Ex-Redflex CEO Karen Finley Sentenced to 30 Months in Speed-Camera Bribery Scheme

The former CEO of a red-light camera company was sentenced last week to 30 months in prison and ordered to pay $2 million in restitution, in a federal criminal case stemming from bribery charges.EXPAND
The former CEO of a red-light camera company was sentenced last week to 30 months in prison and ordered to pay $2 million in restitution, in a federal criminal case stemming from bribery charges.
Ray Stern

A federal judge sentenced former Redflex CEO Karen Finley to 30 months in prison last week for her role in a bribery scheme to win photo-enforcement contracts in Chicago.

U.S. District Judge Virginia Kendall also ordered Finley to pay $2 million in restitution, telling the 57-year-old Arizonan "there is no sense of corporate social responsibility there" and that the case had significant impact on the public.

Still free on bond, Finley has been ordered to surrender to the U.S. Marshal's Office by January 3, 2017. She'll serve her sentence concurrently with the 14-month prison term she received last month for a similar but smaller bribery scheme in Ohio.

Finley pleaded guilty in 2014 to several bribery charges in Ohio, and in 2015 to conspiracy to commit bribery in the Illinois case. Following her admissions of guilt, she testified against ex-Chicago transportation official John Bills, who was sentenced to 10 years in prison in August of this year following a jury verdict.

Last week's sentencing hearing marks a rough landing for the Cave Creek resident and first-time offender, who wrote in a letter last month to the judge in the Ohio case that thinking about her future left her "numb with terror."

Finley once commanded respect in the law-enforcement community owing to her work to provide Arizona and other states with photo-enforcement cameras. Finley, who lives in Paradise Valley, reportedly wept at the hearing and apologized to the court and the public.

"I am sorry that my conduct has contributed to the public's mistrust of the government," Finley said, according to the Chicago Tribune, where reporters had exposed the kickback scandal four years ago. "I am ashamed of myself."

Redflex, an Australian company that runs its North American operations from an office in Phoenix, continues to serve several Arizona cities, including Paradise Valley. The small, high-income town just east of Phoenix was one of the first municipalities in the nation to use photo enforcement.

Retired Paradise Valley Police Chief John Wintersteen wrote a letter to the court urging leniency for Finley.

Asserting that this marks the first time he has ever made such a request for a criminal defendant, Wintersteen, a longtime photo-enforcement supporter, writes in the June letter that Finley is "personally and singly responsible for saving many lives" nationwide. He also notes that Paradise Valley single-handedly saved Redflex when it ran out of cash and couldn't pay its bills, devoting public money for a one-time $225,000 infusion into the company.

After evidence revealed her involvement, Finley confessed she was aware that Martin O'Malley, a Redflex consultant, was bribing Bills, the second-in-command at Chicago's Department of Transportation who also served as a high-ranking precinct captain for the Democratic Party.

The company overpaid O'Malley, who then gave Bills about $2 million over eight years to ensure Redflex thrived and expanded in Chicago. Bills and O'Malley would meet at restaurants to exchange envelopes stuffed with cash. Bills also accepted golf games, hotel rooms, and use of a Gilbert condominium for his efforts. Though Finley never received a direct payment, she was well compensated as Redflex's business grew; she reportedly was paid about $500,000 per year in salary and bonuses.

O'Malley received a six-month federal prison sentence in September.

Redflex officials blamed part of the corruption scandal on one of its star salesmen, Aaron Rosenberg, a company vice president based in California who helped pay off Bills. After the company sued Rosenberg in an Arizona court, Rosenberg alleged that Redflex routinely bribed public officials in 13 states, including Arizona. No evidence of a similar bribery scheme in Arizona was revealed in the case. Prosecutors gave Rosenberg immunity for his cooperation; he was never charged.

A New Times review of the situation last year showed the company contributed thousands of dollars to local Democratic and Republican coffers in the 2000s. (Such donations are perfectly legal for, if not expected of, a company that seeks political favors.)

Finley's actions cost the city of Chicago, which could have negotiated better speed-camera contracts if not for the corruption. But they also had more far-reaching consequences, Illinois Northeastern District U.S. Attorney Zachary Fardon, told the court in a sentencing memorandum.

"Bribery is a two-way street," writes Fardon, who prosecuted the case himself. "Corrupt public officials cannot rob taxpayers without private counterparts willing to feed their corruption ... This egregious behavior has contributed to the public's delusion and cynicism about Chicago city government."

Fardon praised Finley's cooperation in the case, as did Judge Kendall, who reportedly told Finley that her testimony and remorse probably earned her a lighter sentence.

Ex-Redflex CEO Karen Finley Sentenced to 30 Months in Speed-Camera Bribery Scheme
New Times

In her October letter to Judge Michael Watson of Ohio's Southern District, Finley related how she'd worked with Ohio lobbyist John Raphael to pass secret campaign contributions to various elected officials in the state, using fraudulent invoices.

Raphael was sentenced to 15 months in prison in June and began serving time in August. No elected officials in Illinois or Ohio were ever charged.

"I am ashamed and angry at myself  for behaving in a manner that was inconsistent with the way I have lived my entire life," Finley wrote in her letter to the court. "I have destroyed my career and thrown away the good reputation that took me a lifetime to build."

Calling Redflex a "toxic and soul-sucking place to work," Finley wrote of her relief to have the chance to assist prosecutors, put the company behind her, and help care for her ailing father.

But she has had to take medication to deal with "severe anxiety and depression," Finley wrote. She can't find a job and was fired from a local grocery-store bakery after a manager saw her name in the news. She has no children and lives with her husband of 17 years.

"I fear what lies ahead, and I am numb with terror," she wrote, pleading for leniency.

Finley will serve her time in a minimum-security facility and has asked to be imprisoned at the federal prison just west of Anthem, which has about 1,300 male and female prisoners. A source familiar with the case says her request for incarceration in Arizona may or may not be honored. The decision rests with officials at the Federal Bureau of Prisons.

Photo-enforcement programs, whether managed by Redflex or its primary competitor, Scottsdale-based American Traffic Solutions, have been a source of controversy for years in Arizona. A now-defunct freeway-camera system approved by former Democratic Governor Janet Napolitano caused a public outcry and led to the tragic slaying in 2009 of a Redflex photo-radar van operator in Phoenix. The tickets themselves can often be beaten simply by ignoring them when they come in the mail, because state law requires that in order to become valid, the tickets must be hand-delivered unless the recipient signs a waiver.

Republican lawmakers in particular have tried to shut down or limit the programs in Arizona cities. Governor Doug Ducey signed a bill banning photo enforcement from state highways earlier this year. In March, Arizona Attorney General Mark Brnovich declared that the programs were illegal because photo-enforcement companies should have been licensed as private investigators. Redflex and ATS, in conjunction with city officials, turned off the cameras for a few weeks until they could obtain the proper licenses.


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