World Library  
Flag as Inappropriate
Email this Article

Kickback (bribery)

Article Id: WHEBN0035545035
Reproduction Date:

Title: Kickback (bribery)  
Author: World Heritage Encyclopedia
Language: English
Subject: Bribery, Political corruption, Secret rebate, AWB oil-for-wheat scandal, Commercial bribery
Publisher: World Heritage Encyclopedia

Kickback (bribery)

A kickback is a form of negotiated bribery in which a commission is paid to the bribe-taker as a quid pro quo for services rendered. Generally speaking, the remuneration (money, goods, or services handed over) is negotiated ahead of time. The kickback varies from other kinds of bribes in that there is implied collusion between agents of the two parties, rather than one party extorting the bribe from the other.[1] The purpose of the kickback is usually to encourage the other party to cooperate in the illegal scheme.[2]

The term "kickback" comes from colloquial English language, and describes the way a recipient of illegal gain "kicks back" a portion of it to another person for that persons's assistance in obtaining it.[3]

Types and methods

The most common form of kickback involves a vendor submitting a fraudulent or inflated invoice (often for goods or services which were not needed, of inferior quality, or both), with an employee of the victim company assisting in securing payment. For his or her assistance in securing payment, the individual receives some sort of payment (cash, goods, services) or favor (the hiring of a relative, employment, etc.).[4]

"Kickback brokers" are individuals who may not receive the kickback personally, but who help link the individual or company providing the goods or services with individuals capable of assisting with the illegal payments. For helping to link the two colluding parties, either or both parties may make a payment to this "broker".[5]

In government

Kickbacks are one of the most common forms of government corruption.[3] In some cases, the kickback takes the form of a "cut of the action," and can be so well known as to be common knowledge—and even become part of a nation's culture. For example, in Indonesia, President Suharto was publicly known as "Mr. Twenty-Five Percent" because he required that all major contracts throughout the nation provide him with 25 percent of the income before he would approve the contract. And, in Pakistan, President Asif Ali Zardari was publicly known as "Mr. Ten Percent" for the same reason, which later became hundred percent. After coming into the government, he started taking 100% of all major contract investments before he would approve the contract.[1] However, kickbacks differ from other forms of corruption, such as diversion of assets, as in embezzlement, because of the collusion between two parties.[2]

Kickback schemes can be pervasive. For example, in the United States, companies providing medical services to Medicare patients were paying doctors to send patients to them, whether the patient needed the treatment, diagnosis, or test or not. In 1987, the United States Congress passed the stringent Anti-Kickback Act to prevent such schemes.[6]

See also


  1. ^ a b Wrage, Alexandra Addison. Bribery and Extortion: Undermining Business, Governments, and Security. Westport, Conn.: Praeger Security International, 2007. p. 14.
  2. ^ a b Kranacher, Riley, and Wells, p. 387.
  3. ^ a b Campos, p. 299.
  4. ^ Albrecht, Albrecht, Albrecht, and Zimbelman, p. 517.
  5. ^ Campos, p. 299-300.
  6. ^ Buchbinder and Shanks, p. 365.


  • Albrecht, W. Steve; Albrecht, Conan C.; Albrecht, Chad O.; and Zimbelman, Mark F. Fraud Examination. Mason, Ohio: Cengage Learning, 2012.
  • Buchbinder, Sharon B. and Shanks, Nancy H. Introduction to Health Care Management. Boston: Jones & Bartlett, 2007.
  • Campos, Jose Edgardo. The Many Faces of Corruption: Tracking Vulnerabilities at the Sector Level. Washington, D.C.: World Bank, 2007.
  • Kranacher, Mary-Jo; Riley, Richard; and Wells, Joseph T. Forensic Accounting and Fraud Examination. Hoboken, N.J.: Wiley, 2010.
This article was sourced from Creative Commons Attribution-ShareAlike License; additional terms may apply. World Heritage Encyclopedia content is assembled from numerous content providers, Open Access Publishing, and in compliance with The Fair Access to Science and Technology Research Act (FASTR), Wikimedia Foundation, Inc., Public Library of Science, The Encyclopedia of Life, Open Book Publishers (OBP), PubMed, U.S. National Library of Medicine, National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (NIH), U.S. Department of Health & Human Services, and, which sources content from all federal, state, local, tribal, and territorial government publication portals (.gov, .mil, .edu). Funding for and content contributors is made possible from the U.S. Congress, E-Government Act of 2002.
Crowd sourced content that is contributed to World Heritage Encyclopedia is peer reviewed and edited by our editorial staff to ensure quality scholarly research articles.
By using this site, you agree to the Terms of Use and Privacy Policy. World Heritage Encyclopedia™ is a registered trademark of the World Public Library Association, a non-profit organization.

Copyright © World Library Foundation. All rights reserved. eBooks from World Library are sponsored by the World Library Foundation,
a 501c(4) Member's Support Non-Profit Organization, and is NOT affiliated with any governmental agency or department.