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Federal Tax

Second Billionaire Sues Over IRS Data Leak

Tim Shaw  

· 5 minute read

Tim Shaw  

· 5 minute read

Update: This article was revised to add a statement from Booz Allen.

Following the sentencing of a former IRS contractor who pleaded guilty to sharing tax information of wealthy individuals with news outlets, a second billionaire highlighted in reporting using their disclosed returns has filed a complaint alleging tax confidentiality violations.

Kelcy Warren, co-founder and executive chairman of Energy Transfer, sued Booz Allen Hamilton Inc., the employer of Charles Littlejohn, who performed contract work for the IRS through the company. Littlejohn, using his access to IRS systems and databases, provided confidential taxpayer documents to ProPublica, a news organization that ran a series of articles in 2021 and 2022 centered on how the wealthy pay little to no federal income taxes. He received a five-year sentence in a separate criminal suit earlier this year.

Hedge fund manager Ken Griffin, another billionaire whose tax information was disclosed by Littlejohn along with Warren, had brought suit in December 2022 against not Booz Allen, but the IRS and Treasury Department. That case is before the US District Court for the Southern District of Florida, which recently dropped the Privacy Act violation aspect of Griffin’s argument.

Warren’s complaint, however, was filed in the US District Court for the District of Maryland. According to the April 29 filing, the Maryland federal court has jurisdiction because “the unlawful inspections, thefts, and disclosures of Mr. Warren’s tax returns occurred, in whole or in part, in Maryland and arose from Booz Allen’s IRS contract work performed in Maryland.”

Specifically, the suit was sent to the court’s Southern Division, which covers Calvert, Charles, Montgomery, Prince George’s, and St. Mary’s counties and is located in Greenbelt outside of Washington, DC.

As Littlejohn’s employer, Warren argues Booz Allen is responsible for the “unlawful inspections and disclosures” of his confidential tax data. Similarly to Griffin, Warren’s primary contention revolves around Code Sec. 6103, the area of the Tax Code governing the protection of tax leaks by government employees. Warren also accused Booz Allen of failing to “establish appropriate administrative, technical, and/or physical safeguards over access to IRS tax data by employees” and ensuring the security of his returns. These failures were “either willful or a result of gross negligence.”

The complaint said the company “willingly chose not to monitor” Littlejohn’s IRS activities during his work with unmasked tax data, such as his searches, downloads, and transfers of data. It framed Littlejohn as someone with a “radical agenda” and aimed to “weaponize” the data because he “viewed the U.S. tax system as inequitable.”

Further, the suit took issue with how Warren was portrayed in ProPublica’s coverage, saying his tax records and payments were “repeatedly mischaracterized” since they focused “solely on years in which Energy Transfer … had large depreciation resulting from large infrastructure investments.”

Warren asked the court to award him damages from Littlejohn’s disclosure under Code Sec. 6103 and Code Sec. 7431, as well as for the “significant reputational harm, loss of privacy, and economic damages” from the ProPublica articles.

In a statement provided to Checkpoint from a Booz Allen spokesperson, the company said it has “zero tolerance” for legal violations and “wholly condemn[s]” Littlejohn’s crimes, emphasizing its cooperation with the government’s investigation.

“These actions were those of a rogue actor hiding his misconduct on government systems,” Booz Allen commented. “Each day, thousands of Booz Allen employees support critical client missions with dedication and excellence – their professionalism, values and ethics are what define our company, and we take pride in the role we play in supporting our government.”

Warren is represented by Sarah McVay, Jeremy Fielding, and Sydney Corry of Kirkland & Ellis LLP.


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