On May 19, 2025, the U.S. Department of Justice (DOJ) announced the launch of the Civil Rights Fraud Initiative, a program designed to utilise the False Claims Act (FCA) to investigate and potentially prosecute recipients of federal funds—such as universities and contractors—that allegedly violate federal civil rights laws through their diversity, equity, and inclusion (DEI) policies.

Key Objectives of the Initiative

• Enforcement Mechanism: The initiative leverages the FCA, which allows the government to impose significant penalties, including treble damages, on entities that knowingly submit false claims for federal funds.

• Focus Areas: The DOJ has indicated that institutions may face scrutiny if they:

  • Implement DEI programmes that allegedly assign benefits or burdens based on race, ethnicity, or national origin.

  • Fail to protect students from antisemitism.

  • Allow policies perceived as discriminatory, such as permitting men to enter women's bathrooms or requiring women to compete against men in athletic competitions.

• Whistleblower Involvement: The DOJ encourages individuals with knowledge of such violations to file qui tam lawsuits under the FCA, potentially receiving a portion of any recovered funds.

Context and Background

The initiative aligns with Executive Order 14173, signed by President Donald Trump on January 21, 2025, titled "Ending Illegal Discrimination and Restoring Merit-Based Opportunity." This order prohibits federal contractors and grant recipients from conducting DEI programs that are deemed to violate federal anti-discrimination laws.

The DOJ's move follows recent investigations into institutions like Harvard University, examining whether their admissions policies comply with the Supreme Court's 2023 decision that effectively ended affirmative action.

Implications for Institutions

• Compliance Risks: Entities receiving federal funds must ensure that their DEI policies do not contravene federal civil rights laws, as misrepresentation can lead to FCA liability.

• Legal Exposure: The use of the FCA introduces the possibility of substantial financial penalties and reputational damage for institutions found in violation.

• Operational Changes: Organisations may need to reassess and potentially modify their DEI initiatives to align with the DOJ's enforcement priorities.

Final Word

The DOJ's Civil Rights Fraud Initiative represents a heightened focus on ensuring that federally funded institutions adhere strictly to civil rights laws, particularly concerning DEI programs. Entities must carefully evaluate their policies and practices to mitigate legal and financial risks associated with this new enforcement strategy.

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