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Mexico’s 2023 military equipment fund larger than two federal branches combined

Meant to expedite spending for use in Mexico’s calamitous War on Drugs, the fund has been shown to be opaque and susceptible to corruption.

MEXICO CITY (CN) — Mexico’s military now has more money for administration and equipment than the country’s legislative and judicial branches combined. 

The 2023 allocation for the Federal Trust Fund for Administration and Military Equipment Payments of the National Defense Secretary (Sedena) is just under 136 billion pesos, around US $7.2 billion, according to Mexico’s National Transparency Platform.

The newspaper El Sol de México reported that the budgets for the Congress and federal judiciary combined for the same period are around 93 billion pesos ($5 billion). 

The Sedena trust fund was created during the administration of President Felipe Calderón as a means to expedite military spending as part of the calamitous War on Drugs, which has failed to curb the extreme levels of violence in Mexico during the nearly two decades since it was declared in 2006. 

Despite his opposition to the militarization of his predecessors, President Andrés Manuel López Obrador has not only kept the fund in operation, but has increased it by nearly 2,300% during his term, which began in December 2018. 

The fund has been criticized since its inception for its opacity and susceptibility to corruption, according to national security expert David Saucedo. 

“The concept of this type of federal trust fund is not a bad one in and of itself,” he told Courthouse News in a phone interview. “But in the case of this Sedena fund, we’ve seen a whole series of irregularities.”

Saucedo noted that those irregularities have been identified by Mexico’s federal governmental auditor. The most recent audit from 2020 found a discrepancy of over 44 billion pesos ($2.3 billion) between the fund’s deposits and expenditures. 

The López Obrador administration has put no new controls on how the fund is used, Saucedo said. 

“He just uses his narrative that the military is honest, they’re angels, and there’s no corruption, because they are people who don’t steal,” he said. “But that is obviously not true. There needs to be control, supervision, sanctions, and there hasn’t been any of that.”

The fund is like Sedena’s opaque “petty cash account,” Saucedo said. It is a separate budgetary allocation from the $7.8 billion earmarked for Sedena in 2023.

López Obrador has greatly expanded the responsibilities and functions of Mexico’s military during his term, using the armed forces and their budgets to build his controversial megaprojects, such as the new Mexico City airport, the Maya Train and an airport in Tulum, on the Caribbean coast. 

The president has also shifted responsibility for the country’s customs agency to Sedena, extended the military’s role in matters of public safety to 2028 and announced plans for an airline, hotels and other tourism services operated by the armed forces. 

He has also completely eliminated 109 such federal trust funds during his term, including those destined for natural disaster relief and science and technological research. 

Mexico is currently experiencing historic levels of violence, despite López Obrador’s claims that it has has decreased. Thus, with no new oversight to the equipment fund, Mexicans living in that violence can expect that the boost in funds will do little to better their situations. 

“The statistics show that the defense and public safety budgets have increased in recent years,  but the homicide rate has stayed the same,” said Saucedo, noting that the murder rate has plateaued, not dropped. “One would think that more investment in public safety would lead to lower crime rates, but that’s not the case.”

Security analyst Alejandro Hope agreed, saying, “This does not solve any structural problems.” He added that more funds will potentially only breed more corruption and that the mechanism needs accountability more than anything.

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