DOJ Announces Major False Claims Act Initiative Aimed at “Civil Rights Fraud”
In a U.S. Department of Justice (DOJ) memo issued on May 19, Deputy Attorney General Todd Blanche (DAG) announced the “Civil Rights Fraud Initiative” and DOJ’s plan to “vigorously” use the False Claims Act (FCA) to “investigate, and as appropriate, pursue claims against any recipient of federal funds that knowingly violated civil rights laws.” Such laws include a host of federal statutes aimed at protecting individuals from unlawful discrimination and ensuring equal treatment under the law.
According to Blanche, DOJ’s initiative targets federal contractors and other recipients of federal funds who falsely certify their compliance with federal civil rights laws. “Many corporations and schools continue to adhere to racist policies and preferences,” he claimed, “albeit camouflaged with cosmetic changes that disguise their discriminatory nature.” His memo specifically complained about colleges and universities that accept federal funds “while discriminating against their students,” and specifically called out “a university” that “encourages antisemitism, refuses to protect Jewish students, allows men to intrude into women’s bathrooms, or requires men in athletic competitions.” Days before the announcement of the Civil Rights Fraud Initiative, the New York Times reported that DOJ’s Civil Division commenced an FCA investigation into Harvard University and “whether its admissions process had been used to defraud the government.”
Blanche described the FCA as the “primary weapon against government fraud, waste, and abuse,” noting that violations give rise to treble damages and significant penalties. Requiring certifications of compliance with applicable federal statutes is common. For example, the CMS 1500 form that health care providers use to submit claims to Medicare and other federal healthcare programs includes several certifications requiring compliance with applicable Medicare regulations and Anti-Kickback and Physician Self-Referral laws. The Civil Rights Fraud Initiative, however, marks an unprecedented expansion of the FCA's use, extending beyond traditional “fraud, waste, and abuse.” Moreover, requiring federal contractors to broadly certify compliance with all federal civil rights laws and labeling such compliance as a material condition of contracts unrelated to those laws is an entirely new measure.
As explained in our March 3 article, this new certification requirement derives from President Trump’s Executive Order 14173 entitled Ending Illegal Discrimination and Restoring Merit Based Opportunity, issued on January 21. The Executive Order mandates that federal contracts include terms certifying non-operation of diversity, equity and inclusion (DEI) programs that violate anti-discrimination laws and acknowledging that compliance with these “anti-discrimination laws” is material to the government’s payment decisions as defined in the FCA. Though a Maryland federal court initially enjoined the Executive Order’s implementation, the Fourth Circuit Court of Appeals stayed the injunction, pending a decision by that Court.
The DOJ memo explained that the initiative will be co-led by DOJ’s Civil Fraud Section and Civil Rights Division, with each forming a team of attorneys to pursue this work together. The memo also directed U.S. Attorney’s offices nationwide to appoint an assistant U.S. Attorney in each office to advance these efforts. The initiative will involve regular coordination meetings and collaboration with the Criminal Division and other federal agencies, such as the Departments of Education, Health and Human Services and Labor. Additionally, partnerships with state attorneys general and local law enforcement will be established to share information and coordinate enforcement actions. Blanche concluded by “strongly encouraging” qui tam relators to bring FCA “lawsuits” to enforce civil rights laws.
In light of this initiative, companies and universities should evaluate their compliance programs to ensure adherence to federal civil rights laws. Additionally, companies and universities operating DEI programs may wish to seek legal counsel to ensure compliance with these laws and the Trump Administration’s interpretation of them.
Please contact A. Brian Albritton, Raquel Ramirez Jefferson or any member of the Phelps Health Care or White Collar Defense and Investigations teams if you have questions or need advice or guidance.
