Gray told reporters Monday that he knew about Michael Kelly's affair but hired him anyway, calling him a "sterling individual" who's well-qualified to lead the agency.
Kelly has apologized for the affair, calling it "an incredible lapse of judgment." He said he resigned last week as executive director of the Philadelphia Housing Authority after federal officials overseeing the agency learned about the affair. But he says it was a personal failure and there was no wrongdoing in his official capacity.
The D.C. Council must approve Kelly's appointment to head the district's Department of Housing and Community Development.