1/27/2014Redflex Bribery Scandal Spreads Nationwide
Former red light camera executive says current Redflex management is responsible for bribing local officials in ten states.
The Redflex bribery scheme is widespread and ongoing, according to the Australian photo enforcement firm's former executive vice president, Aaron M. Rosenberg. Local Officials in Arizona, California, Colorado, Florida, Georgia, Massachusetts, New Jersey, New Mexico, Tennessee, Virginia and Washington received gifts and other financial incentives intended to encourage them to do business with Redflex.
Redflex filed suit against Rosenberg last February accusing him of misappropriating funds in an attempt to pin the blame for bribery charges on the former executive. The attempt to make Rosenberg the scapegoat may have backfired, as he fired back with documents that could bring down other current company employees. As part of a massive damage control effort, Redflex fired several high-ranking officers of the company to show that the firm had cleansed itself of the taint of bribery. Not so, says Rosenberg.
"[Redflex], through its former chief executive officer, current chief executive officer and current and former Redflex board members engaged in providing governmental officials with lavish gifts and bribes," Rosenberg stated in his counterclaim filed in October. "These behaviors were institutionalized as it was common for the Redflex annual budget, which is presented by the CEO and approved by the board of directors, to include a category titled 'Entertainment.' 'Entertainment' was further defined as 'costs associated with new pursuits and ongoing customer management and included activities such as golf, meals, sports outings and celebratory tokens.'"
The celebratory tokens meant gifts, and Rosenberg argues that these were intended as bribes to convince local officials to enter into photo enforcement contracts with Redflex. Rosenberg points out that Redflex promoted James Saunders, previously vice president of account management, to become the new head of US operations.
"The board and CEO did this with full knowledge that over the years this individual actively participated in and incurred lavish entertainment expenses with elected officials, consultants and city officials in his efforts to secure new contracts and maintain company revenue," Rosenberg argued.
Rosenberg is not just making empty claims, he provided copies of emails to the court to prove that he was following the orders of higher management in bribing local government officials. He provided records of a $5000 donation given to the Arizona State Democratic Executive committee as part of his official work expenses. Karen Finley, former head of Redflex US operations, explained to the company's accounting department the purpose of the money transfer.
"It is approved," Finley wrote in a June 18, 2008 email. "Sorry for the confusion and we gave him 5k for political support. It was not an employee loan or advance."
In 2010, Redflex put the police chief of Oak Ridge, Tennessee up at the Ritz-Carlton Hotel in return for his favorable testimony at a court trial two years ago. Another email shows discussion of a $3235 dinner at Morton's Steakhouse during a Florida League of Cities meeting in 2006 to encourage Florida officials to sign up for red light cameras. Officials from Jacksonville, Miami, Pembroke Pines and West Park sought more information on doing business as a result of the free meal.
"The dinner at Morton's served as an opportunity to solidify relationships between Redflex and the above listed cities where Peter and I had the chance to talk one-on-one with each guest," Rosenberg wrote in an email. "Put in perspective, it would have cost Redflex Traffic Systems more than the dinner expense to go and meet the various council members individually... to have had such a gathering of key personnel in a relaxed atmosphere served to break down key resistance and the presence of Scott Maddox interjected a further and higher degree of credibility toward Redflex Traffic Systems."
The Chicago Tribune first exposed the bribery scheme and was first to report Rosenberg's countersuit.