Legal Definitions - kickbacks

A kickback is a type of corruption where a person in power or influence misappropriates funds to enrich themselves or another individual, organization, or company. This is often done through a corrupt bidding scheme where the official awards a contract to a company that did not place the lowest bid. The company profits from the contract and pays the official a portion of the profits as a kickback.

Kickbacks are considered anti-competitive practices and can be traced back to organized crime. Some people also consider kickbacks to be a form of bribery.

• An official awards a construction contract to a company that did not place the lowest bid. The company profits from the contract and pays the official a portion of the profits as a kickback.
• A government official awards a contract to a company owned by their friend or family member, even though the company is not the most qualified or experienced for the job. The company profits from the contract and pays the official a portion of the profits as a kickback.

These examples illustrate how kickbacks can occur through corrupt bidding schemes and can result in a company profiting from a contract they may not have deserved. The official in power benefits from the kickback, which is a form of corruption.