Attorney General Martha Coakley has begun the legal process, which will lead to the Chelsea Housing Authority being placed into state receivership in the next few days, according to sources familiar with the investigation of the CHA who wished to remain unnamed.
The receivership action is said to have been pushed by Governor Deval Patrick, who requested that Coakley take the action which begins with a variety of court filings and orders and which will also include affidavits allegedly given by Chelsea City Manager Jay Ash and acting CHA director Albert Ewing among others.
Although Ash declined to comment, he has often said previously that he welcomes the assertive actions of the governor and that he would stand behind whatever the governor felt was correct.
The Department of Housing and Community Development requested the attorney general place it in receivership Wednesday morning. Once that is accomplished, the CHA will be under strict state purview of its day to day operations.
State funding for the authority was frozen two weeks ago by the Department of Housing and Community Development.
Coakley is expected to petition the Supreme Judicial Court for permission to appoint an independent receiver who will monitor the authority and to make certain investigation now ongoing continue.
It appears that Ewing, appointed by the CHA whose members resigned en masse will not be running the CHA when it is officially put into receivership.
The CHA has been rocked by revelations that former director Michael McLaughlin was receiving a $360,000 a year salary when it officially listed the salary at $160,000.
In addition, when McLaughlin walked out the door two weeks ago, he took with him a series of checks written out in his name amounting to $200,000 – his vacation and sick time apparently owed him by the authority.
A special meeting of the CHA Board was called to expedite the checks even though McLaughlin was being forced to resign.
He cashed one of the checks – $80,000 – at a bank while riding home with the CHA accountant who wrote them out to him.
The accountant, a longtime family friend has been suspended from his job with pay pending the outcome of a Federal, and state investigation.
The entire CHA board was forced to resign.
And the governor remains boiling about events that have taken place at the CHA.
When a receiver is approved by the court, he or she would report back to the SJC within 90 days.
At that time, Governor Patrick would name one board member and City Manager Ash would name four.