Housing Authority Scratches It’s Head over HUD Memos

The new year quickly brought a new challenge to the Chelsea Housing Authority (CHA) Board and administration as the New England office of Housing and Urban Development (HUD) has sent some pretty aggressive letters to the CHA – letters that one Board member likened to a ‘demand notice’ for repayment of funds allegedly stolen by the CHA’s former director.

In fact, part of the letter from HUD talks about beginning discussions around how the CHA will pay back misappropriated funds allegedly taken by disgraced, former Executive Director Michael McLaughlin. That kind of talk, obviously, is rather shocking as the massive public corruption case surrounding McLaughlin is still under investigation – and the breadth of just how much he might have stolen in HUD funds is not known yet. Likewise, McLaughlin hasn’t even been charged yet with stealing any funds.

The CHA quickly convened a meeting last Thursday after receiving the letters, and will meet again on Tuesday, Jan. 15th, to approve a formal response to the letters from HUD’s regional director, Marilyn O’Sullivan.

HUD officials did respond to a phone call from the Record seeking comment, but did not comment before the Record’s deadlines on Wednesday.

The letters have not been made public yet to the Record, but will be fully disclosed by the CHA after it generates an official response.

“I think our first meeting last week was a very productive one and we’re going to meet again next week to formally respond to the HUD requests,” said Executive Director Al Ewing. “I think we’re looking towards moving the Housing Authority forward and so we’re taking time to respond.”

Board Chair Tom Standish said the second meeting will be about putting the finishing touches on the response.

“We’re optimistic,” he said. “Of course, we aren’t able to do anything about the past now. We’re forward looking now and that’s the way it should be.”

However, it doesn’t appear as if HUD has moved beyond the past just yet.

Standish said the general content of the two letters concerned the legacy inherited from the era of McLaughlin, and the damage that era did on the relationship between HUD and the CHA.

“It is kind of a demand letter,” said Standish.

“I think it’s a strong statement on the side of HUD,” he continued. “It’s my feeling they’re in need of some definitive word from the Authority as to whether or not we can handle the cure here. They want specifics as to policies we have implemented or are in the process of implementing to prevent a repeat of the McLaughlin abuses. They also want to hear about the repayment of misappropriated funds.”

The first letter, he said, primarily dealt with helping HUD figure out what happened to the misappropriated funds and what is going to be done about it. The second letter discusses Capital Fund expenditures misappropriated by McLaughlin.

While many expect McLaughlin to be indicted at some point this year – and there is currently a Grand Jury in Boston’s Federal Court hearing testimony on the case – nothing official has been done and McLaughlin hasn’t even yet been charged with misappropriating any funds.

That makes it all the more surprising that HUD has sent letters asking for repayment of stolen funds in advance of any charges or indictments surrounding those stolen funds.

“We have sought clarification, and we will respond after Tuesday’s meeting,” said Standish.

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