Warren Kinsella posted a picture on his blog of Ford posing with a man the Liberal strategist claims has links to white supremacists.
Kinsella titled his blog entry "The Toronto Mayor's Far-Right Friend."
He claims Jon Latvis was a member of the band Rahowa, widely identified online as an acronym for racial holy war.
The Facebook picture shows Latvis wearing a military style uniform with a tag that reads: "Me meeting with Toronto's Mayor, Rob Ford to get an endorsement for the Latvian Homeguard."
Ford issued a statement saying the picture was taken at the 2012 New Year's Levee at Toronto City Hall and that he poses for pictures with hundreds of people at these events.
The statement from Ford's office said the man requested a meeting with Ford, but identified himself under a different name than the one used on Kinsella's blog.
The two men talked briefly, but the statement says the discussion centred on public transit.
"At no time was the Mayor aware of allegations that this individual had made racist, hateful or otherwise offensive comments, nor were any such comments made during his meeting with the Mayor," said the statement.
"Mayor Ford is a strong supporter of Toronto's Jewish community and strongly deplores anti-Semitism in any form."
Latvis did not immediately respond to emails.
The story has been widely posted online by a number of media outlets.
The Centre for Israel and Jewish Affairs also issued a statement saying it understands Ford's officials can't screen every person who attends a public event like a New Year's Levee and considers the Toronto mayor a true friend of the city's Jewish community.
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