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The US Treasury department said it was cancelling its contracts with the consulting firm Booz Allen Hamilton, as punishment for the leaking of President Donald Trump’s tax returns and the confidential filings of thousands of other wealthy individuals.
Treasury secretary Scott Bessent made the announcement on Monday, saying the leaks, by a Booz Allen employee during the first Trump presidency, indicated the company could not be trusted with confidential information.
“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,” Bessent said.
“President Trump has entrusted his cabinet to root out waste, fraud and abuse, and cancelling these contracts is an essential step to increasing Americans’ trust in government,” he added.
Booz Allen did not immediately return a message seeking comment.
The company’s shares tumbled more than 8 per cent in the wake of the Treasury’s announcement, reversing a big gain on Friday when the company had reported better than feared earnings and made upbeat comments about the future of its government contracts.
The Trump administration has over the past year targeted consulting firms in the hunt for cost savings across the federal government. Booz Allen was one of 10 groups ordered to give up what could be deemed unnecessary contracts, or to provide fee reductions on other work.
The company provided the Treasury with technology support and other work, and the 31 separate contracts that were being cancelled totalled $4.8mn in annual spending and $21mn in total obligations, Bessent said.
Booz Allen shares are down almost one-third since Trump’s second inauguration a year ago. The company historically makes 98 per cent of its $12bn in annual revenue from the public sector, and has been hard hit by the federal cost-cutting push and a protracted government shutdown. It has cut more than 10 per cent of its workforce in two rounds of lay-offs.
A former Booz Allen employee, Charles Littlejohn, was sentenced to five years in prison in January 2024 for leaking Trump’s tax returns and, later, the tax filings of thousands of other wealthy individuals. The sentencing judge called it “the biggest heist in IRS history”.
The news website ProPublica published more than 50 stories based on the leaks, which shone a harsh spotlight on the tax strategies of billionaires from Elon Musk and Jeff Bezos to Warren Buffett and Michael Bloomberg.
Littlejohn had uploaded the returns to a private website in order to avoid IRS protocols established to detect and prevent large downloads, according to the Department of Justice.
Additional reporting by Claire Jones