U.S. DOJ Launches Initiative Leveraging False Claims Act to Target Diversity, Equity, and Inclusion Programs

In a May 19, 2025 memorandum, U.S. Department of Justice (DOJ) Deputy Attorney General Todd Blanche announced the Civil Rights Fraud Initiative, which aims to use the False Claims Act (FCA) to investigate and “pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws” via “racist preferences, mandates, ... and activities” — including diversity, equity, and inclusion (DEI) programs. The initiative’s launch follows two Trump administration executive orders, which we addressed here and here, that expressly tether assertedly unlawful DEI programs to potential treble damages and statutory penalties under the FCA for companies that do business with the federal government. It also comes just two days before May 21, 2025, the deadline specified in Executive Order 14173 for the Attorney General to submit a report to the Assistant to the President for Domestic Policy containing recommendations for enforcing civil rights laws. Among other things, the report must identify “up to nine potential civil compliance investigations of publicly traded corporations, large non-profit corporations or associations, foundations with assets of 500 million dollars or more, State and local bar and medical associations, and institutions of higher education” with endowments exceeding $1 billion.  

The memorandum reflects an initial focus on universities: “[A] university that accepts federal funds could violate the False Claims Act when it encourages antisemitism, refuses to protect Jewish students, allows men to intrude into women’s bathrooms, or requires women to compete against men in athletic competitions.” The announcement follows news that the Department of Justice (DOJ) recently issued a civil investigative demand (CID) to investigate FCA violations by Harvard University and whether Harvard is complying with Students for Fair Admissions, the 2023 Supreme Court decision — cited in the memorandum — that effectively outlawed affirmative action in university admissions. (Relatedly, Executive Order 14173 also directed the Attorney General and the Secretary of Education to issue guidance on what measures and practices are required to comply with Students for Fair Admissions by May 21, 2025, so we expect further announcements on this score soon.)

Notwithstanding the initial emphasis on universities, the memorandum explicitly advises that the initiative covers all “federal-funding recipients or contractors” that “certify compliance with civil rights laws.” Indeed, the memorandum goes out of its way to allege that “many corporations ... continue to adhere to racist policies.” Thus, any company that does business with or receives funds directly or indirectly from the federal government or federal programs has risk, including in the healthcare and life sciences, defense, and education industries.

The initiative will involve nationwide collaboration among federal and state law enforcement agencies. The Civil Fraud Section, which enforces the FCA, and the Civil Rights Division, which enforces civil rights laws, will co-lead the initiative. They will engage with the Criminal Division “as well as with other federal agencies that enforce civil rights requirements for federal funding recipients,” including the Departments of Education, Health and Human Services, Housing and Urban Development, and Labor. The memorandum also directs that the Civil Fraud Section and Civil Rights Division “establish partnerships with state attorneys general and local law enforcement to share information and coordinate enforcement actions.” That collaboration would dovetail with Texas Attorney General Ken Paxton’s recent DEI probes.       

The memorandum closes by exhorting FCA relators to file suits targeting “civil rights fraud” based on DEI activities. Indeed, in a notable endorsement of the FCA’s qui tam mechanism, the memorandum highlights that Congress authorized private parties to litigate FCA claims — and to “shar[e] in any monetary recovery.”

The initiative’s launch strongly underscores that all entities receiving federal money or contracting with the federal government should take steps to ensure that their policies comply with federal antidiscrimination laws, to understand the certifications of compliance they are making to the government and federal programs, to update their compliance programs and to ensure that compliance hotlines are capturing discrimination issues, and to assess their potential FCA enforcement risk stemming from current and historical DEI efforts.