CHICAGO _ Chicago's beleaguered former red-light camera vendor, still reeling from a $2 million bribery scandal that nearly brought down the business and rippled across the globe, has agreed to pay $20 million to the city to settle its lawsuit over the company's admitted fraud.
In a 12-page settlement agreement, Redflex Traffic Systems Inc. agreed to pay the city in mostly annual installments through 2023. The first installment of $5 million is due within 45 days, according to the agreement.
Michael Finn, Redflex's president and CEO, said in a prepared statement he hopes the agreement marks the end of the company's struggles in the U.S. stemming from the Chicago scandal. Redflex is still under investigation by federal authorities in Australia, home to the company's publicly traded parent company, Redflex Holdings.
"Today marks a new beginning for Redflex," Finn said. "Over the last four years, we took the actions every responsible company would have chosen and enhanced our compliance management, training and oversight functions. ... Thanks to our resilient and remarkable employees, we are well-positioned for this new day."
Since first bringing red-light cameras to Chicago in 2003, Redflex earned more than $120 million from the city contract, installing 384 cameras and collecting more than $400 million in traffic fines. That all came to an end beginning in 2012 when the Chicago Tribune first revealed allegations that the entire contract was built on a City Hall bribery scheme.
Last year, John Bills, the City Hall manager who oversaw the contract for a decade, was sentenced to 10 years in federal prison for taking up to $2,000 for every camera installed, in addition to lavish vacation trips, an Arizona condominium, a Mercedes and other gifts designed to curry his favor. The Redflex consultant who acted as the bagman and the former CEO of the company were also sentenced to federal prison terms.
Following the Tribune disclosures, Mayor Rahm Emanuel fired Redflex and replaced it with another vendor. The company fired its top six executives, and the scandal launched probes of its contracts around the country.
The Emanuel administration first sued the company in 2015 for up to $360 million in damages _ three times the amount the company earned from the fraudulent contract _ alleging breach of contract, civil conspiracy, unjust enrichment and payment of kickbacks in connection with city contracts.
At the time, Emanuel said he wanted every company that does business with the city, or hopes to, to know he will not stand idly by when taxpayers are defrauded.
After exposing the potential bribery scheme, the Tribune then launched a 2014 investigation that documented how thousands of drivers were tagged during unexplained ticket surges at malfunctioning red-light cameras.
In response, the city inspector general reported that both the Daley and Emanuel administrations could not document how and where they chose to place cameras, abdicated their responsibility to ensure the camera system was working properly and instead focused on keeping the cameras rolling.
Emanuel shut down dozens of cameras, promised to improve oversight, played down the significance of the findings and sought to refocus public attention on safety benefits. After the Tribune series, the city offered to review the tickets of some drivers caught in unexplained ticket spikes. Ultimately fewer than 200 tickets were refunded.
