Millions in PPP aid given to traffic camera companies linked to corruption scandals
Redflex Traffic Systems, SafeSpeed at heart of corruption probes in Chicago
Companies that contract with major U.S. cities to provide red light and other traffic enforcement cameras reaped millions in taxpayer-funded aid through the Paycheck Protection Program despite alleged involvement in past bribery scandals.
Data released by the Small Business Administration on Monday revealed the names of more than 658,000 small businesses that received government relief through the $670 billion Paycheck Protection Program since its launch at the beginning of April.
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The agency did not reveal precise dollar amounts of the loans and instead provided a range for each loan. The data shows the government issued $521 billion in loans, with an average loan size of $107,000. Combined, the aid program supported about 51 million jobs, or roughly 84 percent of all employees working at small businesses, the Small Business Administration said.
Redflex Traffic Systems, an Australian-based company that runs its North American operations from Phoenix, Arizona, received a loan between $2 million and $5 million, according to the data. The money helped the company retain 168 workers.
It is not illegal for U.S. subsidiaries of foreign companies to apply for aid through the PPP under some conditions. By and large, the rescue program is open to any business with fewer than 500 employees per location. So long as 60 percent of the money goes toward maintaining payroll, the federal government will forgive the loan, essentially turning the loan into a grant.
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But Redflex has a controversial past: The company's former CEO, Karen Finley, was one of three people sentenced to federal prison in 2016 for a long-running bribery scheme that secured the business lucrative contracts in Chicago. The company paid $20 million to the city to settle a lawsuit.
Redflex exerted similar pressure on officials in Columbus, Ohio, to expand their contracts with the company, according to the Chicago Tribune. State lawmakers in Ohio have since banned tickets from red-light cameras unless an officer is present when the violation occurs.
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"Two months ago, we publicly announced that COVID-19 was profoundly impacting our business and we were forced to decide whether to reduce staff or pursue assistance in order to keep our team in place," the company said in a statement provided to FOX Business. "We chose to pursue this loan program and it has helped us protect the jobs and healthcare of our 169 American employees."
"We are appreciative that we qualified and thankful to the SBA for helping us provide stability for our staff and their families during this pandemic," it added.
SafeSpeed, based in Chicago, collected a loan between $1 million and $2 million, which helped it preserve 39 employees, the data shows.
The red-light vendor has likewise been accused of bribing Chicago city officials to push bills in its favor and oppose legislation that threatened its interests. The company's chief has denied wrongdoing.
Former Illinois state Sen. Martin Sandoval pleaded guilty to federal bribery and tax fraud charges in January. Sandoval said he took $250,000 in bribes from SafeSpeed to ensure the company was able to install red-light traffic cameras in Chicago suburbs.
SafeSpeed did not respond to a request for comment.