Dept. of Justice Introduces Civil Rights Fraud Initiative: Authorities to Utilize False Claims Act in Enforcement of Civil Rights Legislation against Universities and Government Contractors
The Department of Justice (DoJ) announced a new Civil Rights Fraud Initiative (CRFI) on May 19, 2025, with the aim of enforcing federal civil rights laws in the distribution of federal funds. The initiative, led by the Fraud Section of the Civil Division and the Civil Rights Division, seeks to use the False Claims Act (FCA) to investigate and pursue claims against recipients of federal funds, such as federal contractors and grant recipients, that knowingly violate these laws.
The CRFI specifically targets entities that certify compliance with civil rights laws but implement programs or practices that assign benefits or burdens based on race, ethnicity, or national origin, thus violating those laws. This includes Diversity, Equity, and Inclusion (DEI) initiatives that may inadvertently or deliberately discriminate.
The initiative encourages private individuals (whistleblowers) to file **qui tam** lawsuits under the FCA, which could allow them to receive up to 30% of recovered monetary damages. This move is expected to increase enforcement against non-compliant contractors and grantees.
The CRFI is a response to the Supreme Court's decision in Students for Fair Admissions, Inc. v. President & Fellows of Harvard College, 600 U.S. 181 (2023), which highlighted the need for stricter enforcement of federal civil rights laws in the context of DEI programs.
The initiative also calls for coordination with the DOJ's Criminal Division, other federal agencies, and state attorneys general. It directs the DOJ’s Civil Rights Division to aggressively pursue both government-led and whistleblower-initiated FCA cases against violations of civil rights by federally funded organizations.
Federal funding agencies have taken various actions to add terms to federal contracts requiring counterparties to certify that they do not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws. The HHS Grants Policy Statement (April 16, 2025) is an example of such actions.
Under the CRFI, entities found to be operating DEI initiatives that assign benefits or burdens on the basis of race or ethnicity can face FCA claims, which could result in treble damages and increased legal risks. This effectively adds "teeth" to the enforcement of the Trump Administration's executive orders that emphasized ending or restricting affirmative action and DEI programs that use race or ethnicity as a basis for decisions.
WilmerHale, a law firm with expertise in False Claims Act, Anti-Discrimination, and Higher Education practices, including DEI compliance assessments, stands ready to defend clients in any related federal investigations and litigation.
In summary, the Civil Rights Fraud Initiative seeks to bolster enforcement against federally funded organizations that use discriminatory DEI programs by characterizing such conduct as false claims under the FCA, thereby reinforcing Trump-era policies that restrict the use of race- or ethnicity-based preferences in federally supported programs and contracts.
- The Civil Rights Fraud Initiative (CRFI) encourages litigation under the False Claims Act (FCA) against entities that operate Diversity, Equity, and Inclusion (DEI) initiatives which assign benefits or burdens based on race or ethnicity, as these practices could face FCA claims and treble damages.
- WilmerHale, with its expertise in False Claims Act, Anti-Discrimination, and Higher Education practices, including DEI compliance assessments, offers education-and-self-development services to clients in preparation for potential federal investigations and litigation stemming from the implementation of discriminatory DEI programs.
