The U.S. Treasury Department has cut its contracts with Booz Allen Hamilton, after a former contractor who worked for the firm was charged and subsequently imprisoned for leaking tax information to news outlets about thousands of the country’s wealthiest people, including President Donald Trump.
The latest move is in line with Trump administration efforts to exact retribution on perceived enemies of the president and his allies — despite Booz Allen’s recent contributions to Trump’s ballroom project, expected to cost more than $400 million.
Still, Booz Allen, which is a major defense and national security technology firm, maintains extensive government contracts with other agencies, including the Defense Department, Homeland Security, and various intelligence agencies.
In 2024, former IRS contractor Charles Edward Littlejohn of Washington, D.C. — who worked for Booz Allen — was sentenced to five years in prison after pleading guilty to leaking tax information about Trump and others to news outlets.
Littlejohn gave data to The New York Times and ProPublica between 2018 and 2020 in leaks that appeared to be “unparalleled in the IRS’s history,” prosecutors said.
In court documents, prosecutors said Littlejohn had applied to work as a contractor to get Trump’s tax returns and carefully figured out how to search and extract tax data to avoid triggering suspicions internally.
Treasury says the agency has 31 contracts with Booz Allen Hamilton totaling $4.8 million in annual spending and $21 million in total obligations. The firm is headquartered in McLean, Va.
Treasury Secretary Scott Bessent said in a statement that the firm “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.”
Brian P. Hale, a Booz Allen spokesperson, said the firm has consistently condemned Littlejohn’s actions and has zero tolerance for violations of the law.
“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,” Hale said. “We look forward to continuing discussions with Treasury on this matter.”
Booz Allen says it doesn’t store taxpayer data on its systems and has no ability to monitor activity on government networks.
Shares of the firm, which trade on the New York Stock Exchange, were down from $102 per share on Friday to $91 and falling on Monday after the announcement.
The firm’s latest quarterly filing with the SEC, for the period ending Dec. 31, states that major risks to the firm include “any issue that compromises our relationships with the U.S. government or damages our professional reputation, including negative publicity concerning government contractors in general or us in particular.”
—By Fatima Hussein, Associated Press