Sources: Mayor Gray's Housing Head Appointee Disclosed Affair to Mayor

Dispute reports that Kelly promoted assistant

News4 sources in the District government confirm that Mayor Vincent Gray’s choice to lead the city’s housing agency -- Michael Kelly -- was involved in a relationship with a senior staffer when he recently headed a similar agency in Philadelphia.

But the sources dispute media reports that say Kelly promoted the assistant and gave her raises.

The sources tell News4 that Kelly disclosed the relationship to Mayor Gray before Gray tapped him to head the D.C. Department of Housing and Community Development. The sources say Gray’s office cleared the appointment with the federal Housing and Urban Development (HUD) which oversees federal funding for housing in the nation.

The statement from the mayor's office:

Prior to his appointment, Mr. Kelly shared that he had had a consensual relationship with a woman at the Philadelphia Housing Authority.  The U.S. Department of Housing and Urban Development investigated the matter and determined there was nothing more to the story.  Michael made a personal mistake.  He is a talented and committed public servant who is dedicated to expanding affordable housing in the District, and we stand behind his nomination.

The Philadelphia Housing Authority has been mired in scandal. Carl Greene, the previous director before Kelly, was accused of throwing expensive parties at taxpayer expense and later fired. Philadelphia television station WPVI-TV also reported that Greene allegedly paid secret cash settlements to settle three sexual harassment complaints against him.

Michael Kelly, the former D.C. official who was brought in to clean up the Philadelphia mess in December 2010, resigned abruptly to return to the District of Columbia. The senior Philadelphia staff member with whom he had an affair also abruptly resigned and returned to her native country.

District sources told News4 that Kelly is not under investigation or facing any misconduct charges, but do acknowledge that he had an inappropriate affair outside of his marriage.

Kelly’s nomination to head the District housing agency is subject to confirmation by the D.C. Council.

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