PHA Director Michael Kelly resigns amid alleged scandal

PHILADELPHIA - June 18, 2012 (WPVI) -- It appears that the Philadelphia Housing Authority is once again embroiled in scandal involving its executive director.

Acting PHA Director Michael Kelly was brought on board back in December of 2010 largely to clean up the mess left by his predecessor, Carl Greene.

But sources tell Action News, Kelly apparently made his own mess and had to resign suddenly.

PHA staffers had complained to HUD (U.S. Department of Housing and Urban Development) officials that Kelly was having a consensual affair with a woman he had appointed to a senior staff position and, that despite having little or no credentials for the post, he was approving her for large pay increases.

After questions began to be raised, the 38-year-old woman who was here on a work visa suddenly resigned three weeks ago and went back to her native country.

Kelly himself resigned Friday citing family reasons.

On Monday, it was announced he has been named to head the Washington DC Deptartment of Housing and Community Development.

"It's the latest in a long series of scandals at the Philadelphia Housing Authority," State Representative Michael McGeehan told Action News during a phone interview.

McGeehan has long been critical of the scandal-plagued agency since the days that Carl Greene was in charge.

He was criticized for throwing over the top parties at taxpayers' expense including hiring belly dancers. He was ultimately fired after the PHA board learned he had settled three sexual harassment complaints against him paying huge secret cash settlements without informing them.

There was a fourth case pending with settlements totaling over a million dollars.

There are three federal investigations currently underway.

McGeehan says during these tumultuous times for the agency, he is deeply troubled by a move in Harrisburg to take the agency out of the hands of HUD and put it back in local control.

McGeehan says as things stand now, a vote on that proposal may come as early as Wednesday.

Meanwhile, Action News was unable to reach Kelly for comment through the Washington, DC mayor's office. There was no comment Monday from the PHA's press office and no immediate comment from the mayor's press office.

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