The Trump administration is intensifying its scrutiny of diversity, equity, and inclusion (DEI) practices, initiating an investigation into companies like Google and Verizon regarding their hiring and promotion strategies centered on these initiatives.
This investigation, led by the Justice Department, utilizes the False Claims Act—a law primarily aimed at recovering funds from entities that overcharge the government or inflate service costs, as reported by the Journal.
Deputy Attorney General Todd Blanche emphasized this effort in a memo from May, instructing officials to probe DEI hiring policies and pursue claims where relevant against recipients of federal funds.
The initiative forms part of a larger strategy by the Justice Department to leverage the False Claims Act for civil rights enforcement, marking a significant expansion of a law initially designed to combat financial fraud in sectors like defense and healthcare.
Under the administration’s legal rationale, companies with DEI programs seen as discriminatory, even while adhering to federal anti-discrimination laws, might be accused of submitting “false claims” for government payments.
Google and Verizon have reportedly been asked by the Justice Department to provide documentation and details concerning their diversity initiatives, according to sources familiar with the matter.
It’s unclear at this stage which other firms may be under investigation regarding their DEI practices.
Some entities under examination have engaged directly with Justice Department officials.
Typically, investigations under the False Claims Act stem from whistleblower reports or alerts from internal government watchdogs regarding suspected fraud.
In this instance, the inquiry was initiated by politically appointed officials at the Justice Department, claiming that companies holding federal contracts are breaching their commitments by persisting with DEI policies, according to the Journal.
The Justice Department’s stance on enforcing the False Claims Act, termed implied certification, asserts that compliance with civil rights laws is crucial for receiving federal funds.
This policy particularly targets companies with federal contracts that maintained DEI policies post-Trump’s executive order, which mandated an end to government support for affirmative action programs and required contractors to certify their compliance with anti-discrimination laws.
Blanche noted that the False Claims Act could serve as a “weapon” in pursuing allegations against companies and educational institutions that “continue to uphold racist policies.”
Legal experts have indicated that this approach may be unconventional and could encounter challenges in court, as the government would need to demonstrate that companies misrepresented their qualifications when securing federal contracts.
Nonetheless, the investigation appears to be creating significant disruption within American businesses. Violations of the False Claims Act are associated with hefty fines and could lead to whistleblower lawsuits.
Faced with legal ambiguity and upcoming challenges to various executive orders from the administration, companies are reportedly reassessing their DEI initiatives.
While Google and Verizon are the only firms explicitly named in the report, the investigation is said to encompass a range of sectors, including automotive, defense, utilities, and pharmaceuticals.
A spokesperson for the Justice Department declined to provide any comments on the matter.
The Post has attempted to contact both Google and Verizon for their responses.
