$2 Million Camera Bribery Charges Expands To 13 States
[UPDATE February 2014: The company is suing their salesperson saying he went 'rogue', the salesperson is now fighting back saying not only was he 'carrying out orders' but this was done in another dozen states.]
This spring, an Australian company, Redflex Systems, admitted to bribing a Chicago City official with $2 million in payments. The company's internal investigation is a detailed and unambiguous admission, including such details as:
- Two former company officials were involved in $2.03 million payments to a consultant who was friends / associate with the City Program Manager for the traffic cameras.
- "The investigation concluded that Redflex officials paid for vacation-related expenses for the City Program Manager for at least 17 different trips from 2003 through 2010. The expenses for 16 of those trips (including hotels, flights, rental cars, golf games, and meals) were paid for by the former EVP or the Consultant, who were reimbursed by Redflex. In addition, the former EVP or the Consultant purchased a computer, Chicago-area golf games and meals for the City Program Manager and was reimbursed by Redflex. These improper expenses totalled approximately $20,000."
What do you think?
I'm stunned...that Chicago has a Governmental Ethics Ordinance, I mean. :)
The Chicago contract (which is being canned when it expires this month) represented 13% of Redflex's worldwide revenue ($~$100M) Mayor Rahm Emanuel said that the contract was immediately cancelled once he found out about the Redflex investigation, and that "his move to block a new contract for the operator of Chicago’s red light camera program shows the city has “zero tolerance” for ethical violations." (LOL)
There are two other geographic locations that the feds are looking into where similar 'activities' with Redflex took place - they wont say which two other cities are involved, but Jefferson Parish, LA (suburban New Orleans) is most likely one of them. Stay tuned for that story once it hits.
The 'consultant' (hired by Redflex) that was allegedly spreading around Redflex money in Chicago is a guy named Marty O'Malley (longtime friend of the City Program Manager [who ran the camera program], John Bills.) That same consultant is being implicated in the Jefferson Parish probe as well.... Bills retired in 2011 and claims no wrong-doing (of course he does). :) Redflex investigators (the law firm they hired) claim the kick-back scheme was the brainchild of Bills (of course they do; ignoring that the same 'consultant' is possibly implicated in other cities' kickback schemes as well).
Here's an audit report from the Chicago Inpector Generals office (from May 2013) showing that, although city officials claim the redlight program exists for 'safety' reasons, there is NO EVIDENCE to support this claim - and MUCH EVIDENCE showing that 'safety' has not even been a consideration when placing/moving these cameras (they also claim no evidence that placement of cameras was done to maximize revenue either - more like the program was a complete joke, with no oversight whatsoever).
Status Quo - Here's a story from a few days ago saying that Mayor Emanuel's campaign received $10K in political donations from the wives of 2 different exec's from System Development Integration - one of the companies bidding for the new contract once the Redflex contract expires. (note that the Trib story it links to is no longer there) :)
Here's the map of the Chicago redlight camera locations.
Finally, check out this story from Chandler, AZ that includes a study that shows that increasing yellow light times is more effective (yet obviously less lucrative for municipalities) for increasing safety/lowering accidents than red-light cameras are. Note how the City Transportation Engineer from Chandler ignores this data completely so he can continue to justify having redlight cameras at some of those same intersections now... :)
In case you can't tell, I think (and always have) that the reasoning for redlight cameras is complete bullshit. Safety of the public is not even a concern, nor was it ever.
Albeit to a lesser extent, graft is not uncommon with large contracts. There is always someone who seemingly has the 'inside track' when a big RFP hits. The policy of my former integrator was 'walk away' if someone asked us to pay for the opportunity to get their business.
One example of this was with local (Native American) Indian Nations, where 'non native' owned businesses were asked to pay a 'license fee' in order to bid work. Rather than a flat fee, this amount almost always was calculated as a percentage of future contract grosses. You paid the fee if you wanted to bid, not if you won.
Other cases included a large retailer asking all sub-contractors to fund a large scale, luxury golfing junket. If you didn't pitch in, you shouldn't expect to be a sub very long afterward.
While the dollar amounts are large in the Chicago example, I expect the practice is fairly common on a smaller scale in countless projects. Season tickets here, little league uniforms there, a thousand dollars in an envelope... it happens.
But it would lessen if exposed. Anyone who can share current examples, let us know.
Bribery in Chicago? I'm shocked, shocked...
(somebody will have to tell me how to embed a youtube video here)
On a side note, municipalities here in Florida have been caught shortening yellow light times in areas where red light cameras have been installed.
So the Redflex bribing scandal is evolving. The company is alleging that a salesperson went rogue and secretly handed out these massive bribes without them knowing (editor's note: ha!)
The salesperson is fighting back, claiming that this was a systematic effort approved and designed by the company (see the counterclaim).
Here are some specific allegations of the salesperson against his former company:
- The company approved 'celebratory tokens" which the salesperson claims was just a fancy term for gifts to customers and prospects.
- He was simply 'carrying out orders' of his superiors and that the expenses were approved repeatedly over years including directives to "proceed in a cautious and appropriate manner in providing gifts and entertainment to city officials."
- He is claiming that it is not just Chicago but includes 'celebratory tokens' to officials in California, Washington, Texas, Colordao, Florida, New Jersey, Georgia and more.
The claims about lots of other deals / states could make this a whole lot messier.
"The claims about lots of other deals / states could make this a whole lot messier. "
Or this thing gets settled out of court with confidentiality agreements signed by both parties, without either admitting to any wrongdoing, and the rest of this story gets canned unless criminal charges for bribery and traffic of influence get laid.
A town near where I used to live, Brick, decided to take down their red light cameras, to great acclaim.
People all over the state are pointing to the Brick story and the corruption allegations, demanding that all red light cameras be taken down.
A number of cities and towns in SoCal have already disabled their "red light scameras" and some have removed them. After being installed for a while drivers avoided those intersections or used extra care, and since there were successful arguments made to increase the length of yellow lights, fine receipts plummeted.
Update - Indictment: the former CEO of traffic camera manufacturer Redcam was indicted on federal corruption charges. So much for the rogue sales person defense.
Also, this will make opponents of traffic cams happy: "Redflex's US operations took a hit in 2013 as the company installed 54 new systems—but removed 101."
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