Election subsidies fattening party bellies

The state provides funding to political parties and election candidates from tax coffers to enable them to engage in political activities without taking illicit funding. The subsidy has helped end the unfortunate past of frequent election funding illegalities after every major election.

The JoongAng Ilbo discovered how the two mainstream parties Democratic Party (DP) and People Power Party (PPP) abused the system to build wealth. The two parties drew bank loans worth 80 percent of the property value to each purchase 10-floor buildings in Yeouido. The DP bought its headquarters building at 19.3 billion won ($14.7 million) in September 2016 and the PPP its building at 48 billion won in July 2020. Now, the buildings are each valued at 31.7 billion won and 51.5 billion won.

What’s more wondrous are their loan repayments. DP repaid 12.2 billion won of the principal in just five years while the PPP reduced 41 billion won worth loan to 25 billion won in just two years.

Income of political parties mainly comes from the state, as donations cannot be that big. The government provides subsidies for general operation of the parties and extra before and after a nationwide election. The dual payment — before and after election — can add huge riches to a major party.

For instance, the PPP received 5 billion won for election expense in the 2018 local elections and the DP about 7 billion won. Both parties got about 4 billion won during the 2020 parliamentary elections. The sum ballooned during the presidential election. The DP received 22.5 billion won before the March 9 presidential election this year and another 43.2 billion won after the election. The DP’s account that had been in 7.9 billion won in deficit before the presidential election expanded to 44.1 billion won after pocketing another 24.7 billion won for the June 1 local elections. The PPP’s income also stretched by nearly 20 billion won after receiving 19.4 billion won before the presidential election and 39.4 billion won afterwards.

The mostly bickering parties both have stayed muted about the election compensations. The National Election Commission (NEC) in 2013 suggested a scrapping of the compensation after an election, as it is a dual subsidy. The NEC made a similar proposal last year, but the two parties ignored it. Instead, they added a provision to compensate a political party when it recruits young candidates for elections. Political reform starts with correcting such excess privileges first.