It’s always a sign when the Vietnam Communist Party (VCP) calls for an emergency session of its Central Committee. Following a late May report by the Central Inspection Discipline Commission that detailed the wrong doing and bribe taking by the country’s Minister of Health and the Chairman of the Hanoi Party Committee, the Central Committee voted to expel the two men from the communist party. A third individual, the Deputy Minister of Science and Technology, but not a member of the Central Committee, was also expelled from the party.
Expulsion from the party is in itself a major deal. Party investigators have four levels of discipline: reprimand, warning, demotion and expulsion. No longer protected by their elite party status, their legal jeopardy just went up a few notches. Now that the party’s inspection has concluded, they will now be passed on the prosecutors for trial and an almost certain conviction.
While the investigation of Central Committee members is not unheard of (indeed two members of the 12th Politburo were expelled), this is an incredibly elite body of 180 members and 20 alternate members in a country of 100 million people.
So what was the scandal about?
This was no run of the mill corruption scandal involving payments to regulators or misuse of public funds. This was a through, year-long investigation, a sign of how importantly the VCP is taking the scandal.
One has to recall that in the first year of the pandemic, Vietnam was the international gold standard or response. They sealed their borders, imposed quarantines, waged a public health campaign, and rallied the population. But Vietnam soon faltered. The Delta and Omicron variants hit the country hard. Vietnam had been so successful in containing the virus that they failed to secure vaccines. Vietnam tried to develop four separate vaccines rather than concentrating its efforts on one or partnering with foreign firms. And following the 13th Party Congress in January 2021, a new leadership team was slow to find its footing. By May 2021, Ho Chi Minh City, the country’s economic engine was in lockdown.
In February 2020, the elite Military Academy of Medicine and Viet-A received an $830,000 grant for a pilot project to produce. In a significant breakthrough, they developed an effective, accurate, and cost-effective test within a month and then quickly moved into commercial production. The Ministry of Health authorized the purchase of the kits at $21 apiece.
But then the dodginess began. In April 2020, the Ministry of Science and Technology announced that the World Health Organizations had authorized the Viet-A test kit, with the expectation of massive sales overseas. Communist Party Chief Nguyen Phu Trong publicly awarded the company with a medal for its achievements in March 2021. Not only did the WHO not recognize the Viet-A test, they rejected it.
That should have set off some alarm bells, but Viet-A made up for the loss of overseas sales by inflating the price at home. A 45 percent markup netted the firm some $175 million.
Calls for investigations mounted in the latter half of 2021. And perhaps with the walls closing in, the company’s Chairman, Phan Quoc Viet, increased the bribes and kickbacks. By the time of his arrest in December 2021, he acknowledged paying bribes of over VND500 billion, roughly $22 million.
His arrest was just the beginning: 21 people have been investigated and VND1.6 trillion in assets were seized.
In March 2022, two senior colonels from the Military Medical Academy were arrested. The director of the Military Medical research Institute was arrested for embezzlement and abuse of power, while the head of the Equipment and Supplies Department was investigated for “violating regulations on bidding, causing serious consequences.” Both were expelled from the party.
In April, Lieutenant-General Do Quyet, director of Vietnam Military Medical University and his deputy, Major General Hoang Van Luong, were investigated for their institution’s role in the scandal. In May, authorities arrested the deputy head of the price management division of the Drug Administration of Vietnam.
That month, the Central Committee’s Central Inspection Committee released their report that culminated with a recommendation for disciplinary actions against the Hanoi party chief Chu Ngoc Anh, who had previously been the Minister of Science and Technology, and current Health Minister Nguyen Thanh Long for their lax oversight and corruption within their ministries.
Does it Matter?
Vietnam is a $271 billion economy, and growing quickly. Even by Vietnamese corruption scandals, the Viet-A scandal wasn’t that large. Yes, bribes were paid, but bribes are paid every day in Vietnam.
But this scandal seems to have stung the leadership a little bit more. In part there was the direct link between the firm and the senior leadership. General Secretary Nguyen Pho Trong had egg on his face.
But more importantly, Vietnam’s response to the pandemic was really quite exemplary. Even after the omicron wave rocked the country in mid-2021, they handled it well, and more importantly, had an extremely effective vaccine rollout. Vietnam’s handling of the pandemic was critical in keeping the economy humming. In 2020 as every other economy in Southeast Asia contracted, Vietnam,’s economy grew, though at a modest 2.9 percent. Growth slowed to 2.58 percent in 2021, but is set to grow rapidly in 2022. Public health is seen as essential to economic growth, especially as Vietnam seeks to benefit from decoupling from China and supply chain diversification.
The scandal has also hit the vaunted Vietnam People’s Army, an institution that enjoys the highest levels of trust in the country. Vietnam has largely avoided the major kickback procurement scandals in their military modernization program that plagues many other countries. But it is far from immune to corruption. And one only has to look to Russia to see how pervasive corruption can hollow out a fighting force even after two decades of concerted modernization efforts.
Finally, anti-corruption has been the hallmark of General Secretary Nguyen Phu Trong’s tenure. Trong has wielded anti-corruption as he believes that the country’s endemic corruption threatens the VCP’s legitimacy. But he also has wielded it as a tool against political rivals. And many in the country will see this as just that: elite political infighting.
Now in his third term, there are expectations that Trong, who suffered a stroke in 2020, will step down before the 14th party congress in early 2026. But as long as he believes that corruption is still reaching the senior most ranks, he’ll fight to stay on, convinced that others will take the issue of corruption as seriously.
Zachary Abuza is a professor at the National War College in Washington and an adjunct at Georgetown University. The views expressed here are his own and do not reflect the position of the U.S. Department of Defense, the National War College, Georgetown University or RFA.