UPDATE: Ms. Sweet has responded to questions of filing UI claims while still earning money with what is a reasonable explanation. She was laid-off from her job at Group Health shortly before she would have been allowed to collect full retirement benefits and the company she co-owns with her husband, The Grape Choice, was, like many companies this past year, unprofitable. In 2007 it made some profit and the two chose to go without paying themselves instead putting their workers first.
I applaud Sweet and Springer for putting their employees first and am pleased that she took the time to respond to the allegations. I have not been following her opponent in the race so don't have a recommendation as to who to vote for but it seems that Sweet acted honorably in this case and she, at the very least, seems to be a good civic leader, putting together events like Celebrate Kirkland. My apologies to her for any damage these allegations may have caused.
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A very thorough article over on the public blog about Kirkland City Council Candidate Penny Sweet. It seems to be well researched and documented. Of course, as the public blogger points out, there may be a perfectly reasonable explanation for the fact that Sweet collected between $4000 and $19,999 in unemployment benefits and the fact that she owns, along with her husband, State Representative Larry Springer, the Grape Choice Wine Shop in Kirkland (good place, btw) and appears to be a revered civic leader. And if there is I'm sure the citizens of Kirkland would love to know what it is.
Then there is what you are asking about, the Grape Choice. From all reports on the business and campaign websites and other campaign press, in addition to owning it she also works there. As the owner, she has to report the net earnings to UI whether she works there or not and whether or not she takes money out as wages. Her F-1 lists Code E on the supplement which is $100K or more.
If the business was losing money, then she had to have been applying for at least 3 jobs a week each week that she received benefits.
She has to meet all 3 of these tests.
If you can retire from your job and have your own business and not look for another job and get a weekly check from the state, then please sign me up for this program.
Posted by: Pat_M on September 24, 2009 06:38 PMIn order to collect UI, you have to file a claim. The Employment Security Department checks with your former employer to determine the circumstances of your termination. If it wasn't for one of the covered reasons, you don't collect benefits -- it's as simple as that. There's nothing inconsistent with deciding to retire after being fired or laid off.
You also don't seem to understand how corporations work vs. sole proprietorships. As an owner of a separately incorporated business, Sweet may or may not perform actions in support of that business. Profits collected by the business as a separate legal entity don't disqualify Sweet from UI unless they are paid to her as wages or other compensation for her labor. Profits may be retained by the corporation or they may be paid to shareholders as dividends -- this won't disqualify her any more than earning capital gains or dividends from GE stock would.
Her F-1 statement doesn't say she earned or otherwise took more than $100k from her business -- it says she has an ownership stake in a business worth more than $100K. Again, this no more disqualifies her from receiving UI than owning more than $100K worth of GE stock.
BTW, how do you know she was not looking for a job while collecting unemployment? Someone with her connections could easily make the required three contacts per week.
Were you the author of the Public Blog piece?
Posted by: scottd on September 24, 2009 07:16 PMThat being said, the question of how much of Grape Choice is owned by Sweet, and how much income the business earns is not relevant. The issue would be whether Sweet was working in the business, and whether an income would be attributed to her actual work.
By the way, you can still work and make money, and be eligible for UI. Your UI check is reduced by 75% of how much you earned during the reporting week. Sweet had a great job, so she was probably getting the maximum unemployment benefit. Even if she had actually worked part-time in the family business, I doubt that it would have reduced her UI check to anything near zero.
That being said, Mark Griswold has certainly put a great deal of effort into his research. It remains to be seen whether he will hit his target this time ...
Posted by: Richard Pope on September 25, 2009 12:07 AMHis "research" consisted of reading an anonymous hit piece on the Public Blog and promoting it on the main page without doing anything to corroborate the speculation presented there. Pretty typical of this site around election season.
Posted by: scottd on September 25, 2009 05:29 AMWhy not have some balls and actually call her and ask for her "perfectly reasonable explanation?" No, it's easier to be a coward and post this weak garbage.
You don't pay self employment taxes on a C corp or rental income. UI fraud comes into play when you own a business and lay yourself off OR if you own a side business and get laid off from some other business and collect UI while you still have a significant income from your side business AND you don't report that income up front when filing for UI.
As this business is either a sole proprietorship, LLC and/or S-corp, the business either runs at a loss or a profit.
If it runs at a loss and you don't list yourself as an employeee, there isn't a conflict with collecting unemployment insurance. A good litmus test is whether you have to pay SE taxes with the IRS.
If it runs at a profit- you totally have to pay SE taxes on your "take" in which case it will be scrutinized and impact your elligibility for collecting unemployment insurance if you are laid off from some other company or you lay yourself off as an employee of your own company. At best you would get a lower UI payout because you are underemployed.
Most self employed people don't pay state UI tax on themselves and can't collect UI if they run out of work. Although they do pay federal- it's a pain to collect and equates to extortion on the self employed...that's another story.
Rentals and dividend income are a different story and less in conflict with collecting UI; a- there is no SE tax (a beautiful motivation for people who want to be wealthy and pay less to the federal government) and b- not many people are earning 100k a year from rental income and dividends and then filing UI.
Posted by: Andy on September 25, 2009 10:03 AMI am responding to a blog by someone not willing to identify him or herself and who went to extraordinary lengths to hide their identity by setting up an anonymous user name and password and working from a public computer at Kinkos.
In early 2007, in a restructuring process at Group Health, my position along with many others was eliminated. This is a business process used in many large companies. I took the opportunity for severance after 31 years with the organization, withdrew my retirement funds and reinvested them. On April 27, 2007 the organization threw me a retirement party. If the reorganization had not happened, I would have had a full retirement just a few years later.
I have collected unemployment benefits while searching for work. I have spent a significant amount of time and submitted hundreds of applications looking for the right job as per all of the state�s requirements. I filed for unemployment and my former employer verified my eligibility status with the state. This is all documented and submitted to the state.
In April 2009 I had surgery and ceased my job search and submissions for unemployment.
I am still entitled to benefits under Washington State law; but since I am running for elected office, I have not resumed any claims although I have continued to pursue job leads.
Larry Springer and I both own The Grape Choice and have for 25 years. I have never received any salary for my work in the business. It has been Larry's source of income in the past. In recent years he has often forgone a salary in order to assure that our employees are paid. Being a state representative takes him away for so much time that our employees are NOT optional. Their salaries come first.
In response to the F-1 form filed with the Public Disclosure Commission, the assumption that listing the business as $100,000 of income is patently false. That number refers to the value of the business, including such things as inventory, fixtures and equipment and does not correspond with income generated. In terms of how is business? In 2007 we did make a profit however; it seldom generated a salary for Larry but paid our 3 employees instead. Like many other businesses, The Grape Choice was not profitable in 2008.
I'm not sure what implication the blogger is trying to make with regard to Celebrate Kirkland. The city has always, until this year, provided the bulk of support through the grant funding process for our 4th of July Celebration. My work has been to find the funds to pay for the rest of it. That has been a challenge over the years. Fortunately we have citizens and businesses who year after year are willing to help.
Regarding the city sponsorship of the Uncorked wine event, the allegation is that the city paid for an event that provided our business with "financial benefits from a dominant sales presence." In fact The Grape Choice paid a sizable sponsorship fee to be part of the event and monies raised at the "wine store" within the wine garden went directly to the event. The city, through the LTAC (Lodging Tax Advisory Committee) committed $15,000 in tourism dollars to support advertizing of the whole event.
One last comment. I realize that during a campaign many allegations and accusations will surface. However, to suggest that my husband, State Representative Larry Springer, may have played a role in my receiving unemployment benefits is ridiculous and feels like cheap campaign rhetoric. I am running for Kirkland City Council because I am committed to my community and its future. I think I have demonstrated that over the last 25 years. End of Story.
The bureaucrats at Employment Security department do not care if people are supposed to look for jobs and lie about their attempts to find jobs, they do not care about reasons for asking for benefits or how much income the unemployed are receiving from other sources.
Also, last year, owner of companies had to notify Employment Security that they not be automatically included in reporting and paying for UI for themselves. If the department was not informed, this year in Janauary owner incomes would be subject to UI tax.
Posted by: tollen on September 25, 2009 11:38 AMJust for future reference, could you give us a few pointers on your moderation policy?
Obviously, commenting on your credibility or research skills is a no-no. Anything else?
Posted by: scottd on September 25, 2009 01:53 PMI, on the other hand, swim with that slime daily. I prefer the backstroke.
And here's what I've learned in my three years publishing The Eastside Sun...
1) All these attacks are anonymous - having the courage to put their names to a post is not an asset these folks admire.
2) The candidate seldom does their own dirty work. They send emmisaries and henchmen to post, spout unsubstantiated claims and author hit pieces.
3) Facts are irrelevant.
4) Politics of Personal Destruction is simply collateral damage.
There is very little as sleezy as this style of politics. I mean, there's no Grab and Go Coffee stands down here.
Posted by: John Gilday on September 25, 2009 05:32 PMJust a moment, John -- it wasn't a "hit piece". Mark researched it himself...