Labor & Employment Law Daily Wrap Up, DOJ NEWS—New ‘Civil Rights Fraud Initiative’ created within Justice Department to go after federal fund recipients promoting DEI policies, (May 20, 2025)

By Brandi O. Brown, J.D.

“Institutions that take federal money only to allow anti-Semitism and promote divisive DEI policies are putting their access to federal funds at risk,” said Attorney General Pamela Bondi. “This Department of Justice will not tolerate these violations of civil rights – inaction is not an option.”

Yesterday, the Department of Justice announced that it is establishing a “Civil Rights Fraud Initiative” and plans to use the False Claims Act to pursue claims against federal fund recipients that “knowingly violate[] federal civil rights laws.” While the announcement specifies that claims will be pursued against “any recipient of federal funds that knowingly violates federal civil rights laws,” colleges and universities appear to be a particular focus in the memo sent out regarding the initiative.

Memo lays out parameters. In the memo, the Deputy Attorney General argues that the False Claims Act is the DOJ’s “primary weapon against government fraud, waste, and abuse” and notes that it offers the opportunity for treble damages and significant penalties. The memo claims that it is implicated when a federal contractor or federal funds recipient knowingly violates civil rights laws, contending that examples of violations include when “a university that accepts federal funds... 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.”

DEI. The memo adds:

“The False Claims Act is also implicated whenever 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.”

Dedicated Assistant U.S. Attorneys. According to DOJ’s memo, the Initiative will be co-led by the Civil Division's Fraud Section and the Civil Rights Division. “Each division will identify a team of attorneys to aggressively pursue this work together. Each of the 93 United States Attorney's Offices will identify an Assistant United States Attorney to advance these efforts.”

It will also coordinate with other divisions and federal agencies, including the Department of Labor, and plans to establish partnerships with state attorneys general and local law enforcement.

Qui tam actions encouraged. “The Department recognizes that it alone cannot identify every instance of civil rights fraud.” Noting that under 31 U.S.C. § 3730 private parties can sue “to protect the public interest” under the False Claims Act and, if successful, share in the monetary recovery, the memo states that DOJ “strongly encourages these lawsuits.” It also encourages whistleblowing and provides information on how to report alleged fraud.

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