The lack of prosecution of bankers responsible for the great financial collapse has been a hotly debated topic over the years, leading to the coinage of such terms as “Too Big To Prosecute“, the termination of at least one corrupt DOJ official, the revelation that Eric Holder is the most useless Attorney General in history, and even members of the judicial bashing other members of the judicial such as in last night’s essay by district judge Jed Rakoff. And naturally, the lack of incentives that punish cheating and fraud, is one of the main reasons why such fraud will not only continue but get bigger and bigger, until once again, the entire system crashes under the weight of all the corruption and all the Fed-driven malinvestment. But what can be done? In this case, Vietnam may have just shown America the way – use the death penalty on convicted embezzling bankers. Because if one wants to promptly stop an end to financial crime, there is nothing quite like the fear of death to halt it.
Bloomberg reports that a Vietnam court will consider the death penalty for a Vu Quoc Hao, the former general director of Agribank Financial Leasing Co. who is charged with embezzling 531 billion dong. While that sounds like a whole lot of dong, converted into USD it is only $25 million, or what Goldman would call “weekend lunch money.” Just imagine how much cleaner Wall Street would be, where the typical bank fraud is generally in the billions, if bankers and other white collar criminals had the fear of death if caught manipulating petty prices or outright stealing amounts that are considered petty cash by most of the 0.001%.
But back to Vietnam and its shining example:
The trial comes as the government seeks to shore up Vietnamese banks saddled with Southeast Asia’s highest rate of bad debt and turn around an economy that grew last year at the slowest pace since 1999. The central bank governor vowed to crack down on violations by groups of shareholders working against banking reforms last year.
Eleven defendants, including Hao, 58, and Hai, are charged with embezzlement, mismanagement, abuse of power and fraud, according to a statement on the court’s website. Prosecutors allege that Hao and Hai formed 10 fake financial leasing contracts to disperse almost 800 billion dong.
At the trial yesterday, Hao said he regrets his violations and hopes the judges will give other defendants lighter sentences, Tuoi Tre newspaper reported today. The verdict and sentencing is expected to be announced Nov. 15, according to the newspaper.
Under Vietnam law, those convicted of embezzling property valued at 500 million dong or more, or creating “other particularly serious consequences,” can be sentenced to life imprisonment or death.
“The party, the government, prosecutors and our courts will give stiff verdicts in these types of cases,” Deputy Prime Minister Nguyen Xuan Phuc, said on the sidelines of an anti-corruption conference in Hanoi yesterday. “We need to make our regulations and legal framework tighter to reduce and prevent corruption.”
“It would be a signal: You could be executed for being caught doing large-scale corruption,” said Adam McCarty, the Hanoi-based chief economist at Mekong Economics. “It has implications for the whole bank restructuring the government is about to do. They want to really dig into these bad debt issues and find out who is responsible for the problems.”
And while one can dream, an outcome such as this in the US is impossible: after all it is these same embezzling bankers that control the legislative and judicial branches (the executive branch is too busy with 404 website errors), which is why deterrence of any substantial scale will never take place in the US and small, medium and large-scale theft will continue unabated, with the occasional slaps on the wrist, until there is nothing left to steal.