Vietnam disrupts crime network, but will reforms follow?

Its biggest gangster and his codefendants are on trial. Sentencing is expected in April.

Outside the peeling walls of the colonial-era courtroom, hundreds of onlookers wait to hear from the man alleged to be Vietnam's biggest gangster. Inside, the judge runs through the charges against Truong Van Cam, an ex-dock-worker and restaurant owner also known as Nam Cam: murder, bribery, gambling. All carry a possible death sentence. Few in this city still known as Saigon give him much chance of survival.

One week after the highly anticipated trial opened, the betting is focused on what punishments will be meted out to Nam Cam's 154 codefendants. Significantly for Vietnam, that number includes ranking members of its all-powerful Communist administration and its security apparatus - all accused of complicity in Nam Cam's illicit web of businesses.

For a country rated the second most-corrupt in Southeast Asia, the trial has evolved into a test of the government's will to crack down on widespread profiteering. Although Vietnam has tried state officials for corruption in the past, the scale of this trial is unprecedented. But some observers say proof of the country's commitment to curbing corruption will come only with further reforms that tackle the root causes of graft and allow for more public scrutiny of the state.

"You don't put 150 people on trial unless you're serious. This is seen as a genuine attempt to deal with the issue of corruption, but whether it's a sign of more to come or a real turning point, I just don't know," says one foreign businessman.

Investors differ on how acutely graft has impacted Vietnam's economy. Many economists say that graft slows development. Vietnam's economy grew rapidly in the 1990s as gradual market reforms attracted foreign capital. This accelerated after the US trade embargo was lifted in 1995, then slowed as the Asian financial crisis swept across the region in the late 1990s.

After huge losses from fraud at prominent state companies in the 1990s, Vietnam's former prime minister declared lifting corruption a national priority in 1997. The country's leaders have since vowed repeatedly to crack down.

"The party and the state of Vietnam are clearly aware of the threat of corruption and consider it a national disaster," Phan Thuy Thanh, Foreign Ministry spokeswoman, told reporters last week.

Just weeks before Nam Cam went to trial, police arrested the owner of a mobile-phone distribution company and charged him with dodging $6.5 million in taxes last year. Foreign business people and analysts say this is only the tip of the iceberg in a cash-driven economy that has shed its Marxist past with a vengeance.

High-profile busts like this are only one part of the problem. For Vietnamese, the most-visible form of corruption are the payoffs that plague their everyday lives. These range from bribes to underpaid doctors for medicine to shakedowns by traffic cops.

"Corruption really affects us. But people in power have connections with criminals, so citizens can't speak out," says Le Viet Tan, a university student.

For Vietnam's rulers, there may be ominous parallels to be drawn with popular protests against corruption elsewhere in Asia, including Tiananmen Square in 1989. That began as a demonstration against corruption in the Communist Party. Issues of land and graft have sparked isolated protests in Vietnam in recent years, provoking a harsh response.

But Martin Gainsborough, a research fellow at Warwick University (UK), whose has studied corruption in Vietnam, says that until now, local anger has not escalated into a wider challenge against the regime.

"It's a big shift from being fed up with the local government and transferring this into dissatisfaction with the overall system ... the [Communist] party can cope with a large amount of corruption happening behind closed doors, but if it gets too out of hand, there's a feeling that they have to stop it, so that it doesn't make them look weak," he says.

In the case of Nam Cam, whose alleged crimes have been presented at great length by the state media since his arrest in December 2001, it was a spate of murders that sent alarm bells ringing in Hanoi, Vietnam's seat of power. Two rival gangsters were slain, reportedly on Nam Cam's orders, shining a light on his seedy criminal empire that ranged from backstreet casinos to cross-border smuggling and protection rackets.

His arrest also reflected lingering concern in Hanoi over its grip on the provinces, particularly Saigon and its freewheeling commercial sector. The city produces about 20 percent of the nation's GDP and has gained increased autonomy in economic planning in recent years.

"Periodically the center feels the need to say: You can't act like this and we're in charge, and now you're going to fall into line and we're going to make an example of you for all the other provinces," says Gainsborough.

Local residents say life here has turned calmer, and some praise the government for restoring order. "I think that after the capture of the Nam Cam group, there will be more actions to stabilize our city," says retiree Nguyen Thi Law.

But analysts point out that even if Nam Cam is locked up, the system that spawned him remains intact and unbridled. Some speculate that Nam Cam's downfall may be linked to a political power struggle at the top, and that his criminal reach is much higher than the officials paraded before the court last week.

A local crime reporter says that other gangsters in Saigon are busy forging links with local officials, filling the void. "There are many smaller Nam Cams out there, and they all want to get into his crime business," he says.

Vietnam's press is on a tight leash. An official last year warned journalists covering Nam Cam not to "expose secrets, create internal divisions, or hinder key propaganda tasks."

Foreign journalists were permitted to attend the opening of the trial and are being promised access to the final day of sentencing in April. Observers say this relative openness is supposed to reassure foreign governments and investors that Vietnam is serious about fighting graft.

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