U.S. Department of Labor
Office of Labor-Management Standards
Honolulu Resident Investigator Office
300 Ala Moana Boulevard, Suite 5-121
Honolulu, HI 96850
(808) 541-2705 Fax: (808) 541-2719
May 27, 2011
Mr. Thaddeus Tomei, Business Rep./Financial Sec.
Elevator Constructors Local 126
707 Alakea Street, Room 105
Honolulu, HI 96813
Case Number:
LM Number: 037074
Dear Mr. Tomei:
This office has recently completed an audit of Elevator Constructors Local 126 under the
Compliance Audit Program (CAP) to determine your organization’s compliance with the
provisions of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). As
discussed during the exit interview with you, President Steve Tsunemoto, Vice President Marc
Yamane, Treasurer Gary Takahashi, and Office Manager Susan Horimoto on May 27, 2011, the
following problems were disclosed during the CAP. The matters listed below are not an
exhaustive list of all possible problem areas since the audit conducted was limited in scope.
Recordkeeping Violations
Title II of the LMRDA establishes certain reporting and recordkeeping requirements. Section
206 requires, among other things, that labor organizations maintain adequate records for at least
five years by which each receipt and disbursement of funds, as well as all account balances, can
be verified, explained, and clarified. As a general rule, labor organizations must maintain all
records used or received in the course of union business.
For disbursements, this includes not only original bills, invoices, receipts, vouchers, and
applicable resolutions, but also documentation showing the nature of the union business
requiring the disbursement, the goods or services received, and the identity of the recipient(s) of
the goods or services. In most instances, this documentation requirement can be satisfied with a
sufficiently descriptive expense receipt or invoice. If an expense receipt is not sufficiently
descriptive, a union officer or employee should write a note on it providing the additional
information. For money it receives, the labor organization must keep at least one record showing
the date, amount, purpose, and source of that money. The labor organization must also retain
bank records for all accounts.
The audit of Local 126’s records for the fiscal year ended June 30, 2010, revealed the following
recordkeeping violations:
Mr. Thaddeus Tomei
May 27, 2011
Page 2 of 4
1. General Reimbursed and Credit Card Expenses
Local 126 did not retain adequate documentation for reimbursed expenses and credit card
expenses incurred by then-Vice President totaling at least $3,113.80,
which includes four separate charges to United Airlines in August and September, 2009,
totaling $3,093.40.
As noted above, labor organizations must retain original receipts, bills, and vouchers for all
disbursements. The president and treasurer (or corresponding principal officers) of your
union, who are required to sign your union’s LM report, are responsible for properly
maintaining union records.
2. Meal Expenses
Local 126 records of meal expenses did not always include written explanations of union
business conducted or the names and titles of the persons incurring the restaurant charges.
For example, receipts for meals totaling $165.69 at Denny’s Kahului and at 3-Star Gourmet
Restaurant in November and December 2009, respectively, did not include such
information. Union records of meal expenses must include written explanations of the
union business conducted and the full names and titles of all persons who incurred the
restaurant charges. Also, the records retained must identify the names of the restaurants
where the officers or employees incurred meal expenses.
Based on your assurance that Local 126 will retain adequate documentation in the future, OLMS
will take no further enforcement action at this time regarding the above violations.
Reporting Violations
The audit disclosed a violation of LMRDA Section 201(b), which requires labor organizations
to file annual financial reports accurately disclosing their financial condition and operations.
The Labor Organization Annual Report Form LM-2 filed by Local 126 for the fiscal year ended
June 30, 2010, was deficient in the following areas:
1. Disbursements to Officers and Employees
Local 126 did not include several payments to or on behalf of officers totaling at least
$10,354.08 in Schedule 11 (All Officers and Disbursements to Officers). It appears that the
local erroneously reported these payments in Schedules 15 through 19.
The union must report in Column F of Schedules 11 and 12 (Disbursements for Official
Business) direct disbursements to officers and employees for reimbursement of expenses
they incurred while conducting union business. In addition, the union must report in
Column F of Schedules 11 and 12 indirect disbursements made to another party (such as a
credit card company) for business expenses union personnel incur. However, the union
must report in Schedules 15 through 19 indirect disbursements for business expenses union
Mr. Thaddeus Tomei
May 27, 2011
Page 3 of 4
personnel incur for transportation by public carrier (such as an airline) and for temporary
lodging expenses while traveling on union business. The union must report in Column G
(Other Disbursements) of Schedules 11 and 12 any direct or indirect disbursements to
union personnel for expenses not necessary for conducting union business.
2. Automobile Expenses
Local 126 did not include in the amounts reported in Schedule 11 (All Officers and
Disbursements to Officers) disbursements for the operation and maintenance of the union
automobile.
The LM-2 instructions provide two methods for reporting automobile-related expenses.
The union must report in Schedules 11 and 12 direct and indirect disbursements for the
operation and maintenance of union owned and leased vehicles and the operation and
maintenance of vehicles owned by union personnel (including gasoline, repairs, and
insurance). The union may divide the expenses and report them in Columns F and G based
on miles driven for union business (supported by mileage logs) compared with miles driven
for personal use.
Alternatively, rather than allocating the expenses between Columns F and G, if 50 percent
or more of an officer's or an employee's use of a vehicle was for official business, the union
may report all of the expenses relative to the vehicle assigned to the officer or employee in
Column F of Schedule 11 or 12 with an explanation in Item 69 (Additional Information)
that the officer or employee used the vehicle part of the time for personal business.
Similarly, if a vehicle assigned to an officer or employee was used less than 50 percent of
the time for business, all of the expenses relative to that vehicle may be reported in Column
G with an explanation in Item 69 that the officer or employee used the vehicle partly for
official business.
I am not requiring that Local 126 file an amended LM report for the fiscal year ended June 30,
2010, to correct the deficient items, but Local 126 has agreed to properly report the deficient
items on all future reports it files with OLMS.
I want to extend my personal appreciation to Elevator Constructors Local 126 for the cooperation
and courtesy extended during this compliance audit. I strongly recommend that you make sure
this letter and the compliance assistance materials provided to you are passed on to future
officers. If we can provide any additional assistance, please do not hesitate to call.
Sincerely,
Senior Investigator
Mr. Thaddeus Tomei
May 27, 2011
Page 4 of 4
cc: Mr. Steve Tsunemoto, President
Mr. Gary Takahashi, Treasurer