swissfini/content/articles/insieme-the-116-million-lesson.md

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title	subtitle	category	date	tags
INSIEME: The CHF 116 Million Lesson Nobody Learned	How Switzerland's tax administration spent a decade and nine figures on software that never existed	Investigation	2020-03-15	INSIEME Federal Government Corruption IT Failure ESTV

The Numbers

Metric	Value
Project duration	12 years (2001–2012)
Total cost	CHF 116 million
Lines of usable code delivered	0
Officials suspended	1 (Director of Federal Tax Administration)
Criminal charges filed	Yes (corruption, bribery)
Lessons learned by federal government	Debatable

What Was INSIEME?

INSIEME was supposed to modernize the information systems of the Federal Tax Administration (Eidgenössische Steuerverwaltung, ESTV). Initiated in 2001, the project aimed to consolidate and upgrade the tax authority's aging IT infrastructure.

The name means "together" in Italian. The irony writes itself.

The Timeline of Failure

2001–2005: Genesis

The project begins with optimistic timelines and reasonable budgets. As with all Swiss federal IT projects, this would not last.

2005–2010: The Quiet Years

Work continues. Milestones slip. Budgets expand. Nobody outside the administration pays much attention.

2010–2012: The Unraveling

Investigative journalists and parliamentary oversight begin asking uncomfortable questions. The answers are worse than expected.

September 2012: The End

Finance Minister Eveline Widmer-Schlumpf pulls the emergency brake. After 12 years and CHF 116 million, INSIEME is officially dead.

The Conflicts of Interest

The project achieved a remarkable concentration of power that would make any governance expert weep:

{{< irony >}} The Director of the Federal Tax Administration simultaneously served as:

• Client (representing the organization that needed the software)
• Sponsor (controlling the budget)
• Project overseer (responsible for quality and delivery)

He then appointed senior staff from his own office as overall project managers. {{< /irony >}}

This arrangement violated every principle of project governance, procurement law, and common sense. It persisted for years.

The Corruption

In January 2012, Finance Minister Widmer-Schlumpf ordered an investigation that revealed:

• Years of violations against federal procurement regulations
• Contracts awarded without proper bidding processes
• Suspicious relationships between ESTV officials and IT contractors

The long-time chief of the tax administration, Urs Ursprung, was suspended—one of the highest-ranking officials ever disciplined in federal administration.

Criminal charges followed. The former IT chief of the tax administration and two IT industry managers faced prosecution for corruption and bribery.

The Aftermath

A parliamentary working group conducted a postmortem. Their findings:

"Leadership weakness at the top of the Federal Department of Finance led to the cancellation of the IT project."

The investigation identified:

• Silo mentality: The ESTV refused to cooperate with the Federal Office for IT (BIT)
• Inadequate oversight: Nobody at the department level was truly watching
• Structural failures: The organizational structure of federal administration presented a "challenge" for complex IT projects

{{< irony title="The Swiss Solution" >}} The working group recommended better governance structures. The federal government agreed this was important. They would work on implementing improvements. Eventually. Through a proper process. With stakeholder consultation.

Meanwhile, the same structural problems persist across dozens of other federal IT projects. {{< /irony >}}

The Deeper Pattern

INSIEME wasn't an aberration. It was a symptom.

A 2019 academic analysis of 15 large IT projects in the Swiss Federal Administration found an accumulated loss of one billion US dollars, concluding that project failure was primarily caused by "poor project governance capabilities."

The causes identified in INSIEME—conflicts of interest, silo mentality, inadequate oversight, nobody truly responsible—appear in federal IT postmortem after postmortem.

What CHF 116 Million Could Have Bought

For context, CHF 116 million is approximately:

• 580 Swiss teachers' annual salaries
• 23 kilometers of autobahn
• 1,160 years of median Swiss household income
• One complete tax administration IT system (if purchased from a competent vendor)

The Verdict

INSIEME demonstrated that the Swiss federal government could spend over a decade and nine figures on a project that delivered nothing—and face no structural consequences that would prevent it from happening again.

The individuals involved faced some accountability. The system that enabled them remained largely intact.

{{< conclusion >}} INSIEME wasn't a failure of technology. It was a failure of governance, oversight, and institutional design. The project succeeded brilliantly at one thing: demonstrating that Swiss federal IT procurement could achieve spectacular dysfunction while maintaining a veneer of process and professionalism.

The CHF 116 million is gone. The lessons remain unlearned. And somewhere in Bern, another IT project is quietly exceeding its budget while nobody with authority asks the difficult questions. {{< /conclusion >}}

Sources

• NZZ: Insieme – IT-Debakel im Bundeshaus (archive.org | archive.is)
• Heise: IT-Großprojekt der Schweizer Finanzverwaltung gescheitert (archive.org)
• SWI: Four indicted in federal IT corruption case
• Netzwoche: Schuldige für Insieme-Debakel ausgemacht
• Année Politique Suisse: Informatikprojekt INSIEME