A diplomatic kerfuffle in Phnom Penh reminds us that the U.S. owes Vietnam $25.7 billion.
Last week, for seemingly no reason whatsoever, an anonymous U.S. State Department official made the strongest argument to date for Donald Trump to make good on wartime reparations promised to Vietnam by his political idol, Richard Nixon.
During Trump’s skinny days, he flew to Houston to attend a birthday party for a bankrupt Texas governor that was attended by the ex-president. Years later, Nixon wrote Trump a letter, urging him to make a play for the White House — a document Trump cherishes even today.
One wonders what Trump might make of another Nixon correspondence, one he penned at the height of his powers, to Vietnamese Prime Minister Pham Van Dong promising roughly $4.7 billion in wartime reconstruction aid without political conditions.
Nixon’s downfall and disgrace (a saga Trump either doesn’t know or doesn’t care about) allowed subsequent successors to utterly disregard the document.
“I don’t feel we ought to apologize or to castigate ourselves,” President Carter told the American people, four years after Nixon wrote it. “I don’t feel we owe a debt.”
In war, victors have traditionally enjoyed spoils, but the U.S. turned that concept on its head in Southeast Asia, insisting the survivors of humanity’s largest bombing campaign pay back the loans taken out by the people directing the planes.
This issue came back into public discourse at the close of 2016, when Cambodian Prime Minister Hun Sen implored Trump to abandon the State Department’s efforts to shake down Phnom Penh for $300 million borrowed by Marshal Lol Non, a tinpot dictator who fled to Hawaii after conspiring with U.S. forces to carpet bomb his own country.
In 2010, one expert calculated the cost of clearing Cambodia’s ordnance at roughly $4 billion.
Ironically, Lol Non finished his days not far from Nixon — in sunny Southern California.
You would expect diplomats faced with such a sticky predicament might tread lightly.
Instead, last week, American Ambassador to Cambodia William Heidt decided to fire back.
“To me, Cambodia does not look like a country that should be in arrears,” he argued citing international protocols and the shiny new buildings he could see from his office.
Hun Sen balked and journalists whose ears still tingle with B-52-related tinnitus backed him up.
Heidt’s gambit will no doubt go down in diplomatic circles as a textbook forehead-slapper — a spectacular example of superpower diplomacy put to work in a country that has, arguably, already vanished into China’s sphere of influence.
In a more immediate sense, however, it made many question what Heidt had been smoking.
An answer emerged on Sunday, courtesy of an American veteran named Chuck Searcy who returned to Vietnam in the 1990’s to push for the normalization of relations. Searcy dedicated his golden years to cleaning up the unexploded ordnance and dioxin that contaminate central Vietnam based on a moral obligation people like Heidt still can’t acknowledge, at least publicly.
Searcy and his friends wanted to know why the U.S. cared about a measly $300 million.
“Sometimes simple fairness and justice, common decency, and morality must take precedence over the U.S. government’s bookkeeping requirements,” he wrote to Vietnam Old Hacks, a Google group maintained by journalists who covered the war and the region.
Finally, a State Department friend fired a response to Searcy, one he saw fit to post on Sunday.
“Why does the U.S. care?” the official wrote. “Otherwise every time there is a coup, or even a change in ruling party via a democratic process, sovereign debts could be questioned.”
The official cited Vietnam’s willingness to pay back those debts as a shining example of how one ought to play ball, while considering how painful a sacrifice it represented.
In April of 1997, U.S. Treasury Secretary Robert Rubin flew to Hanoi, toured the Temple of Literature and mounted a podium to accept an interest downpayment of $8.5 million on $145 million in loans borrowed by the profligate Saigon regime.
Two years earlier, a Vietnam crippled by two decades of economic and political embargo had agreed to pay an additional $209 million to U.S. entities with outstanding promissory notes written by a government Hanoi never even recognized.
Roughly half of that money was designated for oil companies.
Rubin didn’t seem to grasp the irony of any of this.
“Vietnam has made great strides in transforming a country shattered by war to one brimming with energy and confidence,” he said in comments later inscribed in a State Department press release. “The payments that Vietnam will resume under this agreement will send a message to the international financial community that Vietnam takes its financial responsibilities seriously.”
Rubin turned out to be an unlikely spokesperson for fiscal responsibility.
During his time as treasury secretary, he played a central role in the Clinton administration’s de-regulating of the financial services sector before scurrying into a sweet corner office at Citigroup.
A few years ago, the Financial Crisis Inquiry Commission voted to refer Rubin to the Department of Justice for grossly misrepresenting the levels of toxic assets Citigroup took on before they all blew up.
Harvard economist Iris Mack later claimed Rubin had spent the most heated days of the crisis flying around in a private jet and trying to sell her on an extramarital affair.
Rubin walked away from his treachery odious, but un-indicted.
Even if you were to believe the State Department position that it only ever wanted a demonstration of good faith from Vietnam or Cambodia, you’d have a major historical problem on your hands.
After 1975, Vietnam took on Saigon’s debts to Japan and France as a pre-requisite for normalizing relations; but both of those countries had paid Hanoi war reparations following their defeats, according to Nayan Chanda’s 1986 book “Brother Enemy.”
Chanda also described how U.S. legislators insisted Hanoi pay Saigon’s debts while freezing roughly $140 million worth of assets the vanquished regime had racked up in the U.S.
Soon after Vietnam began paying back the absurd debt, a group of legislators led by veteran and former Secretary of State John Kerry earmarked the money for the Vietnam Education Fund to offer students in Vietnam and the United States scholarships.
Earlier this year, the VEF shut down its offices and $20 million of Vietnam’s money went toward building the Fulbright University in Vietnam.
Whatever joy the Vietnamese government was meant to feel about partially paying for the construction of an American university on its soil got bogged down in an announcement that Bob Kerrey, despite war crime allegations, would return to chair its board. Supporters of the idea insisted this would somehow help Kerrey and Vietnam move on.
But here’s the thing about moving on. Vietnam swallowed its pill and paid its debts. The U.S. didn’t.
“This is part of an international convention that regulates the responsibility of a government taking over another after a war,” Nguyen Manh Hoa, a senior official of Vietnam’s finance ministry, told the AP in 1997 when Bob Rubin came to town. “You can inherit interest, but also responsibilities of that government to the world.”
Given Trump’s freewheeling approach to foreign relations, maybe he’d consider just dusting off that old Nixon letter, sitting down at his big leather desk and writing Vietnam a check for somewhere in the neighborhood of $25.7 billion — that’s Nixon’s promise, adjusted for inflation.
And please, someone, make sure to double-check his zeroes.
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