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    US Sen. Grassley calls for investigation of favoritism at Chelsea Housing Authority

    An influential US Senator is demanding a full explanation for why the Chelsea Housing Authority permits three managers to live in public housing projects almost rent-free when there aren’t enough subsidized apartments for the city’s low income residents.

    Sen. Charles Grassley of Iowa, the senior Republican on the Senate Judiciary Committee, told federal housing officials that he is troubled by a recent Globe report describing the policy that allows authority employees making $50,000 a year to live in public housing for $25 monthly rent.

    “I am very concerned that while housing officials are providing housing for employees and their family members, those with the greatest need are being put on waiting lists,” wrote Grassley in a Feb. 6 letter to Housing and Urban Development Secretary Shaun Donovan.


    Grassley, who has already launched an investigation into the extraordinary $360,000 salary paid to former Chelsea Housing director Michael E. McLaughlin, said the special perks for employees in Chelsea are part of a larger problem in public housing.

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    “This practice is not limited to [Chelsea],” he wrote. “A number of employees of the Philadelphia Housing Authority and its affiliates who received large salaries, paid for with federal funds, have lived in public housing while paying minimal rent.”

    Federal housing officials, who provide about $10 million a year to the Chelsea Housing Authority, promised to provide an array of documents Grassley requested, while stressing that they, too, are investigating the Chelsea Housing Authority.

    “We will provide the senator with absolutely everything we have that he requested,” HUD spokesman Jereon Brown. “If we have it, he’s got it.”

    Chelsea Housing Authority sets aside more state-subsidized apartments for people who are not poor than any other housing authority in Massachusetts, according to figures from the state Department of Housing and Community Development.


    In addition to apartments for three resident managers - two of which are funded by the federal government - Chelsea sets aside seven units for police officers and another two apartments for what officials call “supportive housing.”

    In all, Chelsea has reserved at least 12 housing units for people who are not poor even though more than 1,000 families or individuals are on waiting lists for low income apartments.

    Mary-Leah Assad, spokeswoman for the state housing office said the state has begun to scrutinize such arrangements more closely. In 2006, the state approved a subsidized apartment for Chelsea housing manager Jacqueline Matos based on a simple electronic request from the authority.

    Now, Assad said, the state will require all housing authorities to submit a detailed request and document the reasons and value of taking a unit offline.

    However, Assad said the state didn’t find any impropriety in the renting of two additional apartments to relatives of an authority employee, saying that “proper protocols were followed.”


    Grassley also demanded answers on another issue raised by a Globe story. That story documented that director McLaughlin worked only 15 full days last year while being paid perhaps the highest salary of any housing official in the country.

    What procedures, Grassley asked, does HUD have “to ensure that employees work the hours they are paid for.”

    Previously, Grassley co-signed a letter to HUD with Senator Scott P. Brown calling McLaughlin’s salary “outrageous” and evidence of a breakdown in government oversight.

    In response, HUD on Nov. 23 provided the senators with a 16-page package of documents that included portions of McLaughlin’s contract, according to Grassley’s office.

    HUD spokesman Brown said HUD expects comprehensive changes in Chelsea policies once its investigation is completed, but he declined to say exactly why HUD allowed Chelsea managers to move into public housing in the first place.

    “It’s a rare request, but usually we’ll look at it,” he said. “It’s usually for security or to allow there to be more promptness in meeting requests for residents there.”

    In a statement yesterday, Sen. Brown sharply criticized HUD, which had consistently ranked the Chelsea Housing Authority as a “high performer” until the Globe revealed McLaughlin had been concealing his true salary.

    “If HUD has been ranking the Chelsea Housing Authority in the 90th percentile for the past ten years, after reviewing their financial and management operations, then something is clearly wrong with HUD’s oversight policy,” the statement said.

    McLaughlin, 66, is now the subject of numerous ongoing investigations, including an FBI probe into whether he criminally misused his office.

    McLaughlin resigned along with the entire Chelsea housing authority board after his salary was public revealed on Oct. 30. His application for a state pension of about $278,000 has been put on hold, pending investigation.

    Judy Weber, the court-appointed receiver overseeing the Chelsea Housing Authority since shortly after McLaughlin’s resignation, said one resident manager already has given notice that she will vacate her $25-a-month apartment at the end of this month. Weber said the apartment will be returned to the inventory of apartments for low-income families.

    Weber said housing officials will decide what to do about the remaining two resident managers next week.

    “We are literally a week away from deciding what we’re going to do, but we’re not prepared to talk about that yet,” Weber said.

    Yesterday, however, Chelsea housing residents expressed outrage that they pay more in rent than the three managers who live in the apartments.

    “They’re getting paid so much, I just don’t get it. I don’t understand it,” said Danielle Gallant, a 26-year-old mother of a 6-year-old boy and a 2-month-old girl who said the housing authority recently told her she would have to wait more than a year for a bigger apartment.

    Maria Sacchetti can be reached at Sean P. Murphy can be reached at