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UNITED STATES v. BUDZANOSKI

February 18, 1971

United States of America, Plaintiff
v.
Michael Budzanoski et al., Defendants


Weber, District Judge


The opinion of the court was delivered by: WEBER

Defendants are charged in Counts II and III with causing two false expense vouchers to be submitted in March 1969 to their labor organization, and in Count IV of causing a false entry to be made in the books, records and reports of the organization by filing a false monthly financial report from the district union to its international union in violation of 29 U.S.C. ยง 439(c).

 Defendants move to dismiss these counts of the indictment on the grounds that even if such records, entries or reports were false, they do not constitute a violation of Sec. 209 of the LMRDA because the particular records, entries or reports were not those required by Sec. 201(b) of the Act.

 This section requires the filing of an annual financial report, and the report for the year in which the entries were made had not yet been prepared.

 Sec. 206 of the Act requires that records on the matters to be reported shall be maintained for a period of not less than five years after the filing of the required reports, which will provide in sufficient detail the necessary basic information and data from which the reports may be verified.

 Defendants argue that no specific system of bookkeeping is required of the labor organization, and that therefore the only thing required of the persons required to file reports is that they maintain some supporting information for five years after filing the annual report. As a corollary to this argument Defendants assert that any additional records which the union chooses to maintain to record their internal financial transactions or financial status from time to time during the course of the year are not subject to the provisions of the Act.

 Defendants also contend that because their financial records were seized several months before the annual report for 1969 was due to be filed, none of the seized records can be considered as books or records required to be kept to substantiate the annual report for 1969. This assumes that these documents do not become the substantiating record or data until the report is filed and that the person required to report is free to charge, alter, correct or reconstruct any of this data up until the date the report is prepared and filed.

 Defendant argues that Sec. 206 only requires records to be kept for a period of five years after the filing of the annual reports on the transactions which they represent. From this Defendants come to the conclusion that there is no requirement that any documents be kept from the date of the transactions they represent. Defendants also reach the conclusion that there is no requirement that the Defendants keep or record any vouchers until the annual report is filed and that therefore any such vouchers made, even if false, were not documents required by Sec. 206 of the LMRDA and therefore cannot constitute an offense under Sec. 209.

 We cannot accept this sophistry. Sec. 206 specifically requires:

 
1. that records be maintained on the items required to be reported,
 
and
 
2. this shall include vouchers and receipts.

 We cannot come to any other conclusion but that persons required to report shall maintain contemporaneous records. This is one of the common definitions of the word "record" used as a noun:

 
"An official contemporaneous document recording the acts of some public body ...

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