On May 19, 2025, the U.S. Department of Justice’s (DOJ) Deputy Attorney General announced its new Civil Rights Fraud Initiative, which aims to use the False Claims Act (FCA) to investigate and pursue claims against entities that tolerate antisemitism, allow men to enter women’s spaces or compete in female athletic competitions, or engage in unlawful diversity, equity, and inclusion (DEI) practices.
Under this new initiative, implemented through a memorandum issued by the Deputy Attorney General, DOJ will utilize the FCA to investigate and pursue claims against federal contractors and funding recipients (e.g., grants, cooperative agreements, etc.) that “knowingly violate[] federal civil rights laws.” A central focus of the initiative appears to be pursuing claims against entities who certify compliance with civil rights laws while “knowingly” engaging in what the memorandum implementing the initiative calls “racist preferences, mandates, policies, programs, and activities, including thorough [DEI] programs” that provide benefits based on race, ethnicity, or national origin. DOJ will seek to target other behavior as violative of civil rights laws, specifically identifying such activities as universities encouraging antisemitism, refusing to protect Jewish students, and allowing men into women’s bathrooms, concluding that higher education institutions cannot accept federal funds while violating federal civil rights laws. Educational institutions agree to comply with these federal civil rights laws in order to receive federal funds.
DOJ intends to pursue claims against federal-funding recipients and contractors through both the Fraud Section of the Civil Division and Civil Rights Division, noting that the Department will work in coordination with each of the 93 United States Attorney’s Offices as well as other federal agencies that enforce civil rights requirements for federal funding recipients. Of note, DOJ has stated that it contemplates coordinating with agencies such as the Department of Education, the Department of Health and Human Services, the Department of Housing and Urban Development, and the Department of Labor as part of this initiative. DOJ also intends to establish partnerships with state attorneys general and local law enforcement to share information and coordinate enforcement actions. Finally, DOJ specifically encourages private parties to engage as part of this process by filing lawsuits and litigating claims under the FCA as “qui tam” relators. Prior to this initiative, DOJ commenced an FCA investigation into at least one university’s DEI-related practices, which remains ongoing.
As highlighted in a February 2025 alert, there is already increased risk to educational institutions from an FCA perspective. While many schools resolve allegations of discrimination under Title VI of the Civil Rights Act of 1964 or Title IX of the Education Amendments of 1972 or other nondiscrimination statutes through an informal resolution with federal agencies like the U.S. Department of Education, in light of a January 2025 Executive Order, such informal resolutions may now signal to the public that a school may have committed an arguably material violation and submitted a false certification under the FCA. DOJ’s initiative further encourages private parties to initiate qui tam claims against such schools.
While the Deputy Attorney General’s implementing memorandum at least implicitly focuses on enforcement related to educational institutions, we note that the government contractors and federal funding recipients outside of the education industry may also be implicated by this initiative. To that end, we note that an interim final rule to amend the Federal Acquisition Regulation and implement Executive Orders 14173 (Ending Illegal Discrimination And Restoring Merit-Based Opportunity) and 14168 (Defending Women From Gender Ideology Extremism And Restoring Biological Truth To The Federal Government) is pending review by the White House Office of Information and Regulatory Affairs. We are continuing to watch closely for the text of this rule, as well as the implementation of certifications contemplated under certain of the Administration’s other executive orders, to determine the possible implications of such actions within the government contracting industry.
For questions about this initiative and the implications on federal contracting, grants and DEI initiatives generally, contact the authors, your McGuireWoods contact, or a member of the firm’s education, False Claims Act investigations, litigation and enforcement, affirmative action, or federal contracting teams.