What Is a Slush Fund?
A slush fund is a amount of money that is set aside as a reserve. In accounting, a slush fund is a elementary ledger account of commingled worth vary that does not have a designated function. In more sinister instances, a slush fund is also used as a “black fund,” which is unaccounted for and saved off the books.
In politics and the corporate world, the time frame slush fund thus ceaselessly carries a hostile connotation, describing capital that has been raised secretly, perhaps from an illegitimate provide, or to be deployed mainly for unethical or illicit purposes.
Key Takeaways
- A slush fund is a amount of money that is set aside as a reserve and that is the reason saved for no particular function.
- A lack of mentioned function and opacity in relation to where its worth vary come from has led slush worth vary to be observed negatively as a platform to probably finance illicit or unethical movements.
- Slush worth vary have been exposed as being used to bribe or impact, to hide transactions, or to obtain non-public wisdom or other services.
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Understanding Slush Price range
A slush fund will also be regarded as a money reserve that has now not always been as it should be accounted for on the subject of where the associated fee vary have come from or what they are used for. Assets in slush worth vary is also squirreled away, functioning as a type of rainy-day fund, or used for something further nefarious.
Every now and then, the reason for keeping up a slush fund is innocent and fully prison. Money put aside to maintain any surprising costs or contingencies does now not violate any laws or ethical breaches, and technically qualifies as a slush fund.
However, questions will understandably be asked when corporations and politicians funnel away capital without giving a clear explanation why what it will be used for and, in some instances, how it was once even purchased. The hostile history in the back of the time frame moreover doesn’t have the same opinion.
Over the years, slush worth vary have been came upon to be used to bribe or impact other people in return for preferential treatment, to buy topic subject material non-public wisdom, or obtain other services. Consequently, in politics and business contexts the ones have transform synonymous with unethical, fraudulent, and illegal movements.
Permutations on Slush Price range
Politics
In politics, slush worth vary have been used to hide illegal advertising and marketing marketing campaign contributions or to fund high-flying lifestyles. They are able to also be deployed—slightly legally, in truth—to fund contributions and impact other people indirectly thru paying for trip and expensive fundraising movements like {golfing} events. In the United States, political movement committees (PACs) ceaselessly entertain lavishly using any such fund.
Most likely one of the most widely known case of a politician operating a slush fund was once Richard Nixon. The former president’s private legal professional controversially used advertising and marketing marketing campaign contributions to pay hush money to the Watergate burglars.
Business
In business circles, slush worth vary don’t seem to be extraordinary and used legitimately to pay for things like incidentals, client occasions, and several types of recreational aimed at successful business. Alternatively, a slush fund might be deployed for corporate perks, similar to executive cars or employee bonuses, pieces, outings, and team of workers lunches.
There is also a a long way seedier side to corporate slush worth vary. Firms have been identified to use slush worth vary to bribe laborious paintings representatives, siphon money from pension worth vary, or hide source of revenue—so they are able to be used to flatten returns later on. Unsurprisingly, such slush worth vary are not ceaselessly as it should be accounted for or are saved off the respected books absolutely.
In addition to, there are a large number of examples of faux charities which were turn out to be private slush worth vary, where charity dollars will also be wasted on salaries, bonuses, and luxury vacations, if now not outright fraud.
A Brief Beginning position of Slush Price range
The word slush first appeared in England throughout the mid-17th century to give an explanation for half-melted snow. Then, 100 years or so later, it began to take on a completely different because of this.
At the moment’s definition of slush fund dates once more to when a handful of enterprising cooks working on ships stranded for long classes at sea began hiding away the grease left over from the meat they served up at dinner time. The stinky fat they amassed was once given the nickname slush and introduced without delay to candle makers and other buyers when the ship docked at port. Name for was once over the top for the animal fat they’d been storing, enabling the cooks to rake in money to reside further lavishly. Any proceeds from the ones transactions went without delay to transform known as the slush fund.
The origins of a slush fund will also be similar once more to the 18th century when cooks introduced grease they gathered from cooking meat to buy sumptuous items.
