Deputy U.S. Attorney General Todd Blanche issued a Memorandum on May 19 advising recipients of federal funds that the federal government intends to vigorously enforce anti-discrimination laws by deploying a new Civil Rights Fraud Initiative. The purpose of this Initiative is to identify violators of civil rights laws and pursue claims under the False Claims Act.

What is the False Claims Act?

The False Claims Act generally provides that any person who knowingly submits false claims to the government can be liable for three times the government’s damages, plus a penalty tied to inflation. The FCA allows private citizens to sue on behalf of the government (called “qui tam” suits), and successful claimants typically receive a portion of the government’s recovery. Qui tam suits most often involve fraudulent billing or misuse of government funds. The Justice Department recovered more than $2.9 billion under the FCA in Fiscal Year 2024.

What does the Memorandum say?

According to the Memorandum, entities that “knowingly violate civil rights laws” while taking the government’s money are defrauding the United States, and the FCA is “implicated when a federal contractor or recipient of federal funds knowingly violates civil rights laws – including but not limited to Title IV, Title VI, and Title IX, of the Civil Rights Act of 1964 – and falsely certifies compliance with such laws.” The Memorandum further explains,

a university that accepts federal funds could violate the False Claims Act when it encourages antisemitism, refuses to protect Jewish students, allows men to intrude into women’s bathrooms, or requires women to compete against men in athletic competitions.

With respect to contractors and grantees, the Memorandum states that the FCA applies when recipients of federal funds “certify compliance with civil rights laws while knowingly engaging in racist preferences, mandates, policies, programs, and activities, including through diversity, equity, and inclusion programs that assign benefits or burdens on race, ethnicity, or national origin.”

What is the Civil Rights Fraud Initiative?

The Civil Rights Fraud Initiative will be comprised of two divisions with the Justice Department:  the Civil Division’s Fraud Section, which enforces the FCA, and the Civil Rights Division, which enforces civil rights laws. Each U.S Attorney’s office is also directed to identify an Assistant U.S. Attorney to participate in enforcement efforts. In addition, the Initiative will coordinate with the DOJ’s Criminal Division and other federal agencies that enforce civil rights laws.

The Memorandum concludes by “strongly encouraging” private parties to file qui tam lawsuits and to report potential FCA violations to the government for investigation.

What should contractors do next?

Although the threat of FCA litigation is not new for federal contractors, the Trump Administration’s requirement that contractors certify compliance with federal anti-discrimination laws creates a new avenue for potential claims.

Contractors should thoroughly review employment policies and practices, especially those relating to DEI programs, to ensure that applicants and employees are afforded the same benefits and privileges of employment without regard to race, sex, or other protected characteristics.

Please contact any member of Constangy’s EEO/Contractor Compliance, Reporting & Analytics Practice Group with questions or for assistance in auditing employment practices to ensure compliance.