Kickbacks


		1915

		“WHENCE comest thou, Gehazi,
		    So reverend to behold,
		In scarlet and in ermines
		    And chain of England’s gold?”
		“From following after Naaman
		    To tell him all is well,
		Whereby my zeal hath made me
		    A Judge in Israel.”

		Well done, well done, Gehazi!
		    Stretch forth thy ready hand,
		Thou barely ‘scaped from judgment,
		    Take oath to judge the land
		Unswayed by gift of money
		    Or privy bribe, more base,
		Of knowledge which is profit
		    In any market-place.

		Search out and probe, Gehazi,
		    As thou of all canst try,
		The truthful, well-weighed answer
		    That tells the blacker lie—
		The loud, uneasy virtue
		    The anger feigned at will,
		To overbear a witness
		    And make the Court keep still.

		Take order now, Gehazi,
		    That no man talk aside
		In secret with his judges
		    The while his case is tried		.
		Lest he should show them—reason
		    To keep a matter hid,
		And subtly lead the questions
		    Away from what he did.

		Thou mirror of uprightness,
		    What ails thee at thy vows?
		What means the risen whiteness
		    Of the skin between thy brows?
		The boils that shine and burrow,
		    The sores that slough and bleed—
		The leprosy of Naaman
		    On thee and all thy seed?
		        Stand up, stand up, Gehazi,
		            Draw close thy robe and go,
		        Gehazi, Judge in Israel,
		            A leper white as snow!1

This “hysterically vehement”2 diatribe, Rudyard Kipling’s reaction to the Marconi scandal, has been called by Lord Blake “one of the greatest of hate poems in the English language”; it is a peerless expression of the visceral revulsion we Westerners feel for political or financial corruption. [For an excellent and comprehensive analysis of the poem and its historical and political context, including the question of whether it is anti-semitic, see Julian Moore, Gehazi]

From the great to the little; a friend once related to me that he asked a manager of a local branch of a national supermarket chain why the store’s kosher section didn’t carry a certain product. The manager replied that he demanded a ‘commission’ from suppliers to stock their products, and the supplier of this particular item hadn’t cooperated …

While I am instinctively appalled at the solicitation or receipt of kickbacks by someone acting as a business or governmental agent, precisely defining a Halachic objection to these practices is a non-trivial task. While there is to my knowledge no fundamental discussion of kickbacks in the Shulhan Aruch, the following potential problems come to mind:

  • If the agent is swayed by his conflict of interest to dispose of his principal’s resources (property or money) in violation of his explicit or implicit instructions, he may thereby be a mazik or gazlan
  • The mere act of soliciting or accepting a kickback may constitute such a grievous breach of the trust reposed in him that any arrangement between him and his principal is void, and he may therefore forfeit part or all of any remuneration to which he might have otherwise been entitled
  • The principal may be entitled to receive at least a portion of the kickback itself3

Note that the above points yield three very different claims against the agent; the first creates a potential liability for the value of any of the principal’s property which the agent may have improperly disposed of, the second suggests a forfeiture of part or all of the agent’s compensation, and the third involves a claim of the principal to the kickback itself.

I remain unsatisfied, since nothing in the above implies a flat, unequivocal prohibition against soliciting or accepting kickbacks.

Here’s a remarkable responsum of Rav Malkiel Tannenbaum discussing, inter alia, kickbacks. The brazenness of the disputants (Rabbonim!), to whom the slightest inkling of the impropriety of their transaction doesn’t seem to have occurred, is astounding4:

על דבר רב אחד שמכר חזקת רבנותו לאחר באשר רצה ליסע [לארץ הקודש] והושוה שש מאות רו”כ ולבד זה ישלח לו חמשים רו”כ בכל שנה ממעות ארץ ישראל באשר אבי הקונה הוא גבאי על מעות ארץ ישראל מאיזה כולל … אולם עתה אין אשתו רוצה ליסע לארץ הקודש … ולזה המוכר רוצה לחזור בו ממכירתו והקונה אומר שיחזיק ברבנות שם שלא ברצון המוכר כי כיון שקנה אין בזה השגת גבול …

ועוד יש לדון במה שהתחייב לתת חמשים רו”כ בכל שנה ממעות איזה כולל שחותנו ממונה עליו ולפי הנראה הוא גזל גמור ואין לו רשות לתת מעות הכולל להרב המוכר בעד חזקת רבנותו ובודאי שאין בתנאי זה ממש דהרי גם להמוכר אסור לקבל כסף זה … ואף שהמתנדבים נותנים על דעת הממונה שיחלקם למי שירצה מכל מקום אסור לו לתת הכסף בעד החזקה שקנה חתנו ואף אם דעתו שראוי לתת סכום זה להרב מכל מקום הרי הוא נוגע בדבר ואסור לו לדון בזה לבדו וכידוע דגבאי צדקה הם כדיינים שקבלום עליהם הציבור

Rav Tannenbaum’s first point is basically my first point above, that improper disposition of the principal’s resources is gezeilah. I don’t know whether his second point, that officials in charge of charity have the status of judges and are consequently subject to a requirement of impartiality, is applicable to an ordinary business agent.

  1. Rudyard Kipling, Gehazi []
  2. Julian Moore’s words in the paper cited below []
  3. see Shulhan Aruch Hoshen Mishpat 183:6-7; a detailed discussion of this sugya is beyond the scope of this post []
  4. שו”ת דברי מלכיאל חלק ה’ סימן רי”ב []
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One Response to Kickbacks

  1. Interesting but I would question whether the manager would admit, even to a friend, that he is receiving (demanding!) kickbacks. There is a normal business arrangements with large chains that one has to “buy” the space for a product upfront. Usually it involves the markdown of the product that is in the space that one’s product is replacing. It however takes on other forms too such as “commission”and the money goes to the company not the manager or employee.

    But it is interesting that the issue of kickback is not mentioned in halacha. It must have been common in Poland and generally Europe where the Jew was the manager of the landlord and had connections which gave him reason to demand kickbacks for favors especially in the commercial arena. It would be an interesting historical study.

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