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Former Redflex executive alleges ‘gifts and bribes’ to officials

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Wednesday, Feb. 19, 2014
By Joe Martin
Cronkite News

PHOENIX – A former Redflex Traffic Systems executive has accused the company of lavishing “gifts and bribes” on government officials in Arizona and 12 other states.

The allegation by Aaron Rosenberg, former vice president of sales and business development, is part of a counterclaim to a lawsuit filed against him last year by Redflex, a Scottsdale-based firm that cities and states hire to provide traffic camera systems including those used for photo radar.

Rosenberg’s filing cites “institutionalized behaviors” that include providing meals, golf outings and tickets to professional sporting events to pursue and keep contracts.

Redflex has contracts with 10 Arizona cities, according to company spokeswoman Jody Ryan. It used to provide cameras on state highways, but that contract wasn’t renewed in 2010.

The counterclaim is in response to a lawsuit that Redflex filed in Maricopa County Superior Court following Rosenberg’s termination in 2013. In the suit, Redflex claims that Rosenberg violated company policy by using “thousands of dollars in expenses of a personal nature” and gave “inappropriate payments and gifts on behalf of Redflex to employees or agents of Redflex customers or potential Redflex customers.”

Redflex also contends that Rosenberg “disguised reimbursement requests for personal and other inappropriate expenses.”

Rosenberg’s attorney, James Burr Shields II of Phoenix, declined to comment on the case.

Redflex provided a statement denying Rosenberg’s claims.

“We are committed to transparency and honesty in our business practices,” the statement said. “Our focus continues to be on providing best in class customer service and technology to our clients to make their communities safer.”

Rosenberg’s claim, which seeks damages for defamation and emotional distress, said that gift-giving was standard procedure for Redflex employees and that “[Redflex] bestowed gifts and bribes on company officials in dozens of municipalities within, but not limited to the following states: California, Washington, Arizona, New Mexico, Texas, Colorado, Massachusetts, North Carolina, Florida, New Jersey, Tennessee, Virginia and Georgia.”

It contends that Rosenberg was just carrying out orders from higher-ups, including the then-CEO Karen Finley.

The Chicago Tribune reported in October 2012 that Redflex paid a $910 hotel bill for a city official. Rosenberg’s claim said he was told by superiors to “take one for the team” and accept blame for the expenditure, further alleging that company officials told Rosenberg he would be reimbursed for the expense.

Ryan, the spokeswoman, shared the results of an internal Redflex investigation that identified 17 trips paid for by Rosenberg or a local consultant between 2003 and 2010 and then reimbursed by the company, totaling approximately $20,000. The trips included golf games, meals, hotel rooms, flights and rental cars, according to the report.

A spokeswoman for the city of Phoenix, which has used Redflex traffic cameras since 2009, didn’t respond directly to Rosenberg’s allegations but emailed a statement saying in part, “Redflex was the lowest priced, responsive and responsible bidder and the award recommendation was approved by the Phoenix City Council on May 13, 2009.”

Show Low has had a contract with Redflex since 2009 as well. Jeff Smythe, the former police chief, said in a telephone interview that the city worked with Redflex to develop the necessary infrastructure following several serious accidents.

“My dealings with Redflex were scrupulous. Whenever they came to dinner I went dutch or I bought for them,” Smythe said. “They never did anything unprofessional in the dealings of the contract.”