Treasury Cancels Booz Allen Contracts Over Employee’s Leaking of Trump’s Tax Records

A total of 31 separate contracts worth a total of $21 million were axed.

The Booz Allen Hamilton Headquarters in Mclean, Va., on June 20, 2024. Kevin Dietsch/Getty Images

The Treasury Department has canceled all of its contracts with Booz Allen Hamilton after an employee leaked President Donald Trump’s tax records to the media, the department announced on Jan. 26.

Shares of the consulting firm fell by 10 percent.

Because Booz Allen Hamilton failed to install safeguards to protect sensitive data, a total of 31 separate contracts worth a total of $21 million were axed, according to a statement from the department.

“President Trump has entrusted his cabinet to root out waste, fraud, and abuse, and canceling these contracts is an essential step to increasing Americans’ trust in government,” Treasury Secretary Scott Bessent said.

“Booz Allen failed to implement adequate safeguards to protect sensitive data, ​including the confidential taxpayer information it had access ‌to through its contracts with the Internal Revenue Service.”

Between 2018 and 2020, Booz Allen Hamilton employee Charles Edward Littlejohn leaked Trump’s tax filings, as well as those of billionaires Jeff Bezos and Elon Musk, to news organizations.

The data breach impacted approximately 406,000 taxpayers, according to the IRS.

Littlejohn admitted to handing Trump’s tax information to The New York Times and records relating to wealthy individuals to ProPublica.

In October 2023, Littlejohn pleaded guilty to felony counts for the unauthorized disclosure of protected tax information. He was later sentenced to a maximum of five years in prison.

A Booz Allen Hamilton spokesperson said the company supported the U.S. government’s investigation.

“We have consistently condemned in the strongest possible terms the actions of Charles Littlejohn, who was active with the company years ago. Booz Allen has zero tolerance for violations of the law and operates under the highest ethical and professional guidelines,” the spokesperson said in a statement to The Epoch Times.

“When Littlejohn’s criminal conduct occurred more than five years ago, it was on government systems, not Booz Allen systems. Booz Allen stores no taxpayer data on its systems and has no ability to monitor activity on government networks.”

The Treasury decision was issued days after Booz Allen Hamilton released its quarterly earnings report. Traders cheered as the company topped market estimates and bolstered its profit and revenue outlook amid cost-cutting efforts.

The company’s stock declined by as much as 10 percent to about $92 a share to kick off the trading week. While it remains up by 8 percent this year, shares have declined by almost 32 percent over the past 12 months.

Consulting titans have come under pressure over the past year as the Department of Government Efficiency-related views have resulted in federal contract cancellations.

A sizable share of Booz Allen’s annual revenue comes from contracts with the federal government. However, Booz Allen CEO Horacio Rozanski has shrugged off concerns, noting that its focus on artificial intelligence (AI) and technology would help achieve the current administration’s cost-savings goals.

Rozanski, speaking on last week’s earnings call with analysts and reporters, stated that the company has been focused on outcome-based work this year.

“Those priorities were to reduce our cost, accelerate our transition to outcome-based contracting and product sales, and focus our investment by doubling down on proven growth vectors like cyber, national security, partnerships, and AI,” he said.

Additionally, Booz Allen is still securing federal contracts.

The company was awarded a $99 million contract with the Navy’s Military Sealift Command and $10 million in cybersecurity work for the Department of Defense.