The U.S. Treasury Department has abruptly severed all of its contracts with Booz Allen Hamilton following revelations that a company employee unlawfully disclosed President Donald Trump’s tax records to the press. The announcement, made on Jan. 26, underscored the administration’s hard line on data security and accountability inside federal contracting.
In its statement, the department confirmed that The Treasury Department terminated its contracts with Booz Allen after an employee was accused of leaking Donald Trump’s tax records, citing serious failures in the firm’s ability to safeguard highly sensitive taxpayer information. In total, 31 separate contracts—worth approximately $21 million—were canceled.
The fallout was immediate on Wall Street. Booz Allen Hamilton’s shares dropped nearly 10 percent at the start of the trading week, reflecting investor concern over reputational damage and potential future losses tied to federal work.
Treasury Secretary Scott Bessent framed the move as a necessary step to restore public confidence. He emphasized that President Trump had charged his Cabinet with eliminating waste, fraud, and abuse across government agencies, adding that canceling the contracts was essential to rebuilding trust. According to the department, Booz Allen failed to put adequate protections in place for confidential taxpayer data it accessed through its work with the Internal Revenue Service.
The controversy stems from actions taken between 2018 and 2020 by Booz Allen employee Charles Edward Littlejohn. During that period, Littlejohn leaked Trump’s tax filings, along with financial records belonging to high-profile billionaires such as Jeff Bezos and Elon Musk, to media outlets. The IRS later disclosed that the breach affected roughly 406,000 taxpayers.
Littlejohn admitted to providing Trump’s tax information to The New York Times and sharing records related to wealthy individuals with ProPublica. In October 2023, he pleaded guilty to felony charges for the unauthorized disclosure of protected tax information and was subsequently sentenced to up to five years in prison.
The Treasury’s decision came just days after Booz Allen released a strong quarterly earnings report that initially buoyed investor sentiment. The firm exceeded market expectations and raised its profit and revenue outlook, helped by internal cost-cutting measures. Despite that positive news, the contract terminations sent the stock tumbling to around $92 per share. While the company remains up about 8 percent so far this year, its shares are still down nearly 32 percent over the past 12 months.
Booz Allen is not alone in feeling pressure. Consulting giants across Washington have faced increased scrutiny as government efficiency initiatives have led to the cancellation or reassessment of federal contracts. This scrutiny is particularly significant for Booz Allen, which derives a large portion of its annual revenue from U.S. government work.
Still, CEO Horacio Rozanski has sought to reassure investors. He has argued that the firm’s growing emphasis on artificial intelligence, cybersecurity, and advanced technology aligns closely with the administration’s cost-saving and modernization goals. Speaking during last week’s earnings call, Rozanski said the company has prioritized reducing costs, accelerating a shift toward outcome-based contracting, and concentrating investments in areas such as cyber, national security, partnerships, and AI.
Despite the Treasury setback, Booz Allen continues to win government business. The firm recently secured a $99 million contract with the Navy’s Military Sealift Command, along with $10 million in cybersecurity work for the Department of Defense.
Booz Allen Hamilton has not yet publicly commented on the Treasury Department’s decision. The Epoch Times reported that it has reached out to the company for a response.
