DOJ Targets Corporate DEI Under Anti-Fraud Statutes

Published on: December 29, 2025

DOJ Targets Corporate DEI Under Anti-Fraud Statutes

The U.S. Justice Department has launched a series of investigations into major American corporations, alleging that their Diversity, Equity, and Inclusion (DEI) programs may constitute federal fraud. According to the Wall Street Journal, the Trump administration is using a specific civil law to challenge how companies hire and promote employees.

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Table of Contents

1. The Legal “Hook”: The False Claims Act

The government is utilizing the False Claims Act (FCA), a law typically reserved for defense contractors who overcharge the government or healthcare providers committing Medicare fraud.

The Argument: Companies that receive federal contracts or grants must certify that they comply with non-discrimination laws.
The Allegation: The DOJ argues that if a company’s DEI programs give “illegal preferences” based on race or gender, their certification of being “non-discriminatory” is a false statement used to obtain government money.
The Stakes: This allows the government to sue for triple damages and claw back federal funds.

2. Companies and Industries Under Scrutiny

The probe is widespread, targeting high-revenue sectors that rely heavily on federal partnerships:

Technology & Telecom: Google and Verizon have reportedly received “civil investigative demands” for internal documents and hiring data.
Key Sectors: The investigation extends to the automotive, pharmaceutical, defense, and utility industries.
Direct Engagement: Several corporate leaders have already met in person with DOJ officials to defend their workplace programs.

3. Part of a Broader Policy Shift

These investigations are a central pillar of President Trump’s 2025 agenda to dismantle DEI infrastructure across the United States. Key actions include:

Federal Purge: Firing diversity officers within federal agencies.
Funding Cuts: Rescinding grants for programs that prioritize identity-based outcomes.
Private Sector Pressure: Using the DOJ’s investigative power to discourage DEI initiatives in the private sector and higher education.

Comparison of DEI Legal Challenges

Legal Basis	Primary Target	Goal
False Claims Act	Federal Contractors	Recover government funds lost to “civil rights fraud.”
Title VII (Civil Rights Act)	Private Employers	Stop discriminatory hiring practices against individuals.
Executive Orders	Federal Agencies	Abolish DEI offices and redirect taxpayer spending.