Trusts Today (1): Replacing Private Trusts with General Public Trusts

A proposal from the “Holte” blog:

(written in a U.S. context but could be applied in other settings as a new public policy mechanism)

“Essentially the Public General Trust is given “trusteeship” over a self-funded public function. For example the “Health Care” system could be constituted as a public trust and that would give the Public Health Care General Trust “trusteeship” over ensuring that health care is delivered as a right to residents of the United States, and the power to raise sufficient revenues to pay for this trust. The Trust would be under the over-sight of the US Congress but would have both independent revenue authority and spending authority within guidelines set by the founding charter. A General Trust Charter would be written so that it can be replicated at State, County, Metropolitan and local levels, and to participate in the Trust would require that each State ratify the Trust Charter as if it were an amendment to the Constitution. Once the requisite number of states have ratified the Charter, an Amendment establishes the authority to establish such trusts and it goes into effect nationwide. As each state ratifies it, it goes into effect in that State. It doesn’t matter if the members of the trust are for profit, or non-profit, purely private executive organizations or government entities, because they’d all have to conduct their business within the charter of the trust and submit the kinds of decisions that would be classified as unfair “trust” decision to the decision making authority of the Public Trust. The idea is to build in regulation.”


A charter with democratic controls is itself a democratic control. If the railroads had been chartered specifically in the public interest, with separation of power, representation, and federalism down to the town and county level, 90% of the hijinks they were famous for could have been prevented. Surely there’d have been abuses, but not so much as actually occured. A properly constituted organization has the propensity to be more likely to behave in a constitutional manner. Organizations get corrupted when they are organized with unrealistic expectations and without checks and balances on their officers and stakeholders. A clear mission statement can help limit the ability of officers to convert funds from their intended purpose to more selfish ones. If we build in checks and balances then officers have to look over their shoulders before even considering stealing money or gambling it. If there are built in democratic controls then the outside state never needs to intervene unless those controls break down.

Build in regulation

Most private companies involved in coal production, oil production, or other services and production, will claim that they are the ones who know most what they are doing. Sometimes they are even telling the truth. However, no system works well without checks and balances, and for any system to be complete, trustworthy and verifiable; all the stakeholders in that system need to be identified, have a voice in its operations that is appropriate to their expertize and stake, and be able to give input to improve the process and function of the system and to ensure that resources are distributed fairly. That requires built in democratic controls. Workers need to have representation in governing these public trusts. The general public does too. This representation builds in regulation that is far more effective than anything that can be done top down by the general government.

Executive Oversight

Each trust has three senior officers, one of whom is the Governor General. The Governor General oversees an Executive Operations Board, which each member corporation must participate in. The corporations will like this because it gives them a say in the operations of the Trust, and the rest of us will like it because it makes them responsible for sustaining the operations of the board in general and for any failure that results.

Judicial Oversight

Rate setting commissions have a checkered history in running public systems. I believe that their role should be limited to providing a judicial/Juridical role within the Public General Trusts. The Chief Commissioner should be an executive over the commiission, but the Commission itself should have judicial oversight functions only. Rate setting should be done by a Board of Trustees . and only come to the commission if there is a dispute, and each commission should have a special court with a standing jury of people selected lot from Jury pools rather than appointed judges. A judge should oversee this jury, but not be the one making decisions, and it should resemble a Grand Jury except that the Jurors should have group rights to complete access to information and have the right to ask questions, seek answers by discovery, and even subpoena witnesses. The Jurors should make decisions informed by expert witnesss, and so each Commission should have Oversight Commissioners who have informal adjudication powers, investigative powers, and Expert Judgment. Each commission should have a fully functioning court with Judge(s), Jury, Prosecutorial investigators, and Defense bar. It should also have general witnesses or reporter bar whose job is to report on facts and monitor the behavior of the other branches of the Trust. The Jurors will decide all disbarments. Senior officers of the Commission will be subject to disbarment by them as well, and Congress can impeach the officers for cause.

Financial Oversight

Each General Trust should have a board of Trustees. These boards should have officers whose roles are restricted to Financial Oversight. The board of Trustees should be headed by a Treasurer and should consist of officers with general trustee roles and the rights to audit, inquire, review, and allocate funds within the provisioning law. The US already uses Trustees to administer funds, and these Trust Boards usually do a good job. The Officers of this board will report to Congress and be impeachable for cause and also subject to disbarment by the Commission court. Trustees will have the right to review law, policy and funding matters. If disbarred or impeached they may be removed.

A General Bar

Each Trust should have a “bar” of ordinary people who are trusted to uphold the general trust of that Trust. People can only serve as reporters, or participate in the trust in any capacity if they are members of the bar, and the general bar should be a “militia of the whole” and include all registered voters who haven’t been disbarred for some reason. The Commission courts would have the power to disbar people if they misbehave — and then they’d be barred from any position of trust within the Trust. Specific Bars

Each trust should have expert bars as well. Membership in the expert bars would require passing some test, meeting educational requirements, and the rules would be set by the Board of Trustees and approved by the Commission and its court. Each Membership organization would have the power and authority to set the rules, subject to approval from the Trustees, disputes subject to adjudication by the Commission Court. For infractions less than criminal, the Commission could disbar members.

Executive Bar

The next element in the constitution of a public general trust with built in regulation, is corporate membership in a corporate bar. Anyone, corporation, government entity, or private property owner, would have to be a member of the Executive Bar to participate in the Public Trust, and their officers would also have to members of the Bar. To do business within the jurisdiction of the Trust, each corporation and each executive bar would have to maintain good standing and be a member of the bar. Disbarred corporations could no longer do business in the Trust, and Corporations owning a private trust that is part of a system over which the Trust has jurisdiction would have to sell or dispose of the related properties on being disbarred, or face forfeiture. Thus misbehavior would be punished far more effectively among businesses doing business within a public trust than ever fines or jail-time threats could ever manage. The bar would have, effectively, the ability to give the death penalty to misbehaving corporations and to remove the power of misbehaving executives to misbehave within that trust anymore.

Legislative Trustees

In addition to all the above, there will be Stakeholders congresses from time to time, where policies, definitions, best practices and general rules can be decided. Each Bar is associated with a membership organization where members can meet annually at the lowest level of their participation (State, County, Municipality, member organizations in companies, etc….) At those meetings members can select delegates with vote power proportionate to their representation to meet at an annual national congress. Rules, policies, and similar, are approved or disapproved by representatives of the executives, general membership, employees, and from Congress. all these will be subject to review by local legislatures.”

Three Principles

“The point here is that we need public trusts to guard common systems, public goods, and the publics interest in systems that are privately run but affect the general public. To do that we need to provision and fund democratic participation, separation of powers (no-one person should be judge, jury and execution), volunteerism (real democracy), and Federalism (local democracy and National Democracy).

Currently we have private trusts, running many of our systems in a disjointed, disfunctional and sometimes sneaky monopolistic way. With public trust, the public is explicitly represnted, and the impact of monopoly mitigated — without having courts use a sledge hammer where a scalpel would be enough.”

1 Comment Trusts Today (1): Replacing Private Trusts with General Public Trusts

  1. AvatarChris Holte

    Hi, thanks for sharing this. I’d quite forgotten that it was on Fraught with Peril… I’m further developing the concept behind these Public Trust Charters in my book on the subject that I’m writing. Basically I’m following principles that seque off of principles that come from John locke, Adam Smith, Thomas Paine, and the founding fathers of our country; especially John Locke. If a system government is badly constituted it will not function right without extraordinary efforts and will be subject to attacks of tyranny because it cannot avoid arbitrary and self interested exercise of unchecked power.

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