KICKBACKS

Kickbacks are another example of the type of corruption that the citizens of New Orleans had to endure from some of its elected officials and businessmen who are cronies of those elected officials.


A kickback is an official's share of misappropriated funds allocated from his or her organization to an organization involved in corrupt bidding. For example, suppose that a politician is in charge of choosing how to spend some public funds. He can give a contract to a company that isn't the best bidder, or allocate more than they deserve. In this case, the company benefits, and in exchange for betraying the public, the official receives a kickback payment, which is a portion of the sum the company received.

This sum itself may be all or a portion of the difference between the actual (inflated) payment to the company and the (lower) market-based price that would have been paid had the bidding been competitive. Kickbacks are not limited to government officials; any situation in which people are entrusted to spend funds that do not belong to them is susceptible to this kind of corruption.