On May 19, 2025, Deputy Attorney General Todd Blanche issued a Memorandum creating the Civil Rights Fraud Initiative that will “utilize the False Claims Act to investigate and . . . pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws.” According to the Memorandum, though racial discrimination has “always been illegal,” the Administration posits that “many corporations and schools continue to adhere to racist policies and preferences—albeit camouflaged with cosmetic changes that disguise their discriminatory nature.” In an effort to prevent federal funds from being used in connection with or support of these purportedly racist policies and preferences, the Initiative will wield the power of the False Claims Act, the government’s most powerful tool to fight fraud, waste, and abuse.
This Memorandum follows and bolsters President Trump’s Executive Order (EO) No. 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity (Jan. 21, 2025), often referred to as the “Anti-DEI Executive Order,” which seeks to end “illegal” diversity, equity, and inclusion (DEI) efforts by recipients of federal funding. Most pertinent, EO 14173 directed agencies to include terms in every federal contract or grant award requiring the contractor to agree that its compliance with applicable federal anti-discrimination laws is material to the government’s payment decisions, for purposes of the False Claims Act’s materiality element, and certify that it does not operate any programs promoting DEI that violate any applicable federal anti-discrimination laws. The EO is the subject of numerous ongoing legal challenges across the country. The Initiative appears to signal that the Department of Justice is initiating efforts to utilize the False Claims Act as an anti-DEI tool irrespective of the status of EO 14173’s certification provisions.
The Initiative will be co-led by the Department of Justice Civil Rights Division and the Civil Division’s Fraud Section to “aggressively” pursue the Initiative’s goals. Each of the ninety-three United States Attorney’s Offices around the country are also required to identify an Assistant United States Attorney to advance the Initiative’s efforts. The Initiative will also coordinate with DOJ’s Criminal Division, federal agencies, and states attorneys general and local law enforcement to pursue enforcement actions.
In addition to the federal and state partners, the Memorandum deputizes private individuals as DOJ “alone cannot identify every instance of civil rights fraud.” It therefore “strongly encourages” private individuals to file lawsuits under the False Claims Act, and by extension, share in any recovery of monies to the public fisc. Under the False Claims Act, private individuals can file qui tam lawsuits and stand in the shoes of the United States to vindicate alleged injuries to the United States and share in the recovery up to 30%. 31 U.S.C. § 3730. The Initiative seems to rely on the promise of sharing in potentially large recoveries as a strong incentive to bring anti-DEI lawsuits under the False Claims Act and is a call that prospective whistleblowers and the relator’s bar are sure to answer.
The timing of Deputy Attorney General Blanche’s call to action to relators is also noteworthy as the constitutionality of the False Claims Act’s qui tam provisions has been challenged in lawsuits throughout the country and is currently on appeal in the Eleventh and Third Circuits. The first, and so far only, case to declare the qui tam provisions unconstitutional under Article II’s Appointments Clause was decided less than a year ago on September 30, 2024. U.S. ex rel. Zafirov v. Fla. Med. Assocs., LLC, 751 F.Supp.3d 1293 (M.D. Fla. 2024). Following that decision, now-Attorney General Pam Bondi committed to defending the constitutionality of the False Claims Act in response to questioning from Senator Chuck Grassley (R-IA) during her confirmation hearings in January 2025. Since that time, DOJ has filed several statements of interest and briefs supporting the constitutionality of the qui tam provisions in district courts and the Eleventh Circuit. The issuance of the Memorandum may offer another sign that the current Administration will continue to support the constitutionality of the qui tam provisions, here as a means of extending the False Claims Act to reach alleged violations of federal civil rights laws.