On Monday, May 19, the U.S. Department of Justice issued a memorandum announcing the launch of a new "Civil Rights Fraud Initiative," aimed at investigating and pursuing claims under the False Claims Act (FCA) against recipients of federal funds who knowingly violate federal civil rights laws.
The memorandum, signed by Deputy Attorney General Todd Blanche, outlines a coordinated approach to enforcement led jointly by the Civil Division's Fraud Section—which administers the FCA—and the Civil Rights Division. Each of the 93 United States Attorneys' Offices will designate an Assistant United States Attorney to support the initiative.
The FCA, 31 U.S.C. § 3729 et seq., serves as one of the government's most potent civil enforcement mechanisms, as it contains strong penalty provisions aimed at deterring fraudulent conduct, and significant monetary incentives for private individuals—referred to as "relators" in FCA parlance—to bring cases alleging fraud against the government. In past years, the Department of Justice has focused its FCA investigative efforts on priorities such as healthcare fraud, cybersecurity compliance, and COVID-19 pandemic era programs.
This initiative by the Trump administration is consistent with its efforts under Executive Orders 14151 and 14173. The first directs grant-making agencies to prohibit promotion of DEI activities within the scope of grant-funded projects. The second directs contracting agencies and grant-making agencies to require contractors and grantees to provide specific assurances (i) asserting that they do not engage in any DEI activities that violate federal civil rights laws, and (ii) acknowledging that an inaccurate assurance may subject that grantee to liability under the FCA. As a result, in the context of federal grants, various agencies, including the Department of Health and Human Services (through its broadly applicable Grants Policy Statement), and Department of Justice (through new grant terms and conditions in at least some programs), have commenced requiring such additional assurances.
The May 19 Department of Justice memorandum asserts a broad array of areas—by way of examples—that could serve as the basis of future FCA investigations and potential enforcement:
- When a federal contractor or recipient of federal funds knowingly violates civil rights laws, including but not limited to Title VI of the Civil Rights Act of 1964—prohibiting discrimination on the basis of race, color or national origin in program activities.
- "[W]henever federal-funding recipients or contractors certify compliance with civil rights laws while knowingly engaging in racist preferences, mandates, policies, programs, and activities, including through diversity, equity, and inclusion (DEI) programs that assign benefits or burdens on race, ethnicity, or national origin."
- When a university that accepts federal funds "encourages antisemitism" or "refuses to protect Jewish students."
- When a university that accepts federal funds "allows men to use women's bathrooms, or requires women to compete against men in athletic competitions."
The memorandum goes on to "strongly encourage" lawsuits by relators. Coupled with the assurances tying the receipt of funds to civil rights compliance that agencies are increasingly calling upon grantees to provide, the posture reflected in this memorandum represents a significant increase in enforcement risk around the undefined edges of federal civil rights compliance.
Grantees should review any elements of their program activities and any employment practices that may be viewed as differentiating between individuals for access or benefits on the basis of race or gender. This review will help grantees assess risk that the practice or policy might be viewed as inconsistent with federal civil rights laws.
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