In a memorandum dated May 19, 2025, Deputy Attorney General Todd Blanche announced the establishment of a new Civil Rights Fraud Initiative (the Initiative) at the Department of Justice (DOJ). The Initiative will use the False Claims Act (FCA)31 U.S.C. § 3729 et seq. as its “primary weapon” to investigate and pursue claims against recipients of federal funds who “knowingly violate civil rights laws,” such as Title VI, which prohibits discrimination in federally funded programs and activities based on race, color, or national origin, and Title IX, which prohibits discrimination in such programs and activities based on sex.
The Initiative will be co-led and “aggressively pursue[d]” by the DOJ Civil Division’s Fraud Section and DOJ’s Civil Rights Division. The memorandum advises both divisions to coordinate nationally with DOJ’s Criminal Division, as well as other federal agencies, state attorneys general, and local law enforcement to enforce the initiative. It also instructs each of the 93 US Attorney’s Offices nationwide to identify an Assistant US Attorney to support the effort.
Notably, the memorandum explicitly encourages whistleblowers to file lawsuits under the FCA’s qui tam provision,31 U.S.C. § 3730. which authorizes private parties to litigate FCA claims and to receive a portion of any monetary recovery. The memorandum also encourages whistleblowers to report to the “appropriate federal authorities” so that DOJ may consider the information and “take any appropriate action.”
The main target of the Initiative is the operation of diversity, equity, and inclusion (DEI) programs: the memorandum states that the FCA is “implicated whenever federal-funding recipients or contractors certify compliance with civil rights laws while knowingly engaging in racist preferences, mandates, policies, programs, and activities, including through [DEI] programs that assign benefit or burdens on race, ethnicity, or national origin.” Yet the memorandum more broadly notes that recipients could violate the FCA by refusing to “protect Jewish students, allow[ing] men to intrude into women’s bathrooms, or requir[ing] women to compete against men in athletic competitions.” While the memorandum explicitly targets universities for enforcement, emphasizing that “[c]olleges and universities cannot accept federal funds while discriminating against their students,” the Initiative extends to any federal funding recipients.
The memorandum explicitly targets universities for enforcement, but the Initiative extends to any federal funding recipients
The establishment of the Initiative follows the administration’s key executive actions regarding DEI: Executive Order 14173, which directs federal agencies to enforce civil rights laws to combat “illegal DEI preferences within the private sector,” and Executive Order 14151, which directs agencies across the government to terminate all DEI-related federal programs. It also builds upon Attorney General Pam Bondi’s February 5, 2025, memorandum, “Ending Illegal DEI and DEIA Discrimination and Preferences,” (the Bondi DEI memorandum) which asserts DOJ’s commitment to “investigate, eliminate, and penalize” illegal DEI “preferences, mandates, policies, programs, and activities in the private sector and at educational institutions that receive federal funds.” As we note in this Client Alert, the Bondi DEI memorandum also suggests potential criminal investigations related to DEI programs.
Notably, Executive Order 14173 also seeks to leverage the FCA to target DEI programs, as it directs federal agencies to include in all contracts and grants terms requiring: (1) a certification that the contractor or grant recipient “does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws”; and (2) an agreement that “its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions for purposes of” the FCA.
The application of the FCA as a tool for civil rights enforcement marks a significant expansion of the statute’s use. Enacted in 1863, the FCA imposes liability on any individual or entity who knowingly submits false claims to the government. As the May 19, 2025, memorandum acknowledges, the FCA has historically been used to address fraud committed by federal contractors for activities such as overbilling or colluding on bid proposals. With the announcement of the Initiative, the federal government has repurposed the FCA as a tool in its arsenal against DEI-related programming, bringing to bear the threat of potential treble damages and statutory penalties against recipients of federal funding.
The administration’s expansion of FCA enforcement may be subject to a number of defenses — including scienter, materiality, and causation — related to whether the federal-fund recipient knowingly made a false certification that was material to its receipt of the funding. Nevertheless, recipients of federal funds, particularly institutions of higher education, healthcare providers, and other entities with significant reliance on federal funding, should evaluate their DEI-related programs, policies, and practices to ensure compliance with civil rights laws. Colleges and universities in particular should assume they may be subject to heightened scrutiny in the near term. But in light of this Initiative and the significant damages and penalties associated with FCA liability, all recipients of federal funding should take steps to shore up compliance programs, identify potential areas of risk, and consider a range of available risk mitigation strategies.