During the first year of Trump 2.0, most federal regulatory agencies have experienced savage budget cuts, deep staffing reductions, and abandonment of their core mission. The Consumer Financial Protection Bureau, teetering on the edge of extinction, was subjected to the indignity of having its investigators ordered to abide by a “humility pledge” requiring them to take a less aggressive stance toward corporate miscreants.
One of the few exceptions to this disempowerment has been seen at the portion of the Justice Department charged with enforcing the False Claims Act, the federal law most commonly used in prosecuting fraud by government contractors. While the volume of enforcement activity at most federal agencies has plummeted, there has been a steady stream of announcements of resolved FCA cases. As shown in Violation Tracker, the DOJ has imposed $1.8 billion in penalties since Inauguration Day in about 200 actions, many involving fraud by healthcare providers.
Now, however, it appears that DOJ is moving in a different direction. There have been recent press reports saying that Justice is beginning to apply the FCA in an unusual and troubling manner.
Investigations are said to be underway in which major contractors which adopted diversity initiatives in their hiring and promotion are considered to have cheated the federal government. This is based on Trump’s dubious claim that DEI is illegal and his obsession with stamping out all remnants of it in both the public and the private sectors.
The Wall Street Journal reported that Google and Verizon are among the companies that have received DOJ demands for documents and information about their workplace programs. Other targeted companies were said to be industries ranging from automotive and pharmaceuticals to defense and utilities.
The Journal pointed out that false-claims investigations are usually begun when a whistleblower alerts the DOJ to contractor fraud. By contrast, these new anti-DEI probes are being initiated by political appointees—in other words, MAGA apparatchiks.
DOJ is not the only federal agency warping its mission to satisfy anti-DEI objectives. The Washington Post is reporting that the Equal Employment Opportunity Commission, which has a proud history of combatting employer discrimination against women and people of color, is now soliciting complaints from white men who believe they are the victims of unfair treatment related to diversity initiatives.
This comes as the agency has drastically cut back the number of conventional lawsuits involving allegations of discrimination based on race and national origin.
Earlier, the Federal Communications Commission used its power over media mergers to pressure companies to abandon their DEI policies. Companies such as T-Mobile quickly complied.
What is next? Will the Department of Agriculture prosecute farmers for employing crop diversification on their land?
It is bad enough when the Trump Administration adheres to the usual Republican playbook of deregulation and feeble enforcement. It is worse when agencies act aggressively but do so in a way that betrays their mission. The conversion of regulatory agencies into the anti-DEI police undermines their legitimate enforcement role while promoting feelings of white victimhood that are so corrosive to our society.