Growing support around the country for photo-enforcement cameras by governments and politicians has created an ultra-competitive battle between two local companies in the hunt for lucrative contracts.
And what a fight it has turned out to be between American Traffic Solutions and Redflex Traffic Systems, both of Scottsdale, especially behind the scenes, where there has been an attempted bribe by a politician, a convicted company salesman, powerful lobbying efforts and ongoing legislative battles.
Meanwhile, the incredible growth of the photo-enforcement industry - and the political battles and equipment problems that surface from time to time - has provided fodder to Web sites that question the studies and financial motivations of the photo-enforcement companies and the governments that desire them.
ATS and Redflex both claim they are the leader in the industry that's dominated by the two companies. Redflex has more than 190 contracts, including local cameras in Paradise Valley, Chandler and Tempe.
ATS has more than 100 contracts around the country, including Scottsdale, Mesa and Phoenix locally and a greater share of the nation's major cities.
Redflex says it has more than 1,000 cameras taking pictures. ATS has about 700. Both are under contract for many more.
Each company sends out about 500,000 citations a month. Both are moving into new office spaces because they've outgrown their current Scottsdale Airpark buildings. New corporate spokesmen have been hired.
Redflex's revenue is growing at a rapid rate, increasing in the United States from $31.3 million to $44.3 million in one year with the installation of 235 new cameras, according to the company's 2007 annual report. While its U.S. headquarters are in Scottsdale, the company is based in Australia and is traded on the Australia Stock Exchange.
Karen Finley, Redflex president and CEO, said the arguments against the cameras have remained the same for years - it's all about the money or it's "Big Brother."
"Even though the industry has grown and the technology matured, it's the same rhetoric we heard in 1998," Finley said. "But we're in over 190 cities - look at that growth."
ATS, unlike Redflex, is a private company and does not disclose its earnings.
ATS CEO Jim Tuton said the industry is prospering because studies have consistently shown that cameras make the roads safer and citizens support them.
"After 10 years of enforcement, people still want it," Tuton said.
Today, ATS and Redflex are turning their attention back home, to what at this point would be the largest contract for either company - the proposed Arizona statewide contract with 170 camera locations, including urban freeways and rural highways.
A year in the works at the request of Gov. Janet Napolitano, the companies and potentially others, such as Dallas-based ACS, have until March 10 to submit their proposals. The program, which would vastly expand on the state's two mobile speed vans currently operated by Redflex, is projected to generate $90 million for the state in its first year - and millions more for the operator.
"The governor has said that public safety is her top concern when it comes to this," said Shilo Mitchell, spokeswoman for the governor. "Obviously, each person is different the way they read into the (financial projections), but the governor has stated multiple times it's about safety."
BEHIND THE SCENES
For most of the public, their experiences with the companies are limited to driving by a camera or being photographed and paying a fine.
But there are a number of examples that provide insight into what can occur when contracts are on the line.
For instance, a Missouri town's mayor tried to solicit $2,750 from Redflex to assure the company would receive his vote for the city contract.
Redflex immediately reported the attempted bribe to the FBI, then cooperated with a sting that sent the St. Peters, Mo., mayor to prison.
ACS was charged with bribing police officials in Edmonton, Alberta, with trips and perks to secure a contract. All charges were dropped against the company in November.
In Lubbock, Texas, Redflex was the recommended winner of a new contract, but the City Council shocked Redflex by voting 4-3 not to give them the deal. There was a rebid in which Redflex did not participate. ATS ended up with the contract.
"It had the feel of someone violating the anti-lobbying provision the city had," Redflex's Finley said.
Tuton said ATS did not violate the provision. The city unplugged the cameras earlier this month, anyway.
In Jefferson Parish, La., ATS was the recommended winner, but this time Redflex got the contract.
A consultant helping Redflex in the parish and around the Southeast was Jay Specter. Specter, who had been negotiating for Redflex while under indictment, was convicted in South Carolina of five counts of felony forgery from a business deal unrelated to photo enforcement. Redflex nonetheless kept the contract.
Redflex, which said it knew nothing of Specter's legal troubles, immediately fired him. Redflex had hired him in 2005 shortly after Specter left ATS. Tuton said he was fired for his business practices.
Both companies claim to have superior technology, yet they have had to dismiss a large number of citations over gaffes.
In Scottsdale last month, 589 citations were dismissed because ATS could not prove people were going more than 11 mph above the speed limit on Shea Boulevard. They attributed the problem to a faulty lane sensor. In Aberdeen, Wash., a city councilman proved ATS was wrong in issuing him a red-light camera citation in Seattle when he was actually at home sleeping.
ATS ran into controversy in Mesa when revenue fell well below expectations. After an installation delay, Tuton said there was a bad batch of flash tubes that have since been repaired.
In 2005, Redflex had to throw out about 2,000 Scottsdale citations because date, time and speed information was missing.
Such incidents have given ammunition to the industry's opposition. The Washington, D.C.-based Web site thenewspaper.com summarizes negative photo enforcement news from around the U.S. and questions the validity of studies showing the effectiveness of the cameras.
Safespeedlafayette.com was created to make life difficult for Redflex in Lafayette, La., where a number of political tactics forced Redflex to send a representative to the area. The Web site not only gives advice on how to try to beat the system but it also allows users to play a video game to "paintball," "shotgun" or even "nuke" a Redflex van.
THE ARIZONA LEGISLATURE
A House bill has been introduced that would drastically change the system in Arizona by eliminating facial photography. Instead, only the license plate would be photographed and the ticket would automatically be sent to the registered owner of the car whether or not they were driving. There would still be a fine, but there would be no "points" on a driving record. It's a concept ATS first tried changing last year as part of the budget process.
Tuton said HB2662 was not introduced for ATS and that they will support what customers want. But he does speak highly of this process, which is used in most places in the country and results in a higher number of detections resulting in citations.
"It makes it more of a financial penalty and it's effective," Tuton said.
Also at the Legislature, earlier this month the Senate Transportation Committee approved a bill to prohibit photo enforcement on state roads and to send the issue to the ballot. It must still be approved by the full Senate.
To deal with such legislative moves, the companies have hired powerful lobbyists.
Locally, Jay Heiler, former Gov. Fife Symington's chief of staff, and Mike Williams and Associates lobby for Redflex. Stan Barnes, a former East Valley legislator, and Barry Dill of Hamilton, Gullett, Davis & Roman both lobby for ATS. Dill previously served as senior adviser on Napolitano's 2002 gubernatorial campaign and on her 1998 Arizona attorney general campaign.
Despite the occasional hiccup, the success of the companies is undisputed as studies and polls continue to return in their favor.
Both companies have outgrown their space. ATS is staying in Scottsdale Airpark, completely remodeling and taking over two adjacent buildings to expand its space from 15,000 square feet to about 35,000 square feet. The first employees moved in Friday.
Redflex is leaving Scottsdale this summer for a new 76,000-square-foot building on the Interstate 17 corridor in north Phoenix, nearly tripling its current size.
Tuton said ATS is winning about 70 percent of head-to-head contract competitions with Redflex for major cities, and about 65 percent for smaller cities. For instance, last year ATS was awarded the Scottsdale contract.
But in two instances, the competition was determined not by a graded paper submittal or political lobbying, but in the field.
The competitions took place in Austin and Corpus Christi, Texas. Both companies installed cameras for a test period. Both times, Redflex won. It's a matchup the company takes great pride in, evidenced in that the company enlarged the news release on the competition and hung it on the wall of an office lobby.
And the battle goes on. On Thursday, both companies submitted proposals to obtain a massive 220-camera contract for the province of British Columbia in Canada - the largest proposal to date.