In it’s most generic definition, “slush fund” is a metaphor referring to money set aside in reserve. The term, however, is most commonly applied to the more insidious endeavors of politicians and corporations, implying illegal means of gaining and using funds.
An example, provided by Wikipedia:
Where did this term come from?
It’s actually a very old nautical term, but it’s primary component “slush” was
first coined in 17th century England in reference to the substance produced when snow and ice begin to melt and produce an icy slurry. It’s why we call the flavoried ice drink “slushies” slushiess.
In the 18th century, nautical cooks borrowed the term to refer to the leftover fat or grease boiled off meats. William Thompson made it sound anything but appetising in The Royal Navy-men’s Advocate, 1757:
Tars whose Stomachs are not very squeamish, can bear to paddle their Fingers in stinking Slush.
As unappealing as it sounds, it was consider quite a perk for cooks and crew because it was sold off for pay when the ship reached its port. The men referred to this revenue as “the slush fund” and the term was born.
The author William McNally didn’t think favorably of this practice and covered it in Evils & Abuses in Naval & Merchant Service, 1839:
The sailors in the navy are allowed salt beef. From this provision, when cooked nearly all the fat boils off; this is carefully skimmed and put into empty beef or pork barrels, and sold, and the money so received is called the slush fund.
The first time “slush fund” was coined to refer to questionable use of funds in politics was in the USA in 1894. The Congressional Record printed this:
[Cleveland] was not elected in 1888 because of pious John Wanamaker and his $400,000 of campaign slush funds.