(a) Section 502(a) provides that persons who are not covered by
bonds as required by that section shall not be permitted to receive,
handle, disburse, or otherwise exercise custody or control of the funds
or other property of a labor organization or of a trust in which a labor
organization is interested. This prohibits personnel who are required to
be bonded, as explained in Sec. 453.8 from performing any of these acts
without being covered by the required bonds. In addition, this provision
makes it unlawful for any person with power to do so to delegate or
assign the duties of receiving, handling, disbursing, or otherwise
exercising custody or control of such funds or property to any person
who is not bonded in accordance with the provisions of section 502(a).
(b) The legislative history of the Act indicates, however, that it
was not the intent of Congress to make compliance with the bonding
requirements of section 502(a) a condition on the right of banks or
other financial institutions to serve as the depository of the funds of
labor organizations or trusts. Similarly, it appears that the provisions
of that section do not require the bonding of brokers or other
independent contractors who have contracted with labor organizations or
trusts for the performance of functions which are normally not carried
out by such labor organizations' or trusts' own officials or employees,
such as the buying of securities, the performance of other investment
functions, or the transportation of funds by armored truck. \12\
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\12\ See Sec. 453.6(b).
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