Ousted CEO of Toronto Community Housing accused of 'undue influence' over contract

The incoming CEO of Toronto Community Housing says the previous CEO ousted from the job earlier this month exercised "undue influence" on a process that awarded a contract to a management consultant company.

Kathy Milsom fired with cause, contract 'tainted,' incoming CEO Kevin Marshman says

Kevin Marshman, incoming CEO of Toronto Community Housing and current board of directors chair, says previous CEO Kathy Milsom exercised 'undue influence' over the process in which management consultant company Orchango was awarded a contract. He described the contract as 'tainted.' (Richard Agecoutay/CBC)

The incoming CEO of Toronto Community Housing says the previous CEO ousted from the job earlier this month exercised "undue influence" on a process that awarded a contract to a management consultant company.

Kevin Marshman, current chair of the TCH board of directors, told CBC Radio's Metro Morning on Tuesday that Kathy Milsom was fired with cause following the contract awarded to Orchango. TCH announced her termination last Thursday.

Marshman, who will take over as full-time CEO on Apr. 3, said he cannot provide many details about the firing because it could end up before the courts. TCH is Canada's largest social housing provider. 

"What I can tell you about it is that, through the process, Ms. Milsom exercised undue influence on the process and it did not follow our well-established procedures, policies and protocols to ensure integrity so that everybody who bids on a tender is fairly evaluated and has a fair chance of winning the award," he said.

Before the issue made headlines, Marshman said a person approached the board, advising it that "there were concerns with the Orchango contract." The board immediately investigated, he said.

"When it became apparent that the contract, for lack of a better description, was tainted — and you will recall that we announced that in December — we immediately cancelled that contract for cause and put Ms. Milsom on administrative leave."

The board then hired the law firm Bennett Jones to investigate the concerns, which stemmed from a request for proposal (RFP) process that awarded management consulting services to Orchango, which says it specializes in change management.

Kathy Milsom, seen here in June 2018, was fired as Toronto Community Housing CEO. (Gary Morton/CBC)

Milsom was placed on administrative leave last December before she was fired earlier this month.

According to media reports, Milsom said in a statement shortly after she was fired that she found the board's decision "deeply troubling" and she looks forward to "being vindicated of these allegations in due course."

Management turmoil called 'drama'

In a statement released by the TCH board on Feb. 21, it said Milsom will "cease to be CEO, effective immediately." 

The board said in the statement that it concluded that Milsom's "conduct throughout this process did not meet the high standard that we set for ourselves. This conduct included overseeing an RFP process that did not comply with the procedures and protocols expected of a public procurement process and failing to fully cooperate with the investigation that has led to this independent report."

TCH Vice President Sheila Penny is acting CEO until Apr. 3, when Marshman will take over.

The TCH has had four CEOs in eight years. Marshman described the management turmoil as "drama," but when pressed, he said: "Despite the churn that is going on in Toronto Community Housing at its most senior position, the organization continues to move forward. It continues to improve the living conditions of our tenants.

"I think we are going to see a sea change as we move forward."

Marshman added he didn't accept the job lightly.

Orchango president defends work for TCH

Edmond Mellina, president and co-founder of Orchango, said in a statement on the company's website that it is proud of the work it did for TCH.

"This is our specialty: change management. In a short amount of time, we had taken concrete steps to change the culture, including breaking down silos and improving accountability. We established great momentum and were honoured to help deliver the change we could for tenants."

According to the TCH, its 2019 budget of $1.05 billion will focus on improvements to housing and services for its 110,000 tenants.

The budget, approved by the board on Feb. 5, includes $422.6 million for capital, $601.2 million for operations and $21.9 million toward a proposed multi-year business transformation project.

With files from Metro Morning