Weaponizing Regulation

Donald Trump has long presented himself as a foe of regulation, and since taking office for the second time he has gone to great lengths to eliminate existing rules, prevent the adoption of new ones, and dismantle entire agencies.

Yet now it appears he has discovered that regulation can be put to good use—not to control corporate misconduct but rather to advance his administration’s ideological aims and to weaken his perceived enemies.

The False Claims Act (FCA) is one of the primary tools used by the Justice Department to address fraud by federal contractors and healthcare providers. Deputy Attorney General Todd Blanche, previously one of Trump’s criminal lawyers, recently sent a memo to DOJ prosecutors saying they should bring FCA actions against contractors or other recipients of federal funds that have diversity, equity, and inclusion programs.

To promote such efforts, Blanche said he is creating a Civil Rights Fraud Initiative with teams of lawyers from the DOJ’s Fraud Division and the Civil Rights Division who would be expected to collaborate with both the U.S. Attorney Offices around the country and other federal agencies.

Blanche’s initiative is an escalation of the Trump Administration’s aggressive moves to depict DEI, which is meant to address racism and sexism, as its own form of discrimination. It is in keeping with a document issued in March by the DOJ and the Equal Employment Opportunity Commission warning that DEI could be unlawful. And it goes along with the announcement by the Office of Federal Contract Compliance Programs that it was looking for evidence of supposedly illegal practices in the plans submitted by federal contractors under the Biden Administration to address allegations of discrimination.

The Federal Communications Commission, which has a history of addressing employment discrimination by broadcast license holders, is also targeting DEI. FCC chairman Brendan Carr, an unabashed Trump supporter, has been pressuring companies such as Disney and Comcast over their diversity practices. Verizon won approval for its purchase of Frontier Communications by promising to abandon its DEI programs.

Carr is also using the FCC’s authority over media mergers to assist Trump’s dubious lawsuits against private media companies such as CBS parent Paramount Global. And he has used the power of the agency to try to influence the way the news gets reported. He has, for example, posted tweets suggesting that outlets owned by Comcast might be putting their licenses at risk by failing to depict deportee Kilmar Abrego Garcia as the violent gang member the White House claims him to be.

Carr and Blanche appear to be in the vanguard of an emerging effort by the Trump Administration to use the justice and regulatory systems to attack its perceived enemies in the business world.

Wholesale deregulation is troubling, but just as concerning is the warping of oversight into a weapon against corporations for no legitimate policy purpose. One might expect deep-pocketed companies to use their resources to defend themselves. But for now, it appears they are more likely to join many universities, law firms, and other institutions in giving in to the intimidation.

web version: https://dirtdiggersdigest.org/archives/7807