US Treasury department cancels contract with Booz Allen for leaking tax data of rich people
The U.S. Treasury Department is cancelling all of its contracts with the Booz Allen Hamilton consulting firm (simply called Booz Allen) after a contractor leaked confidential IRS information of wealthy Americans, including President Donald Trump and Elon Musk. The information showed how the wealthy manage to pay little or no taxes, and it was picked up by publications like the New York Times and ProPublica. Treasury Secretary Scott Bessent stated that the firm failed to protect the taxpayers' information, as a result of which all 31 contracts, totalling about $4.8 million in annual spending and roughly $21 million in total obligation, will hereby be cancelled. The firm has disputed the claims, as per CNN.
Treasury Secretary Bessent's statement referenced Charles Littlejohn, a onetime Booz Allen employee who is currently serving a five-year prison term for stealing tax return information on wealthy Americans while contracting at the Internal Revenue Service (IRS). “President Trump has entrusted his cabinet to root out waste, fraud, and abuse, and canceling these contracts is an essential step to increasing Americans’ trust in government,” 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, he added.
In 2023, Charles Edward Littlejohn pleaded guilty to leaking the confidential data to reporters. As per NPR, the leaked information was the basis of explosive stories in the New York Times and ProPublica, showing how people like Donald Trump, Elon Musk, and Jeff Bezos manage to minimize their tax obligations. Trump’s tax information was published by The Times and ProPublica, revealing that he paid zero federal income taxes for several years before becoming the president. The leaks further targeted thousands of other wealthy people, and according to the Treasury Department, affected a total of over 400,000 taxpayers.
Booz Allen told publications that it was surprised by the Treasury Department's decision, and disputed some of Bessent’s claims. “Booz Allen fully supported the U.S. government in its investigation, and the government expressed gratitude for our assistance, which led to Littlejohn’s prosecution,” a spokesperson of the company said in a statement to CNN, before adding, “We look forward to discussing this matter with Treasury." The spokesperson further explained that Littlejohn's crimes occurred on "government systems" and not on the systems of the firm. In fact, Booz Allen clarified that they don't store taxpayer data on their systems and have "no ability to monitor activity on government networks.”
Reporting on Littlejohn’s criminal case, Forbes noted that, as per court documents, he turned over returns and return information dating back more than 15 years for billionaires, including Musk, Bezos, Trump, Warren Buffett, and Michael Bloomberg, to ProPublica. Apart from tax returns, the data also included investment details, stock trades, gambling winnings, audit determinations, and other sensitive financial information. The judge who sentenced him said he pulled off “the biggest heist in IRS history," per Forbes. Littlejohn is now incarcerated and scheduled to be imprisoned till October 2027.
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