The U.S. Treasury Department announced that it is terminating all contracts with consulting giant Booz Allen Hamilton, citing a massive data breach that exposed the confidential information of hundreds of thousands of taxpayers.
The move affects 31 contracts worth $4.8 million annually.
The cancellation marks a significant blow to the consulting firm, which has long held lucrative government contracts across multiple federal agencies. Treasury Secretary Scott Bessent linked the decision directly to what he called inadequate data protection measures.
“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.”
At the center of the controversy is Charles Edward Littlejohn, a former Booz Allen employee who stole and leaked tax returns between 2018 and 2020. The breach affected approximately 406,000 taxpayers, according to IRS investigators.
Littlejohn also leaked the tax returns of Donald Trump, Elon Musk, and other prominent individuals at two different news outlets, Fedscoop reported. He is currently serving a five-year prison sentence for disclosing tax information without authorization.
A Booz Allen spokesperson expressed surprise at the announcement, claiming that the company had fully supported the federal investigation that led to Littlejohn’s prosecution. The firm intends to discuss the matter further with the Treasury Department.
Littlejohn has pleaded guilty to felony charges for unauthorized disclosure of confidential tax information.
The canceled contracts represent $21 million in total obligations to Booz Allen. The Treasury Department has not indicated whether it plans to redistribute the work to other contractors or bring the services in-house.