Legal Defense Fund Rules for Officials of the Congressional and Executive Branches
When members of Congress and officials of the executive branch get in trouble with the law or have alleged ethical violations, they may establish a fund – commonly referred to as a legal defense fund or legal expense trust – to defend themselves. These funds are governed by House and Senate ethics rules and guidelines from the Office of Governmental Ethics (OGE) which impose various requirements. The rules governing congressional legal defense funds generally are more restrictive and much more specific than the rules governing officials of the executive branch.
Since legal defense funds for congressional and executive branch officials have been deemed by the Federal Election Commission (FEC) to fall outside the realm of campaign finance law, donors may contribute the maximum to a candidate’s campaign and still make an additional contribution to the same official’s legal defense fund. The 2002 federal election law banning corporate and union money to federal officeholders has not been applied by the FEC to ban such contributions to legal defense funds of officeholders, though Senate rules and OGE guidelines prohibit corporate and union contributions to the legal defense funds of Senate members and executive branch officials. House members may receive contributions for their legal defense funds from any source except registered lobbyists and foreign nationals.
Congressional Legal Defense Funds
Here are the main features of a legal defense fund for members of Congress:
While most legal expenses related to election contests for candidates who are not officeholders must be subject to the limits and reporting requirements of federal election law, members of Congress thus far have been permitted to finance their legal expenses with either surplus campaign funds, legal defense funds established under ethics rules, or both. Since passage of the ban on candidates using corporate or union money to finance their election activities, there has been some controversy as to whether congressional officeholders should be allowed to use both sources of funds to finance election-related litigation.
Executive Branch Legal Defense Funds
The Office of Government Ethics has only addressed the issue of legal defense funds for officeholders in the executive branch through an informal advisory letter. Each executive agency is authorized to develop their own policies regarding such funds, though the agencies usually defer to OGE guidelines.
The issue of legal defense funds has not frequently arisen for executive branch officeholders, with the notable exception of President Bill Clinton. Though officeholders of executive agencies have become increasingly embroiled in legal challenges as of late, most officeholders have chosen to foot the legal bills themselves. So far, it has been fairly uncommon for executive officeholders to establish separate legal defense funds to solicit contributions and pay for legal expenses.
Nevertheless, OGE in 1993 issued guidelines making it easier for executive officeholders to establish legal defense funds to pay for expenses associated with official duties. OGE reversed earlier guidelines that had prohibited officeholders from soliciting or receiving contributions from others to pay for legal expenses as a violation of the law limiting outside income.
Here are the main features of the guidelines for legal defense funds for officeholders of the executive branch:
In addition to these guidelines, OGE has also advised executive agencies to follow the gift rules in setting the requirements for legal defense funds. Under the gift rules for executive officeholders, gifts are to be limited to less than $50 from each donor per year, but each executive agency may choose to waive this gift limit. The gift rules, and OGE guidelines, do not impose any disclosure requirement of the sources of funds or the nature of expenditures.
Under these guidelines, President Bill Clinton established a presidential legal defense fund to help pay for his legal expenses and those of his wife, Hillary Clinton, associated with charges of lying under oath, Whitewater and the Paula Jones sexual harassment lawsuit.
 House Committee on Standards of Official Conduct, Memorandum to All Members, Officers, and Employees, “Legal Expense Fund Regulations,” House Rule 26 (
18 U.S.C. §209(a), which reads in part: "Whoever receives any salary, or any contribution to or supplementation of salary, as compensation for his services as an officer or employee of the executive branch of the United States Government, of any independent agency of the United States, or of the District of Columbia, from any source other than the Government of the United States, except as may be contributed out of the treasury of any State, county, or municipality; or
"Whoever, whether an individual, partnership, association, corporation, or other organization pays, makes any contribution to, or in any way supplements, the salary of any such officer or employee under circumstances which would make its receipt a violation of this subsection--"
"Shall be subject to the penalties set forth in section 216 of this title."