REDFLEX’S EXCELLENT CHICAGO ADVENTURE: THE STORY THAT KEEPS ON GIVING

3/2/13

This morning’s (i.e., Saturday, 3/2/13’s, page 1) Chicago Tribune reports that Redflex Traffic Systems, Inc., the Arizona based U.S. arm of Australia’s Redflex Holdings, has fired three more executives in the fallout from the scandal involving Redflex’s exclusive contract to provide red light cameras in the City of Chicago.   (See my now seminal 2/8/13 post  REDFLEX TRAFFIC SYSTEMS:   CHICAGO POLITICS CLAIMS A “VICTIM” ON THE OTHER SIDE OF THE WORLD and the appended thereto 10/18/12 post REDFLEX TRAFFIC SYSTEMS AND CHICAGO POLITICS:   TRUTH NEARLY AS INTRIGUING AS FICTION for early and extensive reporting on the shenanigans surrounding the Redflex deal.)   Redflex Traffic’s president and CEO Karen Finley, general counsel Andrejs Bunkse, and CFO Sean Nolen have now been given the boot.   They join former Redflex Holdings Chairman Max Findlay and board member Ian Davis in having been shown the door.

This story, on which I reported and opined much earlier in its germination (Again, see the above posts.), is far from over, one suspects.   This latest bout of scapegoating, er, sorry, firings, is not about to end the story but does bring three thoughts from yours truly.

--Interestingly, this morning’s Tribune describes Marty O’Malley, 13^th Ward and St. Bede Parish denizen, heavy contributor to Speaker Mike Madigan’s 13^th Ward Regular Democratic Organization, and “consultant” to whom Redflex paid $570,000 in connection with the Chicago red light camera contract, as “a longtime friend” of John Bills, the city purchasing manager in charge of the contract, 13^th Ward and St. Bede Parish denizen, and all-around heavy in the Speaker Mike Madigan’s 13^th Ward Regular Democratic Organization.

In prior stories on this scandal, Mr. O’Malley denied having known Mr. Bills.  As I said in the aforementioned 10/18/12 post:

Mr. O’Malley denies having known Mr. Bills, or Mr. Madigan, before he and Mr. Bills started working together on the camera project.   Mr. O’Malley’s not having known Mr. Bills is plausible, given their ages; Mr. O’Malley is 72, Mr. Bills is 51.   But, for those of you unfamiliar with the mores of the southwest side, one’s parish is a big thing; it often is the center of many of one’s activities, spiritual and otherwise.

I don’t know whether Messrs. O’Malley and Bills have confirmed that they are “longtime friend(s),” but it’s interesting how the story changes when it has such a hard time holding up.

--Redflex is falling all over itself trumpeting its born again approach to ethics and integrity, sort of the political/corporate equivalent of what I think is called something like the “revirgining movement,” in which teenagers or young adults who have lost their sexual virtue declare themselves to be virgins again and promise not to lose that status until they are married.   One suspects the latter has a greater chance of success than the former.

Redflex has declared, according to the Tribune,

“This day, and each day going forward, we intend to be a constructive force in our industry, promoting high ethical standards and serving the public interest.”

Redflex has also introduced reforms such as requiring anti-bribery and anti-corruption training of employees and hiring a new bureaucrat and calling him or her the “director of compliance.”  One can almost hear the late, great Hank Williams belting out “I Saw the Light,” but I digress.

As I tell my students, ethics and integrity are much like another of life’s more salient activities; those who talk about it the most do it the least.   I advise them that when someone begins a presentation telling you how ethical he is, or a corporation spends an excessive number of pages in its annual report telling you how much integrity it has, hang onto your wallet.

--As in most Chicago political scandals, it is the low level worker bees who are being apprehended by law enforcement or other authorities and hung out to dry by who knows what other authorities.  

One could protest that plenty of high level Chicago guys have gone down, but those are the cases we remember, and we only remember them because highly visible people went down.   They are dwarfed in number by the legions of seemingly petty cases of corruption, involving underlings of the guys that matter, that we forget because of the relatively small dollars involved (though not in the Redflex caper; half a million plus is real money, even to, say, a Chicago ward boss or mayoral assistant) or the obscurity of the characters involved.

Further, high visibility, or even holding a seemingly high office, does not necessarily equate to being one of the really important people in the politics of Chicago and/or Illinois.   Look at Governor Rod Blagojevich; he held the title of governor, but he didn’t really matter.   He was, like Frank Pentangeli in The Godfather or Tom Dempsey in The Chairman, small potatoes and very expendable.

Maybe no big guy, a guy that matters, has been touched by the Redflex hanky-panky, or at least not yet, because nobody who matters is involved.   I don’t say that disingenuously; there is a real possibility that this scandal doesn’t touch a heavy in this area’s politics because any genuine heavy in this area’s politics is too smart to get involved in, or at least to get criminally caught getting involved in, a scandal like this.  

Further, as I wrote at the beginning of this post and at the beginning of this scandal, the saga of Redflex and Chicago is not over yet.

See my two books, The Chairman, A Novel of Big City Politics and The Chairman’s Challenge, A Continuing Novel of Big City Politics, for further illumination on how things work in Chicago and Illinois politics. 

REDFLEX TRAFFIC SYSTEMS: CHICAGO POLITICS CLAIMS A “VICTIM” ON THE OTHER SIDE OF THE WORLD

2/8/13

According to a front page story in today’s (i.e., Friday, 2/8/13’s) Chicago Tribune, trading in the stock of Redflex Holdings, an Australian company that controls operations in the business of red light cameras and other technological means of traffic control, has been halted.   Moreover, Redflex’s Chairman, Max Findlay, and another Board member, Ian Davis, resigned earlier this week.

These actions came in response to a deepening of a scandal at Redflex Traffic Systems involving the rewarding of a contract for red light cameras in the city of Chicago.   It seems that the company’s generosity to Mr. John Bills, the contract’s overseer and a heavy in the ward organization of 13^th Ward Committeeman, Illinois House Speaker, and Chairman of the Illinois Democratic Party Mike Madigan (pictured), was more extensive than originally thought.   According to a report by David Hoffman, a partner at what we who have been around for awhile used to know as Sidley & Austin and a former Inspector General for the City of Chicago who was so dogged in his pursuit of corruption that the Daley administration was very happy to see him go, Mr. Bills received not one night in a luxury hotel, as had formerly been claimed, but, according to the Tribune, “thousands of dollars in pricey hotel stays, including tickets to at least one Super Bowl and White Sox spring training trips over the course of many ears.”   I, for one, am glad to hear that Mr. Bills was reportedly treated to trips to Sox spring training games; when the story centered around accommodations surrounding a Cubs preseason game, the story was starting to crumble, given that Mr. Bills lives in St. Bede Parish, nestled deep in the heart of White Sox country, but I digress.

Now that this story has resurfaced, I thought it would be a good time to republish what has come to be a very prescient post that I wrote on 10/18/12 for the now defunct Rant Political.   One suspects that this story has a long way to go and will get more, er, interesting as time passes.  See my two books, The Chairman, A Novel of Big City Politics and The Chairman’s Challenge, A Continuing Novel of Big City Politics, for further illumination on this subject.

For now, here is the October post:

REDFLEX TRAFFIC SYSTEMS AND CHICAGO POLITICS:   TRUTH NEARLY AS INTRIGUING AS FICTION

10/18/12

The City of Chicago has just scratched the surface in the malodorous dealings of Redflex Traffic Systems, Inc., which supplies the city with red light cameras.   Redflex has been barred from bidding on the city’s upcoming speed camera system after having paid a hotel bill for a city purchasing agent and covered up this indiscretion for two years. Redflex continues to be the vendor for red light cameras for at least the time being.  The background story of Redflex and its dealings with the powers that be in Chicago politics is, typically, murky but, er, interesting.

Redflex Traffic Systems was among several companies bidding for the red light camera contract in Chicago back in the early part of last decade; it won the contract in 2005.   The city official in charge of overseeing the contract was (Get this title; talk about bureaucracy!)  Managing Deputy Commissioner of the Department of Transportation John Bills.  John Bills was, and is, a substantial figure in Illinois House Speaker, Chairman of the Illinois Democratic Party, and Ward Committeeman Mike Madigan’s 13^th Ward Regular Democratic Organization, serving as a registrar, or the guy in who supervises collection of signatures on candidate petitions, for Mr. Madigan.   One supposes that Mr. Bills is also a precinct captain for Mr. Madigan, but I can’t verify that.   Mr. Bills also lives in St. Bede Parish on the southwest side, which is also Mike Madigan’s parish.  

Redflex just happened to hire as its “consultant” on the red light camera project one Marty O’Malley, who also lives in St. Bede.   Mr. O’Malley claims no affiliation with Mike Madigan’s organization, but admits to contributing $1,000 in 2007, $1,500 in 2009. and another $1,500 in 2010 to Madigan’s political operations.   These contributions were made possible largely by the commissions Mr. O’Malley earned on the red light camera sales, but more on that later.   Mr. O’Malley denies having known Mr. Bills, or Mr. Madigan, before he and Mr. Bills started working together on the camera project.   Mr. O’Malley’s not having known Mr. Bills is plausible, given their ages; Mr. O’Malley is 72, Mr. Bills is 51.   But, for those of you unfamiliar with the mores of the southwest side, one’s parish is a big thing; it often is the center of many of one’s activities, spiritual and otherwise.

As it turns out, Redflex won the contract and Mr. O’Malley, who denies that he used political clout or geographical proximity to either Mr. Bills or Mr. Madigan when interviewing for the consultant job, got a commission of $1,500 per camera, more, according to Mr. O’Malley, than he was expecting.  His total payday came to $570,000.   Some of that, as we learned above, made its way into Mike Madigan’s political coffers.  Mr. Bills denies playing any role in getting Redflex the contract; Mr. Madigan, as far as I know, has not been asked if he had any role in this deal.

There was a small fly in the ointment.  It seems that, according to Mr. Bills, he was in Arizona for a Cubs pre-season game (That a guy from St. Bede would have any interest in a Cub game makes this story suspicious on its face; perhaps Mr. Bills was going to root for the opposition, thus adhering to a proud south side tradition, but I digress.) and didn’t have a hotel reservation.  He called a Redflex executive (Redflex has offices in Phoenix.) to see if he could help out.  Redflex booked him a room in a luxury hotel and the bill somehow never found its way onto Mr. Bills’ credit card, which he didn’t notice for quite some time.   For this minor transgression, and for two yeas of covering it up, Redflex is banned from bidding on the speed camera contract.   Mr. Bills also retired from his Managing Deputy Commissioner of the Department of Transportation job last summer after 32 years of working for the city.  No one has said Mr. Bills' retirement and the Redflex problems are related, but who’s kidding whom?

And it gets better…

Since these shenanigans have taken place, Mr. Bills has been appointed by “reform” Cook County Board President Toni Preckwinkle to a position on the Cook County Employee Appeals Board.  This position is part time and pays part time ($35 grand a year), but includes health benefits.  The Appeals Board has long been known as a receptacle for hacks who have somehow run afoul of either the law or the vicissitudes of the voting booth.  Ms. Preckwinkle will not say whether Mike Madigan recommended Mr. Bills for the job.

So…

A minor figure in this drama loses his job for accepting $500 in accommodations from a city vendor.   The vendor keeps its current contract but can’t bid on a new one, though the city Inspector General is investigating the case. 

It looks like there is more to this story and that there are more important people involved than Messrs. Bills and O’Malley.   How likely is it that larger heads will role?   For a hint, take a look at my two novels of Chicago politics, The Chairman, A Novel of Big City Politics and The Chairman’s Challenge, A Continuing Novel of Big City Politics.