11/15/2016FBI Explains How It Took Down Chicago Red Light Camera Corruption
The official US government account of how it took down the Redflex photo bribery scheme in Chicago, Illinois.
By The Federal Bureau of Investigation
John Bills once held a position of trust as Chicago's assistant transportation commissioner. Now the 55-year-old is serving a 10-year prison sentence for his role in a long-running corruption scheme involving the city's red light camera contracts.
"Chicago has a well-known history of public corruption," said Special Agent Brian Etchell, "but even by Chicago's standards, this case stands out."
That is because the corruption went on for nearly a decade, and "the sheer amount of cash bribes to Bills -- more than $600,000 -- was stunning," said Etchell, who investigated the case with Special Agent Craig Henderson from the FBI's Chicago Division. Henderson noted that the corruption scheme involved payments and perks that totaled more than $2 million.
In 2003, Bills served on a committee seeking vendors for the city's Digital Automated Red Light Enforcement Program. That committee recommended awarding contracts to Redflex Traffic Systems, an [Australian] company eventually hired to install cameras that automatically recorded and ticketed drivers who ran red lights.
From the time Redflex received the contract in 2003 until Bills retired in 2011, evidence showed that the transportation official used his influence to expand Redflex's business in Chicago. That resulted in millions of dollars in contracts for the installation of hundreds of red light cameras. Redflex was enriched -- and the company made sure Bills was as well.
The company gave Bills cash, expensive meals, golf outings, airline tickets, hotel rooms and more. Some of the benefits were given to him directly, while hundreds of thousands of dollars in cash was funneled to Bills through his friend Martin O'Malley, whom Redflex hired to facilitate the payoffs.
As a Redflex contractor, O'Malley was paid lavish bonuses as new cameras continued to be added in the city. O'Malley, in turn, stuffed envelopes full of his bonus cash and gave them to Bills, often during meals in Chicago restaurants. O'Malley also used some of the money to buy and maintain a condo in Arizona that Bills used as his own.
Bills had more cash than he knew what to do with. "He would ask co-workers to purchase airfare tickets on their credit cards," Henderson said, "and then he would repay them on the spot in cash. He had his friends write him personal checks, and then he would immediately give them cash -- he would just hand over $3000 right there."
When a Redflex employee alleged misconduct regarding how Chicago's red-light camera business was being conducted, the company did an internal investigation and found nothing wrong. Later, after a newspaper expose raised questions about the relationship between Redflex, O'Malley and Bills, the company began another inquiry, and information from that investigation was presented to the FBI and the United States Attorney's Office.
"Based on the company's investigation, we opened a case starting in 2013," Etchell said. "We were able to establish a direct link between O'Malley, Bills and the Arizona condominium. The majority of the bribes were flowing through Redflex to O'Malley to that condominium."
Etchell and Henderson specialize in public corruption investigations, the FBI's top criminal investigative priority. They painstakingly documented patterns that tied O'Malley's cash withdrawals to purchases by Bills and showed how O'Malley's cash withdrawals coincided with personal meetings with Bills.
Even so, "much of the evidence was still circumstantial," Henderson said. So the investigators interviewed countless individuals, many of whom worked with Bills and at Redflex. In 2014, O'Malley was arrested. Faced with the mounting evidence against him, he began cooperating with the investigation and laid out the entire scheme.
"He was the middleman, the bagman," Etchell said, "and he decided to cooperate with us." Bills was indicted in 2014. In January 2016, a federal jury convicted Bills on all counts against him, among them mail fraud, wire fraud, bribery, and filing false tax returns. He was sentenced in August 2016. A month later, O'Malley, 75 and in frail health, received a six-month prison term.
Karen Finley, a former CEO of Redflex, pleaded guilty in 2015 to one count of conspiracy to commit bribery in the red-light camera corruption scheme. She awaits sentencing.
Henderson thanked the FBI's law enforcement partners -- the Internal Revenue Service, the city of Chicago Office of Inspector General, and the US Attorney's Office -- for making "large contributions to the case." He added, "I would like to think that with each of these investigations, we chip away, piece by piece, at this culture of corruption."