What is a Slush Fund?
DEFINITION
A slush fund or black fund is a cash reserve, a sum of money that has been put aside for future use. The term, then, does not exclusively refer to a cash reverse used for illicit purposes or to gain an undue advantage.
It’s important to understand this point. Slush funds do not necessarily involve theft or the misuse of funds.
If you have one, you’ve probably earned an honest salary and showed admirable restraint by saving up some money instead of splurging.
Businesses, too, can have a slush fund that goes to completely legitimate practices (e.g. parties, employee bonuses, outings, staff lunches, etc.)
The Zero Theft Movement, along with our growing community, takes issue with slush funds only when that money has either been gained through unethical means or used to buy an undue economic advantage. This practice can rig politics and the economy against the public. Thus, when we use the term’ slush fund’ throughout the rest of this article, our sole target is the misused cash reserves that the public funding.
Kaiser Health News reported on an alleged price fixing scheme by generic drug manufacturers that “started at dinners and ‘girls nights out.’” The news report states, “The price for a decades-old antibiotic called doxycycline, for example, jumped from $20 for a bottle of 500 pills in October 2013 to more than $1,800 in April 2014.” A lawsuit, backed by Attorney Generals of 46 states, “accuses drugmakers of conspiring to rig the prices of approximately 80 generic drugs between 2009 and 2016.”
Do you think the prices of old antibiotics and other off-patent drugs are excessively high?
How do Slush Funds Work?
In the case of theft in our country, corrupt politicians and crony capitalists often work together to steal from the public. While a misused or illegal slush fund can be held by businesses independently of congress (and vice versa), the members of both entities act in concert. Their collusion ultimately allows for widespread and legally authorized theft.
Politics & Business: Synchronized Swimming in Slush Fund Dollars
Buying a congress member’s vote, for example, is an illicit use of slush funds. In other words, actually trading money for the Congress member’s vote. Rarely, though, does this happen so blatantly. That’s why legal and illegal contributions, in practice, prove hard to parse out.
‘Contributions’ can come in the form of hotel accommodations, a campaign vehicle, fundraising events, etc. It doesn’t have to only be monetary compensation. In truth, the debate over Pay to Play has made little headway. While monetary contributions can, perhaps, be more easily tracked, contributions, in general, can come in so many forms that regulating such practices is extremely difficult.
Let’s take, for example, a bill like H.R. 1 – For the People Act. A fictional pharmaceutical company reads all about the measures to combat price fixing, and draws from their secret slush fund to hire lobbyists who wine, dine, and most notably, compensate with cold hard cash members of congress to vote ‘nay.’ For an extra fee, maybe the corrupt congress members commit influence peddling, promising the fictional pharma company they will not only vote ‘nay’ but also will persuade their colleagues to do the same.
Obviously, the actual exchange of money gets kept off of the company books, nor will the congress member report the briefcase of cash when they file their taxes.
Coronavirus Relief Packages
The coronavirus pandemic has been a struggle for all. Economically, mentally, emotionally…
While the government has passed two massive relief packages (the $1.8 trillion CARES Act and the $1.9 trillion American Rescue Plan), they did not pass Congress particularly smoothly.
Some Democratic officials lamented the CARES Act due to its alleged lack of oversight over the PPP (Paycheck Protection Program). According to The Washington Post, they also criticized the legislation’s ‘Exchange Stabilization Fund,’ an arguable case of corporate welfare gifted to bailout industries. Senator Mazie Hirono (D-Hawaii.) stated, “We’re gonna give $500 billion in basically a slush fund to help industries controlled by Mnuchin [former U.S. Secretary of the Treasury] with very little transparency? Is that what we ought to be doing?” To provide a little more context, news reports (Forbes, Bloomberg, The New York Times) emerged alleging that corporations requesting aid had been executing massive stock buybacks before the pandemic hit.
Some Republican lawmakers, on the other hand, condemned the American Rescue Plan, claiming it included millions in wasteful spending and money directed to blue states. Congressman Jason Smith (R-MO), in an interview with Cheddar News, stated: “Look at all the money going to blue states such as California and New York. It’s unacceptable…The money needs to go to the American people, but instead, it’s hurting the American working class.”
We must forget partisan politics when it comes to government spending that might be ripping the public off while benefiting corporations. That does not help anybody. Economic corruption helps the few and hurts most, regardless of the political party you support. Settling Sexual Harassment Claims with a Congressional Slush Fund
In 2018, the Committee on House Administration made public a list of settlements from claims against government officials. Names, unfortunately, did not get disclosed, but the committee released the total figure of taxpayer funds that went to paying off these settlements: nearly $300,000.
Lawmakers passed legislation with bipartisan support to both help prevent taxpayer money from going to sexual harassment settlements and improve protections for congressional workers. Lawmakers, moving forward, will have to pay out of pocket for settlements. Not out of a slush fund. Also, the bill includes a provision compelling congress to report and publish settlements.
Increased transparency in congressional conduct and financials are a good step towards making positive change.
However, that’s not enough.
We need to have full access to information on congressional spending and funding. Where’s the money coming from, and what is it going towards? Do the numbers add up? We need a truly independent audit of all congressional accounts, so we can hold them accountable.
Full disclosure and independent oversight, in short, are what we must fight to achieve.
[Read more about Congress’ slush fund here]
Due to the non-interference clause in Medicare Part D, the government cannot negotiate drug prices. Does this lead to much more taxpayer money being spent on drugs than necessary? See what the ZT community has found through their investigations…
Rep. Corrine Brown & the One Door Education Slush Fund Scheme
People in power even create charitable organizations to illegally generate cash for their slush funds.
In early 2016, the United States Department of Justice (DOJ) officially reported the indictment of former House Rep. Corrine Brown and her chief of staff. The Assistant Attorney General Caldwell commented, “Congresswoman Brown and her chief of staff are alleged to have used the Congresswoman’s official position to solicit over $800,000 in donations to a supposed charitable organization [One Door Education] only to use that organization as a personal slush fund.”
The DOJ report goes on to state:
“According to the indictment, more than $200,000 in One Door funds were used to pay for events hosted by Brown or held in her honor, including a golf tournament in Ponte Vedra Beach, Florida; lavish receptions during an annual conference in Washington, D.C.; the use of a luxury box during a concert in Washington, D.C.; and the use of a luxury box during an NFL game in the Washington, D.C., area.”
Over $800,000…allegedly gone to fund an extravagant lifestyle rather than going to its express purpose of improving education. That’s money wasted, essentially stolen out of the pockets of everyone who donated.
Surely that can be considered nothing less than theft.
While still serving her five years in Sumter prison, she was recently released due to the COVID-19 outbreak.
Lawmakers and Leadership Political Action Committees (PACs)
PACs, essentially, are organizations formed for the purpose of fundraising and spending money to promote a candidate or political group. Leadership PACs, in particular, originated in the 70s, when the FEC allowed Congress members to establish organizations that raise money to support fellow politicians. The laws prohibiting members of Congress from using campaign donations for personal use (vacations, dinners, hotel accommodations) do not apply to money contributed to PACs.
In other words, a slush fund can be used freely.
So, who funds this leadership PACs? According to a 2018 Issue One report, lobbyists/special interest groups and major corporations. The donations totaled close to $150 million for the 2018 cycle.
The report goes on to reveal that under 50% of leadership PAC spending goes to backing other politicians. Not only that, 488 of the 535 members in Congress had at least one leadership PAC.
The organization dug even deeper and examined the spending of leadership PACs over two months.
In short, at least some members of Congress have found a way to game the system, establishing legal slush funds to fund their lavish lifestyles.
While it may appear like it doesn’t affect you or the public, this practice can seriously hurt us. Just ask yourself: What, if anything, are lawmakers doing in return for those donating to their slush funds?
Passing or blocking bills that affect net neutrality? Making sure price fixing measures remain in place for lifesaving medicines and blockbuster drugs? Breaking the free market hurts the public, allowing massive corporations to unethically maximize their profits at our expense.
Slush Funds, are they a part of the Rigged Economy?
We need to eradicate any slush fund that has been wrongfully acquired and/or misused by congress, as well as corporations. Undoubtedly, we must fight for transparency, and spread the word. Otherwise lawmakers will continue to sell out and ruin our livelihoods.
The Zero Theft Movement seeks to eliminate any form of foul play in the U.S. economy, including any slush fund being abused. You can do so by joining our independent and secure voting platform, where citizens thoroughly investigate potential cases of theft and author proposals. The community then votes on (1) whether we have actually been ripped off, and (2) if we have, by how much. That’s how we can hold the bad actors responsible, and government officials accountable.
We all stand to profit from an ethical and productive economy if we band together to democratically identify and outlaw rigged practices.
The public has spoken! See how much the rigged economy is ripping off from you.
Standard Disclaimer
The Zero Theft Movement does not have any interest in partisan politics/competition or attacking/defending one side. We seek to eradicate theft from the U.S economy. In other words, how the wealthy and powerful rig the system to steal money from us, the everyday citizen. We need to collectively fight against crony capitalism in order for us to all profit from an ethical economy.
Terms like ‘steal,’ ‘theft,’ and ‘crime’ will frequently appear throughout the article. Zero Theft will NOT adhere strictly to the legal definitions of these terms (since congress sells out). We have broadly and openly defined terms like ‘steal’ and ‘theft’ to refer to the rigged economy and other debated unethical acts that can cause citizens to lose out on money they deserve to keep.