City bars red-light camera company from contract amid allegations
BY FRAN SPIELMAN City Hall Reporter /email@example.com February 8, 2013 2:34PM
Red-light cameras. | Richard A. Chapman~Sun-Times
Updated: March 10, 2013 6:45AM
Mayor Rahm Emanuel on Friday ordered an independent audit of Chicago’s red-light camera contractor — and barred the Arizona company from competing for the new contract — amid allegations that Redflex Traffic System showered more free trips than first believed on a former city official who oversaw the contract.
Emanuel wasted no time in punishing Redflex after reports that the company’s internal investigation had concluded that Redflex paid to send former city transportation official John Bills to the Super Bowl and other sporting events and allegedly concealed those favors from the city.
Former Chicago Inspector General David Hoffman of the law firm Sidley Austin was hired by Reflex to investigate the company’s relationship with Bills, as well as Redflex’s decision to pay Bills’ associate more than $500,000 in commissions.
Contacted Friday, Hoffman, a mayoral appointee to the board overseeing Emanuel’s Infrastructure Trust, refused to comment on his investigation. Other sources confirmed that Redflex had paid to send Bills on multiple trips to sporting events.
“Immediately upon learning of impropriety by Redflex, the mayor took action and declared the company to be a non-responsible bidder on future city work and referred the matter to the inspector general,” Sarah Hamilton, Emanuel’s communications director, wrote in an e-mail to the Chicago Sun-Times.
“Given these more serious allegations, we are declaring Redflex not responsible to bid on the new red light RFP when it is issued. The city is also engaging an independent firm immediately to audit the Redflex contract for all past and ongoing activities to ensure Chicago taxpayers are not cheated in any way. If there are any findings of illegal conduct or improprieties that show Chicago taxpayers were defrauded, the city will seek penalties to the fullest extent of the law.”
Parent company Redflex Holdings Limited responded to Emanuel’s punishment by revealing that it is “sharing information with law enforcement authorities” about the alleged wrongdoing by its employees.
“One month after I became CEO of Redflex Holdings last September, we engaged Sidley Austin to conduct an investigation into issues brought to light by a whistleblower and articles in the media. We gave Sidley unfettered access to our people and our records and directed that its inquiry run without limitation,” CEO Robert DeVincenzi said in a prepared statement e-mailed to the Sun-Times.
“ While we still have more to analyze, we know that some Redflex employees did not meet our own principles, nor the standards that the City of Chicago deserves. We are sharing information with law enforcement authorities, will take corrective action and I will do everything in my power to regain the trust of the Chicago community.”
The company was barred from competing for yet another cash-rich contract — to install speed cameras around schools and parks — after the Chicago Tribune first disclosed the company’s relationship with Bills.
The Tribune initially reported that Redflex had given a lucrative contract to Bills’ friend and that the company had picked up the tab for Bills’ stay at a luxury hotel during the former city official’s annual trip to White Sox spring training.
The stories prompted Inspector General Joe Ferguson to open an investigation.
Last month, City Hall disclosed plans to re-bid the red-light contract but extend it six months to allow a “full procurement and selection process to take place.” At the time, spokesman Bill McCaffrey said the outcome of Ferguson’s investigation would determine whether Redflex would be allowed to bid.
Emanuel’s decision comes despite the company’s ties to several mayoral allies.
Redflex’s Illinois lobbying team includes Michael J. Kasper, a lawyer who defended Emanuel in efforts to knock him off the mayoral ballot. The firm’s city lobbyists include former Ald. Mark Fary (12th), husband of Rosemarie S. Andolino, Emanuel’s aviation commissioner.
Another Emanuel ally, public affairs consultant Greg Goldner, also has worked for Redflex.
Red-light cameras were gradually installed at accident-prone Chicago intersections, beginning in 2003. The cameras pumped out a high of 791,111 tickets in 2009 before dropping in recent years to 763,419 in 2010 and 662,046 in 2011.
The mayor’s decision marks the end of a lucrative relationship that has generated $100 million in revenues for the company and $300 million in fines for the city.
When red-light cameras were first installed, City Hall billed it as a safety measure, just as Emanuel is now touting speed cameras.
But with $100 fines for every motorist who blows through a red light, Chicago’s 380 red-light cameras quickly became a cash cow for the revenue-strapped city.