Did CTU officers and staff violate union rules -- and the union's budget resolution -- by spending ALL of the $1.4 million allocated for various activities on the Chuy campaign 'loan'?...

In what can only be described as equivocation, Chicago Teachers Union Vice President Jesse Sharkey, at the April 2018 meeting of the union's House of Delegates, tried to dodge a specific question about the spending of union funds on the last mayoral election -- and the candidacy of Chuy Garcia. Rumors have been swirling that a faction of the union's elected leadership and staff have been spending union dollars on political campaigns in violation of union traditions which require full disclosure to the House of Delegates and members. In answer to a delegate's question, Sharkey reportedly told the House of Delegates that the union had "loaned" $1.4 million (or so) to the Chuy campaign. When the question was pursued, Sharkey reportedly answered that the "loan" was being repaid at the rate of $100,000 per year.

But a search of union records shows nothing about a massive million dollar plus "loan" to the Garcia campaign. What can be shown from the union's records is that the House of Delegates voted to allocate $1.4 million -- one third of which was for political campaigns.

Members who were arriving to the April 2018 HOD meeting were puzzled, many asking (and later asking Substance) when and how the union had approved such a massive "loan" to the Garcia campaign. Many have also been asking when the terms of that loan's repayment had been disclosed to the delegates and members by the leadership supposedly committed to maximum "transparency."

The questions grow as the union now faces claims that there is a "budget crisis" at CTU because of the drop in membership. The same leadership faction that apparently gave away the $1.4 million to the Garcia campaign now seems to be trying to prepare the membership for cuts in staff services from the union's offices (and perhaps claims that staff salaries need to be cut as well).Historically, the union's leadership has presented its proposed budget to the House of Delegates in May and the delegates are supposed to debate and vote on the budget at their June meeting. The union's fiscal year begins July 1.

Even though it is difficult for members to get a full report on every meeting of the HOD (let alone on the meetings of the Executive Board and committees), an examination of the union's records shows that the union DID NOT approve the $1.4 million loan to the Chuy Garcia mayoral campaign against Rahm Emanuel.

What really happened was the the union's delegates approved a supplemental budget allocation of $1.4 million which was supposed to be spent in three equal parts, only one of which was "political action" of the kind that would be like the massive loan to the Garcia campaign.

The text of the resolution is here. The union's leadership and staff have yet to explain when and how they changed the decision, or to reveal how the terms of the "locan" allow Garcia's campaign to repay the "loan" (and at what interest) until what appears to be 2030 or so.


WHEREAS, in April of 2014 the Director of Financial Operations of the Chicago Teachers Union presented to the Executive Board of the CTU, and in June of 2014, the House of Delegates adopted, a total budget of $29.1 million dollars; and

WHEREAS, this budget was in keeping with the prudent budget practices the leadership has adopted since coming to office—in that time we have brought in $4.9 million more than we have spent resulting in an $8.8 million financial reserve; and

WHEREAS, in assessing the political and contractual challenges that our union faces the leadership believes that it will be necessary to set aside an additional fund of $1.4 million, to be spent in roughly equal parts on political campaigns, our contract campaign, and communicating our issues on education, pensions, and schools to the public; and

WHEREAS, the Constitution and By-Laws of the CTU gives the power to adopt a budget to the HOD—Article VI, Section 2(g):

The Executive Board shall submit the proposed budget, together with its recommendations, to the May meeting of the House of Delegates. No budget shall be in force until it has been passed by the House; and

WHEREAS, the Constitution and By-Laws of the CTU gives the power to adopt urgent and unforseen spending to the Executive Board—Article VI, Section (h)

The union budget shall provide a contingent fund for the Executive Board to meet emergency expenses in Union service; and WHEREAS, the Constitution and By-Laws of the CTU specify that such actions of the Executive Board be reported to the House of Delegates, the officers and Executive Board nevertheless thought it important to seek approval from the House of Delegates for such a large expenditure; and

WHEREAS, the further reasons for additional political spending include our assessment that this moment includes more potential and peril alike than any time in recent memory because the current mayor and his backers in city council have carried out an aggressive policy of school cuts, staff reductions, charter expansion, and pension attacks despite widespread protest and opposition to their policies, which in turn has created record low poll numbers, and the entry of many CTU members and movement allies into the electoral arena; and

WHEREAS, the prospect of electing CTU champions heartens us, but the prospect of an emboldened mayor with a rubber-stamp city council and an anti-union governor demoralizes us just as we head into contract negotiations; and WHEREAS, the further reasons the leadership proposes to spend additional monies on our upcoming contract fight flow from the need to create unity and excitement on the level of our last contract fight, despite political obstacles and internal stress in our buildings; and

WHEREAS, the further reasons to spend money on communications to our members, networks of supporters and the public reflect the fact that the CTU has emerged as a trusted voice for educational issues, and promoting our viewpoint will pay dividends with both public opinion and with confidence of our own membership; therefore be it RESOLVED, that the CTU increase it 2015 budget by $1.4 million, to be paid for out of reserves and with the explicit understanding that all of the CTU budgetary safeguards and procedures remain in effect, and that monies not spent be returned to the CTU’s treasury.

An increasing number of CTU members are demanding answers from the union's elected and appointed leaders about how the union has been spending union dollars, from the union's own budget and Political Action funds, and via the "CTU Foundation" (which is run by the union's officers but has refused to disclose its budgets to the HOD or the members.

A looming danger to the union if the problems that might arise with these maneuvers turn out to be true is that with the adoption of the move to include charter school teachers in the CTU, the union is now for the first time required by federal law to file the "LM2" reports annually. These reports, which carry heavy federal penalties for fraud and even mistake, have long been required from virtually all other locals of the American Federation of Teachers, but for technical reasons have not been filed by the Chicago Teachers Union.


April 24, 2018 at 4:19 AM

By: George N. Schmidt

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