Slush Fund

What Is a Slush Fund?

A slush fund is a sum of money that is set to the side as a reserve. In accounting, a slush fund is a general ledger account of commingled funds that doesn't have a designated purpose. In additional vile cases, a slush fund might be utilized as a "black fund," which is unaccounted for and kept under the table.

In politics and the corporate world, the term slush fund hence frequently conveys a negative meaning, depicting capital that has been raised covertly, maybe from an ill-conceived source, or to be sent principally for unethical or unlawful purposes.

Understanding Slush Funds

A slush fund can be considered a money reserve that has not forever been as expected accounted for in terms of where the funds have come from or what they are utilized for. Assets in slush funds might be saved, working as a kind of stormy day fund, or utilized for something more loathsome.

In some cases, the justification for holding a slush fund is innocent and completely legal. Money put to the side to deal with any surprising costs or possibilities disregards no laws or ethical breaks, and technically qualifies as a slush fund.

All things considered, inquiries will justifiably be posed when businesses and government officials funnel away capital without giving an unmistakable explanation what it will be utilized for and, at times, the way things were even gotten. The negative history behind the term likewise doesn't help.

Throughout the long term, slush funds have been found to be utilized to bribe or influence individuals in return for special treatment, to buy material non-public data, or acquire different services. Accordingly, in politics and business settings these have become inseparable from unethical, fraudulent, and illegal activities.

Minor departure from Slush Funds

Politics

In politics, slush funds have been utilized to conceal illegal campaign contributions or to fund high-flying ways of life. They can likewise be sent — legally, as a matter of fact — to fund contributions and influence individuals in a roundabout way by paying for movement and costly fundraising activities like golf events. In the United States, [political action committees](/political-action-board of trustees super-pac) (PACs) frequently engage sumptuously utilizing such a fund.

Maybe the most notable case of a lawmaker operating a slush fund was Richard Nixon. The former president's personal legal counselor disputably utilized campaign contributions to pay quiet money to the Watergate robbers.

Business

In business circles, slush funds are common and utilized honestly to pay for things like incidentals, client parties, and different forms of diversion pointed toward winning business. On the other hand, a slush fund may be sent for corporate advantages, for example, executive cars or employee bonuses, gifts, excursions, and staff snacks.

There is likewise a lot seedier side to corporate slush funds. Businesses have been known to utilize slush funds to bribe work agents, siphon money from pension funds, or stow away profits — so they can be utilized to smooth returns later on. Obviously, such slush funds are not frequently as expected accounted for or are kept off the official books altogether.

Moreover, there are innumerable instances of fake foundations that have been transformed into personal slush funds, where charity dollars can be squandered on salaries, bonuses, and luxury get-aways, while possibly not outright fraud.

A Brief Origin of Slush Funds

The word slush previously appeared in England during the seventeenth century to portray half-softened snow. Then, at that point, 100 years or so later, it started to take on something else altogether.

The present definition of slush fund traces all the way back to when a modest bunch of venturesome cooks working on ships abandoned for long periods at sea started stowing away the oil left over from the meat they served up at supper time. The foul fat they collected was given the moniker slush and sold on to candle producers and different traders when the ship moored at port. Demand was high for the animal fat they'd been putting away, empowering the cooks to make cash to live more extravagantly. Any proceeds from these transactions proceeded to become known as the slush fund.

The starting points of a slush fund can be linked back to the eighteenth century when cooks sold oil they assembled from cooking meat to buy luxury things.

Highlights

• A lack of stated purpose and obscurity in regards to where its funds come from has driven slush funds to be seen negatively as a platform to finance unlawful or unethical activities possibly.
• A slush fund is a sum of money that is set to the side as a reserve and that is saved for no specific purpose.
• Slush funds have been uncovered as being utilized to bribe or influence, to conceal transactions, or to procure non-public data or different services.