The former chief financial officer of Toronto’s embattled public housing agency could be forced to pay back nearly $60,000 for the free “executive model” vehicle he drove while allegedly pocketing a car allowance of up to $600 per month, according to a confidential report obtained by The Globe and Mail.
The Toronto Community Housing Corp. has asked for legal advice on recouping the money from Gordon Chu, who retired in October of 2010, just months before the release of damning reports that led Mayor Rob Ford to sack the entire board.
The city’s auditor-general came across the apparent discrepancy during an audit of TCHC’s 120-car fleet, one of three follow-up investigations Jeffrey Griffiths unveiled at a TCHC board meeting last month.
“I was shocked. I think the other members of the board were shocked,” Councillor John Parker, the mayor’s designate on the board, said of the revelations about Mr. Chu.
“We were pleased to know that the new management was equally shocked and had already taken steps to pursue the matter and had turned it over to legal action.”
A confidential attachment to the fleet report, presented to the board during a closed-door session, describes how the former CFO began collecting a $500 car allowance when he signed his contract in 2003. In 2007, the allowance was increased to $600.
Meanwhile, in late 2005, Mr. Chu – who isn’t mentioned by name in the document – began driving a leased car paid for by Housing Services Inc., a TCHC subsidiary that provides construction and maintenance services.
Mr. Chu negotiated the $733-a-month lease agreement himself and left no paper record of the deal, the report alleges.
Factoring in fuel and maintenance expenses, HSI shelled out approximately $57,000 for Mr. Chu’s ride over five years.
“In our view, it is inappropriate that a vehicle allowance should be provided by TCHC to the CFO while, in addition, a separate vehicle should be leased for the CFO through its subsidiary company HSI,” the report says.
“This vehicle was a relatively expensive executive model vehicle equipped with upgraded options. In our view, even if vehicles are to be provided to senior staff, they should be within a certain modest and reasonable price range.”
As far as Mr. Parker knows, the case has not been turned over to police. “There was no evidence that there was any fraud in this case. But there was clearly slipshod management.”
Slipshod management was the tip of an iceberg of troubles that surfaced in February of 2011, when Mr. Griffiths released reports slamming the country’s largest social-housing provider for sloppy procurement practices and lavish spending on spa getaways, Christmas parties and high-end chocolates.
Most of the senior managers in charge during that period have since departed, including CEO Keiko Nakamura, who was fired by Case Ootes, an ally of Mr. Ford who served temporarily as a one-man board.
Mr. Chu retired Oct. 8, 2010, according to a memo that praised his “long and distinguished career with Toronto Community Housing and its predecessor corporations.”
He earned $205,371.93 in salary, plus $7,637.52 in taxable benefits in 2010, according to the province’s annual “sunshine list” of public-sector employees earning $100,000 or more.
Mr. Chu could not be reached for comment on Wednesday. His last address listed with TCHC is a mailbox in a strip mall on Creditview Road in Mississauga. There was no answer Wednesday night at a Mississauga house registered to the Chu family.
If TCHC has taken any concrete steps to recover the $57,000 since the board agreed to seek legal advice Feb. 23, the agency’s spokesman isn’t saying. Jeffrey Ferrier wouldn’t comment on a matter the board discussed in-camera.
“Toronto Community Housing takes the auditor-general’s report seriously, and we are working with the board to address all the recommendations in the fleet audit report,” he wrote in an e-mail Wednesday.
For his part, Mr. Parker is confident there are better days ahead for TCHC.
“The corporation has already turned a corner.”