The Chicago Teachers Union has filed a defamation lawsuit against the Illinois Policy Institute, its legal arm the Liberty Justice Center, and IPI marketing vice president Austin Berg, accusing the trio of a deliberate campaign to brand the union as fraudulent and dishonest with its finances. The suit, filed in Cook County Circuit Court, claims the defendants falsely accused CTU of fraud, dishonest accounting, and misuse of funds through a stream of social media posts and articles attacking the union's finances and its president, Stacy Davis Gates.
According to the Chicago Sun-Times, CTU attorney John Owen said the union decided to hold the defendants accountable for what it considers defamatory statements, telling the paper the alleged campaign began in August 2025 and has continued since. CTU represents roughly 30,000 member-educators and says it helped elect Mayor Brandon Johnson, framing itself in the suit as an advocate for Black, transgender, and immigrant students. The lawsuit seeks a jury trial, compensatory and punitive damages, costs of the suit, and other relief, with judgment sought in favor of the plaintiffs.
The 'Cooked Books' Posts at the Center of the Case
Central to CTU's complaint is an August 22, 2025 social media post from the Liberty Justice Center featuring Davis Gates alongside the words “cooked books,” which the union says falsely imputed criminal conduct. CTU's suit also points to a November 2025 AI-generated image posted by the Liberty Justice Center depicting a cookbook titled “Cooking the Books” credited to Davis Gates and CTU staff coordinator Jackson Potter, which the union claims demonstrates actual malice and a deliberate effort to damage its reputation, per the same Sun-Times account.
CTU also cites an October 2025 Illinois Policy Institute article claiming the union refused to show members its audits, which the suit alleges omitted facts about audit availability and the reasons behind reporting delays. The union maintains that audit reports for fiscal years 2020 through 2023 were delayed because of pandemic complications, staffing turnover, and litigation over pension benefits — and that the reports were, in fact, made available for member review. CTU officials provided WBEZ and the Sun-Times with a sign-in sheet they say shows a plaintiff in a separate lawsuit had viewed the union's audit reports.
Origins of the 'Toxic' Label
The union's complaint traces the “toxic” branding directly to a leaked May 2025 video presentation in which representatives from the Illinois Policy Institute and public affairs firm Iron Light discussed a multi-year digital and media campaign explicitly designed to make “the entity itself toxic,” as reported by Source Code. That presentation reportedly detailed targeted advertising aimed at Chicago public school parents. IPI has repeatedly labeled the union “toxic” in its public materials, and CTU's lawsuit describes the Illinois Policy Institute — which is a 501(c)(3) that ProPublica records show reported $8.09 million in revenue and $7.48 million in expenses in its 2024 IRS filing — as functioning like a multi-million-dollar marketing firm rather than a neutral policy shop.
Davis Gates told WBEZ she believes CTU was targeted politically because it defends and expands the public good in opposition to the political right, according to the Sun-Times report. CTU insists its constitution does not require it to release full audits that include information about the CTU Foundation, and the union's audit reports exclude that entity's finances. Debates over CTU's financial transparency date back to 2024, when the disputes first became public.
A Separate Member Lawsuit Adds Pressure
The defamation suit unfolds alongside a separate, ongoing case, Weiss v. Chicago Teachers Union, in which the Liberty Justice Center and four CTU members sued the union in October 2024 claiming it failed to produce required annual financial audit reports. That lawsuit leans on Article VI, Section 1(d) of the CTU constitution, which mandates that the union “furnish an audited report of the Union which shall be printed in the Union's publication,” according to the Liberty Justice Center. Cook County Circuit Judge David B. Atkins denied CTU's motion to dismiss that case in May 2025, writing that CTU “does not even directly dispute” having failed to publish annual audited financial reports since 2020, and he later denied the union's motion for summary judgment in March 2026.
The Liberty Justice Center is also known for representing plaintiff Mark Janus in the 2018 U.S. Supreme Court case Janus v. AFSCME, a 5-4 ruling that public-sector employees cannot be compelled to pay union dues or agency fees as a condition of employment — a decision that reshaped labor law for government unions nationwide. That history underscores the organization's long-running legal opposition to public-sector union power, a dynamic now playing out again in Cook County Circuit Court.
Federal Scrutiny Piles On
The financial dispute has also drawn federal attention. In November 2025, the Republican-led U.S. House Committee on Education and the Workforce sent a formal demand letter to Davis Gates requesting five years of CTU financial audit reports covering 2019 through 2024, explicitly citing reporting published by Illinois Policy Institute staff, according to the Cook County Record. CTU condemned the letter as political interference and retained Washington attorney Michael R. Bromwich, who accused the House committee of acting as a “stalking horse” to improperly assist plaintiffs in the pending Cook County member lawsuit. Separately, the U.S. Department of Labor informed CTU in January 2026 that it would be auditing the union's annual financial report.
Hoodline previously reported on the congressional audit inquiry as it escalated last fall, and on CTU's move this spring to approve an income-based dues hike projected to raise annual dues for most teachers by up to $800, alongside a leadership proposal that would have barred members from suing the union. Union leaders said the higher dues were needed to cover rising political and legal expenses. The financial fight also comes as CTU heads into the November 2026 school board races; the union's political action committees contributed roughly $4.3 million toward the more than $13 million spent on Chicago's 2024 school board contests, the city's first with directly elected board members.
The Illinois Policy Institute has pushed its own numbers on the union's spending, claiming in a September 2024 analysis that only 18 percent of CTU's spending went to direct member representation and collective bargaining, with the rest going toward political advocacy, organizing, and administration. CTU maintains its financial reporting complies with labor standards. As of Monday evening, the defendants had not responded to a request for comment, per the Sun-Times report by reporter Tina Sfondeles, with additional reporting from Sarah Karp.
