"The False Claims Act (FCA), enacted during the Civil War to punish war profiteers, has become a weapon against diversity, equity, and inclusion (DEI) work. In May 2025, Deputy Attorney General Todd Blanche announced the Civil Rights Fraud Initiative, which reframes civil rights compliance as potential fraud-exposing universities, healthcare providers, and nonprofits to treble damages and whistleblower suits. In an official release establishing the initiative, the US Department of Justice (DOJ) warned that "institutions that take federal money only to allow anti-Semitism and promote divisive DEI policies are putting their access to federal funds at risk.""
"The False Claims Act was enacted as a democratic strategy to protect federal taxpayer dollars from federal contractors, providers, insurers, and other entities that submit illegitimate claims for payment to the federal government. It was democratic in vision because it empowered, even encouraged, private citizens to be watchdogs of federal dollars by authorizing them to bring claims-called qui tam claims, or claims in the name of the sovereign-to challenge fraud or error in federal billing."
The False Claims Act originated during the Civil War to punish war profiteers and protect federal taxpayer dollars. The Department of Justice launched the Civil Rights Fraud Initiative in May 2025, recasting civil-rights compliance and DEI work as potential fraud. The initiative warns that institutions receiving federal funds that permit antisemitism or promote divisive DEI policies risk losing federal support. The FCA framework exposes universities, healthcare providers, and nonprofits to treble damages and whistleblower (qui tam) suits. Legal scholars argue that applying the FCA to civil-rights enforcement creates uncertainty and punishes ambiguity rather than clear intentional deception, producing a chilling effect for fund recipients.
Read at Nonprofit Quarterly | Civic News. Empowering Nonprofits. Advancing Justice.
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