GoSafe speed camera firm in US lawsuit over alleged graft

A firm that holds a share of the Republic's €100 million privatised GoSafe speed cameras contract is being pursued by the US city of Chicago for €330 million in damages arising from allegations of corruption and bribery.

Redflex Holdings recently disclosed to the Australian Securities Exchange it had been named as a co-defendant, along with its US subsidiary Redflex Traffic Systems Inc, by the City of Chicago.

However, the Australian-based company has strongly denied any knowledge of any alleged wrongdoing, according to papers that have been seen by The Irish Times.

Redflex has a 16 per cent share in Road Safety Operations Ireland, which runs Ireland's GoSafe speed cameras contract awarded in 2009. The remaining shareholders are Co Kerry businessman Xavier McAuliffe's Spectra and a French company, Egis, who own 42 per cent each.

Bidding

Road Safety Operations, which is based in the

Isle of Man

, is currently bidding to renew its contract with the State for another five years in a deal that could be worth up to €115.5 million, according to

Department of Finance

figures.

The proposed new contract includes the possibility of a two-year extension subsequently. The annual cost to the exchequer is €16 million, with another €500,000 a year in associated administrative costs, including signage.

The existing State contract, which provides for up to 6,000 hours a month of speed monitoring, expires in November. Sources close to the department confirmed that the GoSafe consortium and at least two other operators have submitted tenders.

The Chicago lawsuit follows a criminal trial in which Karen Finley, former CEO of Redflex's US arm, pleaded guilty to conspiracy to bribe Chicago city transportation manager John Bills. He was found guilty earlier this year of receiving €500,000 in cash and gifts, including a boat.

Redflex Traffic Systems supplied fixed speed cameras. His trial heard Mr Bills was paid about $2,000 (€1,780) for each new red light camera monitor and up to 5 per cent of revenue collected by the company from the city. Ms Finley was also a director of the Australian parent company.

In a second disclosure to the Australian Securities Exchange, Redflex Holdings revealed it is co-operating with a linked ongoing criminal investigation by Australia’s federal police into the conduct of former employees.

Redflex runs an international speed cameras business across the US, Mexico, Europe, Asia and Australia. The company has told the US courts it had no knowledge of what its US subsidiary Redflex Traffic Systems was doing and is not liable for damages.

The Irish company became an unlimited company registered in the Isle of Man in June 2013, relieving it of the obligation to publish accounts. In its last publicly available accounts in 2012, it declared profits of €50,000 a week.

It recorded operating profits of €3.12 million in the 15 months to the end of March 31st, 2012.

Auditor’s report

It has lodged a two-page auditor’s report with the Companies Office that does not outline the scale of its profits for 2013, but it confirms that it is still making money.

The directors are listed as chief operating officer Gareth Brown, French national Emmanuel Michaux, Ivor McAuliffe and Xavier McAuliffe. In 2015 the Department of Justice extended the contract by one year, bringing the total value of the current contract to an estimated €96 million.

In the following year, a company director, Ivor Browne McAuliffe, told an Ennis court that an “Isle of Man-based structure” had been introduced “to limit access to our accounts”, according to official papers.

During a hearing about speeding cases, he told Judge Patrick Durcan: "The reason we introduced the Isle of Man structure was to just limit access to our accounts from a competitor's point of view."

Such a move is commonplace for Irish companies, he said.

An Garda Síochána said it has a contract with GoSafe and "is satisfied with the governance arrangements in place to ensure it fulfils its contractual requirements".