EU Ombudsman Emily O’Reilly said the Commission had been “overly secretive” and said that it needed to review its appointment processes.
Mr Selmayr – a lawyer from Bonn – masterminded Jean-Claude Juncker’s campaign to be president and was often described as the power behind his boss.
Since 1 March he has been general secretary at the EU after a swift promotion which was described by German MEP Ingeborg Grässle as “a coup”.
Mr Selmayr has been blamed by many for insisting on a hostile position against Britain to punish it for Brexit.
Ms O’Reilly said today she had found four instances of maladministration resulting from not following rules correctly, “either in letter or in spirit”.
At issue were secrecy around the impending retirement of the outgoing secretary-general and an “artificial urgency” to fill the post that went unchallenged by Juncker’s 27 fellow commissioners, she said in a statement.
She also highlighted Mr Selmayr’s quick progress from being Mr Juncker’s aide to becoming deputy secretary-general of the commission and then, a few minutes later, full secretary-general.
The Ombudsman criticised the Commission for “defensive, evasive and at times combative” responses to media questions on the arcane manoeuvres around the publication of vacancies and selection of candidates which preceded an appointment that Juncker and his fellow commissioners were always free to make.
“All of this risked jeopardising the hard won record of high EU administrative standards and consequently, the public trust,” the ombudsman said in a statement.
Critics named the affair “Selmayrgate” and the European Parliament savaged President Juncker in March, saying the appointment smacked of cronyism.
One widely-circulated joke in Brussels about his alleged self-importance runs: “What’s the difference between God and Selmayr? God knows he’s not Selmayr.”
Senior Tory MEP David Campbell Bannerman said: “Selmayr is one of the ‘get Britain’ figures in the EU who earnestly believe British people should be punished for their decision to Leave”.
He said that the “shocking” bypassing of procedures showed the “disdain for due process by senior EU figures”.
He added: “O’Reilly’s report is very powerful and unusually damning from an EU body.”
A spokesman for the EU commission reiterated at a news conference today the EU executive saw no conflict of interest in the appointment of Mr Selmayr.
“While we do not share all aspects of the underlying report, we welcome that the Ombudsman neither contests the legality of the appointment procedure of the Secretary-General, nor the choice of the candidate”, the commissioner responsible for human resources, Guenther Oettinger, said in a note.