Germany somehow wasted €35 million on 17,000 secure (but useless) phones

The German Federal Audit Office has highlighted a particularly remarkable case of taxpayers’ money being wasted – in the Federal Ministry of Finance, of all places.

According to the report, the Federal Ministry of Finance purchased 17,321 “secure” smartphones for the customs administration between October 2021 and December 2022. The customs employees were to use them to communicate in encrypted form “exclusively in accordance with the specifications of the BSI [German Federal Office for Information Security – ed.]”. The new mobile phones were to enable “data exchange up to the classification level “classified information – for official use only [VS-NfD],” as the Federal Audit Office writes.

But after the purchase, the officials realized that the brand new smartphones could not meet the required encryption standard. Not because they were unable to do so themselves, but because the IT infrastructure into which they were to be integrated did not provide for this. The Federal Audit Office wrote this under the heading “35 million euros misinvested: BMF procures unsuitable smartphones”:

“The smartphones cleared for classified information were integrated into an IT infrastructure (the IT infrastructure of the Federal Information Technology Centre, ITZBund) that had no VS-NfD clearance until June 2025. Until then, customs were not allowed to communicate or process classified information with the smartphones. The smartphones also had functional restrictions in operation that the BMF and the General Customs Directorate (GZD) had not previously recognized. Many customs employees therefore decided not to use the new devices. They continued to use simple mobile phones.”

The Federal Audit Office also mentions the sum that the Federal Ministry of Finance spent on the unsuitable smartphones: 35 million euros. According to this, a single mobile phone cost over 2,000 euros, including accessories and licenses! It is not clear from the report which specific model was involved.

But that’s not all:

“The smartphones had numerous functional limitations. They could only be used to a limited extent in customs practice, e.g. the calendar, telephone directory, image transfer and retrieval of work emails could not be used. They also had a high power consumption, which greatly reduced the battery life.”

The whole thing is reminiscent of a similar disaster in the German Armed Forces: it takes the Bundeswehr almost an hour to send a single chat message. (Link in German.)

And what happened to the unusable mobile phones?

The Federal Audit Office writes:

“The majority of the secure but unusable smartphones were replaced in 2024. The Federal Ministry of Finance has not achieved its goal of using encrypted and secure communication in the customs administration exclusively in accordance with the specifications of the Federal Office for Information Security (BSI). the BMF has therefore failed to invest 35 million euros in secure smartphones.

The Federal Ministry of Finance must avoid bad investments. If it procures equipment for the customs administration, it must be fit for purpose and have added value for the service. It must present the need in a well-founded manner.”

Federal Ministry of Finance defends itself

The Federal Ministry of Finance tried to defend the purchase as follows: “At the time, only the procured smartphone solution met the requirements of the BSI. The high power consumption and the resulting short battery life were initially unknown and only became fully apparent during operation.”