The Trump administration has escalated its crackdown on diversity, equity and inclusion (DEI) policies by launching civil investigations into some of the nation’s largest corporations, marking a dramatic shift in how federal authorities police workplace practices tied to government contracts.
According to Wall Street Journal reporting cited by Newsmax, the Department of Justice (DOJ) has issued civil investigative demands to major companies, including Google and Verizon, seeking internal documents and information related to hiring and promotion policies that consider race, ethnicity or national origin.
The probes are being conducted under the False Claims Act, a powerful antifraud statute traditionally used to pursue contractors who defraud the federal government.
DOJ officials are now arguing that companies holding federal contracts may be committing fraud if they continue to apply DEI considerations after President Donald Trump issued executive orders banning what the administration calls discriminatory race- and sex-based preferences in government work.
The investigations extend beyond Silicon Valley and telecommunications.
Firms in the automotive, pharmaceutical, defense and utilities sectors have also come under scrutiny, with some company representatives reportedly meeting directly with DOJ officials as the probes intensify.
False Claims Act cases typically originate from whistleblower complaints or findings by internal watchdogs, according to Business Standard.
However, these DEI investigations were initiated by politically appointed officials within the department who contend that federal contractors are violating their legal obligations by maintaining diversity-based employment programs.
In a May enforcement memo, Deputy Attorney General Todd Blanche ordered the DOJ “to investigate and, as appropriate, pursue claims against any recipient of federal funds” that knowingly engages in preferences based on race, ethnicity or national origin.
Blanche described the False Claims Act as the “weapon” that would be used against corporations and educational institutions that “continue to adhere to racist policies.”
The aggressive posture follows President Trump’s swift actions upon returning to office in January.
Within hours of taking the oath, Trump signed executive orders dismantling DEI programs across federal agencies and directing contractors to end what the administration calls “illegal DEI discrimination.”
The orders required departments to shut down DEI and environmental justice offices and mandated that hiring and evaluations be based strictly on merit, skills and performance.
The DOJ has since reinforced those directives by launching the “Civil Rights Fraud Initiative,” signaling its intent to pursue contractors and grant recipients that fail to comply.
Assistant Attorney General for Civil Rights Harmeet Dhillon underscored the administration’s stance during Senate Judiciary Committee testimony, warning institutions that continued DEI practices could trigger enforcement actions.
“Either DEI will end on its own,” Dhillon told senators, “or we will kill it.”
Legal experts say the use of the False Claims Act to advance policy objectives is unusual but potentially devastating.
The statute allows the government to seek triple damages, meaning financial penalties could quickly reach into the millions.
The DOJ is also encouraging whistleblowers to file suits on the government’s behalf, offering them a share of any recovery.
The mere threat of an investigation has already rattled corporate America.
Fearing lawsuits, reputational harm and the loss of federal contracts, dozens of major companies have scaled back or eliminated DEI programs since Trump’s return to office, according to USA Today.
As scrutiny intensifies, companies are reassessing their workplace policies amid growing uncertainty.
“It’s a powerful cudgel,” one legal expert told the outlet, noting that even firms confident in their legal footing face significant business risks simply by becoming a DOJ target.
The administration’s actions signal a broader effort to reshape corporate America’s approach to hiring and promotion, placing DEI squarely at the center of an expanding legal and political battle.
