since 2011. Once he had fended off a challenge by Dung and forced him into retirement, Trong launched his “fiery furnace” campaign to cleanse Vietnamese Communist Party ranks of corrupt dealings. That campaign has been going on since 2016. It’s been a hard slog.

Hai and his cronies in the Ho Chi Minh City party/state apparatus were an early target. In 2016, Trong deployed central government inspectors with orders to build a dossier on Hai, his associates, and the shady conversion of state-owned Ho Chi Minh City land to private commercial use. Hai and his confederates could no longer obstruct the inspectors and criminal investigators deployed from Party headquarters.

Van Thinh Phat was also under investigation. From time to time, a newspaper might refer to ongoing investigation of its acquisitions. Even so, hard evidence of illicit real estate dealings was not easy to come by. In 2020, the Communist Party’s Central Supervisory Committee recommended that Hai and other members of the Ho Chi Minh City party organization be stripped of their offices and disciplined. Since then, many of Hai’s former subordinates, but not Hai himself, have been indicted.

Not until Nguyen Van Nen was sent from party headquarters to take charge of the Ho Chi Minh City Party Committee in 2021, with other senior staff deployed from the center in his support, does the investigation of Van Thinh Phat and Ho Chi Minh City party and state officials who enabled them seem to have got traction.

Rumors that Van Thinh Phat’s takedown was imminent began to fly after Trong and his politburo lieutenants for organization, propaganda, the armed forces, and the national police made a low-profile visit to Ho Chi Minh City in September 2022. Trong’s visit was remarked on, because these days the aging party leader rarely travels outside Hanoi. The press was told to describe it as a routine consultation with the leaders of Vietnam’s southern metropolis.

Close observers of Vietnam’s politics speculated that the meeting was to finalize plans to take down not only the Van Thinh Phat real estate empire, but also its political enablers – the remnants of the Le Thanh Hai organization that for nearly a quarter-century provided cover to ‘Vietnam’s richest woman,’ Truong My Lan, and her associates at Van Thinh Phat.

The following month, Lan was arrested. According to Vietnamese press reports, she has steadfastly and completely denied accusations leveled against her. And now, 17 months later, the trial of Lan, her associates, and enablers has begun.

A friend writes from HCM City: “Vietnamese I talk to say they have never seen anything like it. Sirens blaring, a convoy of 20-some prison vehicles makes its way to and from the old French-built courthouse…. The drama will continue until the end of April. Mrs. Lan plus 84 other defendants. 15 former bank officials. Three government officials who were bribed to look the other way. More than 200 lawyers, 2,400 witnesses providing testimony. Government seeking Beijing help in obtaining extradition of Lan's accused husband. Entire Saigon District 1 and District 3 property market are in deep freeze pending outcome of this trial and more. A large uncompleted office building near Saigon port as well as at least a dozen other valuable properties across the city have been seized by the government.”

The trial is expected to continue until the end of April. In its course, the national authorities will detail extensive collusion between former city leaders and the Van Thinh Phat organization. Rarely in Vietnam is a businessperson executed, and almost never if that person is a woman. However, prosecutors are seeking the death penalty for Lan and her chief associates.

Less than two years from now, party leaders will convene for their 14th Congress and, probably, Trong’s retirement. There’s no reason to expect that the party will have by then been cleansed. Scandals show no sign of ending. Just last week, State President Vo Van Thuong resigned his office. Although there is no official explanation yet, bloggers seem to agree that Thuong shared in kickbacks from a big highway construction contract while he was chief of the party organization in Quang Ngai province a decade ago.

And so it goes. There is still a seemingly endless supply of miscreants for Secretary General Trong to feed into his metaphorical “fiery furnace.” Thuong was a Trong protégé, chosen to replace Nguyen Xuan Phuc as President when, after a scandal involving Covid masks came to light, Phuc was “allowed to resign” just 14 months ago.

What’s an honest guy like Trong to do? His advanced age and poor health notwithstanding, it’s possible that Trong will conclude that his life work has not yet ended. Or perhaps he’ll realize at last that it never will be.

David Brown is a retired US diplomat with wide experience in Vietnam and a regular contributor to Asia Sentinel