1. SUMMARY: A PROVINCIAL COURT HANDED DOWN STIFF SENTENCES
ON NOVEMBER 20 TO A DOZEN STATE EMPLOYEES AND COMPANY
EXECUTIVES CONVICTED OF BRIBERY AND EMBEZZELMENT OF ANTI-
POVERTY FUNDS FOR AN INFRASTRUCTURE PROJECT IN LAI CHAU
PROVINCE. MEANWHILE, TOP LEADERS REAFFIRMED EFFORTS TO
COMBAT CORRUPTION AMID WIDESPREAD PUBLIC DOUBTS ABOUT THE
GVN'S COMMITMENT TO FIGHT CORRUPTION. END SUMMARY.



2. THE PROVINCIAL PEOPLE'S COURT OF LAI CHAU SENTENCED 12
STATE OFFICIALS AND COMPANY EXECUTIVES TO JAIL TERMS RANGING
FROM THREE YEARS TO LIFE. THE DEFENDANTS WERE FOUND GUILTY
OF EMBEZZELLING USD 586,000 FROM ANTI-POVERTY FUNDS INTENDED
FOR A USD 4 MILLION ROAD BUILDING PROJECT IN AN MUONG TE
DISTRICT, ONE OF THE POOREST DISTRICTS IN LAI CHAU, ITSELF
AMONG THE MOST IMPOVERISHED PROVINCES IN THE COUNTRY.



3. TRAN HUNG SON, DIRECTOR OF THE STATE-OWNED ETHNIC AND
MOUTAINOUS DEVELOPMENT CONSTRUCTION COMPANNY, WAS SENTENCED
TO LIFE IMPRISONMENT FOR EMBEZZELLEMENT AND ORDERED TO PAY
USD320,000 IN COMPENSATION. LY VAN PHONG, VICE CHAIRMAN OF
THE MUONG TE DISTRICT PEOPLE'S COMMITTEE, RECEIVED A THREE
YEAR SUSPENDED SENTENCE FOR ACCEPTING A BRIBE OF USD2,200.
TEN OTHER DEFENDANTS, INCLUDING CONSTRUCTION COMPANY
EMPLOYEES, LOCAL OFFICIALS AND PRIVATE BUSINESSMEN, WERE
SENTENCED TO BETWEEN THREE YEARS AND TWENTY YEARS IN PRISON.
ONE OF THE ORIGINAL DEFENDANTS, NGUYEN THI THANH TUNG,
FORMER HEAD OF THE LAI CHAU PROVINCIAL DEVELOPMENT AND
INVESTMENT DEPARTMENT, COMMITTED SUICIDE AFTER COMING UNDER
INVESTIGATION FOR DERELICTION OF DUTY.

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PAGE 03 HANOI 03080 230932Z


4. THE COURT TRIAL BEGAN IN LATE MAY, BUT WAS SUSPENDED
AFTER SEVERAL DAYS. ACCORDING TO LOCAL NEWSPAPER ACCOUNTS,
THE CONDUCT OF THE TRIAL SEEMED UNUSUALLY CONTRIVED WITH THE
ACCUSED CLAIMING THAT THEY HAD BEEN SCAPEGOATED. THERE WERE
ALSO REPORTS THAT THE PRESIDING JUDGE ATTEMPTED TO PREVENT
THE DEFENSE LAWYERS FROM RAISING PROBING QUESTIONS ABOUT
CONNECTIONS BETWEEN THE BRIBERS AND THOSE BRIBED.



5. THE AUTHORITIES, ESPECIALLY COMMUNIST PARTY OF VIETNAM
(CPV) GENERAL SECRETARY (GS) NONG DUC MANH, FREQUENTLY
IDENTIFY CORRUPTION, ALONG WITH RED TAPE AND WASTERFUL
SPENDING, AS WIDESPREAD PROBLEMS HINDERING NATIONAL
DEVELOPMENT. EARLIER THIS WEEK, GS MANH ANNOUNCED A NEW ANTI-
CORRUPTION ORDINANCE REQUIRING PARTY MEMBERS, STATE
OFFICIALS, AND STATE EMPLOYEES TO DECLARE REAL ESTATE AND
BUSINESS ASSETS. THE ORDINANCE IS ALSO INTENDED TO CLARIFY
OTHER FINANCIAL DISCLOSURE REQUIREMENTS FOR STATE OFFICIALS,
STATE EMPLOYEES, AND PARTY MEMBERS. MANH, SPEAKING TO THE
PRESS, ADDED THAT THESE DECISIONS, AS WELL AS REGULATIONS ON
FINANCIAL AND BUSINESS ACTIVITIES FORBIDDEN TO PARTY MEMBERS
WILL BE FINALIZED BY THE END OF THE YEAR AND COME INTO FORCE
EARLY NEXT YEAR.



6. IF THE MUONG TE TRIAL IS AN INDICATION, CORRUPTION IS
PERCEIVED TO RUN WIDE AND DEEP. SPEAKING AT THE JUST-
CONCLUDED TRIAL, THE PRESIDING JUDGE COMMENTED, "MANY (MORE)
INDIVIDUALS, BOTH FROM INSIDE AND OUTSIDE LAI CHAU PROVINCE,
ARE BELIEVED TO HAVE RECEIVED BIG AMOUNTS OF MONEY FROM SON
AND THIET (TWO OF THE ACCUSED)." MOST OF THE PRESS AND
PUBLIC ATTENTION FOCUSED ON HOW THE COURT DEALT WITH THE
CASES. AFTER DELIVERING ITS VERDICT, THE COURT ANNOUNCED
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PAGE 04 HANOI 03080 230932Z
THAT THE INVESTIGATING OFFICE WOULD CONTINUE ITS
INVESTIGATIONS. THE COURT ALSO CONFIRMED THAT INVESTIGATING
OFFICES RECEIVED VND 240 MILLION (USD 1,600) IN RETURNED
BRIBE MONEY FROM 24 INDIVIDUALS, MANY OF THEM BELIEVED TO BE
SENIOR STATE EMPLOYEES. DURING THE INVESTIGATION POLICE
REPORTEDLY FOUND A NOTEBOOK BELONGING TO ONE OF THE ACCUSED
CONTRACTORS LISTING BRIBES TO 117 OFFICIALS.



7. IN FEBRUARY THIS YEAR, THE VCP PUNISHED 13 MEMBERS OF THE
GOVERNMENT'S ETHNIC AFFAIRS DEPARTMENT, INCLUDING MINISTER-
CHAIRMAN HOANG DUC NGHI AND THREE VICE-CHAIRMEN, FOR
"WRONGDOINGS". A FORMER VICE-CHAIRMAN OF THE COMMITTEE ALSO
RECEIVED A REPRIMAND. DIFFERENT SOURCES HAVE REPORTED THAT
THE NATIONAL ASSEMBLY WANTED TO REMOVE NGHI FROM HIS POST.
(NOTE: NGHI IS FROM THE TAY ETHNIC GROUP. HE IS VIETNAM'S
LONGEST SERVING MINISTER (SINCE 1985) IS AND A CLOSE WORKING
PARTNER AND PERSONAL FRIEND OF PRIME MINISTER PHAN VAN KHAI.
END NOTE.)



8. COMMENT: THE ATTENTION FOCUSSED ON THE MUONG THE TRIAL
AND GS MANH'S RECENT REMARKS SHOW THAT THE AUTHORITIES ARE
PAYING CONSIDERABLE ATTENTION TO PUBLIC DISCONTENT ABOUT
CORRUPTION. THEIR ABILITY TO EFFECTIVELY ADDRESS THE
PROBLEM IS AN OPEN QUESTION.
PORTER

UNCLASSIFIED