Slush fund was originally a naval slang term; the slush referred to the fat or grease that was obtained by boiling meat, the sale of which could then be used to provide the crew with special luxuries. The so-called 'slush-fund' was the fund that the money obtained from this sale was placed into.
This, colloquially, has come to mean an auxiliary or reserve fund into which money may be put. However, it especially has meaning within a context of corrupt (including but not limited to) political dealings - this could be for example by governments or other bodies/individuals. These funds can have a particular elements of illegality, illegitimacy, or secrecy about them with regards to the use of this money; as well as the details of, or nature surrounding, the means that acquired it.
As such, political dealings with slush funds, tend to bring suspicions of quid pro quo (buying political favors), and tend to be viewed on the surface as corrupt and subversive of the democratic process. Richard Nixon for example was involved in a scandal in 1952 that concerned what was called a "slush fund", for which he apologized on television, and was popularly acquitted.
