The leaders of Canada's largest social housing agency treated it as their "personal fiefdom," hiring and firing staff without regard for the rules, Toronto's ombudsman says. But Toronto Mayor Rob Ford dismissed the findings, saying he backs Toronto Community Housing Corporation CEO Eugene Jones "100 per cent."

The mayor's comments come after months of criticism over Mr. Jones's leadership, and as the agency struggles to reduce a $2.6-billion repair backlog. A report Tuesday from Ombudsman Fiona Crean accuses Mr. Jones – the man tasked with turning the organization around – of an "abject failure of leadership." It also raises questions about the role of the board, saying it "became the senior executives' rubber stamp."

The mayor, who has made improvements at TCHC a key part of his re-election platform, was quick to defend Mr. Jones. "Toronto Community Housing was a mess for years, and he came in and he cleaned house," he said.

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The mayor also suggested that Ms. Crean may have overstepped her bounds. "It definitely looks like it's gone a little bit more over the top than I think her jurisdiction allows her to."

Ms. Crean's investigation followed complaints from former employees who reported inconsistent compensation, improper hiring and unexplained firings after Mr. Jones's arrival 18 months ago.

Her investigation found recruitment ran "amuck." The CFO applied for his job while still a member of the board and used as a reference for that job someone he later hired to be his assistant, it says.

The report also found that Mr. Jones increased his assistant's salary to that of a manager's, while creating an exception to also allow her to receive overtime pay. Mr. Jones gave another employee a 33-per-cent raise and new job title without explanation.

Mr. Jones was not available for comment, but was present at a closed-door meeting of the agency's board Tuesday, which included a presentation from Ms. Crean.

Chair Bud Purves said the board reached no decision and will continue discussions Friday morning.

Others were quick to make the connection between Mr. Jones's alleged flouting of the rules and the mayor's own behaviour.

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"Somewhere, he's got the impression that he didn't need to follow the rules," Councillor Paula Fletcher said of Mr. Jones.

"And we know one person around here who says he doesn't need to follow the rules, so I hope the mayor hasn't given him that impression that you don't need to follow the rules in Toronto."

Ms. Crean outlined many instances of senior employees being promoted or hired without competition, and found a turnover rate of 67 per cent among the agency's 347 managers and non-union staff‎ during the period covered by her study.

The report also found that 45 workers were fired in that period – 41 of them "without cause."

Partly because of this, TCHC paid about $1.6-million in severance in 2013 – a more than 160-per-cent increase from approximately $600,000 in 2009.

But the mayor, who frequently rails against spending, shrugged it off, calling the costs "short-term pain for long-term gain. I've seen the gain at Toronto Community Housing."

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Ms. Crean says that managers at TCHC responded "wholly and professionally" to her investigation, "with one notable exception." Ms. Crean wrote that she was "perplexed" by Mr. Jones's demeanour when he appeared not to have read her report thoroughly, and for delegating responsibility to others.

In February, Mr. Jones was stripped of his bonus and ordered to take leadership training after an investigation into two personnel-related issues. And earlier this week, The Globe reported that the housing corporation was facing a wrongful-dismissal lawsuit after a former employee was fired in late 2013. The lawsuit has been settled for an undisclosed amount.

But Mr. Jones has other supporters besides the mayor, too.

Bonnie Booth, a TCHC tenant for 32 years, said the agency's new CEO has made changes that were needed. "Mr. Jones has done a lot of good things and he's given us the impression that we're valued and he listens to us," she said.

And Councillor Cesar Palacio, a member of the TCHC board, said he has been "bombarded" with calls from tenants praising Mr. Jones and suggesting there has been "pushback" from staff unhappy with the changes.