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61 Procurement Law. 3 (2025-2026)
DOJ's Civil Rights Fraud Initiative Presents New False Claims Act Risks and Considerations for Federal Funding Recipients

handle is hein.journals/procurlw61 and id is 3 raw text is: DOJ's Civil Rights Fraud Initiative Presents New False Claims Act Risks and Considerations for Federal Funding Recipients BY ALEXANDER CANIZARES, LIANE NOBLE, E. PHILEDA TENNANT & MICHAEL CROWLEY Alexander Canizares Liane Noble E. Phileda Tennant Michael Crowley In May 2025, Deputy Attorney General Todd Blanche announced the creation of the Department of Justice's (DOJ's) Civil Rights Fraud Initiative (the Initiative), which prioritizes bringing civil False Claims Act (FCA) actions against those who defraud the United States by taking its money while knowingly violating civil rights laws.' Co-led by DOJ's Civil Fraud Section and Civil Rights Division, the Initiative directs DOJ attorneys to conduct FCA investigations and pursue cases against federal funding recipients and government contractors to combat knowing violations of civil rights law and the false certification of compliance with such laws. The Ini- tiative builds on President Trump's January 21, 2025, Executive Order (EO) 14,173, Ending Illegal Discrimi- nation and Restoring Merit-Based Opportunity,2 which targeted the legality of diversity, equity, and inclusion (DEI) programs and called on agencies to require federal contractors and grantees to certify that they comply with applicable federal anti-discrimination laws. The EO also Alexander Canizares is a partner in the Washington, DC, office of Vinson & Elkins LLP (V&E) and co-head of the firm's Government Contracts Practice Group, focusing on representing clients in government contracts litigation, investigations, and counseling. He is also a co-chair of the ABA Public Contract Law Section Procurement Fraud and False Claims Committee. Liane Noble is counsel in V&E's Austin, Texas, office, where she focuses on commercial and business litigation. Prior to rejoining V&E, she served as an Assistant United States Attorney and the Civil Rights Coordinator for the US Attorney's Office for the Western District of Texas. E. Phileda Tennant is counsel in the V&E Houston, Texas, office, specializing in employment counseling and litigation, including matters concerning equal employment opportunity practices. Michael Crowley is an associate in the V&E Washington, DC, office, concentrating on complex commercial litigation and white-collar defense. states that compliance with these anti-discrimination laws is material to the government's payment decisions, with the threat of FCA enforcement for any resulting false certifications. DOJ's Civil Division has since iden- tified combatting discriminatory practices and policies as a priority and has committed to using all available re- sources to pursue such cases.' This is not the first time an administration has turned to the Civil War-era FCA (31 U.S.C. §§ 3729-3733) to advance a particular policy objective. In recent years, the civil statute-which imposes treble damages and penal- ties on persons who knowingly present false claims for payment to the government-has played a central role in efforts to pursue alleged fraud in areas such as mort- gage lending, pandemic relief loans, and cybersecurity re- quirements in government contracts. But the combination of the FCA and EO 14,173 pres- ents potentially heightened risks for federally-funded en- tities, with companies and nonprofits facing the prospect of increased exposure to DOJ investigations and qui tam whistleblower claims related to DEI programs and other activities. At the same time, the evolving nature of the emerging guidance and orders related to DEI initiatives (and ambiguity as to terms in such guidance and orders) may make it easier for defendants to defeat allegations of knowing (reckless) fraud. In this article, we provide an overview of the new DOJ Initiative and lessons learned from past DOJ task forces and past FCA cases involving federal civil rights laws. We also outline considerations for federal funding recipi- ents related to FCA claims based on civil rights laws with a view toward helping them reassess their compliance programs and navigate enforcement risks in a fast-chang- ing legal landscape. Volume 61, Number 1 The Procurement Lawyer 3 Published in The Procurement Lawyer, Volume 61, Number 1, Fall 2025. © 2025 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.