The U.S. Department of Justice (DOJ) is opening an investigation into Google and Verizon for fraud in a major way. The government resorts to the False Claims Act, which is usually used to punish financial crimes like overbilling. Officials are now using it to go after companies that kept DEI programs going while getting federal money.
Google and Verizon face DOJ federal investigation over potential DEI fraud
The investigation stems from a new legal theory introduced under the current administration. Officials argue that corporations committing to DEI initiatives in their hiring and promotion processes may have misled the government about their compliance with federal anti-discrimination laws. By certifying that they follow merit-based standards while simultaneously pursuing diversity goals, the DOJ suggests these firms may have technically submitted “false claims” for payment.
The pressure on tech giants like Google and Verizon has intensified following an executive order designed to dismantle federal DEI programs. Both companies eventually rolled back their initiatives—Google in early February and Verizon in May. However, investigators are reportedly looking into whether they failed to comply swiftly enough after the policy change on January 20. The DOJ has already requested a significant volume of internal documents and workplace program records. They aim to determine if there was any intentional fraud in place.
Expanding the scope of the False Claims Act
This move marks a major expansion of the False Claims Act’s reach. Historically, this “weapon” was used to root out waste in defense contracting or healthcare. Using it as a civil rights enforcement tool to challenge hiring practices is unprecedented. Legal experts warn that the government faces a high bar in court. To prevail, prosecutors must prove that a company’s social policies were “material” to the contract—meaning the government would have withheld payment had they known the DEI programs existed.
The private sector is already feeling the effects of these probes. The investigation has gone beyond tech and telecommunications to include the automotive, pharmaceutical, and defense industries. The False Claims Act’s threat of triple damages and heavy fines adds a lot of financial risk for a carrier like Verizon, which has had trouble keeping customers lately.
The DOJ continues to meet with corporate leaders and review internal data. However, the outcome remains uncertain. That said, the message to federal contractors is clear: the administration is moving toward a strict merit-based compliance model. The legal tools used to enforce it are becoming more aggressive than ever.
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