How Chicago Teachers Union Inc. spends its money

Members of the Chicago Teachers Union and SEIU Local 73 rallying on South Michigan Avenue during the teachers’ two-week strike last fall.

As it geared up for a two-week strike last fall, the Chicago Teachers Union spent nearly $1.5 million from the dues it collects from members on lobbying and other political activity, a Chicago Sun-Times examination of the clout-heavy union’s finances has found.

That was over the 15-month period between March 2018 and July 2019.

The money was on top of $1.2 million that the CTU’s two political action committees gave union-friendly candidates and political organizations.

And a union foundation has cut back sharply on the money it gave to charities and like-minded groups — to $1 million in 2018 from $1.9 million the previous two years.

That’s according to the Sun-Times’ review of tax and campaign-finance filings as well as documents the union for the first time is required to file with the U.S. Department of Labor. Those offer a more detailed picture than previously has been available to show how the 24,000-member labor group spends its substantial wealth.

The requirement to make that detailed financial filing was triggered by the March 2018 merger of the previously shrinking CTU and the growing union representing teachers at privately managed charter schools.

The new federal reports also provide a clearer picture of: annual losses from rent topping $1 million on the CTU’s previous headquarters at the Merchandise Mart, more than $1.4 million in legal spending on 11 labor grievances, lawsuits and collective-bargaining costs, and the salary of every CTU staffer and the stipend paid to each union delegate.

In addition, the newly required filing contains the names and costs of all CTU contractors and political consultants.

In contrast, its yearly tax filings with the IRS — available through June 30, 2018 — count only union staffers and name only the top-paid employees and vendors. They don’t differentiate between the union’s “representational activities” for members, estimated at about $5.4 million in the Labor Department filing, and the CTU’s political activities.

The IRS documents show that the number of the foundation’s grant recipients fell to 37 in 2018 from 53 the year before, and the average grant to $27,000 from $37,000. Since 2014 when it got an influx of millions from the sale of an apartment tower the CTU had owned for retired teachers in the Gold Coast, the foundation has lost about $2 million a year.

Together, the reports offer a broader picture of a union whose social justice agenda reaches beyond the classroom and teacher pay and benefits, the Sun-Times found.

At the time of the most recent filings, the teachers union had a total of roughly $58 million in its main war chest that’s fueled by members’ dues, its two foundations and its two political action committees.

The Chicago Teachers Union’s headquarters at 1901 W. Carroll Ave.

The union would not make Jesse Sharkey, its president, available to discuss finances.

Some CTU members have grumbled on Facebook about how their dues — a flat $55.85 per pay period — are being spent directly on political candidates. For example, the union put $215,000 into Cook County Board President Toni Preckwinkle’s failed campaign for mayor. The CTU also shifted $56,000 from its budget to the CTU-PAC.

“Can someone please post, again, the way to opt-out of your union dues going to support political candidates?” one teacher wrote on the “Members First” Facebook page of CTU members who have been pushing for more accountability on union spending. The group unsuccessfully ran a slate against the current teachers union leadership.

“That is on the minds of many members who are frustrated with the lack of transparency and accountability in political spending,” another member responded to the Facebook post. “Opting out of PAC voluntary contributions is an option, and sends a message and hopefully brings about change.”

Asked about the union’s political activities, Jennifer Johnson, the CTU’s chief of staff, says the CTU’s work is “inherently political.” But she notes that members can decide whether their dues go to the union’s PACs.

Jennifer Johnson, chief of staff for the Chicago Teachers Union.

“We’re fighting for public education in a sphere where public education is under the realm of the mayor, who is an elected political leader,” Johnson says. “So you can’t just parse the work that simply.”

Regarding the union foundation cutting nearly in half what it gives to charities and other not-for-profit organizations, Johnson says spending was higher the previous two years — after the foundation was reinvigorated with a $48 million windfall from the sale of the Gold Coast apartment tower — as part of an effort to make an immediate impact before scaling back.

“Over time, [the foundation is doing] the kind of long-term planning to make sure that donations continue, that the foundation is donating effectively and strategically and then making sure that it’s sustainable over time,” Johnson says.

The examination of the union’s finances also found that:

The CTU’s registered lobbyists include two Cook County Board members — Commissioners Larry Suffredin and Brandon Johnson. Johnson was elected in 2018 while working as a CTU community organizer. Between March 2018 and July 2019, the union paid $106,000 Suffredin as a consultant and paid $103,000 to Johnson, who remains on staff. Each also gets an $85,000 salary from the county.
Since the end of 2017, Johnson’s campaign fund got $133,000 from the two CTU PACs.
The union paid $82,000 for a public opinion poll ahead of the 2019 elections and $58,000 in election and voter mailings.
It hired two communications consulting firms between July and December 2018. Abundant Media & Entertainment Inc., owned by former CTU communications director Stephanie Gadlin, was paid $37,500. And $73,000 went to a St. Louis advertising company, Human Agency.
The CTU and the CTU PAC have given $316,000 since March 2016 to a coalition chaired by CTU Vice President Stacy Davis Gates, called United Working Families, that appears to operate like an arm of the teachers union. It organizes people to advocate for the working class and supports many of the same candidates as the CTU.
The union remains on the hook to the Merchandise Mart, its former landlord since 1990, for $1.7 million to cover rent from March 2018 to July 2019. It has been able to sublet about 40% of the space, Johnson says, taking in nearly $400,000 during that time but also spent $46,600 on improvements for the tenant. Johnson says the union hasn’t been able to get out of the lease, which was negotiated before the current leadership took power in 2010. The lease runs until October 2021.
The CTU also rents office space from its foundation at 1901 W. Carroll Ave. for about $800,000 a year. Other organizations rent space there as well, among them the Illinois Federation of Teachers, which paid $143,000 in 2018.
Legal spending totaling $1.3 million was spread among 11 law firms handling members’ labor grievances, lawsuits and collective bargaining. Three firms that have long represented the CTU also give money each year to the CTU-PAC. In 2018, its main lawyers — Dowd, Bloch, Bennett, Cervone, Auerbach & Yokich — gave $2,500. Top-paid firm Poltrock & Poltrock gave the PAC $1,480. And Robin Potter & Associates gave $1,250.
Full membership, including retirees, totaled 26,116 as of June 30, 2019 — down from 27,010 the previous year.
A staff of 67 runs the CTU, half of them paid more than $100,000. Another 17 people work for the CTU Foundation. Top paid in the year ending June 30, 2019: Sara Echevarria, $175,000, who is the union’s grievance director. The next four highest salaries went to field representatives paid between $152,000 and $156,000. According to Johnson, those staff members are represented by unions that have negotiated their pay scale over a span of decades.
Sharkey is only the 38th highest-paid CTU staff, making $97,582. He is the lowest paid of the union’s four officers.
Hundreds of union delegates each was paid between $45 and $10,000.
The CTU’s previous top earner, Lynn Cherkasky-Davis, got $311,000 in the year ending June 30, 2018, after she retired and took a $126,182 annual pension. Her payout included accumulated sick days. Cherasky-Davis remains on the foundation’s payroll, making $75,500.