This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 HANOI 002620 
 
SIPDIS 
 
SENSITIVE 
 
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:  Trade Officials Arrested for Taking 
Bribes in Exchange for Textile Quota 
 
 
Sensitive but unclassified.  Protect Accordingly. 
 
¶1. (U) SUMMARY:  On September 15, a key Ministry of Trade 
(MOT) official responsible for allocation of Vietnam's 
textile quota for the U.S. market was arrested by the 
Economic Police for allegedly taking bribes in exchange for 
quota. MOT officials have stated publicly that the case will 
not delay the allocation of 2005 textile quota.  END 
SUMMARY. 
 
¶2. (U) According to press reports, on September 15, the 
Economic Police in Hanoi arrested Mr. Le Van Thang, Deputy 
Director of the Export-Import Department of the Ministry of 
Trade, for leading a "ring" that allegedly was taking bribes 
in exchange for export quota to the U.S. market and serving 
as an intermediary for illegal quota transfer deals among 
Vietnamese exporters.  The Export-Import Department bears 
primary responsibility for textile quota allocation in 
Vietnam.  At least one other MOT official and several non- 
GVN officials have also been arrested in conjunction with 
this case.  Reports indicate that the Economic Police will 
review allocation of U.S. textile quota for the past several 
years and may also look into allocation of export quota for 
the European Union market. Economic Police plan to establish 
an "open mailbox" for complaints from businesses affected by 
the extortion ring. 
 
¶3. (U) Mr. Thang has been the primary interlocutor for 
Econoffs in Hanoi for several years on issues related to the 
negotiation and implementation of the bilateral textile 
agreement (conclude in early 2003).  He worked closely with 
Econoffs in both Hanoi and HCMC to facilitate several 
textile production verification visits in Vietnam by U.S. 
Customs and Border Patrol.  Mr. Thang began working at MOT's 
Import Export office in 1989, before foreign investment and 
access to key export markets sparked a boom in Vietnam's 
textile exports (now Vietnam's second largest export after 
crude oil) and has been with the Department ever since.  He 
joined the GVN's working group for U.S. textile quota 
allocation in 2001. 
 
¶4.  (SBU) According to press reports, Mr. Mai Van Dau, the 
VM of Trade who bears principal responsibility for the 
textile portfolio at MOT, has asserted publicly that U.S. 
textile quota for 2005 will still be allocated according to 
schedule.  (Note:  2004 quota has already been allocated. 
End note.)  On September 16, Mr. Nguyen Duc Thanh, another 
Deputy Director from the Export-Import Department, took over 
Mr. Thang's textile responsibilities.  Mr. Thanh worked at 
Vietnam's Trade Mission to the U.S. in the late 1990's, and 
served as Deputy Director of MOT's Multilateral Affairs 
Department before moving to the Export-Import Department in 
¶2002. 
 
¶5. (SBU) A ConGen contact in the textile industry told 
Congen Econoff that A Chau Company, located in HCMC's Binh 
Than District, reported Mr. Thang to the police for 
extorting bribes in exchange for his allocating additional 
U.S. quota in some of the tightest textile categories.  A 
Chau Company reportedly paid Thang money, but never received 
additional quota in return.  The Congen contact also alleged 
that Mr. Thang had a poor reputation in the textile and 
garment industry even before he began working on allocation 
of U.S. textile quota in 2001 because he maintained a high 
level of "secrecy" in his dealings with industry businesses. 
 
¶6. (U) Vietnam exported almost USD 2 billion worth of 
textiles to the U.S in 2003 and almost USD 540 million to 
the EU.  Demand for U.S. quota in the "hot" categories 
(particularly knit pants and shirts) significantly surpassed 
quota supply in both 2003 and 2004.  The potential profit 
from illegally "freeing up" quota in these categories is 
significant. 
 
¶7. (SBU) Comment:  Since implementation of the bilateral 
textile agreement began in May 2003, we had been pleasantly 
surprised with the effort MOT appeared to take to ensure 
quota allocation was transparent - including posting 
information on MOT's website and frequent meetings with the 
Textile Subcommittee of the HCMC Amcham.  Because of the key 
role played by Thang in quota allocation, if the charges 
against him prove valid, they will cast a very dark shadow 
over all aspects of quota allocation for the past two years. 
On the other hand, if the charges are valid, the GVN merits 
considerable praise for taking steps clean up corruption in 
this critical industry.  In our contacts with MOT and other 
officials, Emboffs in Hanoi and HCMC will highlight the 
importance of resolving this case quickly and taking 
concrete steps to prevent any future tampering with textile 
quota allocation.  End comment. 
MARINE