Head sues Chelsea housing agency in pay dispute

Michael E. McLaughlin’s hand-picked successor to be chief of the Chelsea Housing Authority has filed a lawsuit against the agency, complaining that he is a victim of a “campaign of verbal harassment” from new board members who want to tear up his five-year contract and reduce his pay.

Albert R. Ewing became executive director on the same day last November that McLaughlin quit amid an uproar that McLaughlin had deliberately concealed his inflated $360,000 salary from state regulators. Ewing, a longtime aide to McLaughlin, immediately signed a long-term contract paying him $135,000 a year — a $40,000 raise for him — and providing other benefits such as a car.

Now, Ewing complains that the Chelsea Housing Authority is trying to renege on the contract and dragging his name through the mud by associating him with McLaughlin, who is under criminal investigation.


Ewing’s “professional reputation has been called into question in that he is being viewed as somehow having benefited from a sweetheart deal,” wrote Denzil D. McKenzie, Ewing’s attorney, in the lawsuit filed in Suffolk Superior Court on Thursday.

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State housing officials, who provide $2.5 million a year of the Chelsea Housing Authority budget, say that Ewing has nothing to complain about. His contract, they say, was approved by the same discredited board members who signed off on McLaughlin’s massive paycheck, and they resigned under pressure from Governor Deval Patrick within days of approving Ewing’s contract.

“It is extremely disappointing that Mr. Ewing has chosen to pursue litigation instead of working cooperatively with the [Chelsea] board,” said Aaron Gornstein, the state housing and community development undersecretary. He said the state never gave its approval for Ewing’s “contract that was voted in by the former [Chelsea] board immediately before the resignation of Mr. McLaughlin and all five board members.”

The new board members have said they want to reduce Ewing’s pay by $20,000 a year, to $115,000, and they want to shorten the contract from five years to two. But Ewing has said he will go no lower than a three-year deal at $125,000.

The board’s offer is still far above state guidelines for a housing authority the size of Chelsea’s. The Department of Housing and Community Development recommends annual pay no greater than $85,158.


“Our goal is to restore the public faith in the Chelsea Housing Authority,” said Juan Vega, a commissioner, explaining the effort to renegotiate Ewing’s contract. “It’s important for the low-income people of the city. That’s who we are accountable to. We need to rebuild credibility.”

The lawsuit over Ewing’s contract comes after almost eight tumultuous months in Chelsea since Nov. 3, when McLaughlin resigned. Before he left, McLaughlin derected office staff to cut him checks for more than $200,000 for what he said was unused vacation and sick time.

Since then, federal and state investigators have swarmed the agency and, for several months, a state-appointed receiver oversaw day-to-day operations while the Patrick administration and City Manager Jay Ash recruited a new five-member board.

Ewing, 59, was recruited by McLaughlin in 2000 to become the assistant executive director in charge of tenant selection at the 1,400-unit housing agency, and later emerged as his heir apparent. He has not been implicated in any wrongdoing and board members have said they have no problem with Ewing continuing in the job.

“We wanted him to be successful. There was never a notion that he was anything but competent,” said Barbara Salisbury, a commissioner. “But we are disappointed that it has come to this, that he has filed a lawsuit.”


Ewing argues in his lawsuit that the contract approved by the old Chelsea housing board is valid and binding, noting that he got the job only after the board had interviewed numerous candidates. On Nov. 1, two days before McLaughlin resigned but the day after the Globe revealed his $360,000 salary, the board unanimously selected Ewing to be the director.

Two days later, the board approved McLaughlin’s resignation, chose Ewing as the interim director, and approved a six-page contract making Ewing the permanent director until 2017.

After the board resigned en masse that month, Ewing said, the state receiver reviewed the contract and agreed that it was legitimate.

But Ewing said that new board chairman Thomas Standish told him on March 28 that the five-year contact was unenforceable because it was never approved by state regulators. Since then, Ewing’s lawyer wrote in the lawsuit, board members have “waged a campaign of verbal harassment and intimidation aimed at coercing [Ewing] into modifying the terms of the contract.”

Chelsea board members deny harassing Ewing, but they say they were forced to renegotiate Ewing’s contract by officials at the Department of Housing and Community Development, who say it is overly generous to Ewing and appears to be “cut and paste” from McLaughlin’s lavish and discredited contract.

State housing officials have “not and will not approve the contract submitted to us for review,” wrote Deborah J. Goddard, general counsel for the Department of Housing and Community Development, in a May 9 letter to the housing authority’s attorney. “Contracts for executive director are not valid and effective unless and until approved” by the state.

But Ewing’s attorney McKenzie insists that the state has no say over Ewing’s contract, noting that there is no reference to Department of Housing and Community Development approval in the document.

“Approval by DHCD was not included in the contract until after the fact, when someone came by and said, ‘Oops, DHCD approval is not in there but it’s a requirement anyway,’ ” said McKenzie.

Sean Murphy can be reached at Adrian Walker of the Globe staff contributed to this report.