Rahm Emanuel survived Chicago’s first-ever mayoral runoff, in part, by shrinking, but not abolishing the city’s scandal-scarred red-light camera program and by throwing the book at the Arizona contractor accused of doling out $2 million in bribes.
Now, Chicago taxpayers have something to show for that get-tough stance: a $20 million settlement that, vanquished mayoral challenger Jesus “Chuy” Garcia dismissed as nowhere near enough.
That’s the amount Redflex Traffic Systems has agreed to pay to resolve a laundry list of city claims, ranging from breach of contract, civil conspiracy, unjust enrichment and payment of kickbacks tied to city contracts to false claims, false statements, consumer fraud and deceptive practices.
The settlement calls for $5 million to be paid within 45 days and $5 million more by Dec. 31. The other half will be paid in installments over the next six years unless the terms are extended by mutual agreement.
Retiring Corporation Counsel Steve Patton portrayed the deal as the best the city could get from a company under new management fighting for survival after a bribery scandal. The city’s 2015 lawsuit against Redflex sought up to $360 million in damages.
“You can’t squeeze blood from a turnip…Our alternative is to continue to litigate for another year, two or three. Then maybe we would recover more from a judge or a jury. If we did, that would force them into bankruptcy likely and we would end up getting nothing,” Patton told the Chicago Sun-Times.
“Rather than run the serious risk of getting a larger judgment that would be worthless, we entered into a deal that…represents the most we could reasonably extract from the company given its current financial situation.”
Garcia accused Emanuel of letting Redflex, whose contract the mayor cancelled shortly after taking office, off the hook.
During the campaign, Garcia promised to end, what he called the “red light rip-off” by removing every one of Chicago’s red-light cameras on his first day in office. He never said how he would replace the money.
“For all the pain the red light cameras have caused people, $20 million is not enough. Just the aura and the continuing stinkiness of these deals has really angered people,” said Garcia, who is itching for a 2019 rematch with Emanuel.
“Sure, they cooperated, but they knew they were in trouble. They received…in excess of $131 million in contracts with the city built on bribery. It continues to give the city a bad reputation. That doesn’t have a pricetag on it. The city is probably eager to put an end to this sad saga, but I don’t think $20 million is enough. It just continues to perpetuate the perception that we’re a cesspool.”
In late December, the Department of Justice and the U.S. Attorney’s office agreed not to seek criminal charges against Redflex over bribery scandals in Chicago and Ohio.
The agreement stemmed, in part, from the company’s “extensive and thorough cooperation” with the government.
The company’s cooperation included prosecution of former Redflex CEO Karen Finley, who was sentenced to 30 months in prison after pleading guilty to conspiracy to commit federal program bribery. Former City Hall insider John Bills was also sentenced to 10 years in prison.
Bills helped Redflex cheat its way to $131 million in red-light camera contracts between 2002 and 2011.
During a trial that lifted the veil on a red light camera program built on bribes not public safety, federal prosecutors proved that Bills was getting a kickback of up to $2,000 for every new camera added to a network that became the largest in the nation.
In return, prosecutors say Bills took $680,000 in bribes. That included $560,000 in kickbacks passed to Bills by Martin O’Malley, the elderly, recovering alcoholic Finley agreed to hire in late 2003, primarily to serve as a “bagman” for Bills. O’Malley was sentenced to six months in prison.
At that time, Redflex agreed to pay restitution and compensatory damages to the city in an amount to be determined at a civil trial or final judgment with the federal government.
Now, that settlement has been finalized in a way that Redflex claims will allow the scandal-scarred company under new management to remain “financially strong, with over 150 existing contracts in communities across the Americas.”
President and CEO Michael Finn called it a “new beginning” for Redflex.
During the 2015 mayoral campaign, Emanuel removed 50 red-light cameras at 25 more Chicago intersections where accidents had been reduced to put out a political fire that had threatened to burn him.
To restore public confidence in the scandal-scarred program, Emanuel also sped up the timetable for installation of countdown clocks at 42 red-light intersections that still didn’t have them and embraced red-light camera reforms championed by a pair of influential aldermen.
After the election, the reforms sought by Beale (9th) and Special Events, Cultural Affairs and Recreation Committee Chairman Tom Tunney (44th) were watered down.
Beale and Tunney had wanted yellow lights at red-light intersections to be “no less than 3.2 seconds or the recognized national standards, plus one additional second, whichever is greater” but settled for no change.
And instead of mandating City Council approval before new red-light cameras are “removed, moved or added,” the aldermen settled for a neighborhood hearing and payment plan reforms.
The Chicago Department of Transportation also agreed to pay
Northwestern University $311,778 to study red-light camera enforcement and chart a path forward for the program.
Still, Emanuel remained committed to the program that Chicago motorists love to hate – and the reason is revenue.
By mid-2015, red light cameras had churned out 2.2 million tickets and generated $284.9 million in fines since Emanuel took office, a revenue source the cash-strapped city simply cannot afford to relinquish, records show.
Bills was once a top precinct captain in the 13th Ward Regular Democratic Organization run by powerful Il. House Speaker Michael Madigan (D-Chicago).
He spent a decade pocketing piles of cash bribes, jet-setting across the country and living it up in chic hotels. It took a federal jury less than one day to convict him on 20 counts of fraud, extortion, bribery and other crimes.
Testimony at Bills’ two-week trial had revolved around cash bribes quietly passed in envelopes at Manny’s Deli and Schaller’s Pump, insider information revealed over drinks at the John Hancock Center and secretly recorded conversations hinting at a conspiracy at the center of the nation’s largest red-light camera program.