Governor Deval Patrick demanded the resignation of the head of the embattled Medford Housing Authority on Friday amid an intensifying investigation into alleged favoritism in hiring and contracting at the agency as well as possible theft of money from the sale of metal salvaged from a housing project.
The housing authority’s director of operations told the Globe this week that he kept money from the sale of salvaged copper pipes in 2011. John Lonergan said that he planned to use the money for an employee barbecue - with the approval of housing director Robert Covelle - but the barbecue never happened.
Lonergan contends that he did not spend the money, which he estimated at $1,300, instead keeping it in his desk for at least a year before returning it to the authority last month. But he acknowledged he did not get a receipt to show how much cash he had received. He denied rumors that he received nearly $3,000 and that he and others spent the cash on themselves.
On Thursday, Attorney General Martha Coakley subpoenaed several Medford Housing Authority employees involved in the salvage job, according to a state official who asked to remain anonymous because of the confidentiality of the investigation. Now they’ll have to answer questions before a grand jury that has been investigating the authority for months.
Patrick cannot fire Covelle, whose $126,000-a-year contract is approved by a four-member board of commissioners. But Patrick this week replaced his one appointee to the board, Eugene McGillicuddy, who has publicly defended Covelle. A second board member has said she no longer supports Covelle.
Aaron Gornstein, Patrick’s housing and community development undersecretary, said Covelle shouldn’t wait for the board to oust him. He said the US Department of Housing and Urban Development raised doubts about his leadership in a recent audit that found widespread violations of federal procedures in awarding millions of dollars in contract work.
In addition, state housing officials have made troubling discoveries about Medford in a review of state records, some of which have not been made public, according to another state official who asked not to be named because he is not authorized to speak on the review.
“In light of the recent troubling news about the HUD audit and the ongoing investigation . . . I am seeking, on behalf of Gov. Deval Patrick, your immediate resignation,’’ Gornstein wrote to Covelle in a letter mailed on Thursday.
Covelle insists that he has done nothing wrong and his supporters are urging employees to attend a board meeting on Monday to show they still back him.
On Friday, Covelle’s lawyer said Covelle had no intention of quitting.
“My client is not going to resign based on a news article,’’ said Thomas Drechsler of Boston. “I want to emphasize that there may be investigations going on, but he hasn’t even been accused of anything, let alone found to have engaged in any wrongdoing.’’
In an interview before he received the resignation demand, Covelle said that he was not involved in the copper incident, and that he has launched his own inquiry.
“When I am finished with my investigation, there will be severe punishment - suspensions or terminations,’’ said Covelle, who has been director since June 2009. “Bob Covelle did not do anything wrong with the money.’’
The Medford Housing Authority has been under siege since June 2011 when state housing officials raided agency headquarters to investigate reports that Covelle had improperly helped insiders get jobs and contracts, including his close friend and bocce teammate Santo “Sam’’ Pirri. The agency also hired the girlfriend of Covelle’s son for at least $4,000 to decorate the office.
‘It was not a secret. We all thought it was on the up and up.’John Lonergan, state official
Since then, Coakley and HUD have launched criminal investigations and the Medford City Council voted “no confidence’’ in Covelle last week as councilors criticized his management of the agency, which oversees 1,600 units of housing for low-income people.
Covelle came into office with the strong political support of Mayor Michael J. McGlynn and Covelle’s brother-in-law, the late Middlesex Sheriff James DiPaola, a duo that Covelle referred to as his “consultants.’’ Once in office, Covelle created a new position, director of operations, and hired Lonergan, a family friend of the mayor.
The missing money came to public light at a meeting on April 11 when board member Michael Luongo asked Lonergan what he had done with the proceeds from the copper piping pulled out of LaPrise Village before the buildings were demolished in March 2011.
“I am buying tools with it,’’ replied Lonergan, the authority’s second highest-paid employee with a salary of $89,250 a year.
Lonergan acknowledged that he has not purchased tools with the money, though he insists “there was no funny business’’ and that he recently returned the cash to the authority.
By Lonergan’s account, he asked a maintenance crew to stay after work hours and remove the copper for no pay, but with the promise of a big celebration with the proceeds.
“I just thought this was a nice gesture for the guys,’’ he said, adding that he briefed Covelle on his plan. “Bob knew of it. It was not a secret. We all thought it was on the up and up.’’
Lonergan and another employee took a pickup truck loaded with copper to a scrap dealer in Everett, though he said he could not recall which one. Lonergan said he received $1,300 in cash but neglected to get a receipt. “I made an error and I apologize for that,’’ he said.
But James White, a former maintenance worker who helped on the two-hour salvage, said he heard that Lonergan received almost $3,000 for the “huge amount’’ of copper, which was selling for about $3.50 a pound at the time.
The promised barbecue never happened, and White said “a lot of guys’’ were upset, especially when they heard that Lonergan, Covelle, and others had used the money for a trip, either to Foxwoods casino in Connecticut, or to Florida.
Lonergan said he wanted to hold the barbecue, but an official at the state Department of Housing and Community Development told him that the money could not be used that way.
After he got the news in early 2011, Lonergan said, “I put the money in a locked drawer and that was it. It was out of sight, out of mind. End of story.’’
However, Lonergan’s story is contradicted by state officials. They said they have no record of Lonergan calling until months later, in October - after troopers from Coakley’s office had raided authority headquarters and walked out with boxes of documents.
In the October call to the legal department of the Department of Housing and Community Development, Lonergan said he had just “found a bunch of copper at the LaPrise site. He wanted to know: If we sell it, can we keep the money or is it subject to regular procurement laws?’’ according to one of the state officials who asked not to be named. The housing official told him “no.’’
Last week, Lonergan called the legal department again, according to the state official. This time, Lonergan said, “We sold the copper. I have $1,300 in my desk. Can you write a memo saying what I did is OK?’’
State housing officials immediately reported Lonergan to the attorney general.
On Friday, Covelle said his board had asked him to investigate the incident as well.
Meanwhile, the Patrick administration is moving to push Covelle out, asking board member McGillicuddy, a relative of Mayor McGlynn, to resign. The administration immediately named Sean Caron, currently director of public policy at the Citizens’ Housing and Planning Association, to replace him.Sean P. Murphy can be reached at email@example.com. Andrea Estes can be reached at firstname.lastname@example.org.