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The U.S. Treasury Department announced it would cancel all contracts with Booz Allen Hamilton.
Booz Allen Hamilton provides significant consulting services to the U.S. government.
Between 2018 and 2020, one of the firm's employees leaked tax information about hundreds of thousands of people, including President Donald Trump.
Shares of the large tech consulting company Booz Allen Hamilton Holding Corp (NYSE: BAH) traded nearly 11% lower, as of 2:09 p.m. ET today. The move came after the U.S. Treasury Department cancelled all contracts with the company, which is known for its extensive government work.
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Treasury Secretary Scott Bessent said the department is cancelling all contracts with Booz Allen Hamilton, due to a data leak by one of the firm's employees between 2018 and 2020.
Image source: Getty Images.
During this time, an employee named Charles Edward Littlejohn leaked the tax records of hundreds of thousands of employees. Littlejohn has also admitted to leaking the tax records of President Donald Trump to the New York Times and of other wealthy people to the investigative news outlet ProPublica. He was sentenced to five years in prison in 2024.
Bessent noted that the Treasury Department has 31 contracts with Booz Allen, totaling annual revenue of $4.8 million and total commitments of $21 million. "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.
In a response statement, Booz Allen said it has "consistently condemned in the strongest possible terms the actions of Charles Littlejohn" and "fully supported the U.S. government in its investigation."
While $21 million is not a material amount of revenue for the company, Booz Allen does a lot of government contract work, so investors are likely concerned that the Trump administration may cancel more contracts.
In general, the company has been struggling in a difficult environment, where the Trump administration has been eliminating many government contracts with consulting firms. Booz Allen's stock has been roughly cut in half since November of 2024.
Things may change in the future, but right now, conditions in the consulting industry could remain rocky, so I wouldn't necessarily buy the dip here. The best move is to monitor the stock for signs of improvement in the industry.
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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Booz Allen Hamilton and The New York Times Co. The Motley Fool has a disclosure policy.
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