US embassy cable - 04HANOI2752

UNCLAS HANOI 002752 
 
SIPDIS 
 
STATE PASS USTR FOR DSPOONER/CMILLER/EBRYAN 
STATE FOR EAP/BCLTV AND EB/TPP/ABT/BTT 
USDOC FOR OTEXA 
BANGKOK FOR CUSTOMS ATTACHE 
USDOC ALSO FOR 4431/MAC/AP/OPB/VLC/HPPHO 
TREASURY FOR OASIA 
 
E.O. 12958: N/A 
TAGS: KTEX, ECON, VM 
SUBJECT: Vietnam:  Textile Quota Bribe Scandal - Part Two 
 
REF:  Hanoi 2620 
 
1. Summary: The arrest of the son of a Vice Minister of 
Trade (who bears overall responsibility for textile quota 
allocation) added a new twist to the GVN's ongoing 
investigation into schemes by Ministry of Trade (MOT) 
officials to extract bribes in exchange for U.S. textile 
quota.  Both English and Vietnamese language media are 
reporting extensively on the case.  U.S. textile/garment 
buyers are concerned they the arrest of key officials could 
affect allocation of 2005 quota.  End Summary. 
 
2. On September 30, the Economic Police (part of the 
Ministry of Public Security) arrested two more MOT officials 
and an "intermediary" for alleged involvement in a textile 
bribery scandal.  News reports did not directly link these 
arrests to the earlier arrests of other MOT officials 
reported reftel.  One of the MOT officials arrested on 
September 30 is Mr. Mai Thanh Hai, the son the Vice Minister 
of Trade Mai Van Dau.   According to press reports, Hai (who 
worked in the Export-Import Office of MOT) allegedly 
received 510 million Vietnamese Dong (approximately USD 
32,000) in mid-2003 as part of a 1.5 billion VND bribe 
(approximately USD 94,000) paid by a textile company in 
return for textile quota.  When the company only received 
half the quota it expected, it demanded its money back. 
Articles in the Vietnamese language press have also pointed 
out that Hai is well known for his lavish spending habits, 
for frequenting local nightclubs and for his marriage to a 
former Miss Vietnam. 
 
3. Hai's father, Mai Van Dau, has been Vice Minister of 
Trade since 1992.  His portfolio at MOT includes primary 
responsibility for making export and import policies and 
allocating import and export quotas, including for Vietnam's 
textile and garment exports.  According to press reports, 
since his son's arrest, VM Dau has not returned to work at 
MOT, although he has not officially resigned from his 
position.  (Note: VM Dau will be of retirement age at the 
end of this year.  End Note.)  In discussions with the 
press, the VM denied any knowledge of his son's "business" 
activities.  MOT has not named anyone to replace VM Dau and 
Minister of Trade Truong Dinh Tuyen will reportedly oversee 
the textile quota allocation process for the moment. 
 
4. Representatives of textile companies in Ho Chi Minh City 
report they believe the arrests will not affect quota that 
has already been allocated, but there is concern the scandal 
could affect allocation of 2005 quota.  The head of a U.S. 
textile company told HCMC Econoff that there are reports 
that the GVN team responsible for allocating quota for the 
EU market would be tasked to allocate 2005 U.S. quota.  This 
concerns textile reps because there is widespread belief 
that the EU quota allocation has not been handled 
transparently.  The U.S. textile rep said the now-disgraced 
MOT quota allocation team was open to input from the 
industry.  Even when the team's decisions were not popular, 
the industry at least felt their interests had been heard. 
The industry now worries they will lose their line of 
communication with the MOT. 
 
MARINE.