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Keiko Nakamura, Toronto Community Housing's Chief Executive Officer, left, and David Mitchell, Chair of Toronto Community Housing's Board of Directors attend a press conference to announce the company's response to the report made public by Toronto auditor-general Jeff Griffiths in Toronto, February 28, 2011.

Fernando Morales/Fernando Morales/The Globe and Mail

Rob Ford's victory on the Toronto Community Housing file appears complete after his hand-picked designate ousted the CEO whose resignation the mayor has been demanding for weeks.

Case Ootes formally told Keiko Nakamura to step down Thursday, more than two weeks after a pair of damning auditor's reports slammed misspending and flouted procurement practices at Toronto Community Housing Corp., Canada's largest landlord. Mr. Ford had asked Ms. Nakamura to resign hours after the reports' publication, but she refused.

Mr. Ootes, who has been acting as proxy for the board since he was appointed interim managing director in a fractious council vote last week, is now the sole person in charge of the $6-billion corporation. He is being paid $25,000 to run the housing corporation for a maximum of three months.

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Mr. Ootes is the only person with the authority to fire Ms. Nakamura. He also has the ability to appoint a new CEO, although it's not clear whether he will do so immediately. He was not returning phone calls Thursday. In interviews last week, he said he hadn't yet decided on his course of action. "I have the power to make those decisions that affect staff, whether it's hiring or termination," he said at the time. "Obviously, those powers have to be used judiciously and with due consideration of all the facts."

In a statement issued by the TCHC Thursday afternoon, Mr. Ootes is quoted as saying he has "concluded that because of recent events, Ms. Nakamura continuing as CEO would be a substantial distraction for the corporation in its efforts to provide affordable housing to low- and moderate-income residents."

The mayor's office would say only that it had been advised of the housing corporation's statement regarding Mr. Ootes's request, and that it's time to "move forward and keep our focus on the tenants and taxpayers."

Councillor Doug Ford, Mayor Ford's older brother, said overall, the decision to have Ms. Nakamura leave is "absolutely" a good thing.

"People want accountability. They want transparency. And there was a lack of transparency, as far as I'm concerned," he said. "And I think 90 per cent of the people in Toronto felt the same way. There's rules in place and people have to apply them. And the board of directors has to be accountable."

But he wouldn't comment on whether Mr. Ootes will appoint Ms. Nakamura's successor.

"Case is more than capable of putting things in place. We're going to get the board in place and move forward, find a new CEO and change the governance. … Over the next four or five weeks we'll be updating you."

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The pair of reports from auditor-general Jeff Griffiths found the TCHC had flouted its own spending and procurement policies.

Ms. Nakamura, who had been CEO at the social-housing corporation since early 2010, argued she had nothing to do with the misspent funds and had in fact done her best to clean up spending since taking on the position.

Her defenders included tenants and former board members, including the mayor's own designate on the now-defunct board, Councillor John Parker.

"I'm sorry to hear that Keiko will be leaving," he said Thursday. "In my brief tenure on the board, I was very impressed with her professionalism. I was impressed with her work. She gave me every impression that she saw the problems at the TCHC and had already begun the steps towards turning things onto the right track.

"You'd have to think that comes from [the mayor's]direction, but it certainly didn't come from me."

Councillor Paula Fletcher, who sat on the housing corporation's board for seven years, said she's concerned about the fate of the TCHC.

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"He's a one-man board," she said of Mr. Ootes. "The governance model here, it was dreamt up on the back of a napkin. For a $6-billion corporation, that's pretty serious.

"I think everybody who thinks social housing is important needs to worry a little bit and keep their eyes very closely on what's going on over there. That's unheard of."

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