NEW YORK (CNN) -- The American Civil Liberties Union has withdrawn from a federal donation program, refusing to follow U.S. Patriot Act rules requiring use of a government anti-terrorism watch list to check employees' names, a spokeswoman said.

The ACLU stands to lose about $500,000 by pulling out of the Combined Federal Campaign, which allows federal employees to donate to various nonprofit organizations through payroll deductions, ACLU spokeswoman Emily Whitfield said Saturday.

In 2003, the ACLU received $470,000 in such contributions.

ACLU Executive Director Anthony Romero, in a letter to CFC Director Mara Patermaster, said Attorney General "John Ashcroft and this administration have created a climate of fear and intimidation that undermines the health and well-being of this nation."

Using the watch lists, developed under the U.S. Patriot Act, is one requirement of continued program participation.

The Patriot Act -- which expires in 2005 -- was passed into law in the weeks after the September 11, 2001, terrorist attacks.

It strengthened government legal powers to conduct investigations and detain people.

Supporters of the law have said the Patriot Act has been a valuable tool in anti-terrorism efforts.

The ACLU, a legal organization that works to defend individual Constitutional rights, has long opposed the U.S. Patriot Act.

In his letter, Romero said, "We will act not only on our behalf, but on behalf of our nation's nonprofits, to defend ourselves against John Ashcroft and a government that tramples on the Constitution in the name of national security."

Romero said his organization withdrew from the program after seeing comments by Patermaster in Saturday's New York Times, indicating the ACLU could be dropped from the program for "violating the government's policy."

Whitfield said the lists contain "tens of thousands of names and aliases," and it's against the ACLU's principles to use any kind of watch list.

"Our experience with watch lists is that they are notoriously unreliable," Whitfield said.

The ACLU had received legal advice indicating it was not required to check employee names against the list, Whitfield said. The group was exploring its legal options, she said.

"The ACLU would never have signed the CFC's funding agreement if we believed for one minute we would have to check our employees against a list," she said.

Asked what the group will do to make up for the loss of the donations from federal employees, which have been rising each year, Whitfield said, "We'll just fight a little harder."

The CFC distributes the donations to more than 2,000 nonprofit groups, and the ACLU has been in the program since 1983. Other groups in the CFC program are the 4-H youth education program, National Public Radio and the Alzheimer's Association research organization.