Former PHA leader Kelly left after investigation into misconduct

Federal housing officials confirmed yesterday that recently departed Philadelphia Housing Authority executive director Michael Kelly had been under review for fraternizing with a female employee.

Kelly took the helm at PHA in December 2010 following a nasty sexual harassment scandal involving the previous executive director, Carl Greene. His departure was announced Friday by the U.S. Department of Housing and Urban Development. Kelly initially told the Philadelphia Tribune he left for “personal reasons,” denying any scandal or political pressure.

6ABC was the first to report yesterday that Kelly, who is married, had a relationship with a female employee. HUD spokesman Jereon Brown confirmed that HUD conducted a review after receiving a tip about Kelly and a female manager and concluded the relationship was inappropriate.

“It did not violate any of HUD’s policies, however, it erodes the confidence of the workforce,” Brown said of the relationship. “It can be deemed that the person is receiving preferential treatment. That we cannot tolerate.”

Kelly was told of the findings in late May, at which time he submitted his resignation, Brown said. Kelvin Jeremiah, PHA’s director of Audit and Compliance, has taken Kelly’s place on an interim basis while a nationwide search is conducted for a permanent director.

Kelly was general manager at the New York Housing Authority in 2010 when he was recruited to serve as administrative receiver for PHA. He was made permanent in the position last August and credited with restoring stability and implementing several reforms at the embattled agency, including zero tolerance for ethic violations.

Kelly was named as director of housing and community development in Washington, D.C. on Monday, where he previously served as head of the D.C. Housing Authority. His family still resides there, sources said.

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