Treasury cancels Booz Allen contracts

Treasury Secretary Scott Bessent on Monday said he had canceled all Treasury Department contracts with the consulting firm Booz Allen Hamilton, whose employee leaked the tax records of President Donald Trump, and the billionaires Jeff Bezos and Elon Musk, to media outlets.

Booz Allen Hamilton’s stock price dropped by more than 10% on the heels of the Treasury Department’s announcement.

The department said it currently has 31 separate contracts with Booz Allen Hamilton, totaling $4.8 million in annual spending and $21 million in total obligations.

“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,” Bessent said in a statement.

“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,” he said.

The department noted that between 2018 and 2020, Booz Allen employee Charles Edward Littlejohn “stole and leaked the confidential tax returns and return information of hundreds of thousands of taxpayers.”

The data breach affected about 406,000 taxpayers, according to the IRS.

Littlejohn, 40, pleaded guilty in October 2023 to one count of disclosure of tax return information.

He admitted leaking Trump‘s tax records to The New York Times. He also admitted to leaking records about wealthy individuals to the news outlet ProPublica.

He was sentenced to the maximum term of five years in prison in January 2024.

Booz Allen, in a statement Monday, said, “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. When Littlejohn’s criminal conduct occurred over 5 years ago, it was on government systems, not Booz Allen systems,” the company said.

“Booz Allen stores no taxpayer data on its systems and has no ability to monitor activity on government networks,” the statement said. “Booz Allen fully supported the U.S. government in its investigation, and the government expressed gratitude for our assistance, which led to Littlejohn’s prosecution. We look forward to discussing this matter with Treasury.”