On May 19, 2025, the U.S. Department of Justice (“DOJ”) issued a memorandum and accompanying press release announcing its “Civil Rights Fraud Initiative,” designed to vigorously enforce the federal False Claims Act (“FCA”) “against those who defraud the United States by taking its money while knowingly violating civil rights law.” The memo is the latest in a series of actions taken by the administration to ensure that in the government's view universities, government contractors and other recipients of federal funds do not unlawfully discriminate based upon Diversity, Equity, and Inclusion (“DEI”) efforts, or on the basis of anti-Semitism.
What You Need to Know:
- On May 19, 2025, the U.S. Department of Justice (“DOJ”) announced a new initiative that will utilize the False Claims Act (“FCA”) to enforce the President’s civil rights agenda, with significant implications for universities, government contractors, and other recipients of federal funds.
- The initiative aims to increase coordination within DOJ and to provide additional resources to bring these actions.
- And, as always, these suits incentivize so-called Relators (whistleblowers) to collaborate with DOJ in order to share in any potential recovery.
- Under the initiative, DOJ intends to target entities who receive federal funds and have prioritized those that they believe implement discriminatory Diversity, Equity, and Inclusion practices, and permit anti-Semitism.
Recent experience shows that even before the issuance of this memorandum, the DOJ had been conducting such investigations pursuant to its FCA authority. Perhaps most meaningfully, this initiative devotes additional resources and attention to the effort and encourages whistleblowers to come forward—by filing Qui Tam suits—in order to share in any recovery. In addition to threat of a potential debarment and loss of federal funding, an FCA investigation carries with it the punitive potential of treble damages, in addition to civil penalties on every identified false claim.
The memorandum references President Trump’s Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, which was issued shortly after the President’s inauguration in January 2025. The Executive Order takes aim at the use of DEI policies. The memorandum, and accompanying statements of the Attorney General and Deputy Attorney General, set forth explicitly what many have observed since President Trump issued his Executive Order: that DOJ will investigate, and bring enforcement actions under the FCA, “whenever federal-funding recipients or contractors certify compliance with civil rights laws while knowingly engaging in racist preference, mandates, policies, programs, and activities, including through diversity, equity, and inclusion (DEI) programs that assign benefits or burdens on races, ethnicity, or national origin.”
While the memo does not limit itself to any specific industry or practice, it cites certain behavior that DOJ believes violates civil rights laws, and therefore the FCA, at universities, government contractors, and entities that accept federal funding:
- Encouraging anti-Semitism and refusing to protect Jewish students;
- Allowing men into women’s restrooms; and
- Requiring women to compete with men in athletic competitions.
Accordingly, the initiative will use the FCA to investigate and pursue claims “against any recipient of federal funds that knowingly violates civil rights law.” The initiative will be co-led by DOJ’s Civil Fraud Section, which normally handles FCA investigations and litigation, and the Civil Rights Division, which normally enforces civil rights laws, with input from the Criminal Division, the U.S. Attorney’s offices, and other agencies.
But the initiative is not limited to these agencies, and it is notable that DOJ intends to coordinate with these additional Departments:
- The Department of Education;
- The Department of Health and Human Services;
- The Department of Housing and Urban Development; and
- The Department of Labor.
Perhaps most significantly, the initiative, explicitly and actively solicits Relators to bring private lawsuits to enforce the FCA, in what are known as qui tam actions. Indeed, the initiative “strongly encourages” the filing of qui tam actions with the prospect of Relators sharing in potentially lucrative recoveries.
According to a January 2025 press release, the government recovered more than $2.9 billion dollars through settlements and judgments in 2024, inclusive of both government-led and qui tam actions. The DOJ also noted in that press release that qui tam filings reached an all-time high in 2024. Thus, based upon the activity of the plaintiffs’ bar in recent years, and the generous carrot held out to Relators, there are good reasons for universities in particular, but all recipients of federal funds more generally, to review their compliance with federal contracts in light of the most recent DOJ statement.
