The former head of Toronto Community Housing is accusing the public housing entity of wrongly firing her in a new statement of claim filed in court.
In a 29-page statement filed Monday, Kathy Milsom also alleges that Mayor John Tory promised to “throw (her) under the bus” if the increased spending on a controversial contract became a “media issue.”
The claims made by Milsom have not been tested in court. Neither Toronto Community Housing nor a second named defendant, TCH employee Andrew McKenzie, have filed a statement of defence.
“As this matter is before the courts, Toronto Community Housing will not be providing comment,” spokesperson Bruce Malloch told the Star in an email.
McKenzie did not respond to requests for comment. An out-of-office response on his TCH email said he was away until March 18.
“As the mayor said last month, the Toronto Community Housing board has taken decisive action and he believes the board made the right decision,” Tory’s spokesperson Don Peat said in a statement. “As this matter is now before the courts, we won’t be making further comment.”
The TCH board, following an investigation from an independent law firm, terminated Milsom with cause, saying in a statement that her “conduct throughout this process did not meet the high standard that we set for ourselves” and that she oversaw a bid that “did not comply with the procedures and protocols expected of a public procurement process.”
In the statement, Milsom claims that through late 2017 and 2018, board members, including chair Kevin Marshman were aware of the hiring of consultant Orchango and supportive of the change management work. The claim alleges Marshman met privately with Mellina “at least twice” in 2018 to discuss the work under the contract.
Milsom claimed she informed Marshman that Orchango had previously done consulting when she was at a previous job and she believed they could “be of assistance” to TCH, the statement of claim says.
After Milsom initially hired Orchango under a smaller contract, board members suggested a bid process for the work would be “preferable . . . given the extent of change management efforts required,” the statement says.
According to the statement, Milsom put TCH employee McKenzie in charge of the file, including the crafting of an RFP. Milsom claims McKenzie had the RFP vetted by the head of Orchango, Edmond Mellina, without her knowledge. Orchango later won the $1.3 million contract.
McKenzie, the claim notes, is the brother of city Councillor Michael Thompson, who is a “close ally of Mr. Tory.”
The board earlier said that an employee who “oversaw” the contract bid process had also been placed on leave. They did not name the employee.
McKenzie is still employed by TCH, a spokesperson confirmed. His title is listed online as senior director of service integration and delivery.
The lawsuit is seeking $1.6 million against TCH and another $1.1 million against McKenzie for “unlawful interference with economic relations.”
“(Milsom) performed her duties faithfully, diligently, honestly, and competently,” the statement of claim says. “She was well-regarded by many board members, (TCH) staff and (TCH) tenants.”
An initial investigation into the contract, Milsom claims, began after a former employee complained about the process in September 2018.
The Toronto Sun then reported on the existence of the contract in late November.
The claim says Tory “was upset” by the Sun article and that “his office discussed how to respond to it with (Marshman).”
“(Tory and Marshman) concluded that it was politically preferable to distance themselves from the contract rather than defend it, and in particular to ‘throw the plaintiff under the bus,’ as previously threatened,” the statement of claim says.
The investigation, conducted by law firm Rubin Thomlinson, concluded that it was McKenzie, not Milsom that had “acted inappropriately,” according to the statement of claim. It also said allegations made by McKenzie that Milsom had directed him to involve Mellina in drafting the RFP were unsubstantiated.
Neither the report nor its findings has been made public.
A separate investigation was launched in December by law firm Bennett Jones, after the Sun article was published. When that investigation was concluded, Milsom was terminated. That report has also not been made public.
Milsom claims she was fired after Marshman and Tory “urged” the board to terminate her “in order to provide the media with a false ‘accountability’ narrative.”
Milsom also claims TCH officials failed to inform the Sun about their previous knowledge of the contract.
In announcing her termination, the TCH board appointed Marshman as CEO.
The contract with Orchango was earlier cut short.
Jennifer Pagliaro is a Toronto-based reporter covering city politics. Follow her on Twitter: @jpags