OP is going to end up in court either way. Though getting burned for being a racist hiring manager is probably a better look in tech today than standing up against racist hiring practices and contacting the labor board to sue.
Contact your local labor board with a copy of the spreadsheet. There are hundreds of lawyers who will take your case pro-bono and probably bankrupt your company unless it's a FAANG.
So the real question is do you want to go out into the world again and look for a job, or not? Because if this is true, you have absolute evidence of racism in hiring which is very, very, very illegal.
This is just what OP is experiencing with extra steps. Here's why:
1. Find merit based, good, but (unfortunately) majority candidate.
2. Position is held open, the meritorious engineer is waiting for an offer.
3. A few minority position trickle in that are nearly as good but not quite.
4. DEI argues you should choose the minority and uses an excuse like "they're trainable" to justify racist hiring practices.
In both these systems you really only wanted to use racist recruiting practices to hire non-white non-males. But to get around the legal concern step (4) gives you plausible deniability.
It is no surprise that your average person thinks these hiring practices are racist and they lead to tokenization of the very group you're trying to protect. Consequently all the "hidden bias" DEI bleets on about is brought on by them. Things like "they were only hired/promoted because they fit in X category" where X is something innate and uncontrollable. It is not "racist" to look at a minority coworker differently if you know for the fact they weren't hired on merit. No different than the CEO's son getting a promotion to VP. Both people are undeserving.
I am in the "majority" and have been passed up on promotions and probably not hired in several jobs because of things like this. Thanks to step (4) it is difficult to sue, but it would bring me great pleasure to take a company to court because of this.
DEI should be renamed DIE to reflect it's true nature at a company. The extremist, racist, wing of HR.