Exclusive: Chicago Teachers Union audits show potential criminal conduct
New audit records reveal inconsistencies in union reporting that may have led to misstatements to members and the federal government.
Sometimes the little guy wins.
It happened on Friday, Jan. 16, when leadership at the Chicago Teachers Union published financial information that they had kept hidden for years.
The CTU’s internal bylaws require leadership to produce an audit for members every year. But the last audit ever shown to members was posted Sept. 9, 2020.
So members concerned with basic transparency—especially as the union transformed into the city’s largest political spender and Mayor Brandon Johnson’s top financial backer—had been demanding to see those audits ever since.
In return, those members endured lies and bullying from CTU leadership.
But their persistence paid off.1
The newly published audits reveal several inconsistencies in union reporting that may have led to misstatements to members and the federal government, according to information published exclusively by The Last Ward.
Members demanding transparency were right all along
CTU members saw something new when opening up their member portal on Friday.
The website now hosts 11 audits members have never seen before. And the content of those audits suggest several reasons why leadership may have kept them hidden for so long.
Before getting into those specifics, it’s important to note union leadership has repeatedly claimed that members already had access to these documents.
“The reality is that the union has always shared its audits with its members,” CTU attorney Robert Bloch told The Intercept in a story published before the weekend.
But members had never seen the 11 audits posted Friday.
As CTU leadership attempts to spin the news surrounding the release of these audits, observers should keep that misdirection in mind.
Stacy Davis Gates appears to be misrepresenting union finances
The new filings appear to show that while CTU told a court and its membership that the audits were not yet complete, union leadership suggested the opposite to the U.S. Department of Labor and IRS.
In other words, CTU President Stacy Davis Gates might have been telling the truth about the audits to CTU membership, a Cook County judge, the IRS or the Department of Labor.
But she could not have told the truth to all four.
Here’s why:
Fed up after years of stonewalling, members filed a lawsuit against the CTU on Oct. 8, 2024, demanding release of the audits. They are represented by the nonprofit litigation firm Liberty Justice Center.
As part of the case, CTU President Stacy Davis Gates declared in court that “in recent years, CTU has been catching up on finalizing audits after 2019,” so the audits for 2020, 2021 and 2022 were not “ready” until December 2024.
Further, the audits for 2023 and 2024 were not completed until 2025, according to documents released by CTU on Friday.
During the same time period Gates told the court the union had not finished a review of their books, she was submitting reports to the Department of Labor and IRS suggesting the opposite.
Look at the union’s 2022 LM-2 filing with the Department of Labor, for example. One question asks whether the union had an audit or review of its books conducted by an outside accountant. Gates marked “yes.”
Gates was also telling the IRS that audits had been procured, according to tax filings prepared by the CTU Foundation. Each year, Gates reported on the Foundation’s Form 990 that the foundation obtained independent audits.
Here’s an example from the CTU Foundation filing for the 2022 fiscal year.
If CTU was indeed years late in conducting an independent review of union financials, it appears Gates was filing inaccurate reports with the federal government. Alternatively, if CTU actually did procure those audits in a timely manner, but later changed or reproduced the audits to read differently, Gates was misleading the court and her members.
Which is it?
The stakes are high.
Making a false statement under oath in Illinois is a Class 3 felony. Making false statements on the LM-2 would make the signatory subject to criminal penalties for false reporting and perjury. And making false statements on the Form 990 could lead to a loss of the Foundation’s tax-exempt status, and in extreme cases, criminal penalties.
The union kept two sets of books
The audits released Friday also reveal the union commissioned audits each year for two different financial statements.
It’s important to understand the difference:
The “combined” financial statements include the union and its two PACs. These were the topline financials reported to members for the last several years, without the associated audit materials the union had previously included in its reporting to members.
The “consolidated” financial statements include the union, its two PACs, and the CTU Foundation.
Notably, the union failed at least two audits for the combined financials (fiscal years 2021 and 2024). Those audits contain adverse opinions, which mean the auditor concluded CTU’s financial statements were misstated in a material and pervasive way.
“Management has elected to omit the activities of the Chicago Teachers Union Foundation, Inc. and the Children and Teachers Foundation of the Chicago Teachers Union,” the opinion reads.
As a result, the combined financial statements “do not represent fairly the financial position of the Chicago Teachers Union,” the auditor found.
Hiding the foundation financials in this way should raise concern for members and warrants further investigation.
Students of city history may remember that the CTU foundation was the vehicle for selling Fewkes Tower, a high-rise in Old Town originally intended to house retired teachers. The union sold the tower for $50 million, with the proceeds flowing into the Foundation. Leadership then spent that money in part on a new headquarters in the West Loop. That new headquarters is owned by the foundation and charges rent to the union.
Gates doubles as the president of the foundation, and CTU Vice President Jackson Potter doubles as vice president.
Spin zone
The Department of Labor last week sent a letter to CTU asking for a meeting to “obtain detailed information about the union and its financial records, bookkeeping practices, and internal controls,” according to reporting from The Intercept.
These discrepancies certainly warrant that.
But union leadership and their political allies have attempted to mask the audits controversy by attacking the messengers, and implying the demands for transparency are political in nature.
On Jan. 15, U.S. Rep. Delia Ramirez, D-Illinois, sent a letter to the House Education and Workforce Committee complaining the committee had requested the audits “based on citations exclusively from the Illinois Policy Institute.” Ramirez’s campaign committee has received more than $289,000 from the CTU.
And just prior to releasing the audits, the union planted two stories claiming the demands for transparency were concocted by “MAGA Republicans.”
Observers may note Liberty Justice Center, the firm representing CTU members in the audits case, is also suing the Trump administration. Specifically, Liberty Justice Center argued the marquee case challenging the legality of Trump’s sweeping global tariffs before the Supreme Court, with a ruling expected as soon as Jan. 20.
In the news
The Washington Post published my piece on how you can’t start a Chicago-style hot dog cart in Chicago, featuring artwork by Adrián Astorgano.
Last week’s edition of The Last Ward was cited by Nellie Bowles at The Free Press in her popular TGIF newsletter.
And I joined the Mincing Rascals podcast on WGN Radio.
My “green light” recommendation: No Other Choice (2025), now playing at the Music Box Theatre.
For a complete background on the CTU audits saga, click here.