The City of Chicago, American Civil Liberties Union of Illinois (ACLU) and American Friends Service Committee (AFSC) have agreed to settle claims stemming from an undercover Chicago Police Department (CPD) investigation of the AFSC conducted in 2002.

In the Fall of 2002, the CPD conducted an investigation in advance of the Trans-Atlantic Business Dialogue conference that was being held in Chicago. As part of its investigation, at least one undercover police officer attended a meeting of the AFSC. In 2004, in an audit of the City's compliance with a judicial consent decree that it was required by that consent decree to file publicly, the City disclosed that it had investigated the AFSC and other groups. The decree, which was modified by the court in 2001 and dissolved by agreement of the parties in 2009, was first entered in 1982 to resolve two lawsuits alleging that CPD investigations of private organizations had violated the First Amendment.

As a result of the public disclosure of the AFSC investigation, the AFSC and the ACLU filed a petition against the City in 2005 alleging, among other things, that the public disclosure of the AFSC investigation violated the modified consent decree and unduly stigmatized and damaged the reputation of the AFSC. The City denied the AFSC and the ACLU of Illinois' allegations.

The parties have recently settled this litigation. Pursuant to the settlement, the City represents that its 2002 investigation of the AFSC revealed no evidence that the AFSC, in connection with the Trans-Atlantic Business Dialogue conference or otherwise, had engaged in any conduct constituting a threat to public safety, a threat to the public good, or a violation of any criminal law.