The U.S. Treasury Department has cancelled 31 contracts with Booz Allen Hamilton, collectively valued at $4.8 million in annual revenues and representing a total obligation of $21 million. Treasury Secretary Scott Bessent sharply criticized the firm’s failure to safeguard taxpayer records after former contractor Charles Edward Littlejohn unlawfully accessed and leaked confidential IRS files between 2018 and 2020. Littlejohn pleaded guilty in October 2023 to unauthorized disclosure of tax return information and received a five-year prison sentence in January 2024. The leaked data included returns for President Donald Trump, Jeff Bezos, Elon Musk and approximately 406,000 other high-net-worth individuals.

News of the contract cancellations triggered a sell-off in Booz Allen Hamilton shares, which fell more than 10% on the day of the announcement, closing down 8.1% compared with the previous session. In a public statement, Booz Allen reiterated that the data breach occurred on government systems rather than its own networks, emphasized zero tolerance for illegal conduct and noted full cooperation with federal investigators. The company stressed it stores no taxpayer data on its infrastructure and is seeking discussions with Treasury officials to address the department’s concerns.

Despite the Treasury actions, Booz Allen remains a key contractor to the Department of Defense, holding a five-year, $1.58 billion intelligence analysis agreement related to countering weapons of mass destruction signed in August 2025. The firm’s backlog across all divisions stood at over $38 billion at year-end, and management reports a qualified pipeline of nearly $53 billion for the upcoming fiscal year, driven by growth in national security and civil programs. Analysts note that while the Treasury cancellations represent a modest revenue loss, Booz Allen’s diversified defense and homeland security portfolio should sustain its government contracting revenues.