Redflex Holdings

Redflex Holdings
Public (ASX: RDF)
Industry Road traffic enforcement products and services
Founded 1997 (1997)
Headquarters South Melbourne, Victoria, Australia
Website www.redflex.com.au

Redflex Holdings provides vehicle monitoring and enforcement services for government, police, and traffic departments globally.

Redflex develops and manufactures a wide range of digital photo enforcement products and systems, utilizing advanced sensor and image capture technologies. Redflex solutions include fixed multi-lane, multi-sensor red light and speed enforcement solutions, mobile radar and laser speed enforcement systems and infringement processing software.

Products and services

Redflex has programs to deter red light running, speeding, passing stopped school buses, crossing railroad tracks while the alarm is active, running stop signs, unauthorized vehicles driving and stopping in bus lanes, speeding in highway work zones, stopping in an intersection during a red light, and travelling in a crosswalk when a pedestrian is present. Redflex also has technology used to help prevent right angle crashes by red light runners.

Redflex operations

Redflex operates primarily in Australia and the United States of America, and was listed on the Australian Securities Exchange in January 1997.[1] Redflex Holdings consists of two distinct companies; Redflex Traffic Systems Pty. Ltd. covering Australia and global operations and Redflex Traffic Systems Inc. covering the US market. The company works with partners in other countries, such as ChinaTel Group in the Peoples Republic of China.[2]

Redflex is based in South Melbourne, Victoria where it runs its systems engineering operation as well as its system integration and research and development programs.

In 2011, Redflex was the subject of a failed A$303.5 million hostile takeover bid by the Macquarie Group and Carlyle Group.[3][4]

There is debate and ongoing research about the use of red light camera systems provided by organisations such as Redflex. Authorities cite public safety as the primary reason that the cameras are installed,[5][6][7] while opponents contend their use is more for financial gain than for safety.[8][9] Opposition to traffic enforcement cameras owned by Redflex has resulted in their removal in some cities, including the American cities of Austin, Texas and the California cities: Belmont, Bell Gardens, Berkeley, Burlingame, Compton, Corona, Costa Mesa, Cupertino, El Cajon, El Monte, Escondido, Emeryville, Fairfield, Fresno, Fullerton, Gardena, Glendale, Grand Terrace, Hayward, Highland, Indian Wells, Irvine, Laguna Woods, Lancaster, Loma Linda, Los Angeles, Long Beach, Maywood, Montclair, Moreno Valley, Oakland, Paramount, Pasadena, Poway, Rancho Cucamonga, Redlands, Redwood City, Rocklin, Roseville, Rowland Heights, San Bernardino, San Carlos, San Diego, San Jose (photo radar), San Juan Capistrano, Santa Fe Springs, Santa Maria, Santa Rosa, South Gate, Union City, Upland, Walnut, Whittier, Yuba City, and Yucaipa.[10] 12/19/2014 Ohio passed a law requiring require a police officer be present at camera locations to personally witness a violation before a civil citation could be issued.[11] Ohio cities, including Dayton, Toledo and Akron, claimed a violation of home rule and citing an injunction by Lucas County Common Pleas Judge Dean Mandros, on 3/22/2015[12] just before the State law was going to take effect, continue to operate the cameras.

Chicago scandal

In late 2010, Redflex executives were implicated in a bribery scandal in Chicago, Illinois. Following up on a letter from a whistleblower, the Chicago Tribune reported that a Redflex 'consultant' had been making improper payments to a City of Chicago transportation official, John Bills, who was responsible for overseeing the awarding of contracts for the installation and operation of Chicago's widely hated red light camera system. The consultant, Marty O'Malley, who was a long time friend of Bills hired to oversee the Chicago contract, had received US$570,000 in commissions for the contract which had provided approximately US$100 million in revenue for Redflex. A two-year internal investigation conducted by Redflex reported in October, 2012 that it had found only one instance of an inappropriate expenditure: a two-day hotel stay at the Arizona Biltmore for Bills, paid for by the consultant, who was subsequently sent for 'anti-bribery training'. The Chicago contract is the company's largest in North America. With 384 cameras it provides 13% of Redflex Holdings' worldwide revenue.[13]

After the Chicago Tribune continued to find more evidence of improprieties in the relationship between Redflex executives & consultants and Chicago officials, Redflex hired a "former Chicago inspector general, David Hoffman" to lead a new investigation.[13] On 8 February 2013, Redflex received notification from the City of Chicago's Department of Procurement Services that it will "not be considered a responsible vendor for the new RFP for red light cameras that the City intends to issue in the near future." In response, Redflex Holdings chairman of the Australian Board of Directors Max Findlay, board member Ian Davis and the company's top sales executive resigned after being blamed for the company's problems in Chicago.[14][15] Hoffman's report, delivered to the Redflex board in February 2013, found that Redflex had, indeed, provided Bills with lavish vacations expensed directly on the expense report of Redflex Executive Vice-President Aaron Rosenberg, who had also 'gifted' Bills with trips to the Super Bowl and White Sox spring training over many years, valued at up to US$2 million. Hoffman also found that Redflex's president had knowledge of the arrangement and had lied to Chicago's administration about the extent of the wrongdoing.[16] On 20 February, Redflex fired Rosenberg and filed a lawsuit against him alleging "dishonest and unethical conduct".[14] In a 1 March email addressed to all employees, Redflex Holdings chief executive officer and President Robert DeVincenzi, who took over the company in September 2012, announced the resignations of three top executives in its Phoenix, Arizona headquarters: former President & CEO Karen Finley; Redflex's General Legal Counsel Andrejs Bunkse and Chief Financial Officer Sean Nolen. The company has 'taken steps' to improve its internal ethics by requiring its employees to take 'anti-bribery and anti-corruption training'.[13]

The growing scandal has caused trading in Redflex shares to be halted twice already, according to the Chicago Tribune.[17] In 2012, the company reported a net profit of $21.3 million; On 11 February 2013 Redflex announced the figure will be adjusted to US$5.5 million due to legal costs which, after taxes of US$6.2 million are paid, will likely result in the company posting a loss.[15]

Ohio scandal

June 19, 2015 Acting on information supplied by a former top salesman, the FBI, Ohio Bureau of Criminal Investigation and the IRS, the Department of Justice brought charges of bribery and fraud against former Redflex CEO Karen L. Finley of Cave Creek Arizona, to which she pleaded guilty to a one-count information charging her with conspiracy to commit federal programs bribery and honest services wire and mail fraud. Finley admitted to a scheme that funneled campaign contributions to elected officials in Columbus and Cincinnati to either obtain or continue the contracts to supply photo red light enforcement.[18]

References

  1. ↑ "Share Price & Information - ASX".
  2. ↑ "ChinaTel Group, Inc. Signs MOU with Redflex, Traffic Systems Pty. Ltd., Beijing China, Aiming to Establish High Speed Wireless Broadband Based Traffic Management Systems in the People's Republic of China". Reuters. 2009-01-15.
  3. ↑ Kelly, Ross (9 May 2012). "Redflex shareholders shun takeover offer from Macquarie, Carlyle". The Australian. Dow Jones Newswires. Retrieved 11 July 2012.
  4. ↑ McIlwraith, Ian (10 May 2012). "Red faces in failed Redflex merger vote". The Sydney Morning Herald. Retrieved 11 July 2012.
  5. ↑ "Red Light Photo Safety Program: Frequently Asked Questions". SanDiego.gov. Retrieved 16 December 2010.
  6. ↑ Alastair Dalton (8 November 2004). "Crossings Pose the Biggest Rail Threat". The Scotsman. Scotland. p. 4.
  7. ↑ Beth Burger (1 July 2010). "5-year crusade concludes with red light law". Bradenton Herald.com. Retrieved 7 January 2011.
  8. ↑ "Crist signs Fla. bill legalizing red light cameras". NaplesNews.com. 13 May 2010. Retrieved 7 January 2011.
  9. ↑ "NMA Objections To Red Light Cameras". National Motorists Association. Retrieved 9 January 2011.
  10. ↑ "2/20/2015 California Cities Continue To Dump Red Light Cameras". The Newspaper.com. 20 February 2015. Retrieved 11 July 2012.
  11. ↑ Provance, Jim (2014-12-19). "BLADE COLUMBUS BUREAU CHIEF". Toledo Blade.
  12. ↑ Sewell, Dan (March 24, 2015). "Toledo judge blocks Ohio's new red-light camera restrictions". dispatch.com.
  13. 1 2 3 Kidwell, David 3 more Redflex execs out as fallout continues for city's red light camera firm Chicago Tribune March 2, 2013
  14. 1 2 Kidwell, David Red-light camera firm fires VP, sues him over Chicago scandal Chicago Tribune February 22, 2013
  15. 1 2 Largest Red Light Camera Program In World Faces Widened Corruption Probe thenewspaper.com February 11, 2013
  16. ↑ Kidwell, David Red light camera firm admits it likely bribed Chicago official Chicago Tribune March 2, 2013
  17. ↑ "2013-02-11 Update re Chicago and Earnings Guidance" (PDF). Redflex Holdings: Investor Relations. 2013-02-11.
  18. ↑ "Former CEO Pleads Guilty to Bribery and Fraud Scheme Involving Red Light Camera Contracts". Department of Justice. 2015-06-19.
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