Could the Yoon verdict put the PPP on the street?

Former President Yoon Suk Yeol's ouster could carry consequences far beyond a prison sentence and leave the conservative People Power Party (PPP) on the hook for tens of billions of won.

On Monday, the Seoul Central District Court handed an 18-month prison sentence, suspended for three years, to Yoon for election law violations.  The sentence also invalidated his presidency. 

If higher courts finalize the ruling, the PPP could face a worst-case scenario — namely, being forced to return 39.7 billion won ($27 million), the state subsidy for the election campaign.

 The Public Official Election Act reimburses presidential candidates for their entire campaign costs if they win at least 15 percent of the vote.

After Yoon won the 2022 presidential election, the PPP received 39.76 billion won, including a 300 million won candidate deposit. If Monday's ruling against ex-President Yoon is finalized after the appeals process, the party might be on the hook for that total.

The party's finances, however, leave little room for such a hit. The PPP held total assets worth 131.5 billion won as of February, according to the JoongAng Ilbo’s findings on Sunday.

Most of those assets consisted of real estate, including land valued at 75.6 billion won, buildings worth 16 billion won and lease deposits totaling 27.3 billion won.

Although the party reported 11.6 billion won in cash and cash equivalents, little of that is available to cover a reimbursement because it is largely earmarked for fixed operating expenses such as labor costs, the PPP insiders say.

Spending records for the fourth quarter of last year show that the party had spent 14.2 billion won on personnel costs and organizational activities.

"It's already a struggle to pay staff and fund the party's regular political activities," a PPP official said.

Inside the party, many believe there is little choice beyond selling its headquarters in Yeouido, a political district in western Seoul.

"Other than selling the party headquarters, there is no obvious solution," an administrative official from the PPP said.

Yet the first-instance ruling does not immediately squeeze the party financially. 

"Repayment procedures would only begin after the Supreme Court issues a final ruling, so a first-instance conviction alone would not [force us to] put the party headquarters on the market," another party official said. "If we do end up having to repay the money, however, there are few alternatives besides disposing of real estate."

The PPP owned the Namjung Building in Yeouido after it purchased it for 48 billion won in July 2020.

The party has resorted to such measures before. In 2004, its predecessor, the Grand National Party, sold its 10-story headquarters in Yeouido to repay 82.3 billion won in illegal presidential campaign funds related to the 2002 presidential election.

It also surrendered its training center in Cheonan to the state. The property was valued at more than 100 billion won at the time.

Then-party leader Park Geun-hye even established a temporary party headquarters at outdoor tents in Yeouido as part of an effort to rebuild the conservative party's image.

Ironically, the issue once posed a similar threat to the ruling Democratic Party (DP).

In November 2024, then-DP leader Lee Jae Myung was sentenced to one year in prison, suspended for two years, at the first-instance ruling for an election law violation case.

The DP faced uncertainties about whether the party would have to return the 43.4 billion won it had received to cover Lee's 2022 presidential campaign expenses.

Proceedings were suspended after the Supreme Court overturned the lower court's ruling and remanded the case for retrial with the view that Lee was guilty in May last year and following Lee’s victory in a snap presidential election a month later.

If the case resumes and Lee's conviction becomes final with a fine of 1 million won or more, which would invalidate his election, the liberal party would be required to repay the 43.4 billion won.

At the time, the PPP aggressively attacked the DP by proposing legislation that would allow campaign reimbursements to be provisionally seized immediately after a first-instance guilty verdict.

"The bill intended to check Lee Jae Myung could end up backfiring on the PPP," a conservative party official said.

BY KIM GYU-TAE [[email protected]]