The Treasury Department announced Monday that it is cutting ties with Booz Allen Hamilton, one of the government’s biggest consulting partners. The decision comes in the wake of a massive data breach involving a former employee who leaked President Donald Trump’s tax returns to the news media.
Treasury Secretary Scott Bessent confirmed the agency is canceling all 31 of its contracts with the firm. These agreements are worth roughly $4.8 million in annual spending and total about $21 million in overall obligations.
The cancellation is a direct response to the actions of Charles Edward Littlejohn, a Booz Allen employee from 2018 to 2020. During his time there, Littlejohn stole and leaked the confidential tax information of hundreds of thousands of Americans, including the president.
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“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. He noted that the firm failed to put the right safeguards in place to protect the sensitive data it could access through the IRS.
Littlejohn allegedly applied for the IRS contracting job with the specific goal of finding and releasing Trump’s tax returns. He eventually admitted to leaking those records to The New York Times. He also shared the tax data of other wealthy individuals, such as Elon Musk, with other outlets. Littlejohn pleaded guilty to felony charges and was sentenced in January 2024 to five years in prison. While officials initially thought 70,000 taxpayers were affected, the IRS later found the breach actually impacted about 406,000 people.
Booz Allen pushed back against the decision on Monday, distancing itself from its former employee. In a statement, the company emphasized that it has “zero tolerance” for illegal activity and noted that the breach happened on government computers, not their own private servers.
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“Booz Allen stores no taxpayer data on its systems and has no ability to monitor activity on government networks,” the company stated. They added that they fully supported the investigation that put Littlejohn behind bars and that the government had previously expressed gratitude for their help.
While the cancellation sends a strong message, it represents only a tiny dent in Booz Allen’s bottom line. The firm is a massive player in federal contracting, having secured $7.5 billion in government obligations for the 2025 fiscal year alone. The company says it looks forward to discussing the matter further with the Treasury.
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