Treasury Department Cancels Booz Allen Contracts, Citing Past Insider Threat Incident - ASIS Homepage

Illustration by iStock, Security Management RISK MANAGEMENT INSIDER THREAT Treasury Department Cancels Booz Allen Contracts, Citing Past Insider Threat Incident By Megan Gates 28 January 2026 Today in Security The U.S. Department of Treasury canceled all its contracts with consulting firm Booz Allen Hamilton on Tuesday and referenced a past insider threat incident as the reasoning. “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,” said U.S. Treasury Secretary Scott Bessent said in a press release announcing the decision. The announcement went on to mention a Charles Edward Littlejohn—a former Booz Allen Hamilton contractor for the Treasury’s Internal Revenue Service (IRS) who stole and leaked confidential tax returns and taxpayer information between 2018 and 2020 to The New York Times and ProPublica. Littlejohn was arrested and pled guilty in January 2024 to one count of disclosing tax return information without authorization. He was sentenced to five years in federal prison and is appealing the sentencing. Booz Allen did not return Security Management’s request for comment on this article. But the company did publish a statement on Tuesday, saying that it has consistently condemned Littlejohn’s actions and that it has zero tolerance for violations of the law. “When Littlejohn’s criminal conduct occurred over 5 years ago, it was on government systems, not Booz Allen systems,” the statement said. “Booz Allen stores no taxpayer data on its systems and has no ability to monitor activity on government networks.” The company added that it supported the U.S. government’s investigation into Littlejohn and that it was surprised by this week’s contract cancellations. Booz Allen had 31 separate contracts with the department that totaled $4.8 million in annual spending and $21 million in total obligations. The Treasury Department did not respond to Security Management’s request for comment on the timing of the contract cancellation announcement or its insider threat program. Records from the department, however, show that it was ordered to create an insider threat program on 6 January 2020 to meet an executive order directive. The Incident While working at the IRS as a contractor for Booz Allen from 2018 to 2020, Littlejohn stole tax return information associated with a high-ranking government official—dubbed Public Official A in court documents. Littlejohn accessed Public Official A’s tax returns and related individuals and entities’ tax returns on an IRS database using broad search terms to conceal the true purpose of his queries. He then saved the tax returns on multiple personal storage devices, including an iPod, before contacting a news organization and sharing tax information associated with Public Official A. Littlejohn then stole additional tax return information related to Public Official A and provided it to that news organization, which published a series of articles in September 2020 based on the information. That same year, Littlejohn stole additional tax return information on thousands of the country’s wealthiest people. He then shared that information with a second news organization, which published more than 50 articles using the stolen data. Littlejohn then deleted and destroyed evidence of his disclosures. “Almost all of the files in [Littlejohn’s] user profile on his assigned IRS laptop computer were deleted just prior to the laptop being returned to the IRS, when [Littlejohn] ceased working on [Booz Allen’s] contract in 2021,” according to Littlejohn’s guilty plea. When U.S. President Donald Trump initially ran for office in 2016, he refused to follow precedent of releasing his tax returns for public review. Prosecutors claimed that Littlejohn sought to work as a contractor for the IRS in 2017 to steal Trump’s tax records, according to The Times. “In 2020, citing Mr. Trump’s tax documents, The Times reported that the former president paid just $750 in federal income taxes in 2016, the year he was elected president, and that he had not paid any income taxes in 10 of the previous 15 years,” the Times reported when Littlejohn pled guilty. “In 2021, ProPublica published details about how the 25 wealthiest Americans, including Jeff Bezos, Michael R. Bloomberg, and Elon Musk paid relatively little in federal income taxes. The disclosures revived Democrats’ calls for imposing a wealth tax.” Insider Risk The contract cancelations appear to be a new avenue for addressing insider threat incidents, which security leaders said in a 2025 survey are increasingly difficult to mitigate. Of 635 CISOs and cybersecurity professionals that Cybersecurity Insiders surveyed, 93 percent said insider threats are as difficult—or more difficult—to detect than external cyberattacks. But only 23 percent of those same respondents said they had strong confidence in their ability to detect insider threats before damage occurred. “Just 21 percent of organizations extensively integrate behavioral indicators such as HR signals, financial stress, and psychosocial context into their detection programs,” the survey found. “Without these insights, insider threat management is limited to technical anomalies, causing teams to miss critical early warning signs.” Why aren’t these integrations happening? Most survey respondents said inadequate tools (71 percent), insufficient budgets (69 percent), and privacy concerns (58 percent) were blocking their progress on advancing insider threat management programs. For more on insider threat risk management, revisit these articles from our archive: “Operational Strategies for Today’s Insider Threat Environment,” “The State of Insider Threat Initiatives 10 Years After Snowden,” and “Insider Threat: The Shift from Report to Support.”   MOST POPULAR ARTICLES 1. Rethinking Physical Security: Why Life-Cycle Management is Now Table Stakes 2. Effects of War in Iran Spread Around the Globe 3. How a DJI Ban Could Impact the Drone Industry