The Donald Trump administration canceled all contracts with consulting firm Booz Allen Hamilton after one of its employees leaked President Trump’s tax returns. U.S. Treasury Secretary Scott Bessent announced on that all 31 contracts between the Treasury Department and the company are now canceled.
According to The Independent, the decision came after the company failed to protect sensitive taxpayer information. The canceled contracts were worth $21 million in total, with $4.8 million in yearly spending that the firm just lost.
Bessent said the move aims to restore public trust in government. He explained that President Trump asked his cabinet to eliminate waste, fraud, and abuse. Bessent stated that “canceling these contracts is an essential step to increasing Americans’ trust in government.”
The company failed to protect hundreds of thousands of taxpayers’ private data
The main problem was poor security. Bessent said 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.”
Charles Edward Littlejohn, a Booz Allen Hamilton employee, was responsible for the leak. Between 2018 and 2020, he stole and leaked confidential tax returns of hundreds of thousands of taxpayers. The IRS found that about 406,000 taxpayers were affected by this data breach.
Booz Allen Hamilton leaked the tax data targeting President Trump and 400K other Americans
— Beard Vet (@Beardvet) January 26, 2026
Edward Snowden worked as a contractor for Booz Allen Hamilton https://t.co/vKFbLmOOPJ
Littlejohn also leaked sensitive information about high-profile people, including President Trump, Jeff Bezos, and Elon Musk. The president has faced scrutiny over various issues recently, including his casual attitude toward memory lapses. Littlejohn pleaded guilty to felony charges for sharing confidential tax information without permission. In January 2024, he was sentenced to the maximum five years in prison.
Booz Allen Hamilton released a statement on Monday strongly condemning Littlejohn’s actions. The company noted his crimes happened years ago and said they have “zero tolerance for violations of the law and operates under the highest ethical and professional guidelines.”
The company argued that Littlejohn committed the crimes on “government systems, not Booz Allen systems.” They said they don’t store any taxpayer data and cannot monitor activity on government networks. The company stated they helped the government with its investigation and want to discuss the matter further with the Treasury Department.
This contract cancellation comes as the administration continues making bold moves, recently threatening tariffs over potential trade deals. After the contract cancellation was announced, Booz Allen Hamilton’s stock price immediately dropped by 10 points.
