The Independent Police Complaints Commission ruled out corruption allegations in the decision to give Neil Wallis a £1,000-a-day job with the Metropolitan Police.
The investigation also dismissed claims of misconduct surrounding former assistant commissioner John Yates’ alleged involvement in securing a job at the force for Mr Wallis’s daughter.
But the two investigations showed “senior people appear to have been oblivious to the perception of conflict” amid the phone hacking scandal, Deborah Glass, the watchdog’s deputy chairwoman, said.
Senior figures at the force were to blame for failing to carry out a vetting check on Mr Wallis “prior to, or during, his employment” for communications advice between October 2009 and September 2010, the report said.
Mr Wallis was arrested and bailed last year as part of the force’s investigation into phone-hacking.
Ms Glass expressed concern over the resignation last month of former Metropolitan Police communications chief Dick Fedorcio, who was told he had a case to answer over the procurement of the contract.
Ms Glass added: “The IPCC cannot prevent a member of police staff leaving before facing misconduct proceedings. But I can and do observe that such a practice can be hugely damaging to public confidence.”
Mr Yates, who quit the force during the peak of the scandal last summer, showed “poor judgment” in forwarding Amy Wallis’ CV to Scotland Yard’s head of human resources.
The action had “the foreseeable consequence that human resources staff believed that they were obliged to find a post”, the report said.
Ms Glass said: “In these investigations, at the heart of the issues affecting public confidence was the question of whether two separate arrangements – both involving a form of employment connected to Neil Wallis – were either corruptly entered into or otherwise breached MPS policies and procedures. In neither case did we find evidence of corruption, but in both cases we found that policies were breached, and in the case of the former director of public affairs, Dick Fedorcio, that there was a case to answer in relation to misconduct.”
Ms Glass added: “I am acutely aware that both reports are being published against the backdrop of the Leveson Inquiry, which is examining the relationship between the police and the media.
“The ongoing inquiry is painting an uncomfortable picture of the relationship between the biggest police force in Britain and sections of the media.”