Treasury Secretary Scott Bessent announced the cancellation of 31 contracts with Booz Allen Hamilton, citing the firm’s failure to safeguard confidential IRS data after former contractor Charles Edward Littlejohn leaked tax records for President Donald Trump, Jeff Bezos and Elon Musk. The contracts were collectively valued at $4.8 million in annual revenue and $21 million in total obligation. Littlejohn’s unauthorized disclosures, which he admitted to between 2018 and 2020, impacted some 406,000 taxpayers and led to his five-year prison sentence in January 2024.

Following the contract cancellations, Booz Allen’s share price declined by over 10% on the trading day of the announcement, closing down 8.11%. Despite the drop, the firm emphasized that the breach occurred on government systems, not its own networks, and asserted full cooperation in the IRS investigation. Management reiterated zero tolerance for data violations and highlighted that no taxpayer data resides on Booz Allen infrastructure.

Booz Allen retains substantial engagements with the Department of Defense, including a five-year, $1.58 billion counter–weapons of mass destruction intelligence analysis contract awarded in August. The company’s defense and national security backlog exceeds $38 billion, with a qualified pipeline approaching $53 billion as of December 31. Management expects these long-term projects to underpin revenue growth and offset near-term disruptions from the Treasury fallout.