The head of Canada's largest social housing provider and other members of its senior management team have repeatedly violated recruitment rules, says the city’s ombudsman in a scathing report that raises red flags about their leadership and conduct surrounding the hiring, promoting and firing of staff.
Fiona Crean’s 111-page report, called Unrule(y) Behaviour, was extremely critical of Eugene (Gene) Jones, the embattled president and CEO of Toronto Community Housing Corp., who she says intentionally flouted existing human resources policies and practices.
Crean said Jones felt he was entitled to "do as he wanted" and that he had no responsibility for knowing the rules. She said Jones felt the responsibility of knowing the rules fell to the corporation's vice-president of human resource, who often didn't know the rules either.
"This is a story about the failure of leadership at the top," Crean told reporters after releasing her report Tuesday morning.
She said the pattern was set by Jones and others followed his lead, and she accused senior managers of running the corporation as though it was their own "personal fiefdom."
Jones remains the head of the TCHC, which is owned by the city, but observers believe the report puts his employment further into jeopardy.
Mayor Rob Ford defended Jones on Tuesday, telling reporters that firing the CEO would not be a "smart move."
At a press conference Tuesday night, Bud Purves, chair of the Toronto Community Housing Corporation's board of directors, acknowledged the "serious issues" identified by the obmudsman but said the board needs more time to review the report. He said the board will reconvene deliberations on Friday at 8 a.m.
'Climate of fear' amid turnover
In the 18 months after Jones was hired, 88 staff members left the agency, mostly involuntarily, and there were 96 new hires.
Crean said employees were treated unfairly and there was “a climate of fear” that destabilized the workplace amid the turnover.
Staff were hired and fired improperly, compensation rules were regularly broken and contracts were changed without proper consultation or notice, the report found.
Some wage levels were arbitrarily determined and that could have wasted taxpayer money, Crean told reporters.
The wave of personnel changes created “chaos” and left the TCHC without the necessary skills and adequate institutional memory, she added.
The report also raised concerns about record keeping. Crean said there were 233 staffing changes over the period of her investigation but there were files for only 119 of them and almost every file was incomplete.
Crean cited several specific cases where the rules were broken:
- A day after Jones was appointed, he promoted a director to become interim vice-president of human resources without reviewing resumes or applications or interviewing candidates. A month later, the interim tag was removed without a competition. The promotion never went to the board for approval.
- Jones hired a new vice-president four days before the competition closed and denied that it prevented other qualified candidates from applying.
- Jones hired a manager and promoted her six months later to a senior director with a $30,000 raise without a process, job description, job evaluation or competition.
- In another case, Jones put his executive assistant into a management-level category, allowing her to claim paid overtime, something not permitted by the rules.
- Management did not receive proper approvals or provide adequate notice to staff when they made changes to employment contracts, altering the fundamental terms of employment for non-union staff. The changes eliminated long-held common-law rights to notice and severance pay.
- Senior executives failed to declare a conflict of interest when hiring people they knew personally.
Crean met with Jones and other managers April 15 after she provided a draft report. In her final report, she said Jones told her he had not “looked at it thoroughly,” and he delegated his responsibility to review and respond to the vice-president of human resources.
“The CEO’s participation was minimal,” Crean wrote in the report. “I am perplexed by his reaction and demeanour.”
Crean was also critical of the oversight provided by the TCHC's board of directors, failed to ensure the appropriate recruitment and selection procedures were followed, the report said.
Crean said the board, which includes four members of council, didn't ask enough questions, accepted incomplete reports from management and were not aggressive enough.
TCHC agrees with recommendations
The ombudsman launched the investigation in August 2013 after current and former non-unionized employees complained to her office about things such as improper hiring and unfair terminations in the months after Jones was hired in June 2012.
Crean's report contains 12 recommendations to improve the situation and she says the TCHC has promised to implement each one.
Her recommendations include training the senior executive to follow existing human resource policies, streamlining hiring and promoting information for internal records and reporting to the board, and expanding the conflict of interest policy to include past business relationships and other personal associations.
Councillors take aim at mayor
After the report was released, city Coun. Karen Stintz, a mayoral candidate who is challenging Ford in October’s municipal election, said Crean’s findings underline a lack of leadership from the mayor.
Stintz said there are still problems with transparency and accountability at the TCHC, despite the mayor's claims that he has addresses issues of mismanagement.
“Agencies that receive taxpayer funding must be accountable for how they are managed so that we know that taxpayers are getting value for their investments and that tenants are treated with respect,” she said in a written statement. "The mayor has repeatedly claimed that he has personally addressed mismanagement at our social housing provider. This report provides clear evidence that Mayor Rob Ford’s claims are not true.”
Coun. Shelley Carroll, another Ford critic, also said some of the blame rests with the mayor because he had a hand in the appointment of current board members after the forced departure of the previous CEO in 2011 amid a spending and expense scandal. Back then, most of the board members quit and council voted to dismiss the remaining ones.
Carroll blasted Jones, saying he had to have known that he was making the corporation and the city vulnerable while doing a great disservice to tenants.
“He’s going to have to make a robust answer to this report and he’s going to have to commit that he takes seriously the ombudsman’s earlier recommendation that he needs training himself,” Carroll told CP24 reporter Jackie Crandles. “He needs significant training if he’s going to continue this role and he has to start to look like he’s taking it seriously.”
This is not the first time the TCHC has been subject to an outside review under Jones’ leadership.
A private law firm investigated two allegations of improper conduct and in February the TCHC said it was taking steps to “strengthen managerial practices.”
The TCHC said the investigation found Jones did not exercise proper management oversight and failed to follow board processes and procedures.
In light of the law firm’s findings, the TCHC said Jones would not be eligible to receive a 2013 bonus and he would be required to attend a university executive leadership program, work with an executive coach and participate in a six-month performance review.
Despite the firm’s findings, Mayor Rob Ford stood by Jones and reiterated his support for the embattled executive.
Before he was hired by the TCHC, Jones served as the executive director of the Detroit Housing Commission from 2008 to 2012.
Mayoral candidate wants to strengthen oversight
Given the seriousness of the allegations in the ombudsman report, at least one mayoral candidate is calling for new rules on the way investigations of a similar magnitude are handled going forward.
In a statement released Tuesday afternoon David Soknacki said he would like to see funding increased to city watchdog offices and a central office created to help “support more urgent investigations.”
“If the system was working, then the TCHC Board would have caught these allegations earlier and acted on them before it came to that,” Soknacki said. “Directors are appointed to ask tough questions on the public’s behalf, and it’s time Council took more aggressive steps to insist on results from our boards, rather than simply waiting for the next volcano to erupt.”
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