Former Redflex CEO admits to bribery

The former CEO of Phoenix-based Redflex Traffic Systems has pleaded guilty in a second bribery case involving the company's efforts at landing photo-enforcement contracts across the country.

Karen L. Finley, who led the company from 2005 to 2013, reached a plea agreement with federal prosecutors in Ohio that effectively trims any prison term she might face for conspiracy. The deal, unsealed this week, essentially treats the company's long-standing bribes in Columbus as part of a similar scheme uncovered in Chicago.

ARCHIVE: Chicago traffic-camera scandal hurting Phoenix-based Redflex

The company distanced itself from Finley on Friday.

"The government's actions are not a reflection of today's Redflex, they are a reflection on the company's past — a past that the company moved beyond over two years ago by taking specific, strong steps to improve compliance," said Tilden Katz, a spokeswoman for Redflex. "Redflex's focus remains on making a life-saving difference in the communities we serve. We are proud of the steps we've taken and will continue to lead the industry in how public-private partnerships should be managed."

Finley, a Cave Creek resident, is awaiting sentencing in the Columbus case and is reportedly scheduled to plead guilty in Chicago in August. Meanwhile, authorities have examined deals elsewhere involving the company for signs of foul play.

While Finley's cases continue to move through the courts, she appears to be helping authorities as they determine who else might be implicated in public corruption.

As part of a deal with prosecutors, Finley admitted that between 2005 and 2013 "she participated in a scheme in which the company made campaign contributions to elected public officials in the cities of Columbus and Cincinnati through a consultant retained by the company."

The final approval for Redflex's donations, euphemistically called "success fees" for the consultant, came from Finley, according to court records. The documents allege the company then falsely changed receipts and other documentation to try and cover its tracks.

There were possible contributions of up to $30,000 total for officials in both cities as well as more contributions to the Ohio Democratic Party, according to court records. Some of those donations were funneled through the party to individual campaigns. In exchange, records show, those elected officials would help the company get contracts for photo traffic enforcement.

The FBI continues to investigate who on Cincinnati's City Council might have attempted to receive bribes, the Cincinnati Enquirer reported Friday. That city rejected a contract with the company in 2005, but several members of the council tried to resurrect the matter several times until voters there banned photo enforcement outright in 2008.

Another former Redflex executive, Aaron M. Rosenberg, has said bribery was used in a dozen states, including Arizona. The company sued Rosenberg in Maricopa County Superior Court, and he countersued in a case that is pending.

Redflex is the subsidiary of an Australian company and has its U.S. headquarters in north Phoenix. Phoenix, Paradise Valley, El Mirage, Star Valley and Chandler have contracts with the company. Redflex once held a contract with the Arizona Department of Public Safety for photo enforcement on highways. The cameras — and the 1.1 million speeding tickets they generated — proved highly unpopular, and the state ended their use in 2010.

Columbus had a contract with Redflex that ran from 2006 until earlier this year. It stopped because the Ohio Legislature passed a law in late 2014 requiring that a police officer be physically present whenever a citation is issued. The Arizona Legislature considered, but did not pass, a similar measure this year.

The company's practices initially came under scrutiny after a 2012 investigation by the Chicago Tribune found evidence of bribes by Redflex officials to help win a $100 million contract there.

Before the corruption cases came to light, Finley, 55, seemed to be riding high. In 2010, the Phoenix Business Journal named her one of the Valley's "most admired CEOs."

Now, she faces up to five years in prison, a fine of up to $250,000 and restitution.

The corruption cases have done little to lift the standing of a company often seen as profiting from the comparatively minor transgressions of others.

Supporters of the camera contracts cited some reasons often heard elsewhere: They could generate revenue, avoid police layoffs and make roads safer. To many, however, the company is seen as leading a cash grab from motorists. The website FireRedflex.com notes a dozen cities nationally, as well as Puerto Rico, that have ended their Redflex contracts this year.

Katz, the company spokeswoman, said Finley's case came about because of the company's own probe of what was happening. "Redflex fully disclosed its internal investigation's findings to the Justice Department and assisted DOJ's investigation on the Ohio matter in a strictly confidential manner at the government's request," Katz said. "As a result of that investigation, Ms. Finley has pleaded guilty."

Cincinnati.com contributed to this article.