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Toronto Toronto Community Housing CEO fired over ‘tainted’ $1.3-million consultant’s contract

The board of Toronto’s beleaguered public housing authority has fired the organization’s CEO, after an investigation found she oversaw the “tainted" signing of a $1.3-million management consultant’s contract.

Toronto Community Housing Corp. (TCHC) announced on Thursday that its board had decided that CEO Kathy Milsom should leave, saying her “conduct throughout this process did not meet the high standard that we set for ourselves.”

TCHC, which is the largest public-housing agency in Canada and spends hundreds of millions each year on redevelopment and repairs, has long been plagued by scandals. It has now cycled through four CEOs since 2011. Toronto Mayor John Tory had made reforming the organization a key priority after he was first elected in 2014, and has repeatedly pleaded for hundreds of millions of dollars from Ottawa and Queen’s Park to repair its many dilapidated buildings.

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In the latest controversy, the agency’s board placed Ms. Milsom on leave in December, pending an investigation by an external law firm into the awarding of a three-year, $1.3-million contract to management consultant Edmond Mellina and his firm Orchango. The contract, to provide “change-management consulting services” to TCHC as it seeks to become more “tenant-centric,” was also terminated in December.

On Thursday, TCHC’s board said it had reviewed the investigation by law firm Bennett Jones LLP and had concluded that Ms. Milsom had overseen a request-for-proposals process that “did not comply with the procedures and protocols expected of a public procurement process.” TCHC’s statement also said that Ms. Milsom had failed “to fully co-operate with the investigation” by the law firm.

Ms. Milsom, who is also the chairwoman of the governing council of the Standards Council of Canada and a director of the Greater Toronto Airports Authority, did not immediately respond to a request for comment. In a statement, she called the board’s decision “deeply troubling” and said she would be “vindicated.”

“I can say with emphatic and unequivocal certainty that at all times I acted in the best interest of the organization, its tenants, its employees and its stakeholders,” Ms. Milsom’s statement reads.

TCHC says current board chairman Kevin Marshman will take over as CEO, starting in April. He had previously served as an interim CEO in 2017, before Ms. Milsom was appointed. On Thursday, Mr. Marshman confirmed that Ms. Milsom had been “terminated for cause” and is not receiving any severance payment. But he said he could say little more about the situation because it is a human-resources issue and “may be the subject of litigation.”

He described the process around the Orchango contact as “tainted,” and said the Bennett Jones report confirmed that the awarding of the contact did not follow TCHC’s rules for a “public procurement" and so denied other firms who bid on the work “a fair and equal opportunity.”

"Ms. Milsom was directing that activity. And as a result of that, she has been terminated,” Mr. Marshman said.

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Mr. Marshman also said that another TCHC employee, also put on leave when the probe began, was not found to have engaged in wrongdoing and is returning to work at the housing agency. However, he would not confirm the employee’s identity.

Speaking to reporters on Thursday, Mr. Tory said he had confidence in Mr. Marshman to charge ahead with reforming TCHC – a process the mayor said is going too slowly and which he has asked the city manager to find ways to accelerate.

“It has not been a happy story to read about, both before I came to city hall and in the time I have been here,” Mr. Tory said. “But … I think the most important thing that we have to do is maintain a standard of conduct and behaviour in management that is at the highest level when it comes to public bodies of this kind.”

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