Sheila Paxton, the city hall staffer who testified to participating in a scheme to defraud the federal government of hundreds of thousands of dollars, has taken a leave of absence from her job as Deputy Mayor Norm Kelly’s policy director.
Kelly confirmed Paxton was on leave, but would not specify if it was paid or unpaid.
“She’s on leave,” he said Wednesday. “That’s the only comment I’ll make on that right now.”
The Star revealed Paxton’s testimony in an article published two weeks ago. She hasn’t been seen at city hall since.
Paxton admitted to participating in a kickback scheme involving job training programs at the now defunct Human Resources Development Canada, according to transcripts of a 2006 trial in which she was the Crown’s star witness against three co-conspirators.
“I knew what we were doing was wrong,” she testified. “I know that I paid secret commissions and that’s a crime.”
Paxton, who did not return calls and emails for comment, previously told the Star her involvement “has absolutely nothing to do with city hall and nothing to do with my current job.”
After leaving the government agency, Paxton funnelled project proposals to her friend, Joan Rowe, who remained at HRDC. Paxton described under oath how Rowe would approve the contracts in exchange for an equal share of Paxton’s 5-per-cent commission.
In 2006, Rowe pleaded guilty to fraud and accepting bribes. She was sentenced to 28 months in prison and ordered to pay $500,000 in restitution.
Paxton co-operated with investigators and was not charged with any criminal offences. She testified for the Crown against alleged co-conspirators in several trials.
More than a decade after the scheme came to light, Paxton and a co-defendant are being pursued by the federal government, which has filed a lawsuit to try to recoup more than $330,000.
Councillor Mark Grimes said he was not aware of Paxton’s past when he hired her to work as his executive assistant in 2008. She joined Mayor Rob Ford’s staff in 2012 as a policy adviser and moved to Kelly’s office last year when city council stripped Ford of his powers and budget.
Ford also denied knowledge of Paxton’s past. “It’s unfortunate, but I guess we’ve all made mistakes and she never did anything wrong to me. I like Sheila,” he said.
Councillor Karen Stintz, who’s running for mayor, described Paxton as an “incredibly dedicated” and hard-working staff member.
“She’s always tried to do the right thing,” Stintz said.
City spokesperson Jackie DeSouza confirmed that Paxton is still on the city payroll.
With files from Betsy Powell