Mexico's Fox has no money to fund transition

MEXICO CITY, July 26 (Reuters) -- The transition team of Mexican President-elect Vicente Fox has a problem. It has no money.

Aides to Mexico's first opposition president in seven decades said this week their accounts had run dry, staffers were paying their own cellular telephone bills and there was no law or fund to cover the costs of preparing the new government for power.

Political analysts said on Wednesday the absence of mechanisms to finance the five-month gap between the July 2 election and Fox's December 1 inauguration was an example of how the Institutional Revolutionary Party (PRI) nonchalantly had assumed all public money in Mexico was its own.

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"It wasn't a problem in the past. As the PRI was the party of state, the outgoing president ensured the incoming president had everything he might need," said analyst Lorenzo Meyer. "We never even knew where the money came from."

Fox, of the conservative National Action Party (PAN), will be Mexico's first non-PRI president since 1929. His stunning victory on July 2 is seen as cementing Mexico's transformation into a democracy from a virtual one-party state.

But the lack of funds could hamper Fox's efforts to ensure a smooth and orderly transition.

PRI president-elects traditionally announced their cabinets and policies on the day of taking power, not before.

But in an unprecedented effort to prepare himself for office, Fox set up a transition team to work with President Ernesto Zedillo's outgoing administration on drawing up the 2001 federal budget.

The transition team was also working to define proposals for judicial, tax and other reforms. In addition Fox planned trips to South America, Europe, the United States and Asia to woo investors.

But there is no money.

"This is an unprecedented situation, unforeseen in the law," said Fox spokeswoman Martha Sahagun.

Sahagun told reporters Fox's team was negotiating with the government for a solution, likely to be a special fund, and that she did not believe Fox's planned August 7-10 trip to Chile, Argentina and Brazil would have to be called off.

In the past PRI president-elects never had to worry about money because they were taking over from one of their own.

Political analysts said that in previous elections, the presidential guard would be assigned to the PRI candidate as soon as he was nominated and the president's office would pay for hotels, transportation and food.

Reforms under Zedillo limited the presidency's "legal" participation in PRI campaigns to bodyguards. But no one took into consideration what to do if the opposition won.

Homero Aridjis, a poet, environmentalist and long-time critic of the PRI, said the final year of six-year presidential terms -- known as the Year of Hidalgo -- had always been marked by widespread ransacking and theft.

Outgoing officials would strip government offices bare, and siphon off any funds. The incoming president also enjoyed the right to dip into public coffers for his needs.

"The PRI was Mexico. Mexico's money was the PRI's," said Aridjis, noting that PRI party cadres constituted a "monarchal caste" living for generations off public budgets.

Ironically the financial problems of Fox that have arisen with the PRI's ouster may be a healthy sign, said Meyer.

"The fact that there is no money for Fox is a good indication that things will be different," he said.

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