Chicago's red light camera scandal deepened Wednesday with the federal indictment of a former Redflex Traffic Systems CEO on charges she and a top City Hall manager conspired to rig the camera business for a decade.
Karen Finley, one of several Redflex executives dumped amid the scandal, was indicted along with former city official John Bills and a longtime Bills friend accused of being the bagman in a $2 million bribery scheme that ran from 2002 until 2012, when the Tribune first disclosed Bills' ties to the company.
The Chicago program grew into a marquee system for Redflex — the largest in the United States — and generated nearly $500 million in $100 tickets for the cash-starved city. But now it is the subject of multiple probes and political attacks after the Tribune's reports and more recent revelations that thousands of drivers were fined during suspicious spikes in tickets.
Mayor Rahm Emanuel moved to fire Redflex in 2013, but the company ran the program until March. Emanuel's administration has acknowledged that oversight of the program was lacking and has started a review of up to 16,000 citations from intersections where the Tribune documented wild swings in ticketing.
City Inspector General Joseph Ferguson, who has launched an investigation of the spikes, is also working closely with federal authorities to investigate the corruption allegations.
“The alleged confluence of corrupt local officials and corrupt corporate officers demands a counterweight of local and federal authorities working to redeem the frayed confidence of the public,” Ferguson said in a joint news release with U.S. Attorney Zachary Fardon.
Finley, 54, of Cave Creek, Ariz., was indicted on nine counts of mail fraud, three counts of wire fraud, three counts of bribery and one count of conspiracy to commit bribery.
Bills, 53, of Chicago, who was first charged with bribery in May, was indicted on nine counts of mail fraud, three counts of wire fraud, three counts of bribery, three counts of filing a false income tax return, one count of conspiracy to commit extortion and one count of conspiracy to commit bribery.
Bills' longtime friend Martin O'Malley, 73, who was hired by Redflex as a Chicago consultant, was also indicted on one count of conspiracy to commit bribery. Prosecutors said he served as the conduit for about $2 million in Redflex payments, much of it intended for Bills.
Bills and O'Malley have repeatedly denied any wrongdoing. Finley's attorney, Mike Kimerer, said Wednesday that his client intends to plead not guilty to all charges when she appears in Chicago for her arraignment. The date has not been set.
Bills' attorney, Nishay Sanan, called the federal indictment “weak” and said his client expects to be “fully vindicated at trial.”
O'Malley's attorney did not return telephone messages.
In their news release announcing the indictment, federal prosecutors said the investigation was continuing.
“When public officials peddle influence for profit, the consequences are severe, and when corporate executives enable that corruption, the same rule applies. We will attack alleged public corruption from every angle,” Fardon said.
The Tribune first disclosed the questionable relationship between Bills and Redflex in October 2012, revealing a scandal that has shaken the foundation of the company and its Australian parent, Redflex Holdings Ltd.
The indictment represents the first charges against Finley and O'Malley in what prosecutors describe as a conspiracy that began when Redflex officials came to City Hall in 2002 seeking to win a fledgling contract to install automated traffic cameras.
Prosecutors have alleged that Bills, a former managing deputy commissioner for transportation who oversaw the red light program, coached Redflex officials in a series of clandestine meetings and helped arrange the company's selection. In return, prosecutors allege, 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.
According to the indictment, O'Malley was hired by Redflex after Bills told him to answer an advertisement placed by Finley looking for a Chicago consultant. Prosecutors say that in addition to paying for personal debts incurred by Bills, O'Malley also paid him $570,000 in cash between 2004 and 2012.
Those payments were in addition to the hotel rooms, car rentals, meals, golf games, computers and other personal items bought for Bills on Redflex's dime, the indictment says.
“Most of the expenses were the result of requests made directly by Bills,” the indictment says.