Trusts and disasters 2023/10/26 | Excelsior

In the discussion about the eventual extinction of the trusts of the Judicial Branch there is an element absent: the relevance of these to face adverse situations, whether natural disasters or government attacks against autonomous Powers.

Let's go by parts. Were the trusts of the Judicial Branch that the government intends to extinguish illegal? No way. According to article 9 of the Federal Budget and Fiscal Responsibility Law (LFPRH), the federal government can establish public trusts “with the purpose of assisting the federal Executive in the powers of the State to promote priority and strategic areas of development. Likewise, public trusts are those that constitute the Legislative and Judicial Branches and the autonomous entities to which resources from the Expenditure Budget are assigned through the autonomous branches. That is to say, trusts under the federal government—such as those that guarantee labor benefits in the SEP, Pemex or CFE—are as legal as those of the Judicial Branch.

Did these trusts take advantage of under-years to illegally increase their resources? No. Any transfer of the annual budget of the autonomous branches to their trusts must be justified and authorized by Congress. Have any of these trusts been used to divert or hide resources? If this is the case, the government or the Superior Audit of the Federation should point it out or demonstrate it. It is worth remembering that trusts must be held accountable and monitored.

According to article 12 of the LFPRH: “The Legislative and Judicial Powers, as well as autonomous entities, must publish in the Official Journal of the Federation, the income of the period, including financial returns, expenses, destination and balance of the trusts in which they participate. This information must be delivered quarterly and reported to the Superior Audit of the Federation. The same article states that, upon the extinction of these trusts, “the remaining public resources must be transferred to the respective treasuries or their equivalents.”

The reform approved this week indicates in its fourth transitory article that the resources of the trusts of the Judicial Branch must be delivered to the Treasury of the Federation. It is striking that the reform only modifies article 224 of the Organic Law of the Judicial Branch of the Federation, but the articles of the LFRH indicated above were not reformed. Is there a contradiction between both laws?

This could open the door to a constitutional question: if at a given time resources were authorized to create trusts for an autonomous Power or body, can future governments or legislatures confiscate them? If that is the case, how can a Power be considered autonomous if it cannot have its own assets?

There are those who say that the trusts of the Judicial Branch only mask privileges of a select group of public servants. In contrast, the natural disasters experienced this week in Mexico bring to the fore another trust with operating rules that was extinguished by the government in November 2020: the Natural Disasters Fund (Fonden).

In its original version, article 37 of the LFPRH ordered that the Federation's Expenditure Budget must include provisions for disaster prevention — Disaster Prevention Fund, Disaster Fund, etc. — of at least “0.4%.” of programmable spending” each year. With this budget forecast, the Fonden trust was financed, which was ordered to be extinguished in November 2020 along with dozens of other trusts. We will soon have to know if the new scheme—the Program for Emergency Response to Natural Hazards—represented an improvement or not with respect to Fonden.