(a) Contributions. A legal expense fund may only accept contributions of payments for legal expenses from permissible donors listed in paragraph (b) of this section.

(b) Permissible donors. A permissible donor includes:

(1) An individual who is not:

(i) An agent of a foreign government as defined in 5 U.S.C. 7342(a)(2);

(ii) A foreign national;

(iii) A lobbyist as defined by 2 U.S.C. 1602(10) who is currently registered pursuant to 2 U.S.C. 1603(a);

(iv) Acting on behalf of, or at the direction of, another individual or entity in making a donation;

(v) Donating anonymously;

(vi) Seeking official action by the employee beneficiary's agency;

(vii) Doing business or seeking to do business with the employee beneficiary's agency;

(viii) Conducting activities regulated by the employee beneficiary's agency other than regulations or actions affecting the interests of a large and diverse group of persons;

Example 1 to paragraph (b)(1)(viii): A donor contributed to a Department of State employee's legal expense fund. The donor has recently applied to renew their United States Passport. Because the Department of State's passport renewal office affects the interests of a large and diverse group of people, the donation is permissible under paragraph (b)(1)(viii) of this section.

(ix) Substantially affected by the performance or nonperformance of the employee beneficiary's official duties; or

(x) An officer or director of an entity that is substantially affected by the performance or nonperformance of the employee beneficiary's official duties.

(2) A national committee of a political party as defined by 52 U.S.C. 30101(14) and (16) or, for former members of a campaign of a candidate for President or Vice President, the campaign, provided that the donation is not otherwise prohibited by law and the entity is not substantially affected by the performance or nonperformance of an employee beneficiary's official duties; or

(3) An organization, established for more than two years, that is:

(i) described in section 501(c)(3) of the Internal Revenue Code and exempt from taxation under section 501(a) of the Internal Revenue Code, and

(ii) not substantially affected by the performance or nonperformance of an employee beneficiary's official duties.

Note 1 to paragraph (b): Acceptance of a legal expense payment from another employee must be analyzed under subpart C of this part.

(c) Contribution limits. A legal expense fund may not accept more than $10,000 from any single permissible donor per calendar year.

Note 2 to paragraph (c): As discussed in § 2635.1002(b)(2), payments for legal expenses or the provision of pro bono legal services that otherwise qualify for a gift exclusion or exception other than § 2635.204(n) in subpart B of this part are not covered by this subpart.

(d) Use of funds. Legal expense fund payments must be used only for the following purposes:

(1) An employee beneficiary's expenses related to those legal proceedings arising in connection with the employee's past or current official position, the employee's prior position on a campaign of a candidate for President or Vice President, or the employee's prior position on a Presidential Transition Team;

(2) Expenses incurred in soliciting for and administering the fund; and

(3) Expenses for the discharge of Federal, state, and local tax liabilities that are incurred as a result of the creation, operation, or administration of the fund.

Example 1 to paragraph (d): An employee beneficiary's attorney determines it is necessary to employ an expert witness related to a legal proceeding arising in connection with the employee beneficiary's official position. Funds may be distributed from the legal expense fund to pay fees and expenses for the expert witness.