1. What You Need to Know About the LM-30
2007
INTERNATIONAL REPRESENTATIVES TRAINING NAPLES, FL
What You Need to Know About the LM-30
Laurence J. Cohen
IBEW General Counsel
Sherman, Dunn, Cohen, Leifer & Yellig, P.C.
900 7th St., N.W., Ste. 1000
Washington, D.C
(202)

2. The LM-30 has been in the news a great deal recently
The LM-30 has been in the news a great deal recently. What is it, why now, and what do you have to do?

3. The requirement of the LM-30 has been part of the law  the LMRDA  since 1959
LMRDA Section 202(a) requires every union officer and employee (other than those performing exclusively clerical or custodial services) to file with the Secretary of Labor each year a report detailing certain financial transactions, or financial interests, he or she may have had.
Largely unenforced since 1959  45 years  even during Reagan years.
Bush Administration seizes on it as a new way of making life difficult for unions and union officials.

4. 2005: DOL issued a Notice of Proposed Rulemaking
2005: DOL issued a Notice of Proposed Rulemaking. Required filing of LM-30s for 2005.
Due March 2006  90 days after individual’s tax year.
Unions gave advice and instructions to their officers and employees, and guidance to local unions.
President Hill did the same, and advised IBEW officers and employees to avoid the necessity of filing the LM-30 by not accepting anything of monetary value from the various categories of businesses, vendors and employers covered by the LM-30.

5. Difference between LM-30 and LM-10
The LM-30 is the obligation of individuals (officers and employees) to report covered financial transactions and items of monetary value received during the year.
LM-10 is employer form  different in one key respect. Requires reporting of payments both to union officials and to unions as such.

6. The original LM-30 Form
Covered officers and employees were required to file the LM-30 Report if they, or their spouses or minor children, engaged in any one of three types of transactions with employers. Broad definition of "employer"  means any entity that has employees.
Had any financial interest in or dealing with an employer whose employees the IBEW represents or is actively seeking to represent.
NOTE: Should have no transactions like these: they would violate Section 302 of Taft-Hartley Act.

7. The original LM-30 Form (cont.)
Has received money, or anything of value, from any business that deals with the IBEW or its trust funds.
Generally, vendors such as money managers, printers, insurance agents, law firms, etc.
Potential problem for those who are trustees, officers or employees of trust funds under ERISA or 28 U.S.C
Has received anything of value from employer not in first tow groups.
Reportable; not unlawful.

8. The original LM-30 Form (cont.)
Other Points
A key distinction is between financial items that are reportable and those that are unlawful.
Crucial point: report anything received that has any monetary value: meals, golf fees, sporting events, etc.
$25.00 de minimis items (later changed to $250.00). Not reportable if items received don’t exceed $ from an employer during year.

9. Final Rule Issued July 2, 2007 Covers calendar year 2008.
Start recordkeeping January 1, 2008.
2008 form due March 31, 2009.

10. Final Rule Issued July 2, 2007
Major Changes From Proposed Rule to Final Rule
Employees who receive lost-time pay from their employer, under union-leave and no-docking provisions in CBAs (e.g., union stewards) must now file LM-30 Form.
Exception for those who spend no more than 250 hours of employer paid time on union business in year.
New Rule may sweep tens of thousands of stewards into Form's coverage.
Seems of questionable legality.

11. Final Rule Issued July 2, 2007
Major Changes From Proposed Rule to Final Rule
Union officers and employees must now report any personal transactions with any financial institution that does any business with union, a union benefit fund or with employers of union members.
Old rule covered only financial transactions that raised conflict of interest issues for union officials.
Officer or employee must report any mortgage payment, loan, credit card bill, etc., even if obtained in arm's-length transaction from bank, like any other customer.
LM-30s, with all these details, will be posted on DOL website.

12. Final Rule Issued July 2, 2007
Major Changes From Proposed Rule to Final Rule
For first time, payments such as expense reimbursements that union officer receives for serving as benefit fund trustee must be reported.
New reporting requirement by officers of expense reimbursements for serving on board of charity that union supports.
Reporting by officers of fees for serving as union representative on corporate board of directors.

13. Final Rule Issued July 2, 2007
Major Changes From Proposed Rule to Final Rule
"Downstream" reporting for national union officers.
National officers must report any financial dealings they have with any employer that does business with any of the union's local unions.
Expected to know which bank, investment advisor, etc., with whom the officer deals also deals with any of the hundreds of local unions.
New form is much longer and more complicated than previous form.

14. Final Rule Issued July 2, 2007 Few good points about Final Rule
DOL retains $ de minimis exemption.
Don't have to report payments or gifts not exceeding $ from any one source during reporting year.
Payments or gifts not exceeding $20.00 during year need not be counted to determine if $ threshold is met.
"Widely attended gatherings" exemption.
No report due if officer or employee attends one or two gatherings, for which employer has spent $ or less per attendee per gathering.
Problem is: gathering isn't "widely attended" unless attendees include both union officials and "substantial number" of people with no relationship to a union or its trust funds.

15. Efforts To Counter Or Modify Final Rule
Some Discussions Going on With DOL, Seeking Modification re Stewards and Personal Financial Transactions
If discussions not successful, two alternatives:
Possible rider to DOL appropriations to forbid spending any money to enforce New Rule.
Likely AFL-CIO lawsuit re stewards and personal financial transactions.
We'll assess situation near end of year and provide further guidance.