Status of FBI Chief Revolves Around Honor--and Money : Ethics: When and how Sessions departs now focuses on damaging report. Size of his pension is also a key point in the discussions.

The question of whether William S. Sessions remains as director of the FBI, an issue that has entangled the Justice Department for months, is coming down to two key points, sources said Thursday--his honor and his pension.

The timing of a Sessions departure would have a bearing on the size of his pension. If he serves out the remainder of 1993, according to FBI officials, his annual retirement income would be more than $5,000 higher than if he leaves now.

And in what has been described as “negotiations” with Deputy Atty. Gen. Philip B. Heymann, Sessions is insisting that his departure not be linked to a Justice Department report, prepared during the closing weeks of the George Bush Administration, which concluded that he had abused his office.

President Clinton, who ultimately will decide Sessions’ fate, said he would await the recommendation of Atty. Gen. Janet Reno. Reno, in turn, has asked Heymann to handle discussions of the matter.

Heymann and Sessions were returning Thursday from a European terrorism conference in Copenhagen, where they hoped to discuss the report and Sessions’ tenure. They could not be reached for comment.

Under one scenario, Sessions would step down and accept a lesser, temporary assignment that would keep him on the payroll through December, assuring him of the higher pension.

A major hurdle has been raised, however, by Sessions’ insistence that there be no public link between any decision to step down and the critical report--which Sessions contends is flawed.

That condition could put Reno in the extraordinary position of rejecting the findings of the department’s Office of Professional Responsibility, which would suggest she had lost confidence in the unit that operates as the attorney general’s watchdog.

The office found that Sessions had abused his position by engaging in a “sham” to avoid paying taxes on the use of his limousine to and from home and that he scheduled out-of-town meetings and other FBI business in a way that would allow him to visit family members at government expense.

The report also found that Sessions had refused to cooperate with an inquiry to determine whether he received a “sweetheart” deal on his home mortgage because of his position and that he improperly billed the FBI for a $10,000 fence around his home.

In accepting the report’s findings, then-Atty. Gen. William P. Barr said in a letter to Sessions: “The evidence supporting the report’s conclusions is overwhelming and your explanations, where provided, are wholly unpersuasive.” Sessions challenged the report’s conclusions, blaming them on “animus” toward him by Barr.

The informal discussions between Heymann and Sessions follow a May 21 meeting between Reno and the FBI director, his two lawyers and Heymann. That meeting was scheduled at the last minute, before Sessions left for Europe, according to one source. It was intended to fulfill Reno’s commitment to meet with the FBI chief before making any recommendation to Clinton.

Sessions, 63, has served 5 1/2 years of a 10-year term. As FBI director, he serves at the pleasure of the President and can be removed without cause at any time. However, legislation discourages presidents from removing FBI directors automatically when they take office.

Under a so-called high-three formula, Sessions’ retirement annuity would be based on the highest three years of his salary, which rose from $96,600 annually in 1990 in three steps to $133,600 this year.

Based on 28 years of federal service--including 13 years as a district judge, and earlier Justice Department appointments--he would be entitled to more than $69,000 annually. But if he were to leave now, the amount would drop to about $64,000 a year, according to FBI calculations.

Reno has made no public comment on the office of professional responsibility findings against Sessions. But she earned a reputation as a stickler for ethics during her 15 years as Dade County, Fla., state attorney and has carried that attitude to Washington.

When she took office in March, Reno promised to give the Sessions matter high priority, but later said she wanted to await Heymann’s confirmation because of his long dealings with the FBI.

Negotiating Sessions’ departure would be in line with senior Administration officials’ comments in late March that they regarded his conduct as “foolish, not corrupt.”

“We don’t think he’s a bad man or an evil man or a corrupt man,” one official said then. “We do think he did some foolish things.”