In a series of complaints filed with state and federal authorities last month, the Freedom Foundation, a government union watchdog, alleges the Pennsylvania State Education Association (PSEA) and the Democratic Governors Association (DGA) engaged in a money laundering scheme to illegally bankroll Pennsylvania Gov. Josh Shapiro’s 2022 gubernatorial campaign with nearly $1.5 million in teachers’ union dues.
Pennsylvania law prohibits unions from utilizing members’ dues to contribute to political candidates. But in May 2022, PSEA made two, six-figure contributions from its general fund to the Fund for Student Success (FSS), an opaque political fund operated by PSEA but little-known to its members. The FSS then handed the funds to the DGA, which is dedicated to supporting “Democratic governors and candidates across the nation.”
Allegedly, both the PSEA and the DGA neglected to properly disclose the contributions. Because it hasn’t registered the FSS as a political committee with the Pennsylvania Department of State, PSEA’s seven-figure contributions went unreported.
Likewise, the DGA failed to report receipt of the dues-funded contributions to Pennsylvania authorities, then backed Pennsylvania Gov. Josh Shapiro’s 2022 campaign to the tune of $7.2 million.
Though the contributions appear nowhere in Pennsylvania’s campaign finance records, the Freedom Foundation discovered the transactions in comparatively obscure disclosures filed by the FSS and DGA with the Internal Revenue Service.
The fact that the PSEA lawfully manages a second political committee, PSEA-PACE, suggests that the union’s alleged violations were executed with full knowledge of Pennsylvania campaign finance registration and reporting requirements behind the backs of those public school teachers PSEA claims to represent.
“PSEA’s scheme to secretly launder nearly $1.5 million in members’ dues through the Democratic Governors Association to support Josh Shapiro’s 2022 candidacy appears to have violated both an array of Pennsylvania laws and the Internal Revenue Code,” said Maxford Nelsen, the Freedom Foundation’s director of research and government affairs.
Three complaints detailing the allegations were filed with the Pennsylvania Department of State, the Pennsylvania Office of Attorney General, the Pennsylvania Labor Relations Board, the Internal Revenue Service, and the Federal Bureau of Investigation, among others.
If confirmed, the alleged violations could result in civil fines or criminal prosecution of PSEA and/or DGA officials.
The allegations carry heavy implications for Pennsylvanians. During his 2022 campaign, Gov. Shapiro voiced support for lifeline scholarships, a school voucher system that would have enabled students in Pennsylvania’s lowest-performing public schools to pay for private alternatives.
UAW’s President Shares Union’s VP Wish List, and It Conflicts With Likely Kamala Pick Shapiro
Shapiro Appoints Teachers’ Union Fox to Oversee PA’s Pension Henhouse
But after pushback from the PSEA, which rejected the proposal as “unacceptable,” Shapiro line-item vetoed funding for the program out of the 2023 budget. While PSEA’s financial support for Shapiro was well-known, the revelation of additional union contributions provides more context for the governor’s change of heart.
Further, “PSEA executives displayed as much contempt for their own members as they did for Commonwealth law and voters,” Nelsen continued.
Indeed, Pennsylvania’s public school teachers in search of reliable workplace representation should think twice about monthly payments to a union allegedly preoccupied with a political laundering scheme at the expense of its members.
Maddie Dermon is director of communications for the Freedom Foundation.
