DOJ Turns to Fraud Act in Broad Probe of Corporate DEI Programs

The U.S. Department of Justice (DOJ) has initiated sweeping investigations of major U.S. companies’ diversity, equity and inclusion (DEI)-based hiring and promotion practices, according to a report by The Wall Street Journal cited by Reuters.

According to Reuters, under a rarely used strategy, the DOJ is deploying the False Claims Act — a statute traditionally reserved for fraud cases — to examine whether companies with DEI policies submitted misleading federal-funding certifications.

Among the firms spotlighted are Alphabet Inc. (Google) and Verizon Communications Inc.. Both reportedly received demands for internal documents and information about their workplace diversity programs.

But the scope of the probe appears far wider. According to the Journal, companies across multiple sectors — including automotive, defense, pharmaceuticals and utilities — have been contacted. Some firms have even met in person with DOJ officials, the report said.

Experts say the legal rationale represents a dramatic expansion of the False Claims Act’s traditional domain. By treating DEI-based hiring policies as potential misrepresentations when firms apply for federal funds or contracts, the DOJ’s approach could expose companies to massive fines or whistleblower suits — even absent evidence of financial misconduct.

The shift comes as part of a broader push by the Donald Trump administration to eliminate federal support for DEI efforts and discourage such programs in the private sector. In his first days in office in January, Trump ordered the removal of diversity officers from government agencies and ended grant funding for many DEI-related initiatives.

The DOJ and the companies named — including Google and Verizon — did not immediately respond to Reuters’ requests for comment.