It is a fascinating appointment for the City regulator. The previous incumbent John Murray had been a financial journalist and City editor. His predecessor John Fryer had been a Sunday Times and BBC labour and industrial correspondent with no prior PR experience, while the one before that, Vernon Everitt, had been an internal FSA staff member and Bank of England official.
Kelly is in a different league. Though he was a journalist with the Belfast Telegraph and a producer at the BBC, he joined the Northern Ireland Office and handled communications for Northern Ireland minister Mo Mowlam. He first worked with Blair after the Omagh bombing, and had an elevated role because Campbell was on holiday.
Once on the staff inside Number 10, as Campbell gradually withdrew he handled the David Kelly Iraq inquiry and Cheriegate - the saga surrounding flats in Bristol, alleged fraudster Peter Foster and Cherie Blair.
After all that, working for the financial regulator must surely be pretty tame stuff. But in hiring Kelly, chairman Lord (Adair) Turner and chief executive Hector Sants have clearly decided that the main battles the FSA will have to have to fight in the next few years are going to be in Whitehall and Westminster, not in the City. In Kelly it has someone who knows intimately how Whitehall works.
Before the election, the Tories said they would abolish the FSA and split its functions between the Bank of England and a new consumer protection agency. It is too early to say how much priority it will get, but in the near term the FSA will still have a massive international political agenda as the G20 and a string of other international bodies grope their way towards a new international financial architecture.
Let's hope Kelly is not looking for a quiet life.
Anthony Hilton is City commentator on London's Evening Standard