Treasury cancels Booz Allen Hamilton contracts, sending stock plunging
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Booz Allen Hamilton headquarters in McLean, Virginia, in 2024. Photo: Kevin Dietsch/Getty Images
Booz Allen Hamilton shares plunged Monday after the Trump administration announced it's canceling all Treasury Department contracts with the consultancy.
Why it matters: Government contractors are under growing scrutiny during Trump's second term, as the administration's push to root out "waste, fraud, and abuse" begins translating into real financial consequences.
Zoom in: Treasury Secretary Scott Bessent announced Monday that the department is canceling the 31 contracts it has with Booz, totaling $4.8 million in annual outlays and $21 million in long-term commitments.
- "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 in a statement.
- "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."
Context: Bessent singled out Charles Edward Littlejohn, a former Booz Allen employee, for leaking tax returns while working as an IRS contractor.
- The disclosures included President Trump's returns, along with those of thousands of other wealthy Americans, which Littlejohn is said to have shared with the New York Times and ProPublica.
- Littlejohn's lawyers said he acted out of a "deep, moral belief" that the public had a right to know how much Trump and other wealthy Americans paid in taxes. He later pleaded guilty and was sentenced to five years in prison.
A Booz spokesperson said Monday that the company has "consistently condemned in the strongest possible terms the actions of Charles Littlejohn" and maintains "zero tolerance for violations of the law."
- "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," the spokesperson said. "We look forward to continuing discussions with Treasury on this matter."
Threat level: Booz is uniquely vulnerable to a crackdown in government spending on contractors.
- The Treasury deals represent a sliver of Booz's annual revenue — but the company gets nearly all of its revenue from the feds, meaning a broader crackdown could cut deep.
The impact: Booz shares were down 11% shortly before 2pm ET.
- The stock has lost more than 30% over the last year after Elon Musk's Department of Government Efficiency started slashing deals with government contracts.
Editor's note: This article was updated with a statement from Booz Allen.
