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CTU Closes $725,000 Account At Bank Of America To Protest CPS Debt Swaps

CHICAGO (CBS) -- The battle between the Chicago Teachers Union and the Chicago Public Schools headed to a new front on Wednesday, as the union told a big bank it is taking its business elsewhere.

CTU recording secretary Michael Brunson visited the Bank of America offices at 135 S. LaSalle St. to pull more than $725,000 out of the bank and close the union's account. The union said if CPS needs money for its classrooms, the district shouldn't make cuts, it should go after Bank of America.

"The board is literally choosing teacher layoffs and special ed cuts to pay Bank of America profits. If the mayor and the Board of Education would choose to fight the banks the way that they fight the Chicago Teachers Union for these school funds, and put real legal and financial pressure on Bank of America, we have no doubt that the bank would come to the table," Brunson said.

Union officials have said they believe Bank of America misled CPS about the risks of controversial debt swap deals. They want CPS to try to recoup the money it lost in those deals.

"Over the life of these deals, the swaps thus far have cost $502 million at CPS. That's almost exactly the same as the size of the CPS budget deficit. That's an abomination," said Saqib Bhatti, director of the ReFund America Project, which co-authored a report detailing how much controversial swap deals have cost Illinois taxpayers.


CTU vice president Jesse Sharkey said the union is transferring the funds from Bank of America to a bank the union says is not profiting off what it deems "toxic interest swaps."

Sharkey said the move is not just symbolic.

"There's real money there, and there really are violations of the law that we believe should be prosecuted, that should be brought to the table, and there should be a rebate," he said.

Brunson questioned why CPS has not sued banks to get back millions lost in interest rate swaps, like other cities have.

"How can anyone believe that students or teachers should give up one cent when they won't even make a good faith effort to win back money from these banks," he said.

A Bank of America spokesperson declined to comment on CTU closing its account, citing privacy rules.

The CTU's decision to close its Bank of America accounts comes a day after the district announced plans for $100 million in layoffs and other cuts in the next 30 days, and a move to unilaterally end the district's so-called "pension pickup" for union members, effectively increasing teachers' pension costs.

"I really want to emphasize something strongly here; we do not want to do this. I would be the happiest guy around if next week we had an agreement with the teachers' union and we could rescind the process on these steps," Claypool said Tuesday.

Wednesday afternoon, the CTU's 800-plus member House of Delegates will meet, and could vote to overturn the Big Bargaining Team's decision to reject a four-year contract offer from CPS. However, CTU vice president Jesse Sharkey said that is unlikely.

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