A Vietnamese court began a major corruption trial today of 22 defendants, including a former senior Vietnamese Communist Party official and a top oil executive the government is accused of snatching from Germany.
Most of the defendants are current or former senior oil executives, including three other former chairmen of state- owned energy giant PetroVietnam.
The company and the banking sector have been at the center of an unprecedented crackdown on corruption under the watch of Communist Party General Secretary Nguyen Phu Trong.
Former Politburo member Dinh La Thang, 57, also a former PetroVietnam chairman, is accused of "deliberately violating state economic management regulations, causing serious consequences" for his role in awarding PetroVietnam's Construction Joint Stock Co, or PVC, a contract to build a thermoelectric plant without a proper bidding process.
He also allegedly advanced USD 67 million to PVC, which did not use the funds for the proper purpose, causing losses of USD 5.5 million to the state.
Thang, the first former Poltiburo member to be prosecuted in decades, faces up to 20 years in prison if convicted. Trinh Xuan Thanh, 51, a former PVC chairman, is accused of the same charge as well as embezzling USD 186,000 from another thermoelectric plant.
The embezzlement offense carries the death penalty.
In August, Germany accused Vietnam's intelligence service of kidnapping Thanh from a Berlin park. Vietnam denied the allegation, saying Thanh turned himself in to police voluntarily, but the incident strained ties and Germany expelled two Vietnamese diplomats.
The trial of Thang and Thanh "sends out a stern warning that there will be no 'no-go zones' in this campaign, and corrupt officials, no matter who they are and what position they hold, will be brought to justice," said Le Hong Hiep, a research fellow at the Singapore-based ISEAS - Yusof Ishak Institute.
"The campaign has some aspects of political infighting, but the main driver is still the party's wish to stem widespread corruption, which has undermined the people's confidence in the party's governance capabilities as well as its economic reform efforts," Hiep said.
He said political power was previously fragmented in Vietnam, weakening the fight against corruption, but is now concentrated in the party general secretary. The corruption crackdown is intensifying now because Trong and his allies were able to consolidate power after a party congress in early 2016 at which Trong won a second five-year term, Hiep said.
Once a rising political star, Thang was dismissed from the all-powerful Politburo in May and was subsequently fired as secretary of the southern commercial hub of Ho Chi Minh City. He was arrested on December 8, and his brother Dinh Manh Thang was detained one day later for alleged embezzlement in another corruption case.
Hiep said the trial of Thanh will continue to have a chilling effect on relations between Vietnam and Germany and may affect a free trade agreement between Vietnam and the European Union.
"The EUVFTA may be delayed, but I believe it will eventually be ratified by the EU, especially if the trial of Mr Thanh is seen as transparent and fair. In the end, economic considerations may outweigh political ones in this case," he said.
"I'm happy that the government is getting tough on corruption," said Ngo Quang Hung, 62, a retiree who was among several dozen people gathered outside the courthouse.
Foreign media are not allowed to attend the trial, which is expected to last two weeks.
In Berlin, German Foreign Ministry spokesman Rainer Breul said embassy representatives were inside the courtroom. "We will observe it very closely and then evaluate what this means for our policy," Breul said.
Chancellor Angela Merkel's spokesman, Steffen Seibert, noted that "we have condemned this kidnapping as completely unacceptable. This is a breach of the law."
Germany has made clear that the incident has weighed on trust between the two governments "and that it is necessary for Vietnam to act to restore this trust," Seibert said.
Vietnam ranked 113th out of 176 countries in Transparency International's 2016 corruption index.
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