Late last year, Morgan Stanley got a tip: Reporters were asking about allegations that a high-profile executive, the former congressman Harold E. Ford Jr., had harassed a female journalist.
Morgan Stanley conducted a quick investigation, interviewing the accuser and Mr. Ford, who denied the allegations. According to Morgan Stanley officials briefed on the internal process, the Wall Street bank concluded that it was a he-said, she-said situation and didn’t find proof of harassment.
Then Morgan Stanley fired Mr. Ford.
Why? It depends on whom you ask.
The Morgan Stanley officials briefed on the process say that amid a national outcry over sexual harassment, the bank had little choice but to fire Mr. Ford after it learned of the allegation. Even though the harassment charge was never corroborated, they said, the bank found evidence that Mr. Ford had misled executives about some of his behavior, which itself constituted cause to remove him. And they say Mr. Ford already had received a final written warning about abuse of his expense account and other conduct.
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Mr. Ford and his lawyer say there’s a different explanation: that Morgan Stanley used the journalist’s allegations as a pretext to fire him simply because he was disliked internally.
“After more than 20 years of building a reputation working hard in the public and private sectors, all it took was one false claim to cost me my job and the ability to walk my kids to school without getting accusatory stares on the street,” Mr. Ford, 47, said.
“Morgan Stanley fired him, and defamed him, without ever figuring out what happened,” said Beth Wilkinson, one of his lawyers.
Long before his termination, Mr. Ford had become a polarizing figure within Morgan Stanley. While some executives liked him, he had been accused of padding his expense account and mistreating his assistants, according to people close to both the bank and Mr. Ford. Mr. Ford acknowledged that he had faced flak over those issues, but said his conduct had always been appropriate.
Now Mr. Ford is fighting to salvage his reputation. He has publicly threatened legal action, and his lawyers are negotiating with Morgan Stanley over a possible settlement, according to people on both sides of the talks.
The chain of events preceding Mr. Ford’s ouster provides insight into how companies are dealing with human-resources issues in an era of unprecedented scrutiny.
The son of a longtime Tennessee congressman, Mr. Ford was elected to Congress in 1996 at the age of 26, entering as its youngest member at that time.
Mr. Ford, a moderate Democrat, occasionally crossed party lines during his five terms in the House. He was regarded as a potential future White House contender.
But his political career was derailed in 2006 when he lost a Senate race. The next year, Mr. Ford landed at Merrill Lynch. His job was to woo companies and individuals who might become clients. In 2008, he married Emily Threlkeld, a Hollywood fashion stylist whose stepfather was once a prominent Morgan Stanley executive. Three years later, Mr. Ford joined that firm.
He worked closely with Gregory Fleming, who ran Morgan’s wealth-management division. He frequently spoke at industry events and became a common presence on cable talk shows. He earned millions a year.
She sought Mr. Ford’s help. They met for coffee, and the next night they had dinner at the “21” Club in Manhattan. Some of Mr. Ford’s behavior made Ms. LaCapra uncomfortable, according to emails reviewed by The New York Times.
Nonetheless, the two shared a taxi after dinner to their homes. “Had fun tonight!” Ms. LaCapra emailed him later that night. “Thanks for inviting me out.”
The email banter continued over the following days, touching on topics including travel plans and Valentine’s Day. Despite the friendly veneer, Ms. LaCapra forwarded one of Mr. Ford’s emails to another person with the word “Creeper” atop his note.
On Feb. 20, Mr. Ford invited Ms. LaCapra to another dinner.
“I don’t want to have further interactions after dinner with your friends at the 21 Club on Feb 11,” she responded. “I felt that some of your conduct was inappropriate and it made me uncomfortable. I tried to be polite, but also to make it clear that I don’t veer outside the normal boundaries of a source-reporter relationship. It seems like your recent overtures are on a path outside of those boundaries.”
Mr. Ford responded that he was “very sorry” and that “my overtures are strictly professional.”
For nearly four years, the issue seemed to go away.
But during that time, Mr. Ford’s support at Morgan Stanley was weakening. Some regarded him as a celebrity banker who hadn’t earned his seven-figure paydays, according to several executives.
In early 2016, Mr. Fleming left, and Mr. Ford felt he had lost a senior ally, three people familiar with his thinking said.
Before long, he was moved from an office on the 39th floor, one level below top executives, to a smaller one on the sixth floor. He cycled through executive assistants, and some complained that he was difficult to work for, according to people close to both Mr. Ford and Morgan Stanley.
Mr. Ford felt he was being marginalized in the downsized office, and he regarded some assistants assigned to him as incompetent, the people familiar with his thinking said.
Morgan Stanley officials also accused him of misusing his expense account, which Mr. Ford denied. He received a written warning about his conduct, according to the Morgan Stanley officials and one of Mr. Ford’s lawyers, John Singer.
Last fall, reporters began asking about the “21” Club dinner.
Morgan Stanley executives contacted Ms. LaCapra. She told them that Mr. Ford had behaved provocatively at dinner and that an altercation had broken out after she declined to join him for an after-dinner drink.
“Mr. Ford tried to pull me into an elevator to go to a cocktail lounge, despite my verbal and physical resistance,” Ms. LaCapra said in a statement to The Times.
When Morgan Stanley interviewed Mr. Ford about the evening, he said he had behaved properly.
“I never pulled or grabbed her,” he said in a statement to The Times. “Her story is totally inconsistent with the reality that she voluntarily got in a cab with me after a group dinner, dropped me off and sent me an unsolicited email later that night saying she had fun and thank you.”
The existence of the harassment allegation was too much for Morgan Stanley, especially since Mr. Ford was already in a precarious position, the bank officials said. Executives also felt he had misled them about some of the evening’s events.
On Dec. 6, the day after its interview of him, Morgan Stanley fired Mr. Ford. The next day, the firm said in a statement that he had been “terminated for conduct inconsistent with our values and in violation of our policies.”
News articles linked his firing to the harassment allegation. “Ex-lawmaker fired by Morgan Stanley over sexual misconduct claims,” a New York Post headline declared.
A month later, settlement negotiations between Mr. Ford’s lawyers and Morgan Stanley are continuing. A person close to Mr. Ford said he was seeking a public statement from the bank that he hadn’t been fired specifically because of sexual harassment.