Citadel’s Ken Griffin Sues IRS Over Financial Data Breach (1)

Billionaire hedge fund manager Ken Griffin sued the US Internal Revenue Service, claiming it failed to protect his confidential financial information.

The Citadel founder is seeking financial damages over a data breach that resulted in ProPublica’s publication of information on a number of the wealthiest people in the US. He accused the IRS of “willful and intentional failure to establish appropriate administrative, technical, and/or physical safeguards.”

The lawsuit, filed Tuesday in federal court in Florida, also names as a defendant the US Treasury Department, which includes the IRS. The IRS didn’t respond to a request for comment on the suit.

“IRS employees deliberately stole the confidential tax returns of several hundred successful American business leaders,” Griffin said in a statement in response to a request for comment. “It is unacceptable that government officials have failed to thoroughly investigate this unlawful theft of confidential and personal information. Americans expect our government to uphold the laws of our nation when it comes to our private and personal information — whether it be tax returns or health care records.”

Read More: Thiel Gets Tax Edge With $5 Billion in Roth IRA, ProPublica Says

Republicans, who won control of the House of Representatives in last month’s election, have pledged to use their newfound power to investigate the breach and the IRS response. Government officials who have expressed concern about the leak include Treasury Secretary Janet Yellen, who referred to it as “criminal activity” and vowed to work with federal investigators to find the source.

The ProPublica report said billionaires including Jeff Bezos and Elon Musk had in some years paid minimal or no income tax even as their fortunes soared. It outlined the tax strategies available to the top 0.1%.

Griffin reported an average annual income of almost $1.7 billion between 2013 and 2018 and paid an average federal tax rate of 29.2% during that time, ProPublica reported.

Griffin, 54, has a net worth of $29 billion, according to the Bloomberg Billionaires Index.

Michael Bloomberg, majority owner of Bloomberg News parent Bloomberg LP, was also among those included in the reporting.

In his lawsuit, Griffin says he requested that the IRS and Treasury demand ProPublica return or destroy confidential IRS data and provide him with information about the disclosure of his tax data, and hasn’t seen “any meaningful response.” He asked the court to order the defendants to produce documents related to the disclosure of his tax information, as well as for the monetary damages.

The case is Griffin v. Internal Revenue Service, 22-cv-24023, US District Court, Southern District of Florida.

(Adds information in fifth paragraph about government reaction and in seventh and ninth paragraphs about Griffin’s taxes and his allegations.)

--With assistance from Laura Davison.

To contact the reporter on this story:
Neil Weinberg in New York at nweinberg2@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Peter Jeffrey, Brian Chappatta

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