The Trump administration is stepping up its war on DEI, reportedly launching probes about the use of diversity initiatives in hiring and promotion at companies including Google and Verizon.
The Justice Department’s investigations come under the aegis of the False Claims Act, a statute traditionally used to recover money from companies that overbill the government or inflate the cost of services rendered, The Wall Street Journal reported Monday.
Deputy Attorney General Todd Blanche outlined the initiative in a May memo that directed DOJ officials “to investigate and, as appropriate, pursue claims against any recipient of federal funds” that based its hiring policies on DEI, according to The Journal.
The effort is part of a broader DOJ push to use the False Claims Act as a civil rights enforcement tool, a significant expansion of a law historically aimed at rooting out financial fraud in areas such as defense contracting and healthcare billing.
Under the Trump administration’s legal theory, companies that certify compliance with federal anti-discrimination laws while maintaining DEI programs deemed discriminatory could be accused of submitting “false claims” for government payment.
Alphabet’s Google and Verizon have already received Justice Department demands for documents and information related to their workplace diversity programs, according to people familiar with the investigations.
It was not immediately known which other companies may be facing DOJ probes related to DEI.
Some companies under scrutiny have met in person with Justice Department officials, The Journal reported.
False Claims Act investigations are typically triggered by whistleblowers or internal government watchdogs flagging suspected fraud.
In this case, the probes were initiated by politically appointed officials within the Justice Department who argue that companies with federal contracts are violating their obligations if they continue to embrace DEI policies, according to The Journal.
The DOJ’s approach to False Claims Act enforcement, known as implied certification, allows the government to argue that compliance with civil rights laws is material to receiving federal funds.
The policy would target companies with federal contracts that still had DEI policies on the books when President Trump signed an executive order ending government support for affirmative action-style programs and requiring contractors to certify compliance with federal anti-discrimination law.
Blanche wrote that the False Claims Act would be the “weapon” used to pursue claims against companies and universities that “continue to adhere to racist policies,” according to The Journal.
Legal experts told The Journal that the DOJ’s approach is unusual and could face hurdles in court, since the government would have to prove that a company made a material misrepresentation when securing a federal contract or submitting claims for payment.
Still, the newspaper noted that the investigations have rattled corporate America — False Claims Act violations carry steep fines and potential exposure through whistleblower lawsuits.
Companies have reportedly been reassessing DEI programs amid legal uncertainty and pending court challenges to parts of the administration’s executive order.
While Google and Verizon were the only companies named in The Journal’s article, the investigations extend across industries including automotive, defense, utilities and pharmaceuticals.
A DOJ spokesperson declined to comment.
The Post has sought comment from Google and Verizon.
Credit: Source link
