Wednesday, May 14, 2014

Former Chicago City Worker Charged With Accepting Bribes From Red Light Camera Company

A federal investigation launched after a 2012 Chicago Tribune article raised concerns about the relationship of the City's red light camera contractor, Redflex Traffic Systems, and the city's manager of the red light camera project, John Bills, has resulted in the filing of federal bribery charges today against Bills. The federal complaint against Bills alleged that the company funneled as much as $2 million to Bills through a Chicago-based consultant hired by the company to pay for cash, trips, Super Bowl tickets, an Arizona condominium and other gifts for Bills.

The contract Chicago entered into with Redflex to install red light cameras throughout the city has produced revenues of more than $100 million for the company, while Chicago's city coffers have grown by over $300 million from the traffic fines issued by the red light camera program. According to the criminal complaint, Bills first approached Redflex about a bribe during the pre-bid discussions. The complaint alleges that Redflex paid over $2 million in salary and benefits to a Chicago consultant to funnel payments to Bills. The Tribune identifies the consultant as Martin O'Malley, a long-time friend of Bills, who has denied any wrongdoing.

The Tribune first learned about the scheme in 2012 after it obtained an internal memorandum from an ousted vice president of Redflex discussing how the bribery scheme "would take down the contract and most likely the company." In responding to Chicago officials to the report, Redflex officials denied most of the allegations set forth in the memorandum, although it acknowledged payment of a hotel stay at the Arizona Biltmore for Bills as "an oversight and a lapse." A Chicago Inspector General's report, however, identified 17 trips the company had comped Bills, including airfare, hotels, rental cars, golf outings and meals and the suspicious consulting payments of more than $2 million paid to O'Malley. Bills retired from his city job in 2011. Mayor Rahm Emanual cancelled the contract with Redflex and replaced the company with Xerox State & Local Solutions, Inc. (formally known as ACS).

The Tribune reports that a fired national sales representative for Redflex, Aaron Rosenberg, is cooperating with federal investigators. Redflax has filed a lawsuit against Rosenberg seeking damages against him for harm it says he brought to the company. In a countersuit Rosenberg filed against his former employer, he alleges the company doled out bribes and gifts to municipal officials in 13 different states. Rosenberg alleges that the company attempted to scapegoat him for its long-standing practice of paying bribes to local officials to win contracts. In addition to all of the trips, money spent by Redflex was supposedly used to purchase a $177,000 Arizona condominium for Bills, along with a Mercedes convertible. There's also a boat purchased for $10,000, improvements to Bills' Michigan cabin, tens of thousands of dollars in mortgage payments for Bills' girlfriend, rent payments and cash to pay for his divorce attorney.

It's easy to pass this off as just typical Chicago corruption, but the same thing is happening in state and local government here in Indiana on an equally corrupt level. The difference is that Chicago still has two competing newspapers which perform traditional investigative journalism that we no longer have in Indiana in most communities, particularly Indianapolis, and our federal and state prosecutors choose to ignore large scale public corruption taking place in plain sight, unlike federal prosecutors in Chicago.

The use of red light cameras is not authorized by Indiana law. According to a Fox 59 news report, State Rep. Ed DeLaney (D-Indianapolis) was part of a bipartisan coalition seeking to bring red light cameras to Indiana. Redflex hired Baker & Daniels (now known as Feagre Baker Daniels) to lobby for approval of state legislation authorizing the use of red light cameras a few years ago according to state lobbying records. ACS and its successor company, Xerox, which also provides red light camera technology, has hired Barnes & Thornburg for many years to lobby the Indiana legislature. The City of Hammond installed red light cameras in 2008 without state approval, which many questioned the legality of at the time.


Flogger said...

The Star has made a choice not engage in investigative journalism into Political Corruption.

I thought this maybe of interest off the specific Chicago Subject, but part of the Crony-Capitalism file:

Vice President Joe Biden arrived in Ukraine's capital city, Kiev, on Monday. From April 21, 2014 report.

Press release
London, 12 May, 2014
R. Hunter Biden will be in charge of the Holdings’ legal unit and will provide support for the Company among international organizations.

The White House on Tuesday (May 13th) brushed aside questions about whether the involvement of Vice President Joe Biden's son in a Ukrainian natural gas company raised ethical issues at a time when the administration is promoting energy diversity in the country.

From the BBC:
The younger Mr Biden isn't the only American with political ties to have recently joined Burisma's board. Devon Archer, a former senior advisor to current Secretary of State John Kerry's 2004 presidential campaign and a college roommate of Mr Kerry's stepson HJ Heinz, signed on in April.

So we have at all levels of government (think Eric Turner) where we have a Gold Mine for some, but for the vast majority of us the Shaft.

Anonymous said...

-And just when can we expect to see the indictments here for the Regional Operations Center?