Redflex has setup HQ in Melbourne Victoria Australia
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Red light camera firm Redflex pays $US20m to end bribery scandal
Peter Mitchell AAP 7:31AM February 7, 2017
Australian red light camera company Redflex has agreed to pay $US20 million to the City of Chicago to settle a bribery scandal that led to the jailing of the company’s former North American chief executive and battered its reputation and share price.
The deal ends a lawsuit the city filed against Phoenix-based Redflex Traffic Systems and its Australian parent Redflex Holdings alleging fraud and making false statements when it contracted in 2003 to run Chicago’s red-light camera enforcement program.
The system, much-vilified by drivers, automatically ticketed motorists. Chicago cancelled Redflex’s contract in 2013 following reports about the scheme.
Redflex (RDF) is hoping the US District Court settlement is the scandal’s final dark chapter, but Australian Federal Police have opened up their own investigation into the Melbourne headquartered company.
Former Chicago transportation official John Bills pocketed $US2 million in bribes from Redflex as the city became the red light camera capital of the US and earned more than $US120 million from city contracts.
Bills, who lived a life of way above his city salary with a luxury car, lavish vacations and dinners, an Arizona condominium and other gifts, was sentenced to 10 years’ jail.
Former Redflex North American chief executive Karen Finley was jailed for 30 months while Bills’ bagman, who Redlfex hired as a consultant, was sentenced to six months.
Finley was also sentenced to 14 months’ jail for another Redflex bribery scandal in Columbus, Ohio.
“I hope that this serves as a warning to other companies that do business or hope to business with the city that we will hold those who try to take advantage of taxpayers accountable,” Chicago Mayor Rahm Emanuel said.
The Chicago-Tribune first exposed the Chicago scandal in 2012.
The settlement money is to be paid instalments over the next six years, city officials said. In January, the company made a deal with federal prosecutors ensuring that others at Redflex won’t be prosecuted if it continues to co-operate.
“Today marks a new beginning for Redflex,” Redflex Traffic Systems President and CEO Michael Finn said in a statement, noting that the company has enhanced compliance management, training and oversight.
Redflex chairman Adam Gray added: “I would like to thank the groups and individuals involved in illuminating and then responsibly addressing the company’s past misdeeds.
“Having now fully and favourably closed this chapter in the company’s history, we look forward to focusing exclusively upon assisting our customers in improving road and pedestrian safety within their communities, to profitably growing the Redflex business, and to creating value for our shareholders and stakeholders alike.”
In 2012 Redflex’s share price on the Australian Stock Exchange was around $2.00 but after the scandal struck it fell to 21 cents in 2015.
It is trading this week around 50 cents.
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