Washington, D.C. — In a major policy shift, U.S. Transportation Secretary Sean Duffy has issued a directive warning that federal funding for transportation projects could be withdrawn if recipients implement diversity, equity, and inclusion (DEI) initiatives or fail to cooperate with immigration enforcement authorities.
The warning was outlined in a letter dated April 24, in which Secretary Duffy stated that any program or activity rooted in DEI principles may violate federal law, and that civil or criminal penalties could apply to those who do not comply with federal immigration cooperation mandates.
“It is the policy of the Department to award and to continue to provide federal financial assistance only to those recipients who comply with their legal obligations,” Duffy wrote.
Increased Scrutiny, Potential Audits
The Department of Transportation (DOT) has announced that audits may be conducted to ensure grantees are not allocating funds toward unauthorized or discriminatory initiatives. Duffy urged state and local agencies to proactively consult DOT representatives to confirm they are operating within federal guidelines.
The letter cited past instances where certain agencies either failed to cooperate with U.S. Immigration and Customs Enforcement (ICE) or issued driver’s licenses to individuals unlawfully residing in the United States. Such actions, Duffy warned, “may give rise to civil and criminal liability.”
He also emphasized that contractors and subcontractors hired for federally funded projects must be legally authorized to work in the U.S. and must employ only authorized personnel.
DEI Practices in the Crosshairs
In strong language, the transportation secretary clarified that any policy—regardless of its label—that prioritizes race, gender, or other classifications over merit-based criteria could be deemed discriminatory under federal law.
“Any policy, program, or activity that is premised on a prohibited classification, including so-called DEI goals, presumptively violates federal law,” Duffy stated.
The DOT also made clear that funding recipients must avoid discriminatory practices in hiring, contracting, and program administration.
Reversing Biden-Era Directives
Since taking office, Duffy has moved swiftly to implement former President Donald Trump’s directives to eliminate what the administration calls “woke” or ideologically driven policies within federal agencies.
Just weeks ago, the DOT formally rescinded Biden-era environmental and social guidelines tied to transportation grants. The agency is also reviewing previously approved infrastructure projects for mentions of climate change, environmental justice, or equity, as part of the administration’s broader regulatory rollback.
During a recent congressional hearing, Duffy said he had no intention of delaying projects unnecessarily but stressed his commitment to following the current administration’s policy framework:
“I’m not going to hold up any projects… but I will ensure that the will of Congress and the law is respected.”
Political Implications and State Compliance
In a televised interview with Fox Business, Duffy warned that states with progressive policies that defy the administration’s interpretation of federal law risk losing billions in infrastructure funding.
“Hopefully, this will incentivize those states to get in line with commonsense American principles and policies, which the president has laid out,” Duffy said. “If they do, they don’t have a problem. But if they don’t comply, we’re not going to approve their grants.”
Editor’s Note: This move marks a significant turning point in how federal transportation funds may be distributed moving forward, tying eligibility to both immigration enforcement cooperation and adherence to a merit-only policy framework. Observers expect legal challenges and political pushback in the weeks ahead.
