Civil Rights Fraud Initiative Formed to Use False Claims Act to Prosecute “Unlawful” DEI
On May 19, 2025, the Department of Justice issued a Memorandum (the Blanche Memorandum) outlining a new Civil Rights Fraud Initiative using the False Claims Act, 31 USC Section 3729 et seq., to enforce federal civil rights and ensuring equal protection under the law. On January 21, 2025, President Trump issued Executive Order 14173 and on February 5, 2025, the Attorney General issued a Memorandum Ending Illegal DEI and DEIA Discrimination and Preferences.
The Blanche Memorandum specifically states, “[t]he 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. While racial discrimination has always been illegal, the prohibition on such policies became clear after the Supreme Court stated that “[e]liminating racial discrimination means eliminating all of it.” Students for Fair Admissions, Inc. v. President & Fellows of Harv. Coll., 600 U.S. 181,205 (2023).
This Civil Rights Fraud Initiative is tasked with using the False Claims Act to investigate and pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws, including federal contractors. The FCA will be used as the tool to prosecute claims of false certification with civil rights laws. The DOJ will use a comprehensive approach engaging with federal, state and local law enforcement to coordinate investigations and prosecutions. It has also encouraged private parties and Whistleblowers to report suspected violations.
What makes this particularly fraught is the lack of clarity surrounding what is unlawful DEI or DEIA. Investigations are likely to occur in all areas where federal funds are received including higher education and construction since the Memorandums directed each agency to identify “the most egregious and discriminatory DEI and DEIA practices.” By March 1, 2025, each agency was to submit its proposal for a plan, with specific steps to deter or eliminate Illegal DEI or DEIA programs or principles that constitute illegal discrimination or preferences, and identification of up to nine possible civil compliance investigations. It is likely these investigations are underway.
As a contractor operating in NY State which is continuing its DEI mandates, what are you to do with these seemingly conflicting mandates? One, you should immediately conduct an audit/review of your policies and programs surrounding DEI and DEIA to ensure that no advantages or disadvantages are assigned based on race, gender, national origin, etc. and modify those policies to remove any race/gender-based incentives. Two, you should review and strengthen your internal compliance, training and record-keeping. Three, ensure that any certifications on contracts are truthful, accurate and based upon demonstrable practices. Four, ensure your anonymous reporting mechanisms are well known to your employees and monitor them to identify and address potential areas of concerns before they escalate.
If you would like more information or assistance with a Form I-9 Audit, kindly reach out to Lorraine D’Angelo, lorraine@ldaconmplianceconsulting.com or call (914) 548-6369.