Treasury cancels $21M in Booz Allen Hamilton contracts

WASHINGTON, Jan 26 (Reuters) – The U.S. Treasury Department said on Monday it had canceled all of its contracts with McLean-based government contractor Booz Allen Hamilton, accusing the company of failing to protect sensitive data, including at the Internal Revenue Service.

The Treasury Department had 31 contracts worth $21 million with the consulting firm, a release announcing the cancellation said.

“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,” said Treasury Secretary Scott 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.”

The department cited the case of Charles Littlejohn, a former contractor for the U.S. Internal Revenue Service who was sentenced to five years in prison in 2024 for leaking the tax records of Donald Trump and hundreds of thousands of other wealthy Americans to media organizations.

Littlejohn leaked the information between 2018 and 2020 while working as a Booz Allen Hamilton employee, it said. The IRS has determined that the data breach affected approximately 406,000 taxpayers to date, Treasury said on Monday.

(Reporting by Susan Heavey and Katharine Jackson; editing by Doina Chiacu)