Former CEO of company with Georgia ties indicted in Chicago

August 23, 2014 11:08 am

by Jason · 4 comments

A little over a year, I wrote about a Redflex Traffic Systems, a company that specializes in traffic cameras. The Arizona-based company was awarded a contract from the Gwinnett County Public Schools to install cameras in its school buses.

As noted at the time, Redflex has a pretty sordid past. The company was barred from doing business with the Chicago government because of corruption allegations. Think about that for a moment. The Windy City is known for its, uh, special breed of politics. How sketchy does a company have to be to be barred from doing business there?

Well, earlier this month, the former CEO of Redflex was indicted by a federal grand jury on a number of corruption charges:

The 23-count indictment accuses former Redflex CEO Karen Finley of providing illegal kickbacks to John Bills, a city employee who served as a member of the red-light camera evaluation committee as managing deputy commissioner of Chicago’s transportation department.

The scheme allegedly rewarded Bills with $570,000 in cash and other personal benefits in exchange for insider information that allowed Redflex to expand its Chicago contracts — to the tune of $124 million. The kickbacks were reportedly funneled through one of Bill’s friends, who was hired as an independent contractor at Redflex and earned $2 million in total compensation.

“When public officials peddle influence for profit, the consequences are severe, and when corporate executives enable that corruption, the same rule applies,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “We will attack alleged public corruption from every angle.”

Automated camera enforcement of speed limits and red lights has proven a controversial practice, despite widespread use in many US cities and abroad. The systems are promoted as beneficial to public safety, however critics argue that the cameras are primarily adopted to provide a revenue stream from fines.

You can read the press release on the indictment from the FBI here. Redflex’s former customer liaison was also indicted.

{ 4 comments… read them below or add one }

Will Durant August 23, 2014 at 7:24 pm

Though something was inked a year ago, there was a suit filed by a competitor and the School District apparently didn’t follow through with this company last year and still some issues this year. At least as of June of this year according to the Gwinnett Daily Post:
http://www.gwinnettdailypost.com/news/2014/jun/18/delays-continue-in-gcps-redflex-contract-approval/?hunting

seenbetrdayz August 25, 2014 at 8:28 am

Not so sure I like the idea of private for-profit companies being involved in law enforcement, and I say that as someone who usually looks to privatize as much as possible.

When everything illegal becomes profitable, everything will become illegal.

Not to mention that a lot of these contracts with private companies last for years longer than the terms of the politicians who agree to them. So you can get pissed at your city council for signing the contract, vote them all out, but the private company goes and gets a bunch of lawyers to defend the contract which never sat well with the voters in the first place.

I recall reading one situation with a company—it might have been Redflex—where the city council was pressured by the voters to make the company stop issuing tickets, but the city STILL had to pay for the (unused) services thanks to the terms of the contract.

seenbetrdayz August 25, 2014 at 8:36 am

This might not be the one I was thinking of but it’s a pretty good example of what I’m referring to:

FARRAGUT — For the second time in a week a traffic camera vendor is suing local government because citations for improper right turns on red have been halted based on a new state law.

Redflex Traffic Systems Inc. on Monday filed suit against the town of Farragut and claims that without court intervention, hundreds of traffic violations will continue to go unprosecuted, which will affect traffic safety and deprive Farragut and the company of revenue that was agreed on in a contract between the two.

http://www.knoxnews.com/business/redflex-sues-farragut-over-new-traffic-camera-law

Lea Thrace August 25, 2014 at 8:48 am

This why I always have a heaping helping of skepticism when private public partnerships of any kind are announced. There is rarely adequate oversight of these contracts and operations. And in the end the public (and ultimately taxpayers) end up getting royally screwed.