Kemp to Give Up $50,000 in Fees Called in Doubt

Former Rep. Jack Kemp, President Bush’s nominee to head the Department of Housing and Urban Development, said Wednesday that he has agreed to give up more than $50,000 in speaking fees and other honorariums that he earned over the last several months in possible violation of House rules.

Insisting that what he did “isn’t a violation,” Kemp conceded that staff members of the Senate Banking, Housing and Urban Development Committee had raised questions about the money. The committee plans to vote on Kemp’s nomination to the Cabinet today.

“They said it didn’t look good. So I said, ‘I’ll give it back,’ ” Kemp said.

House rules limit a member’s outside income to $26,850 in any one year and no more than $2,000 from any one event. Kemp, who earned far more than that during the last few months, had expected to defer most of the income to 1989, when he thought he would no longer be holding public office. But the Banking Committee staff argued that because he was still a member of Congress when he earned the money, he was covered by the limits.

Numerous Loopholes

The dispute appears to have been settled by Kemp’s decision to return the funds, and no delay in Kemp’s confirmation is expected, committee staff director Kevin Gottlieb said. But the incident does provide another illustration of the numerous loopholes that exist in the controversial rules governing congressional honorariums.

After he withdrew last winter from the race for the Republican presidential nomination, Kemp, who already had decided not to run for another term in Congress, began to lay plans for a new career of public speaking and writing. He joined the staff of the conservative Heritage Foundation, which provided him office space, and signed on with the Washington Speaker’s Bureau to set up lectures.

$10,000 Per Lecture

Charging as much as $10,000 per lecture, Kemp quickly passed the limit on allowable outside income. Congressional rules allow members to collect income above the limits if they donate it to charity, and Kemp donated $22,000 in 1988. But for the bulk of the money, Kemp would have followed a different way of passing the limit--those who were paying him would not send the checks until after his congressional term formally ended on Jan. 3.

Under that plan, which Kemp said Wednesday he had cleared with the House Ethics Committee, Kemp would have been able to keep some $67,000 that he otherwise would have been required to give up. “We weren’t sure what he was going to do” with the money, Kemp spokeswoman Mary Brunette said, noting that Kemp could still have given some of the $67,000 to charity.

$10,000 From Laffer

Among the fees Kemp received were $10,000 from A. B. Laffer & Associates, a firm headed by supply side economist Arthur Laffer, a longtime associate of Kemp’s. Another $10,000 came from the U.S. Chamber of Commerce, whose chief economist, Richard Rahn, is a leading supply side spokesman. The Chamber of Commerce already has paid Kemp the full amount, and he will return $8,000. He will forgo another $8,000 from Laffer, who has not yet paid him.

Similarly, Kemp will forgo $26,000 out of $30,000 that he had earned for two appearances this fall on the public television “Firing Line” program. The program is hosted by conservative writer and editor William F. Buckley, another longtime Kemp backer.

The income deferral plan probably would have gone unnoticed had Bush not tapped Kemp in mid-December to head HUD, sources familiar with the rules on outside income noted.

The discussions between the committee and Kemp did not involve the overall limit on outside income.

Honorarium Income

Under the rules, both Kemp and the committee staff members agree, he would have been free to defer as much honorarium income to 1989 as he wished. Instead, the chief question was whether Kemp was bound by the $2,000 limit on individual speeches.

Kemp had argued that because he would collect the money after he was out of Congress, the $2,000 did not apply. Committee staff lawyers disagreed.

But, said Gottlieb, “I don’t think he was doing anything duplicitous.” The rules on outside income, he noted, “are obviously complex.”