DOJ probes corporations’ diversity policies under fraud law

The Trump administration has launched a new round of investigations into how large US corporations handle diversity, equity, and inclusion (DEI) programs in hiring and promotions, the Wall Street Journal reports.

Google and Verizon are among the firms that have received requests from the Justice Department for documents and details about their workplace policies. The probe spans industries such as technology, telecom, defense, pharmaceuticals, and utilities.

The DOJ is using the False Claims Act, a law typically meant to punish contractors who cheat the government by overbilling or submitting fake claims.

Officials now say that companies holding federal contracts may be committing fraud if they continue DEI programs while doing business with the government.

These cases stand out because they did not begin with whistleblowers, as is usually the case in false-claims investigations. Instead, politically appointed officials pushed the effort, arguing that companies are not meeting their obligations to the government.

Legal experts say this approach is unusual and could be hard to defend in court. Even so, the investigations have shaken corporate America. If the government wins, companies could face penalties worth millions, as the law allows damages to be tripled.