Less than 48 hours after the City Council Monday night renewed its contract with the giant nationwide red light camera provider Redflex Traffic Systems, Inc., the first indictment of a Redflex official was handed down yesterday afternoon in Chicago.
This morning, hours after the Chicago Tribune story below was posted, near midnight, Culver City Police Chief Scott Bixby received a 320-word message, under the signature of the Redflex president, apparently intended to absolve his company of blame.
In part, the message said:
“I'm writing to make you aware of documents released yesterday from the United States Department of Justice that pertain to our former City of Chicago contract. These documents outline criminal charges against a former City of Chicago employee that relate to that contract… The Government's decision to charge the former City of Chicago employee was expected, and is consistent with our internal investigative findings that we shared with governmental authorities last year. We did what a responsible company should do….”
Appended to the president’s message was a lengthy outline of “corrective actions” he said Redflex is taking.
Here is the Tribune’s story:
By David Kidwell and John Chase
The former head of Chicago's red light camera program was arrested Wednesday in a $2 million bribery scandal and charged by federal prosecutors with plotting to steer the contract to Redflex Traffic Systems before the first ticket was ever issued in 2003.
John Bills, the former transportation official who managed the red light contract until 2011, coached Redflex officials in a series of clandestine meetings and helped them grow their program into the largest in the country, authorities alleged. In return, they said, Bills received hundreds of thousands of dollars in cash spent on a vacation home, a boat and a Mercedes convertible, along with dozens of trips and a condominium near the company's Arizona headquarters.
The single bribery charge against Bills puts him at the center of sweeping allegations in a scandal that by size alone ranks among the largest in Chicago's notorious history of corruption.
The Tribune first disclosed the questionable relationship between Bills and Redflex in the fall of 2012, revealing a scandal that has shaken the foundation of the company and its Australian parent, Redflex Holdings Ltd.
Bills' attorney said his client did nothing wrong and is being squeezed by federal authorities to cooperate against Redflex and others.
“John Bills has nothing to cooperate about because he did absolutely nothing wrong,” attorney Nishay Sanan said.
“John denies ever taking a bribe from anybody. He's a hardworking individual, and the one thing that everybody should realize is he didn't have the power in the city of Chicago to direct any contract to anybody,” Sanan said.
The bribery count carries a maximum penalty of 10 years in prison and a $250,000 fine. Bills was escorted in handcuffs into a federal courtroom in Chicago by U.S. marshals and said, “I do” when asked if he understood the charges. He was released without posting bond.
Authorities allege that Bills worked behind the scenes to help the then-fledgling Redflex almost as soon as he was approached with an unsolicited proposal by a company official identified in the complaint as Confidential Source 1.
The Tribune reported earlier this year that the cooperating source is fired Redflex Executive Vice President Aaron Rosenberg, who acknowledged he was cooperating with authorities in a civil defamation lawsuit against the company. Rosenberg accused Redflex of doling out bribes and gifts at “dozens of municipalities” in 14 states and said he was made a “scapegoat” to cover up the long-standing practice after the Tribune began asking questions about the Chicago contract.
Rosenberg said that after he approached Bills in 2002, Bills threw him a hint by saying one of his bosses at City Hall “had been paid money from an engineering firm related to another city of Chicago contract that the superior oversaw,” the complaint alleges.
Rosenberg, who has been granted immunity, told authorities he saw this as an effort by Bills “to determine whether Bills would be able to get money from Redflex in return for getting Redflex the red light camera contract,” the complaint said.
The complaint also details several meetings in 2003 of Bills, Rosenberg and other Redflex officials to make Bills a “Redflex expert” and plan strategy on how to steer the business to the company.
The Tribune in February detailed one such meeting in the swanky Signature Room atop the John Hancock Center.
“Essentially, he spent two hours coaching us on how to win the contract, telling us how to behave, what things were going to work and what wouldn't,” former Redflex software designer Mike Schmidt told the Tribune. “At the time, though, it was hear no evil, see no evil. I needed my job. …”
The federal complaint also alleges that while Redflex was still competing for the contract, Bills called Rosenberg to ask that Redflex pick up the tab for a Los Angeles trip for Bills and his friends, which Rosenberg did with the approval of his supervisor.
At the time, Rosenberg's supervisor was Karen Finley, the CEO of Redflex Traffic Systems. She and two other Redflex executives — including the general counsel — resigned last year amid the scandal.
The complaint said Bills met with Rosenberg to review red light photographs of both competitors for the contract, choosing photographs that made Redflex appear to be the better candidate. Bills even arranged the seating for the City Hall selection committee in an attempt to influence the vote for Redflex, lining it up so that members supporting Redflex voted first to create momentum, the complaint alleges.
The complaint alleges the cash bribes to Bills were funneled through a longtime friend of his who was hired as a Chicago consultant on the Redflex contract in 2003.
Martin O'Malley, identified only as Individual A in the complaint, served “as a conduit to get money to Bills in return for Bills' help in getting Redflex the city of Chicago contract, and for Bills' help in ensuring that Redflex's contract would potentially be expanded and renewed in the future,” authorities alleged. Had O'Malley been on the Redflex payroll instead of a commission contract, the complaint said, he “would have been one of the highest paid employees in the entire company.”
The complaint said federal authorities tracked more than $643,000 in cash withdrawals O'Malley made from 2006 to 2011, with Bills and his wife making cash deposits of $103,000 in their own bank accounts — many of them around the same time. In addition, the complaint alleged that O'Malley bought a Gilbert, Ariz., condominium for $177,000 on Bills' behalf. Bills' attorney Sanan denied both allegations. O'Malley could not be reached for comment, and his attorney did not return phone calls.
Related
• The full story: Tribune investigates Redflex
• Timeline: How the Redflex scandal unfolded
• PDF: Full text of John Bills bribery complaint
• Raw video: John Bills leaves court
• John Bills
• PDF: City rejects Redflex proposal
