Justice Department Using Fraud Law to Target Companies on DEI

The Trump administration has launched investigations into the use of diversity initiatives in hiring and promotion at major U.S. companies, built on the novel use of a federal law meant to punish businesses that cheat the government.

The civil probes are proceeding under the umbrella of the False Claims Act, which has traditionally been used to go after contractors who bill the government for work that was never performed or inflate the cost of services rendered.

Now the Justice Department is embracing the theory that holding a federal contract while still considering diversity when hiring is in effect fraud against the government that entitles it to recoup potentially millions of dollars.

Alphabet’s Google and Verizon Communications are among a list of companies that have received Justice Department demands for documents and information about their workplace programs, according to people familiar with the investigations.

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