[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]
AMERICA IS UNDER CYBER ATTACK: WHY URGENT ACTION IS NEEDED
=======================================================================
HEARING
before the
SUBCOMMITTEE ON OVERSIGHT,
INVESTIGATIONS, AND MANAGEMENT
of the
COMMITTEE ON HOMELAND SECURITY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
APRIL 24, 2012
__________
Serial No. 112-85
__________
Printed for the use of the Committee on Homeland Security
[GRAPHIC] [TIFF OMITTED]
Available via the World Wide Web: http://www.gpo.gov/fdsys/
__________
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20402-0001
COMMITTEE ON HOMELAND SECURITY
Peter T. King, New York, Chairman
Lamar Smith, Texas Bennie G. Thompson, Mississippi
Daniel E. Lungren, California Loretta Sanchez, California
Mike Rogers, Alabama Sheila Jackson Lee, Texas
Michael T. McCaul, Texas Henry Cuellar, Texas
Gus M. Bilirakis, Florida Yvette D. Clarke, New York
Paul C. Broun, Georgia Laura Richardson, California
Candice S. Miller, Michigan Danny K. Davis, Illinois
Tim Walberg, Michigan Brian Higgins, New York
Chip Cravaack, Minnesota Cedric L. Richmond, Louisiana
Joe Walsh, Illinois Hansen Clarke, Michigan
Patrick Meehan, Pennsylvania William R. Keating, Massachusetts
Ben Quayle, Arizona Kathleen C. Hochul, New York
Scott Rigell, Virginia Janice Hahn, California
Billy Long, Missouri Ron Barber, Arizona
Jeff Duncan, South Carolina
Tom Marino, Pennsylvania
Blake Farenthold, Texas
Robert L. Turner, New York
Michael J. Russell, Staff Director/Chief Counsel
Kerry Ann Watkins, Senior Policy Director
Michael S. Twinchek, Chief Clerk
I. Lanier Avant, Minority Staff Director
------
SUBCOMMITTEE ON OVERSIGHT, INVESTIGATIONS, AND MANAGEMENT
Michael T. McCaul, Texas, Chairman
Gus M. Bilirakis, Florida William R. Keating, Massachusetts
Billy Long, Missouri, Vice Chair Yvette D. Clarke, New York
Jeff Duncan, South Carolina Danny K. Davis, Illinois
Tom Marino, Pennsylvania Bennie G. Thompson, Mississippi
Peter T. King, New York (Ex (Ex Officio)
Officio)
Dr. R. Nick Palarino, Staff Director
Diana Bergwin, Subcommittee Clerk
Tamla Scott, Minority Subcommittee Director
C O N T E N T S
----------
Page
Statements
The Honorable Michael T. McCaul, a Representative in Congress
From the State of Texas, and Chairman, Subcommittee on
Oversight, Investigations, and Management:
Oral Statement................................................. 1
Prepared Statement............................................. 3
The Honorable William R. Keating, a Representative in Congress
From the State of Massachusetts, and Ranking Member,
Subcommittee on Oversight, Investigations, and Management...... 4
The Honorable Bennie G. Thompson, a Representative in Congress
From the State of Mississippi, and Ranking Member, Committee on
Homeland Security.............................................. 6
Witnesses
Mr. Shawn Henry, Former Executive Assistant Director, Criminal,
Cyber, Response, and Services Branch, Federal Bureau of
Investigation:
Oral Statement................................................. 8
Prepared Statement............................................. 10
Mr. James A. Lewis, Director and Senior Fellow, Technology and
Public Policy Program, Center for Strategic and International
Studies:
Oral Statement................................................. 13
Prepared Statement............................................. 14
Mr. Gregory C. Wilshusen, Director, Information Security Issues,
Government Accountability Office:
Oral Statement................................................. 18
Prepared Statement............................................. 20
Mr. Stuart McClure, Chief Technology Officer, McAfee:
Oral Statement................................................. 29
Prepared Statement............................................. 31
Mr. Stephen E. Flynn, Founding Co-Director, George J. Kostas
Research Institute for Homeland Security, Northeastern
University:
Oral Statement................................................. 37
Prepared Statement............................................. 39
Appendix
The Honorable Michael T. McCaul, a Representative in Congress
From the State of Texas, and Chairman, Subcommittee on
Oversight, Investigations, and Management:
Statement of John Watters, Chairman and CEO, iSIGHT Partners,
Inc.......................................................... 57
AMERICA IS UNDER CYBER ATTACK: WHY URGENT ACTION IS NEEDED
---------- R
Tuesday, April 24, 2012
U.S. House of Representatives,
Subcommittee on Oversight, Investigations, and
Management,
Committee on Homeland Security,
Washington, DC.
The subcommittee met, pursuant to call, at 2:05 p.m., in
Room 311, Cannon House Office Building, Hon. Michael T. McCaul
[Chairman of the subcommittee] presiding.
Present: Representatives McCaul, Long, Duncan, Keating,
Clarke, Davis, and Thompson (ex officio).
Mr. McCaul. The committee will come to order. The purpose
of our hearing is to examine the evolving computer hacking
threats from nation-states and hacker groups to Government,
financial institutions, American businesses, and personal
computer networks.
I now recognize myself for an opening statement. America's
computers are under attack and every American is at risk. The
United States Government, critical infrastructures, American
business institutions, and our personal data are being
compromised by nation-states and hacker groups. Their intent is
to conduct cyber warfare, paralyzing our infrastructure,
stealing our intellectual property, conducting espionage, and
gaining access to our credit card, bank account, and Social
Security numbers.
Richard Clarke, Former Special Advisor on Cybersecurity to
President Bush, said within the first 48 hours of a cyber
attack on the United States we could experience the Department
of Defense's classified and unclassified networks collapsing as
a result of large-scale routers failing to function, reports of
large oil refinery fires as well as lethal clouds of chlorine
gas emitting from chemical plants, our financial system
dissolving as a result of important financial data being lost
with no idea of who owns what, pipelines carrying natural gas
exploding, trains and subways derailed, a Nation-wide blackout
leaving American cities in the dark.
Unfortunately, this is not a science fiction scenario.
There are no shells exploding or foreign militaries on our
shores. But make no mistake: America is under attack by digital
bombs. There are several things the American public should
understand about these attacks. They are real, stealthy, and
persistent, and could devastate our Nation. They occur at the
speed of light. They are global and can come from anywhere on
the Earth. They penetrate traditional defenses.
So who is conducting these attacks and why? An October 2011
report to Congress on foreign economic collection and
industrial espionage states, it is part of China and Russia's
national policy to try to identify and steal sensitive
technology which they need for their development. China and
Russia view themselves as strategic competitors of the United
States and are the most aggressive collectors of U.S. economic
information and technology. China's cyber warfare capabilities
and the espionage campaigns they have undertaken are the most
prevalent of any nation-state actor. China has created citizen
hacker groups, engaged in cyber espionage, established cyber
war military units and laced the infrastructure with logic
bombs.
Russia has advanced capabilities and the intent and
technological prowess necessary to carry out a cyber attack
anywhere in the world at any time. Russia has been accused of
unleashing a cyber war against Estonia in 2011 and shutting
down government websites. Russia has also taken down Georgia's
banking and government sites as part of a policy to demonstrate
its power during a conflict.
There are, of course, many other countries developing cyber
capabilities and using cyber espionage to steal U.S. trade and
technology secrets to bolster their own economic development,
and all of them pose a threat. Besides nation-states, there are
groups such as Anonymous, Moltsec, and AntiSec who indulge in
non-state hacktivism or hacking and activism. They are largely
a sympathizer for freedom of information and their agenda is
basically to protest what they perceive as violations of
privacy. These attacks are sometimes aimed at individuals but
many times used against businesses.
Based on recent arrests here in the United Kingdom--here
and in the United Kingdom--it appears that the groups consist
predominantly of juveniles who want notoriety. Non-state
hacktivist groups have indulged in denial of service attacks
against the likes of Sony, MasterCard, and Stratfor located in
my hometown of Austin, Texas. They deface websites, slow down
on-line access to the internet and steal sensitive information
such as password files, credit card information, and Social
Security numbers. These groups, both nation-states and non-
state hacktivists, present a threat not only to the security of
our Nation but also to our personal and business files.
We require a robust National effort to counter these
attacks against our National interest. The potential of cyber
attacks is frightening. The Stuxnet worm is groundbreaking
malware launched against the uranium nuclear program. It was
used to blow up centrifuges. It is so devious in its use of
computer vulnerabilities, with such a multi-pronged approach,
that the Iranians had no idea they were being attacked. Such a
successful attack against the United States, with viruses
designed to manipulate and bring down our industrial control
systems, could cause devastating human and economic losses.
Indeed, General Alexander, Director of the National
Security Agency, told me that it is not a matter of ``if'' but
``when'' a cyber Pearl Harbor will occur. We have been
fortunate that up until this point, cyber attacks in our
country have not caused a cataclysmic event that has brought
physical harm to Americans, but that is not for lack of an
effort on the part of those who mean to destroy our way of
life.
Last week Former Secretary of Homeland Security Michael
Chertoff said it doesn't take a lot to understand how an attack
on critical infrastructure during a time of tension could
seriously undermine the ability of a country to defend itself.
The Secretary recalled: ``I had the experience of living
through an event that occurred after there was a fair amount of
warning, and four planes were hijacked and we lost about 3,000
people. My message to anybody who is interested in this,
particularly in the Congress, is let's do something meaningful
because it is not a tolerable situation.''
I share the Secretary's concerns. It is time to do
something meaningful.
[The statement of Mr. McCaul follows:]
Statement of Chairman Michael T. McCaul
April 24, 2012
America's computers are under attack and every American is at risk.
The U.S. Government, critical infrastructures, American business
institutions, and our personal data are being compromised by nation-
states and hacker groups.
The intent is to conduct cyber warfare, paralyzing our
infrastructure, stealing our intellectual property, conducting
espionage, and gaining access to our credit card, bank account, and
Social Security numbers.
Richard Clarke, former special adviser on cybersecurity to
President George W. Bush, said within the first 48 hours of a cyber
attack on the United States we could experience:
The Department of Defense's classified and unclassified
networks collapsing as a result of large-scale routers failing
to function.
Reports of large oil refinery fires, as well as lethal
clouds of chlorine gas emitting from chemical plants.
Our financial system dissolving as a result of important
financial data being lost with no idea of who owns what.
Pipelines carrying natural gas exploding.
Trains and subway derailing.
A Nation-wide blackout leaving American cities in the dark.
Unfortunately, this is not a science fiction scenario.
There are no shells exploding or foreign militaries on our shores.
But make no mistake: America is under attack by digital bombs.
There are several things the American public should understand
about these attacks:
They are real, stealthy, and persistent, and could devastate
our Nation.
They occur at the speed of light.
They are global and could come from anywhere on earth.
They penetrate traditional defenses.
Who is conducting these attacks and why?
An October 2011 Report to Congress on Foreign Economic Collection
and Industrial Espionage states, it is part of China and Russia's
national policy to try to identify and steal sensitive technology,
which they need for their development. China and Russia view themselves
as strategic competitors of the United States and are the most
aggressive collectors of U.S. economic information and technology.
China's cyber warfare capabilities and the espionage campaigns they
have undertaken are the most prevalent of any nation-state actor. China
has created citizen hacker groups, engaged in cyber espionage,
established cyber war military units, and laced the U.S. infrastructure
with logic bombs.
Russia has advanced capabilities and the intent and technological
prowess necessary to carry out a cyber attack anywhere in the world, at
any time.
Russia has been accused of unleashing a cyber war against Estonia
in 2007 and shutting down government websites.
Russia has also taken down Georgia's banking and government sites
as part of a policy to demonstrate its power during a conflict.
There are of course many other countries developing cyber
capabilities and using cyber espionage to steal U.S. trade and
technology secrets to bolster their own economic development; and all
of them pose a threat. Besides nation-states, there are groups such as
Anonymous, LulzSec and AntiSec who indulge in non-state ``hacktivism''
or hacking and activism.
They are largely a sympathizer for ``freedom of information,'' and
their agenda is basically to protest what they perceive as violations
of privacy.
These attacks are sometimes aimed at individuals but many times
used against businesses.
Based on the recent arrests here and in the United Kingdom, it
appears the groups consist predominantly of juveniles who want
notoriety.
Non-state hacktivist groups have indulged in denial of service
attacks against the likes of Sony, Mastercard, and Stratfor, located in
my hometown of Austin, Texas, defacing websites, slowing down on-line
accesses on the internet and stealing sensitive information such as
password files, credit card, and Social Security numbers.
These groups, both nation-states and non-state hacktivists, present
a threat not only to the security of our Nation, but also to our
personal and business files. We require a robust National effort to
counter these attacks against our National interests.
The potential of cyber attacks is frightening. The Stuxnet worm is
groundbreaking malware launched against the Iranian nuclear program. It
is so devious in its use of computer vulnerabilities with such a
multipronged approach that the Iranians had no idea they were attacked.
Such a successful attack against the United States with viruses
designed to manipulate and bring down our industrial control systems
they could cause devastating human and economic losses.
General Alexander, director of the National Security Agency, told
me that it is not a matter of if, but when a cyber Pearl Harbor will
occur.
We have been fortunate that up until this point cyber attacks in
our country have not caused a cataclysmic event that has brought
physical harm to Americans. But that is not for lack of effort on the
part of those who mean to destroy our way of life.
Last week, former Secretary of Homeland Security Michael Chertoff
said ``It doesn't take a lot to understand how an attack on critical
infrastructure during a time of tension could seriously undermine the
ability of a country to defend itself.''
The Secretary recalled, ``I had the experience of living through an
event that occurred after there was a fair amount of warning and four
planes were hijacked and we lost about 3,000 people. My message to
anybody who's interested in this, particularly in Congress, is let's do
something meaningful because it is not a tolerable situation.''
I share the Secretary's concerns. It is time to do something
meaningful.
Mr. McCaul. With that, I recognize the Ranking Member of
the subcommittee, Mr. Keating, for his opening statement.
Mr. Keating. Thank you, Mr. Chairman. Mr. Chairman, thank
you for convening today's hearing. I would also like to
acknowledge Chairman McCaul's long-standing interest in
cybersecurity efforts. I want to also acknowledge the presence
of Ms. Clarke, who is the Ranking Subcommittee Chair on
Cybersecurity, as well as Ranking Member Thompson, whose
interest in this issue has been longstanding, and he is the
Ranking Member of the overall committee.
In 2007 Chairman McCaul, along with Congressman Jim
Langevin, were named co-chairs of the Center for Strategic and
International Studies Commission on Cybersecurity for the 44th
Presidency. Since that time he, among others, have been leaders
on this issue, and last month he and I co-hosted a House-wide
cybersecurity briefing that included an in-depth discussion on
how cyber attacks threaten our critical infrastructure, cell
phones, and computers.
I am pleased to see that two of the participating
organizations in that briefing--CSIS, the Center for Strategic
and International Studies, and Northeastern University--are
testifying today. I look forward to continuing to work with
Chairman McCaul on cybersecurity issues and performing
oversight of the Department's role as a leading cybersecurity
agency.
Cybersecurity, as acknowledged by President Obama, is one
of the most serious economic and National security threats our
Nation faces. The impacts of a cyber attack against critical
infrastructure or our widely-used Federal system are spurring
efforts in Washington to compel energy companies, along with
other operators of vital infrastructures, to do more to protect
their computer network from hackers. Public reports reveal
Federal networks have been under attack for years, and some
accounts point to upwards to 3 billion cyber attacks a year in
the United States. The price of the security is not cheap.
Government agencies would need to boost cybersecurity spending
more than seven times to block 95 percent of hacker attacks,
according to a Bloomberg Government study.
That translates into an annual spending average of $190.3
million per agency, up from the current $26 million, according
to the study based on interviews with officials of 48 Federal,
State, and municipal agencies.
Moreover, one recent study estimated that 71 percent of all
companies experienced a cyber attack last year. The current
combined financial impact on public and private sector cyber
attacks is unknown, but estimates are in the billions. Yet as
we add up the dollars and weigh the risks, we must not forget
the greatest attack will be on the confidence of the American
people if even one large-scale cyber attack scenario were to
materialize.
It is therefore imperative that we get a full understanding
of the root causes of cyber attacks, learn from where the
threat is derived, and ensure that every available means of
protection is deployed at our disposal.
Mr. Chairman, last week during our full committee's markup
of the Precise Act, I proposed an amendment that would have
incorporated the model of the three-legged stool of Government
working in partnership with academia and industry and to
legislation designed to anticipate cyber threats and develop
means to combat them.
I plan to work further in this initiative because even in
times of greatly-needed cost-saving measures, we should be wary
of trading in long-term gains for short-term cuts. For this
reason, our Government should do more to accelerate the pace of
research discovery and development in home-grown technologies.
I believe that this path forward will enable us to see a return
on our investments and remain competitive in the global economy
as well.
I know that my colleague, Chairman McCaul, is a proponent
of engaging research institutions in these matters, and I
congratulate him and his work on the Cybersecurity Enhancement
Act of 2011. Unfortunately, this week the House will consider
legislation that contains broad and ambiguous language, serious
privacy implications, and that moves away from Homeland
Security being the central agency for cybersecurity efforts.
The Department through its United States Computer Emergency
Readiness Team, or US-CERT, has made great strides, and I am
concerned that the legislation compromising its authority will
set us back in our fight against cyber attacks. The President,
the CSIS Commission on Cybersecurity for the 44th Presidency,
and the House Republican Cybersecurity Task Force have all made
numerous recommendations on how to improve cybersecurity. I
would encourage my colleagues to bring legislation to the floor
that fully protects the Constitutional rights and contains
recommendations made by these entities.
I look forward to today's testimony and am especially glad
to hear from Dr. Stephen Flynn of Northeastern University as he
discusses the nature of the cybersecurity threat and his
standpoint on making universities full-fledged cybersecurity
partners. I yield back.
Mr. McCaul. I thank the Ranking Member, and thank you for
your special recognition of our efforts and my efforts as well.
With that, I recognize the Ranking Member of the full
committee, Mr. Thompson.
Mr. Thompson. Thank you very much, Chairman McCaul, for
today's hearing. The threat to our Nation's cyber systems and
networks is real and present. Billions of Americans use the
internet every day to communicate, pay bills, obtain
information, and perform job-related functions. Moreover, the
Federal Government relies on the internet and a network of
Federal systems to support infrastructure, maintain defense
systems, protect power plants and water supplies, perform
administrative functions of Federal agencies, and a host of
other activities.
It is therefore imperative that we take seriously the
United States' role in securing cyber space from unwanted
intrusions and dangerous attacks. A large portion of Federal
responsibility lies with the U.S. Congress. It is our role to
ensure that necessary legislation is passed and provide America
with the protection it needs. Per the title of today's hearing,
urgent action is needed, and I agree.
However I have consistently noted that what is needed is
legislation that will accomplish three things: No. 1, address
the growing cyber threat to critical infrastructure networks;
No. 2, promote and enhance information sharing between and
among private sector and the Federal Government while
protecting the privacy and civil liberties of Americans using
the internet; and No. 3, solidify and enhance the Department of
Homeland Security's role as a Federal Government lead for
Federal network security and private sector cyber support.
Unfortunately, none of the bills being voted on by the
House this week accomplish these goals. As a result, at the end
of Cybersecurity Week, America will remain without a
comprehensive National strategy that bears cybersecurity
efforts in one domestic agency and protects the privacy rights
of American citizens.
While the initial measure introduced by Representative
Lungren, the chairman of the Committee's Subcommittee on
Cybersecurity, Infrastructure Protection, and Security
Technologies was not perfect, it took a number of steps in the
right direction and would have measurably strengthened our
Nation's cybersecurity posture. Yet the key initiatives that I
believe were necessary were removed at the last minute. Despite
these changes, the Republican leadership has elected not to
bring that measure to the House floor.
So while I look forward to today's testimony and thank the
witnesses for their participation, I am disheartened by the
missed opportunity to produce the urgent action that is indeed
needed. I yield back, Mr. Chairman.
Mr. McCaul. I thank the Ranking Member. I share your
concerns. I do want to say that there are four bills that will
be on the House floor this week, all of which passed out of
committee in a bipartisan fashion. I believe it is the
leadership's intent to proceed with those bills that will go
forward in a bipartisan way, as this is an issue that should be
a bipartisan issue and not a partisan issue. Unfortunately, the
bill passed out of Homeland Security was not a bipartisan vote.
When I talked to Secretary of Homeland Security Napolitano
and General Alexander, the NSA director, the two key components
they wanted to see was a codification of the existing legal
authorities based on Presidential Directives and Executive
Orders. The bill passed out of committee does that. Also with
respect to information sharing, that is achieved through the
National Cybersecurity and Communications Integration Center.
So I think those two key components are addressed in the bill.
But let me just say this to the Ranking Member. I hope that
we can work together to make this bill out of this important
committee, with the agency that really is in the forefront and
the center of cybersecurity. I hope we can work together to
make this a more bipartisan bill and proceed to the House
floor.
With that, other Members are reminded that opening
statements may be submitted for the record. We are pleased to
have a very distinguished panel here before us today.
First, Mr. Henry needs probably little or no introduction
and I can't tell you how pleased I am to have him here today.
He has been a real leader in this area. He is a former
executive assistant director of the Criminal, Cyber, Response,
and Services Branch of the FBI, really at the forefront of this
effort for so many years. He was responsible for all FBI world-
wide computer investigations. Additionally, he was an original
member of the National cyber study group which developed a
comprehensive National Cybersecurity Initiative.
Next we have a dear friend of mine, a colleague, somebody I
worked with, as the Ranking Member mentioned, on the CSIS
Commission report on cybersecurity, Dr. James Lewis. Jim is a
senior fellow and director of the Technology and Public Policy
Program at the Center for Strategic and International Studies
focusing on technology, National security and the international
economy. Previously he was the project director for the CSIS
Commission on Cybersecurity for the 44th Presidency. Jim, great
to see you here again today.
Next we have Mr. Gregory Wilshusen. It is hard to say that
three times in a row and get it right. But Greg is the director
of information security issues at the GAO where he leads
information security-related studies and audits of the Federal
Government. Thank you for being here as well.
Next we have Mr. Stuart McClure who is the executive vice
president and the worldwide chief technology officer at McAfee.
Most of you know McAfee is a leader in cybersecurity efforts.
At McAfee he also served as senior vice president of global
threats and research.
Finally we have Dr. Flynn. Dr. Stephen Flynn is the
founding co-director of the George Kostas Research Institute
for Homeland Security at Northeastern University. Prior to
September 11 he served as an expert advisor to the U.S.
Commission on National Security, the Hart-Rudman Commission.
Dr. Flynn served in the Coast Guard on active duty for 20
years, and we thank you for your service, Dr. Flynn, in that
regard.
So with that, the Chairman now recognizes Mr. Henry for his
testimony.
STATEMENT OF SHAWN HENRY, FORMER EXECUTIVE ASSISTANT DIRECTOR,
CRIMINAL, CYBER, RESPONSE, AND SERVICES BRANCH, FEDERAL BUREAU
OF INVESTIGATION
Mr. Henry. Good afternoon Chairman McCaul, Ranking Member
Keating, and Members of the subcommittee. I am pleased to be
here today with the distinguished witnesses to discuss the
cyber threats facing our Nation and how these threats impact
our Government and our private-sector networks. It is difficult
to overstate the potential harm these threats pose to our
economy, our National security, and the critical infrastructure
upon which our country relies.
I am currently the president of CrowdStrike Services, a
computer security organization. But up until last month I led
all the FBI cyber efforts, as the Chairman noted, and I saw
with deep granularity the threats that we face. The number and
sophistication of these cyber attacks has increased
dramatically over the past 5 years and it is going to continue
to grow. The threat has reached the point that given enough
time, motivation, and funding, a determined adversary will
likely penetrate any system that is accessible directly from
the network. I do not believe our critical infrastructure can
remain unscathed in the long term if the current environment
remains unchanged. With the depth and breadth of the intrusions
that I have seen, I believe it is necessary for network
administrators to assume that they have already been breached
rather than waiting for their network intrusion systems to
alert them to an infiltration.
Network security compliance in and of itself falls far
short of the continuous evaluation that needs to be done on our
networks every single day. Cyber criminal threats to the United
States result in significant economic losses. Cyber criminals
are forming private trusted and organized groups to conduct
cyber crime, and these groups are accessing personally
identifiable information which includes banking, brokerage
account information, credentials and credit card numbers of
individuals and businesses that can be used for financial gain.
The economic consequences are severe, and there have been
hundreds of millions of dollars lost in the financial services
sector alone.
But that doesn't even begin to tell the real story about
what is happening to this Nation. A colleague of mine recently
used an analogy where an iceberg represents the totality of
threats to the information infrastructure. Cyber crime, as I
have just described, is merely the tip of the iceberg. The
biggest threats are below the waterline, just like the vast
majority of an iceberg. The public sees the tip because cyber
crime is regularly reported in the media-- stolen credit cards,
lost identities, eastern European organized crime groups, and
breached bank accounts. The waterline is the separation between
the unclassified and classified environment. Thus, the most
sophisticated and damaging attacks occur primarily out of the
public sight.
I would offer that only a small percentage of individuals,
primarily those in the intelligence community, have ever seen
below the waterline, and the real threat is grossly
underappreciated by the public.
The most significant cyber threats to our Nation are those
with high intent and high capability to inflict damage or even
death in the United States, to illicitly acquire substantial
assets, or to illegally obtain sensitive or unclassified U.S.
military, intelligence, or economic information. These are the
threats from foreign intelligence services who assault U.S.
businesses many times every single day, 365, and for those I
have seen below the waterline.
The threat continues unabated. U.S. critical infrastructure
faces a growing threat due to advancements in the availability
and sophistication of malicious software tools and the fact
that new technologies raise new security issues that are not
always addressed prior to adoption. Specifically, industrial
control systems which operate the physical processes of the
Nation's pipelines, electricity, and other critical
infrastructures are at elevated risk of cyber exploitation.
Today, likely only advanced threat actors are capable of
employing these techniques. But as we have seen with other
malicious software tools, these capabilities will eventually be
within reach of all threat actors.
So what does this all mean? I believe most major companies
have already been breached or will be breached, resulting in
substantial losses of information, economic competitiveness,
and National security. Many are breached and have absolutely no
knowledge that an adversary was or remains resident on their
network, oftentimes for weeks, months, or even years.
While I was executive assistant director at the FBI, our
agents regularly knocked on the door of victim companies and
told them their network had been intruded upon and their
corporate secrets had been stolen because we found their
proprietary data resident on a server in the course of another
investigation. We were routinely telling organizations they
were victims, and these victims ranged in size and industry and
cut across all financial critical sectors, or all critical
sectors.
For those companies that do know and fail to report or
address the breach, they are aiding and assisting in the
foreign intelligence service collection, and their corporate
infrastructure is a component of the adversary's collection
platform. Although our adversary cyber capabilities are at an
all-time high, combating this challenge needs to be a top
priority for both the public and the private sector.
The adversary is persistent. It is not enough to stop their
attack once or twice. They will keep coming until they get in.
The problem with existing technologies and threat mitigation
tactics is they are too focused on adversary tools like malware
and exploits, and not on who the adversary is and how they
operate.
Ultimately, we focus on the enemy and take the fight to
them to raise their cost of attack, and we will fail because
they will always get through if we don't take that approach.
This requires us to stop solely playing defense. The
sophisticated adversary practices crafty offense and the
offense outpaces the defense. While we certainly need to
continue defense and not let our guard down, we need to be more
proactive and strategic in our approach. We cannot stand by and
wait for them to trip an alarm as they shake the proverbial
fence, because the sophisticated adversaries are jumping right
over the fence. They are never tripping an alarm. They are
bypassing the intrusion detection systems. We must assume that
they are already inside the perimeter and we must constantly
hunt them on our networks to identify and mitigate their
actions.
Hunting necessitates us acquiring a better sight picture of
who the adversary is, the assets they are targeting, the
techniques they are employing and who exactly they are. This is
where intelligence sharing is critical.
Technology is just a piece of the solution, not the sole
solution. What we have is an adversary problem, not a malware
problem. Let me repeat that piece about intelligence. The
sharing of intelligence is critical and the U.S. Government
needs to develop better protocols to share intelligence broadly
across the private sector.
In conclusion, we face significant challenges in our
efforts to combat the cyber attack. I am optimistic that by
strengthening partnerships and effectively sharing intelligence
and successfully identifying our adversaries, we can best
protect our businesses and critical infrastructure. However, I
would be remiss if I didn't say this: Recognizing this is a
complex problem; there are many moving parts. I appreciate the
committee's statement about the sense of urgency. It is really,
really important because our Nation is at risk and we cannot
stand by and admire this problem.
I look forward to working with the subcommittee and
Congress as a whole to determine a successful course forward
and ensure that we can have a safe, positive, economic, and
social benefit from the internet while minimizing the risks
posed to us by our adversaries.
[The prepared statement of Mr. Henry follows:]
Prepared Statement of Shawn Henry
April 24, 2012
Good afternoon Chairman McCaul, Ranking Member Keating, and Members
of the subcommittee. I'm pleased to be here today to discuss the cyber
threats facing our Nation and how these threats impact our Government
and private-sector networks. It is difficult to overstate the potential
harm these threats pose to our economy, our National security, and the
critical infrastructure upon which our country relies.
the cybersecurity threat
As the subcommittee is aware, the number and sophistication of
cyber attacks has increased dramatically over the past 5 years and is
expected to continue to grow. The threat has reached the point that,
given enough time, motivation, and funding, a determined adversary will
likely penetrate any system that is accessible directly from the
internet. Even systems not touching the network are susceptible to
attack via other than remote access, including the trusted insider
using devices such as USB flash drives, and the supply chain.
It is difficult to say with confidence that our critical
infrastructure--the backbone of our country's economic prosperity,
National security, and public health--will remain unscathed and always
be available when needed. In fact, I have stated publicly that with the
depth and breadth of the intrusions I've seen, I believe it is
necessary for network administrators to assume they have already been
breached rather than waiting for their intrusion detection systems to
alert them to an infiltration.
criminal cyber threats against the private sector
Cyber criminal threats to the United States result in significant
economic losses. Cyber criminals are forming private, trusted, and
organized groups to conduct cyber crime. The adoption of specialized
skill sets and professionalized business practices by these criminals
is steadily increasing the complexity of cyber crime by providing
actors of all technical abilities with the necessary tools and
resources to conduct cyber crime. Not only are criminals advancing
their abilities to attack a system remotely, they are becoming adept at
tricking victims into compromising their own systems.
Once a system is compromised, cyber criminals will use their
accesses to obtain Personally Identifiable Information (PII), which
includes on-line banking/brokerage account credentials and credit card
numbers of individuals and businesses that can be used for financial
gain. As cyber crime groups increasingly recruit experienced actors and
pool resources and knowledge, they advance their ability to be
successful in crimes against more profitable targets and will learn the
skills necessary to evade the security industry and law enforcement.
The potential economic consequences are severe. The sting of a
cyber crime is not felt equally across the board. A small company may
not be able to survive even one significant cyber attack.
Often, businesses are unable to recoup their losses, and it may be
impossible to estimate their damage. Many companies prefer not to
disclose that their systems have been compromised, so they absorb the
loss, making it impossible to accurately calculate damages. As a result
of the inability to define and calculate losses, the best that the
Government and private sector can offer are estimates. Over the past 5
years, estimates of the costs of cyber crime to the U.S. economy have
ranged from millions to hundreds of billions. A 2010 study conducted by
the Ponemon Institute estimated that the median annual cost of cyber
crime to an individual victim organization ranges from $1 million to
$52 million.
According to a 2011 publication released by Javelin Strategy and
Research, the annual cost of identity theft is $37 billion. This
includes all forms of identity theft, not just cyber means. The
Internet Crime Complaint Center (IC3), which aggregates self-reported
complaints of cyber crime, reports that in 2010, identity theft schemes
made up 9.8 percent of all cyber crime.
the tip of the iceberg
A colleague of mine recently used an analogy where an iceberg
represents the totality of threats to the information infrastructure.
``Cyber crime'', as described above, is merely the tip of the iceberg;
the biggest threats are ``below the water line'', just like the vast
majority of an iceberg. The public sees ``the tip'' because the cyber
``crime'' is regularly reported in the media; stolen credit cards, lost
identities, Eastern European Organized Crime groups; and breached bank
accounts. The ``water line'' is the separation between the unclassified
and classified environment; thus, the most sophisticated and damaging
attacks occur primarily out of the public's sight.
I would offer that only a very small group of individuals--
primarily those in the intelligence community--have ever seen ``below
the water line'', and the real threat is grossly underappreciated by
the public. The most significant cyber threats to our Nation are those
with high intent and high capability to inflict damage or even death in
the United States; to illicitly acquire substantial assets; or to
illegally obtain sensitive or classified U.S. military, intelligence,
or economic information. These are the threats from foreign
intelligence services, and for those I have seen below the waterline.
cyber threats to u.s. critical infrastructure
The threat continues unabated. U.S. critical infrastructure faces a
growing cyber threat due to advancements in the availability and
sophistication of malicious software tools and the fact that new
technologies raise new security issues that are not always addressed
prior to adoption. The increasing automation of our infrastructures
provides more cyber access points for adversaries to exploit, and the
target set grows daily as more and more data is pushed, transmitted, or
stored on the network.
New ``smart grid'' and ``smart home'' products, for example,
designed to provide remote communication and control of devices in our
residences, businesses, and critical infrastructures, must be developed
and implemented in ways that will also provide protection from
unauthorized use. Otherwise, each new device will become a doorway into
our systems for adversaries to use for their own purposes.
Industrial control systems, which operate the physical processes of
the Nation's pipelines, railroads, and other critical infrastructures,
are at elevated risk of cyber exploitation. We need to be concerned
about the proliferation of malicious techniques that could degrade,
disrupt, or destroy critical infrastructure. Though likely only
advanced threat actors are currently capable of employing these
techniques, as we have seen with other malicious software tools, these
capabilities will eventually be within reach of all threat actors.
what does all this mean?
I believe most major companies have already been breached or will
be breached, resulting in substantial losses of information, economic
competitiveness, and National security. Many are breached and have
absolutely no knowledge that an adversary was or remains resident on
their network, often times for weeks, months, or even years. While I
was EAD at the FBI, our agents regularly knocked on the door of victim
companies and told them their network had been intruded upon and their
corporate secrets stolen, because we found their proprietary data
resident on a server in the course of another investigation. We were
routinely telling organizations they were victims, and these victims
ranged in size and industry, and cut across all critical sectors.
addressing the threat
Although our cyber adversaries' capabilities are at an all-time
high, combating this challenge needs to be a top priority for both the
public and the private sector. We need to continue to develop
partnerships within industry, academia, and across all of Government to
have a dramatic improvement in our ability to share intelligence to
combat this threat.
The adversary is persistent. It's not enough to stop their attack
once or twice; they will keep trying until they get in. The problem
with existing technologies and threat-mitigation tactics is they are
too focused on adversary tools (malware and exploits) and not on who
the adversary is and how they operate. Ultimately, until we focus on
the enemy and take the fight to them to raise their cost of attack, we
will fail because they will always get thorough.
This requires us to stop relying solely on ``defense.'' The
sophisticated adversary practices crafty offense, and the offense
outpaces the defense. While we certainly need to continue defense--we
cannot let our guard down--we need to be more proactive and strategic
in our approach.
We cannot stand by and wait for them to trip an alarm as they shake
the proverbial fence; sophisticated adversaries jump OVER the fence,
bypassing the intrusion detection ``alarm'' entirely. We must assume
they are already inside the perimeter, and we must constantly hunt them
on our networks to identify and mitigate their actions.
Hunting necessitates us acquiring a better site picture of the
adversary--what assets are they targeting, what techniques are they
employing, and who, exactly, are they? This is where intelligence
sharing is critical; using advanced intelligence technology, companies
can share information enabling them to learn the human aspects of the
attack, become more predictive, and thus preventative. Technology is a
piece of the solution, not the sole solution, because what we really
have is an adversary problem.
conclusion
We face significant challenges in our efforts to combat the cyber
threat. I am optimistic that by strengthening partnerships, effectively
sharing intelligence, and successfully identifying our adversaries, we
can best protect businesses and critical infrastructure from grave
damage.
I look forward to assisting the subcommittee and Congress as a
whole to determine a successful course forward for the Nation that
allows us to reap the positive economic and social benefits of the
internet while minimizing the risk posed by those who seek to use it to
do us irreparable harm.
Mr. McCaul. Thank you Mr. Henry for your service and for
your insight to this committee.
Next, the Chairman recognizes Mr. Lewis.
STATEMENT OF JAMES A. LEWIS, DIRECTOR AND SENIOR FELLOW,
TECHNOLOGY AND PUBLIC POLICY PROGRAM, CENTER FOR STRATEGIC AND
INTERNATIONAL STUDIES
Mr. Lewis. Thank you, Mr. Chairman. Thanks to the Members
of the committee for the opportunity to testify. Many of you,
of course, are already familiar with the problem, so I will
touch on two issues in particular: Cyber espionage and cyber
attack. Cyber espionage is our biggest problem, as you just
heard, but most breaches are not reported. The best example is
the 2010 Google incident which involved at least 35 other
Fortune 500 companies, none of whom reported a problem.
Concealing losses makes business sense, but it also makes it
hard to plan a good defense. Perhaps the new SEC ruling will
change this, but it hasn't changed yet.
It is difficult to value the loss from cyber espionage, but
all the estimates I have looked at put it in the tens or even
hundreds of billions of dollars per year. The damage from
espionage depends on whether the acquiring nation can use the
technology. Sometimes it can take years for them to benefit. In
other cases the benefit can be immediate, and we can identify
foreign programs that appear to be based on U.S. technology.
The clearest damage comes from the loss of military technology,
but America's technological leadership and economic
competitiveness is at risk. The fastest growing threat comes
from the proliferation of the ability to attack critical
infrastructure.
We have been hearing about cyber Pearl Harbors and cyber
Armageddons for about 15 years, and a reasonable person could
ask: Why isn't this hype? Here is why it is not hype.
Experiments at Idaho National Labs in 2007 showed that software
sent over the internet could cause physical destruction by
exploiting vulnerabilities in industrial control systems.
Stuxnet confirmed this. There has been at least one other
unreported incident. Just yesterday we saw oil facilities in
Iran damaged by cyber attack.
Only a few countries currently have this capability but new
classes of opponents want them and are seeking to acquire them.
This includes Iran and North Korea. These regimes are not known
for stable decision making. Both have development programs and
both have experimented with attacks. FBI Director Mueller
points out that Iran may be losing its reluctance to attack the
United States directly.
Non-state actors, particularly Western anti-Government
groups, are also exploring cyber attack. You can download the
tools that will find critical infrastructure vulnerabilities
easily off the internet. I did it last week and I toyed around
with it and found 6,000 vulnerable networks. It was kind of
fun. Combine these reconnaissance tools with the attack tools
available in the cyber crime black market, and someone with
good hacking skills--and there are many in these groups--could
attack the poorly-defended critical infrastructures that are
found in this country.
As cyber attack capabilities become commoditized, the
temptation for these politically motivated groups to use them
against vulnerable U.S. targets will increase. The greatest
threat to cybersecurity in America, however, is complacency.
There are some in the internet community who still believe that
the internet can heal itself. This is just naive. There are
some business groups who argue that a disaggregated, voluntary
approach to cybersecurity guided by information sharing will be
adequate. This was tried in the Clinton administration. It did
not work then, it does not work now, it will not work in the
future when our opponents are more advanced and when we are
more dependent on cyber space.
The future of threats in cyber space involves the diffusion
and the commoditization of attack capabilities. It will involve
an increased number of privacy breaches and the loss of
intellectual property. There are a number of steps that could
reduce these risks, but unfortunately it appears that we may
need to wait for a damaging cyber attack to make us move.
I appreciate all the work the committee has done, both the
full committee and the subcommittees. I know you are trying
hard, but I think this attack is inevitable. Thank you for the
opportunity to testify and I look forward to your questions.
[The prepared statement of Mr. Lewis follows:]
Prepared Statement of James A. Lewis
April 24, 2012
Every week--it's getting kind of boring--we read about hackers
pilfering some company's database and stealing data on thousands or
even millions of individuals. These are private-sector networks and
they point to a crucial problem for assessing cybersecurity. Government
agencies have to be transparent about breaches. Companies have to
report breaches when it affects consumer privacy. But companies don't
have to report breaches involving intellectual property or critical
infrastructure. In fact, it is in their interest to conceal them.
Perhaps the new Security and Exchange Commission Ruling that asks
companies to report cyber incidents that damage shareholder value will
change this, but it is too early to tell.
So we have frequent reports of penetrations to governments'
systems, weekly or daily reports of penetrations of company networks
that affect privacy, and almost no reports of penetrations affecting
intellectual property and critical services. This pattern is not
credible--the level of privacy-related penetrations companies report is
likely to also be the real level of intellectual property-related
penetration. It's just not reported. We know from anecdotal data and
from a few published instances that these network penetrations occur
frequently. This anomaly in the reporting suggests we really lack--in
open-source information--a clear understanding of the threat to the
American private sector, and that protestations that private networks
are secure or do a better job are, to put it charitably, inaccurate.
An accurate assessment of threats in cyber space is essential for
effective defense. A defense built on fictions will fail the first time
it is tested. There is too much wishful thinking and complacency in the
face of a threat that is growing as potential attackers acquire new
capabilities and as our economy becomes more dependent on the internet
and other cyber technologies. Digital networks are now the backbone of
economic activity and National security, but our efforts to secure them
remain haphazard, putting our Nation at risk. We can better understand
this risk by looking at three separate categories of threat--espionage,
crime, and attack.
Our adversaries include powerful states, skilful criminals, and a
range of extremist groups. We are hampered in our defense against these
opponents when we try to treat cybersecurity as a business problem.
Some companies will take adequate defense measures; other will not. It
makes business sense for an intelligence agency to spend lavishly to
penetrate an opponent's network. It does not make business sense for
companies to spend at the same rate to defend. To put this in military
terms, we have an uncoordinated defense that is easy to defeat in
detail.
Cyber espionage is the most pressing threat we face. The loss of
intellectual property and business confidential information--economic
espionage--using hacking and other techniques poses a threat to
National security by undermining the military advantage provided by
technology and by damaging economic competitiveness. The rate and
degree to which National security is damaged depends, of course, on the
ability of the acquiring nations to actually use the technology they
steal and on America's own economic policies and Government support for
science and engineering--our own economic policies and laws probably do
more damage than cyber espionage--but there are many troubling
incidents that suggest that real harm is being done. A major oil
company lost exploration data worth hundreds of millions to a foreign
attacker. We all know the Google case--at least 34 other high-tech
companies were also penetrated, although they did not report the fact.
Foreign hackers took IMF and G-20 documents relating to global
financial negotiations. The delays and cost overruns in the F-35
program may be the result of cyber espionage, as could the rapid
development of China's J-20 stealth fighter. Industries as diverse as
chemicals, telecommunications, and solar energy have all suffered from
cyber espionage.
The most harmful form of cyber espionage is state-directed. Foreign
nation-state opponents are sophisticated intelligence agencies and
advanced militaries whose business is to defeat network defenses and
who have a demonstrated capacity to easily exploit commercial and
Government networks. They have resources and persistence and their work
can be seen as an extension of traditional espionage activities. Our
network defenses are so poor, particularly in the ``dot.com'' space,
that the effort to break in probably only takes these agencies and
their proxies a few months of effort.
There is no convincing estimate of the cost of economic espionage
to the United States. One study put the cost at perhaps $30 billion a
year (in 2011 dollars) but other studies estimate the loss to be in the
hundreds of billions. These higher figures exaggerate loss, but
whatever the dollar figure, the illicit acquisition of technology and
the loss of confidential political and business information hurts
American security. The insight into Government policies, and strategic
industries provided by cyber espionage, and the acceleration of
competitor technological development, provide foreign competitors with
a tangible advantage that harms the United States. The committee may
wish to ask, for example, for classified briefing on improvements in
China's stealth and submarine capabilities and the possible relation
between these improvements and hacking incidents at defense contractors
over the last decade.
We do not want to assume that losses are distributed evenly across
all sectors of the economy. State-sponsored espionage will focus on
area of concern to governments: Advanced technologies in aerospace,
materials, information technology, and sensors, as well as commercially
valuable financial data and energy-related information. Semiconductors
and solar energy have been prime targets recently. Private entities
also engage in cyber espionage, in many cases they do so with the
acceptance of their governments. Hacking by private companies and
individuals could engage a much broader swath of companies and
technology. This probably reflects not only commercial interests but
also an official policy to encourage the illicit acquisition of
technology as a way to promote economic growth.
Cyber espionage ranks first as a threat to the United States and
other developed countries. Cyber crimes focused on financial gain are a
lesser threat, but they damage public safety by putting private
citizens and companies at risk of monetary loss. Anecdotal evidence
suggests that crime against banks and other financial institutions
probably costs the United States a several hundred million dollars
every year. This is not a major economic loss, but harms American
citizens and does some damage to our economy. However, cyber crime also
threatens National security in that it allows potential opponents to
maintain and train proxy forces at our expense. Nations like Russia and
China are sanctuaries for cyber crime because it allows them to
maintain ``irregular forces'' in cyber space--hackers who can be tapped
to do the state's bidding in espionage, coercion, or attack.
A recent opinion piece in a leading newspaper illustrates how
confusing the discussion of cybersecurity has become, and helps explain
why America may be too slow in constructing adequate defenses. The
essay posited that most cyber criminals did not make much money, and
that the threat they posed was overblown. You can test this formula by
applying to it mugging: Most muggers do not make much money, so by the
same logic, mugging is not a problem. This formula is divorced from any
serious concept of public safety. Similarly, the National security
implications of cyber crime were overlooked. Since cyber criminals are
the proxy forces--the irregulars--that our two most dangerous opponents
in cyber space use for National ends, cyber crime is an indirect and
unwitting subsidies from American companies to foreign military and
intelligence services.
Cyber espionage and crime happen on a daily basis. This is [sic]
nto the for [sic] cyber attacks against critical infrastructure or
services, which have been few and far between. The threat comes from
the spread of attack capabilities. In 2007, tests at the Idaho National
Labs showed that sending malicious instructions via computer networks
to the industrial control systems used to run critical infrastructure
could cause machines to destroy themselves. Stuxnet produced a similar
effect. These incidents showed that software can be sued as a weapon,
and the internet as a delivery vehicle. Espionage and crime exploit
vulnerabilities in networks technologies; attacks on critical
infrastructure compound this by exploiting not only network
vulnerabilities but also the vulnerabilities in industrial control
systems. There is no economic incentive to fix these control
vulnerabilities because they will not affect normal operations and they
will become visible only when there is an attack. While the cost of
cyber crime is relatively small, it is an integral part of other, more
dangerous threat we face, including the ability to launch a damaging
cyber attack.
These attacks have been long prophesied, but we have only seen two
or three. Only a few nations have the capability to destroy critical
infrastructure and they are unlikely to use it outside of a war. We
know that our two most likely military opponents have the capability to
penetrate networks, scramble data, disrupt critical services, and even
cause physical damage. We also know that they are more deterrable, more
responsible, and in the case of China, face major disincentives, as a
disruptive cyber attack would do as much damage to their own country,
given how deeply our two nations' economies are intertwined.
You sometimes hear analysts say that we are in a covert cyber war
with China. This is inaccurate. We should stop trying to cram our
complicated relationship with China into a simple Cold War framework.
China and the United States are interdependent in ways that were
inconceivable for the United States and Soviet Union. China is
challenging the United States, but it is not a peer-competitor.
Although it is rapidly increasing its military capabilities, it does
not pose the existential threat to the United States that the Soviet
Union posed. Given the deep distrust and hostility between the two
nations, and the competition for regional and global influence,
cybersecurity is a potential flashpoint in the bilateral relationship
and a source of growing tension, but this is not war.
The number of nations seeking to acquire cyber attack capabilities
is growing rapidly--cyber attack is becoming a standard element in
military planning. A more troubling development is that new classes of
opponents are seeking the ability to launch cyber attacks. These new
classes of opponents will not be as easily constrained. They are more
likely to use cyber attack and all evidence suggests that we have
nothing in the way of adequate defense. We simply do not take the
threat of cyber attack seriously--would anyone not paid to do so argue
that information sharing and voluntary action would protect us from
terrorism? Or that telling companies what missiles and aircraft look
like would be an adequate defense against a nuclear strike? But it is
an American tradition to be surprised by opponents and only take action
after the first attack.
The area of greatest concern is in the diffusion of the ability to
attack critical infrastructure, to less responsible and less deterrable
actors who may calculate that it is in their interest to launch a cyber
attack against the United States. Attack capabilities could spread if
private hackers to independently discover the techniques currently
possessed by governments. Some members of the hacker community have
amazing capabilities. Another way attack capabilities could spread
would be for hackers who are government proxies in Russia and China to
``commercialize'' the skills and tools they have been provided for
official purposes. These proxies receive training and support from
military and intelligence agencies. They also participate in the cyber
crime black markets. The flow from government agencies to proxies to
the black market is likely, although it appears that governments still
reserve the most advanced attack technique to themselves.
It is difficult to assess how rapidly attack capabilities are
growing outside of governments, and the actual transmission mechanism
for cyber attack tools is unclear. For example, more than a decade ago,
foreign intelligence agencies had the ability to activate cell phones
and use them as listening devices even if they were turned off.
Variants of this technique appear to be entering the black market. We
do not know if it is because someone is commercializing a skill they
learned from government service or if it is an independent discovery.
People play with the technology and code--this is the original meaning
of hacking--and find how to do interesting things the designers never
intended or suspected were possible.
The most advanced exploits are still out of reach, however, for all
but large, well-resourced attackers. Stuxnet, for example, combined
deep engineering knowledge and clandestine intelligence techniques with
advanced hacking skills. Private hackers and most governments do not
yet have the capability to launch a Stuxnet-like attack (but this is
coming). That some of the Stuxnet code is publicly available does not
really increase risk. Many cyber attacks are ``single-use'' exploits
that work as a surprise but are much less effective after the target
reacts and adjusts. In the United States, for example, a 2010 survey
found that three-quarters of American utilities said they had put in
place defenses against Stuxnet. These utilities would most likely be
able to deflect a Stuxnet-like attack, while only the others would
still be vulnerable.
Stuxnet has increased risk as it has shown the world how to stage a
damaging cyber attack, but there are many options other than Stuxnet.
Unfortunately, even private hackers can exploit freely available
information on vulnerabilities and penetration techniques to attack
many commercial networks and the critical infrastructure connected to
them. Why use an advanced attack like Stuxnet when a simple attack will
work so well? There are tools that allow anyone to scan the internet to
find unprotected digital devices at critical infrastructure facilities
that connect control systems to the internet. You can scan for devices
that are improperly configured, devices such as wireless routers that
come from the manufacturer with the password set as ``password.'' It
does not take a mastermind to break into such systems.
These tools are widely available. Informal tests using these tools
can find several thousand insecure connections in the United States on
any given day. They provide a ``consumer version'' of the cyber
reconnaissance an advanced power would carry out in planning an attack
against the United States. Combine these publicly available
reconnaissance tools with attack tools available on the cyber crime
black market, and anyone with sufficiently advanced hacking skills will
be able to attack poorly defended critical infrastructure or other
commercial targets.
The diffusion and consumerization of attack capabilities is not the
only growing source of threat. We must also consider motivation and
intent, in addition to capability. The few nations that currently
possess advanced cyber attack capabilities are deterred by American
military force or they are our allies. Most cyber criminals only engage
in actions that generate income. Attacking critical infrastructure does
not generate income unless extortion is involved (by threatening to
disrupt services if the criminal is not paid). Cyber criminals have no
motive to launch a cyber attack unless they are acting as government
proxies or unless they have been hired as mercenaries.
This is where the nexus between the diffusion of attack
capabilities and intent become important. There are countries and
groups that would like to attack the United States and are not as
deterrable as our current adversaries. As nations and hackers develop
more sophisticated attack capabilities and as sophisticated attack
tools become available on the cyber crime black market, the threat of
attack is increasing.
We know that two countries hostile to the United States are
developing cyber attack capabilities. North Korea has been pursuing
cyber capabilities for more than a decade but the backwardness of its
economy has so far limited its success. North Korea lacks easy access
to advanced technologies. Its tightly controlled population is an
unlikely source of hackers, as North Koreans do not have the
independence and internet access hackers need to thrive. Technological
backwardness and political culture are major obstacles to developing
strong hacking capabilities, but, as with nuclear weapons, if North
Korea is able to support sustained investment in cyber attack
capabilities and find some outside support, it will eventually acquire
them. North Korea's erratic behavior suggests it will use cyber attacks
against South Korea, Japan, or U.S. forces in Korea, should it succeed
in its long quest to obtain a cyber attack capability.
Iran is a more troubling case. Iran has also been pursing the
acquisition of cyber attack capabilities for several years. Iran has
been for many years willing to attack U.S. forces and embassies in the
region, and FBI Director Mueller stated in recent testimony that Iran
is more willing to carry out attacks inside the United States.
Statements by Iranian officials show that they believe that the United
States, along with Israel, was responsible for the Stuxnet attacks and
suggest that they believe they would be justified in retaliating in
kind. Iran's attack capabilities are still limited but they have probed
Israeli networks in what appear to be tests. Iranian hackers have
greater access to the internet and to the cyber black market than North
Korea, suggesting that their development of cyber capabilities will be
more rapid.
Iran, even more than North Korea, could miscalculate the costs of a
cyber attack against the United States. Iran has groups that it
sponsors, like Hezbollah, that it has used in the past to attack
Americans. The Iranians may believe that these proxies will make it
difficult for the United States to attribute an attack and this will
reduce their perceptions of the risk of a cyber attack on American
targets. Iran routinely exaggerates its military capabilities and its
claims of cyber prowess are dubious, but there is a clear commitment
(as with nuclear weapons) by the regime to continue its efforts to
acquire the ability to launch cyber attacks.
Finally there are non-state, anti-American and activist groups that
already make extensive use of the internet. As cyber attack
capabilities become ``commoditized,'' the temptation for these
politically motivated groups to use them against vulnerable U.S.
targets will increase. We have not seen terrorist groups use cyber
attacks--they seem to have neither the capability nor the interest--but
since these groups make extensive use of the internet they could
eventually be attracted to cyber attack if the means to carry it out
are easily available. Some non-state actors are grouped under the label
``Anonymous,'' a disparate and decentralized federation of internet
activists where many members espouse anti-government or anti-American
ideas. The name ``Anonymous'' is misleading, however, as it implies a
single entity. Anyone can say they are ``Anonymous,'' from individuals
posting comments on 4Chan to members of foreign intelligence agencies
(for whom ``false flag'' operations are routine). In a few cases, it
appears that cyber criminals have used the name Anonymous when carrying
out their for-profit exploits.
These threats are all external, but greatest threat to America's
cybersecurity come from inside. This threat is complacency and it has
two sources. In the internet community, there are many who still
believe that the internet can heal itself, that civil society and
multi-stakeholder internet governance will ultimately provide adequate
security. They say that threats in cyber space are exaggerated and that
better cybersecurity puts privacy and the alleged virtues of an open
internet for innovation at risk. This is simply naive and outdated.
This sort of approach has never worked anywhere else, and it is not
working now in cyber space.
At the same time, business groups underestimate the threat we face
and continue to assert that some sort of disaggregated, voluntary
approach to cybersecurity, guided by better information sharing, will
be adequate to protect the Nation. This, of course, was the approach
adopted by the Clinton administration in 1998. It did not work then and
it does not work now. It will not work in the future when our opponents
are even more advanced and when we are even more dependent on cyber
space. Simplifying the regulatory and tax structure would be immensely
beneficial for our economy, but it is a non-sequitur to argue that
blocking mandatory standards for cybersecurity somehow compensates for
any over-regulation of commercial activities.
The future of threats in cyber space will involve the diffusion and
commoditization of attack capabilities. It will involve an increased
number of privacy breaches and the loss of intellectual property and
confidential business information. The situation is not static and
could change rapidly. There are a number of steps we could take to
reduce risk, but these steps face insurmountable political obstacles
that will not disappear until after a damaging cyber event. To prepare
itself for the inevitable, the committee may wish to ask for a
classified briefing on the best available intelligence estimate for
when America will experience a cyber attack.
Mr. McCaul. Thank you, Jim, for your testimony and your
service to the country on this important issue.
With that, the Chairman now recognizes Mr. Wilshusen.
STATEMENT OF GREGORY C. WILSHUSEN, DIRECTOR, INFORMATION
SECURITY ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Wilshusen. Chairman McCaul, Ranking Member Keating, and
Members of the subcommittee, thank you for the opportunity to
testify at today's hearing on cyber-based threats facing our
Nation. The increasing dependency of IT systems and network
operations pervades nearly every aspect of our society. In
particular, increasing network interconnectivity has
revolutionized the way our Government, our Nation, and much of
the world communicate and conduct business. While bringing
significant benefits, this dependency also creates
vulnerabilities to cyber-based threats. Today I will describe
some of those threats, vulnerabilities, and reported security
incidents affecting the Nation's systems.
But first, if I may, Mr. Chairman, I would like to
recognize several members of my team who were instrumental in
preparing this statement. One, Mike Gilmore, is behind me. Back
at the office Anjalique Lawrence, Lee McCracken, and Kristi
Dorsey played a pivotal role in developing these statements.
Mr. Chairman, the Nation faces an evolving array of cyber-
based threats. These threats can be intentional and/or
unintentional. Unintentional threats can be caused by software
upgrades or defective equipment that inadvertently disrupt
systems. Intentional threats can involve targeted and
untargeted attacks from a variety of sources. These sources, as
have been mentioned earlier, include foreign nations, criminal
groups, hackers, terrorists, and insiders. They vary in their
capabilities and their motives, which include seeking monetary
gain and pursuing an economic, political, or military
advantage. Moreover they have a variety of attack techniques at
their disposal, such as using malicious code, social
engineering, phishing, denial of service, and more
sophisticated attacks that can use a combination of these and
other techniques. The nature of these attacks vastly enhances
the reach and impact due to the fact that attackers do not need
to be physically close to victims and can more easily remain
anonymous.
The threat posed by cyber attacks is heightened by
vulnerabilities in Federal systems and networks. Specifically,
significant weaknesses in security controls continue to
threaten the confidentiality, integrity, and availability of
information systems supporting Federal operations.
Most major Federal agencies have significant deficiencies
in their information security controls. For fiscal year 2011,
18 of the 24 major Federal agencies reported inadequate
information system controls for financial reporting purposes,
and inspectors general at 22 of these agencies identified
information security as a major management challenge for their
agency. GAO and agency IGs have made hundreds of
recommendations to agencies to strengthen controls over their
systems.
We have also identified vulnerabilities and industrial
control systems that monitor and control sensitive processes
and physical functions supporting the Nation's critical
infrastructures. Federal agencies continue to report an
increasing number of cybersecurity incidents. Over the past 6
years, the number of incidents reported by Federal agencies to
US-CERT has risen nearly 680 percent, to almost 42,900 in
fiscal year 2011. These incidents include unauthorized access
and improper use of computing resources and the installation of
malicious software on systems. Reported attacks and
unintentional incidents involving Federal, private, and
critical infrastructure systems occur daily and demonstrate
that their impact can be serious.
For example, individuals could suffer privacy and financial
loss from identity theft and on-line scams. Private companies
could lose a competitive advantage or market value from the
cyber threat of intellectual property or business proprietary
information, and essential Government functions and critical
infrastructure services could be impaired or disrupted.
In summary, the cyber threats facing the Nation are
evolving and growing with a wide array of threat actors having
access to increasingly sophisticated techniques for exploiting
system vulnerabilities. The danger posed by these threats is
heightened by the weaknesses that pervade Federal information
systems and systems supporting critical infrastructures.
Ensuring the security of these systems is essential to limiting
potentially devastating consequences that imperil public health
and safety in our National and economic security.
Mr. Chairman, this completes my statement. I would be happy
to answer any questions.
[The prepared statement of Mr. Wilshusen follows:]
Prepared Statement of Gregory C. Wilshusen
April 24, 2012
gao highlights
Highlights of GAO-12-666T, a testimony before the Subcommittee on
Oversight, Investigations, and Management, Committee on Homeland
Security, House of Representatives.
Why GAO Did This Study
Nearly every aspect of American society increasingly depends upon
information technology systems and networks. This includes increasing
computer interconnectivity, particularly through the widespread use of
the internet as a medium of communication and commerce. While providing
significant benefits, this increased interconnectivity can also create
vulnerabilities to cyber-based threats. Pervasive and sustained cyber
attacks against the United States could have a potentially devastating
impact on Federal and non-Federal systems, disrupting the operations of
governments and businesses and the lives of private individuals.
Accordingly, GAO has designated Federal information security as a
Government-wide high-risk area since 1997, and in 2003 expanded it to
include protecting systems and assets vital to the Nation (referred to
as critical infrastructures).
GAO is providing a statement that describes: (1) Cyber threats
facing the Nation's systems, (2) vulnerabilities present in Federal
information systems and systems supporting critical infrastructure, and
(3) reported cyber incidents and their impacts. In preparing this
statement, GAO relied on previously published work in these areas and
reviewed more recent GAO, agency, and inspectors general work, as well
as reports on security incidents.
What GAO Recommends
GAO has previously made recommendations to resolve identified
significant control deficiencies.
cybersecurity.--threats impacting the nation
What GAO Found
The Nation faces an evolving array of cyber-based threats arising
from a variety of sources. These threats can be intentional or
unintentional. Unintentional threats can be caused by software upgrades
or defective equipment that inadvertently disrupt systems, and
intentional threats can be both targeted and untargeted attacks from a
variety of threat sources. Sources of threats include criminal groups,
hackers, terrorists, organization insiders, and foreign nations engaged
in crime, political activism, or espionage and information warfare.
These threat sources vary in terms of the capabilities of the actors,
their willingness to act, and their motives, which can include monetary
gain or political advantage, among others. Moreover, potential threat
actors have a variety of attack techniques at their disposal, which can
adversely affect computers, software, a network, an organization's
operation, an industry, or the internet itself. The nature of cyber
attacks can vastly enhance their reach and impact due to the fact that
attackers do not need to be physically close to their victims and can
more easily remain anonymous, among other things. The magnitude of the
threat is compounded by the ever-increasing sophistication of cyber
attack techniques, such as attacks that may combine multiple
techniques. Using these techniques, threat actors may target
individuals, businesses, critical infrastructures, or Government
organizations.
The threat posed by cyber attacks is heightened by vulnerabilities
in Federal systems and systems supporting critical infrastructure.
Specifically, significant weaknesses in information security controls
continue to threaten the confidentiality, integrity, and availability
of critical information and information systems supporting the
operations, assets, and personnel of Federal Government agencies. For
example, 18 of 24 major Federal agencies have reported inadequate
information security controls for financial reporting for fiscal year
2011, and inspectors general at 22 of these agencies identified
information security as a major management challenge for their agency.
Moreover, GAO, agency, and inspector general assessments of information
security controls during fiscal year 2011 revealed that most major
agencies had weaknesses in most major categories of information system
controls. In addition, GAO has identified vulnerabilities in systems
that monitor and control sensitive processes and physical functions
supporting the Nation's critical infrastructures. These and similar
weaknesses can be exploited by threat actors, with potentially severe
effects.
The number of cybersecurity incidents reported by Federal agencies
continues to rise, and recent incidents illustrate that these pose
serious risk. Over the past 6 years, the number of incidents reported
by Federal agencies to the Federal information security incident center
has increased by nearly 680 percent. These incidents include
unauthorized access to systems; improper use of computing resources;
and the installation of malicious software, among others. Reported
attacks and unintentional incidents involving Federal, private, and
infrastructure systems demonstrate that the impact of a serious attack
could be significant, including loss of personal or sensitive
information, disruption or destruction of critical infrastructure, and
damage to National and economic security.
Chairman McCaul, Ranking Member Keating, and Members of the
subcommittee: Thank you for the opportunity to testify at today's
hearing on the cyber-based threats facing our Nation.
The increasing dependency upon information technology (IT) systems
and networked operations pervades nearly every aspect of our society.
In particular, increasing computer interconnectivity--most notably
growth in the use of the internet--has revolutionized the way that our
Government, our Nation, and much of the world communicate and conduct
business. While bringing significant benefits, this dependency can also
create vulnerabilities to cyber-based threats. Pervasive and sustained
cyber attacks against the United States could have a potentially
devastating impact on Federal and non-Federal systems and operations.
In January 2012, the Director of National Intelligence testified that
such threats pose a critical National and economic security concern.\1\
These growing and evolving threats can potentially affect all segments
of our society--individuals; private businesses; local, State, and
Federal governments; and other entities. Underscoring the importance of
this issue, we have designated Federal information security as a high-
risk area since 1997 and in 2003 expanded this area to include
protecting computerized systems supporting our Nation's critical
infrastructure.\2\
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\1\ James R. Clapper, Director of National Intelligence,
Unclassified Statement for the Record on the Worldwide Threat
Assessment of the U.S. Intelligence Community for the Senate Select
Committee on Intelligence (January 31, 2012).
\2\ See, most recently, GAO, High-Risk Series: An Update, GAO-11-
278 (Washington, DC: February, 2011).
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In my testimony today, I will describe: (1) Cyber threats facing
the Nation's systems, (2) vulnerabilities present in Federal systems
and systems supporting critical infrastructure,\3\ and (3) reported
cyber incidents and their impacts. In preparing this statement in April
2012, we relied on our previous work in these areas. (Please see the
related GAO products in appendix I.) These products contain detailed
overviews of the scope and methodology we used. We also reviewed more
recent agency, inspector general, and GAO assessments of security
vulnerabilities at Federal agencies and information on security
incidents from the U.S. Computer Emergency Readiness Team (US-CERT),
media reports, and other publicly available sources. The work on which
this statement is based was conducted in accordance with generally
accepted Government auditing standards. Those standards require that we
plan and perform audits to obtain sufficient, appropriate evidence to
provide a reasonable basis for our findings and conclusions based on
our audit objectives. We believe that the evidence obtained provided a
reasonable basis for our findings and conclusions based on our audit
objectives.
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\3\ Critical infrastructures are systems and assets, whether
physical or virtual, so vital to our Nation that their incapacity or
destruction would have a debilitating impact on National security,
economic well-being, public health or safety, or any combination of
these.
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background
As computer technology has advanced, both Government and private
entities have become increasingly dependent on computerized information
systems to carry out operations and to process, maintain, and report
essential information. Public and private organizations rely on
computer systems to transmit sensitive and proprietary information,
develop and maintain intellectual capital, conduct operations, process
business transactions, transfer funds, and deliver services. In
addition, the internet has grown increasingly important to American
business and consumers, serving as a medium for hundreds of billions of
dollars of commerce each year, as well as developing into an extended
information and communications infrastructure supporting vital services
such as power distribution, health care, law enforcement, and National
defense.
Consequently, the security of these systems and networks is
essential to protecting National and economic security, public health
and safety, and the flow of commerce. Conversely, ineffective
information security controls can result in significant risks,
including:
loss or theft of resources, such as Federal payments and
collections;
inappropriate access to and disclosure, modification, or
destruction of sensitive information, such as National security
information, personal taxpayer information, or proprietary
business information;
disruption of critical operations supporting critical
infrastructure, National defense, or emergency services;
undermining of agency missions due to embarrassing incidents
that erode the public's confidence in Government; and
use of computer resources for unauthorized purposes or to
launch attacks on other computers' systems.
the nation faces an evolving array of cyber-based threats
Cyber-based threats are evolving and growing and arise from a wide
array of sources. These threats can be unintentional or intentional.
Unintentional threats can be caused by software upgrades or defective
equipment that inadvertently disrupt systems. Intentional threats
include both targeted and untargeted attacks from a variety of sources,
including criminal groups, hackers, disgruntled employees, foreign
nations engaged in espionage and information warfare, and terrorists.
These threat sources vary in terms of the capabilities of the actors,
their willingness to act, and their motives, which can include monetary
gain or political advantage, among others. Table 1 shows common sources
of cyber threats.
TABLE 1.--SOURCES OF CYBERSECURITY THREATS
------------------------------------------------------------------------
Threat Source Description
------------------------------------------------------------------------
Bot-network operators........ Bot-net operators use a network, or bot-
net, of compromised, remotely-controlled
systems to coordinate attacks and to
distribute phishing schemes, spam, and
malware attacks. The services of these
networks are sometimes made available on
underground markets (e.g., purchasing a
denial-of-service attack or services to
relay spam or phishing attacks).
Criminal groups.............. Criminal groups seek to attack systems
for monetary gain. Specifically,
organized criminal groups use spam,
phishing, and spyware/malware to commit
identity theft, on-line fraud, and
computer extortion. International
corporate spies and criminal
organizations also pose a threat to the
United States through their ability to
conduct industrial espionage and large-
scale monetary theft and to hire or
develop hacker talent.
Hackers...................... Hackers break into networks for the
thrill of the challenge, bragging rights
in the hacker community, revenge,
stalking, monetary gain, and political
activism, among other reasons. While
gaining unauthorized access once
required a fair amount of skill or
computer knowledge, hackers can now
download attack scripts and protocols
from the internet and launch them
against victim sites. Thus, while attack
tools have become more sophisticated,
they have also become easier to use.
According to the Central Intelligence
Agency, the large majority of hackers do
not have the requisite expertise to
threaten difficult targets such as
critical U.S. networks. Nevertheless,
the world-wide population of hackers
poses a relatively high threat of an
isolated or brief disruption causing
serious damage.
Insiders..................... The disgruntled organization insider is a
principal source of computer crime.
Insiders may not need a great deal of
knowledge about computer intrusions
because their knowledge of a target
system often allows them to gain
unrestricted access to cause damage to
the system or to steal system data. The
insider threat includes contractors
hired by the organization, as well as
careless or poorly-trained employees who
may inadvertently introduce malware into
systems.
Nations...................... Nations use cyber tools as part of their
information-gathering and espionage
activities. In addition, several nations
are aggressively working to develop
information warfare doctrine, programs,
and capabilities. Such capabilities
enable a single entity to have a
significant and serious impact by
disrupting the supply, communications,
and economic infrastructures that
support military power--impacts that
could affect the daily lives of citizens
across the country. In his January 2012
testimony, the Director of National
Intelligence stated that, among state
actors, China and Russia are of
particular concern.
Phishers..................... Individuals or small groups execute
phishing schemes in an attempt to steal
identities or information for monetary
gain. Phishers may also use spam and
spyware or malware to accomplish their
objectives.
Spammers..................... Individuals or organizations distribute
unsolicited e-mail with hidden or false
information in order to sell products,
conduct phishing schemes, distribute
spyware or malware, or attack
organizations (e.g., a denial of
service).
Spyware or malware authors... Individuals or organizations with
malicious intent carry out attacks
against users by producing and
distributing spyware and malware.
Several destructive computer viruses and
worms have harmed files and hard drives,
including the Melissa Macro Virus, the
Explore.Zip worm, the CIH (Chernobyl)
Virus, Nimda, Code Red, Slammer, and
Blaster.
Terrorists................... Terrorists seek to destroy, incapacitate,
or exploit critical infrastructures in
order to threaten National security,
cause mass casualties, weaken the
economy, and damage public morale and
confidence. Terrorists may use phishing
schemes or spyware/malware in order to
generate funds or gather sensitive
information.
------------------------------------------------------------------------
Source: GAO analysis based on data from the Director of National
Intelligence, Department of Justice, Central Intelligence Agency, and
the Software Engineering Institute's CERT Coordination Center.
These sources of cyber threats make use of various techniques, or
exploits, that may adversely affect computers, software, a network, an
organization's operation, an industry, or the internet itself. Table 2
provides descriptions of common types of cyber exploits.
TABLE 2.--TYPES OF CYBER EXPLOITS
------------------------------------------------------------------------
Type of Exploit Description
------------------------------------------------------------------------
Cross-site scripting......... An attack that uses third-party web
resources to run script within the
victim's web browser or scriptable
application. This occurs when a browser
visits a malicious website or clicks a
malicious link. The most dangerous
consequences occur when this method is
used to exploit additional
vulnerabilities that may permit an
attacker to steal cookies (data
exchanged between a web server and a
browser), log key strokes, capture
screen shots, discover and collect
network information, and remotely access
and control the victim's machine.
Denial-of-service............ An attack that prevents or impairs the
authorized use of networks, systems, or
applications by exhausting resources.
Distributed denial-of-service A variant of the denial-of-service attack
that uses numerous hosts to perform the
attack.
Logic bombs.................. A piece of programming code intentionally
inserted into a software system that
will cause a malicious function to occur
when one or more specified conditions
are met.
Phishing..................... A digital form of social engineering that
uses authentic-looking, but fake, e-
mails to request information from users
or direct them to a fake website that
requests information.
Passive wiretapping.......... The monitoring or recording of data, such
as passwords transmitted in clear text,
while they are being transmitted over a
communications link. This is done
without altering or affecting the data.
Structured Query Language An attack that involves the alteration of
(SQL) injection. a database search in a web-based
application, which can be used to obtain
unauthorized access to sensitive
information in a database.
Trojan horse................. A computer program that appears to have a
useful function, but also has a hidden
and potentially malicious function that
evades security mechanisms by, for
example, masquerading as a useful
program that a user would likely
execute.
Virus........................ A computer program that can copy itself
and infect a computer without the
permission or knowledge of the user. A
virus might corrupt or delete data on a
computer, use e-mail programs to spread
itself to other computers, or even erase
everything on a hard disk. Unlike a
computer worm, a virus requires human
involvement (usually unwitting) to
propagate.
War driving.................. The method of driving through cities and
neighborhoods with a wireless-equipped
computer--sometimes with a powerful
antenna--searching for unsecured
wireless networks.
Worm......................... A self-replicating, self-propagating,
self-contained program that uses network
mechanisms to spread itself. Unlike
computer viruses, worms do not require
human involvement to propagate.
Zero-day exploit............. An exploit that takes advantage of a
security vulnerability previously
unknown to the general public. In many
cases, the exploit code is written by
the same person who discovered the
vulnerability. By writing an exploit for
the previously unknown vulnerability,
the attacker creates a potent threat
since the compressed time frame between
public discoveries of both makes it
difficult to defend against.
------------------------------------------------------------------------
Source: GAO analysis of data from the National Institute of Standards
and Technology, United States Computer Emergency Readiness Team, and
industry reports.
The unique nature of cyber-based attacks can vastly enhance their
reach and impact. For example, cyber attackers do not need to be
physically close to their victims, technology allows attacks to easily
cross State and National borders, attacks can be carried out at high
speed and directed at a number of victims simultaneously, and cyber
attackers can more easily remain anonymous. Moreover, the use of these
and other techniques is becoming more sophisticated, with attackers
using multiple or ``blended'' approaches that combine two or more
techniques. Using these techniques, threat actors may target
individuals, resulting in loss of privacy or identity theft;
businesses, resulting in the compromise of proprietary information or
intellectual capital; critical infrastructures, resulting in their
disruption or destruction; or Government agencies, resulting in the
loss of sensitive information and damage to economic and National
security.
systems supporting federal operations and critical infrastructure are
vulnerable to cyber attacks
Significant weaknesses in information security controls continue to
threaten the confidentiality, integrity, and availability of critical
information and information systems used to support the operations,
assets, and personnel of Federal agencies. For example, in their
performance and accountability reports and annual financial reports for
fiscal year 2011, 18 of 24 major Federal agencies \4\ indicated that
inadequate information security controls were either material
weaknesses or significant deficiencies \5\ for financial reporting
purposes. In addition, inspectors general at 22 of the major agencies
identified information security or information system control as a
major management challenge for their agency.
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\4\ The 24 major departments and agencies are the Departments of
Agriculture, Commerce, Defense, Education, Energy, Health and Human
Services, Homeland Security, Housing and Urban Development, the
Interior, Justice, Labor, State, Transportation, the Treasury, and
Veterans Affairs; the Environmental Protection Agency, General Services
Administration, National Aeronautics and Space Administration, National
Science Foundation, Nuclear Regulatory Commission, Office of Personnel
Management, Small Business Administration, Social Security
Administration, and U.S. Agency for International Development.
\5\ A material weakness is a deficiency, or a combination of
deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the entity's financial
statements will not be prevented, or detected and corrected on a timely
basis. A significant deficiency is a deficiency, or a combination of
deficiencies, in internal control that is less severe than a material
weakness, yet important enough to merit attention by those charged with
governance. A control deficiency exists when the design or operation of
a control does not allow management or employees, in the normal course
of performing their assigned functions, to prevent, or detect and
correct, misstatements on a timely basis.
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Agency, inspectors general, and GAO assessments of information
security controls during fiscal year 2011 revealed that most major
Federal agencies had weaknesses in most of the five major categories of
information system controls: (1) Access controls, which ensure that
only authorized individuals can read, alter, or delete data; (2)
configuration management controls, which provide assurance that only
authorized software programs are implemented; (3) segregation of
duties, which reduces the risk that one individual can independently
perform inappropriate actions without detection; (4) continuity of
operations planning, which helps avoid significant disruptions in
computer-dependent operations; and (5) agency-wide information security
programs, which provide a framework for ensuring that risks are
understood and that effective controls are selected and implemented.
Figure 1 shows the number of agencies that had vulnerabilities in these
five information security control categories.
[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]
Over the past several years, we and agency inspectors general have
made hundreds of recommendations to resolve similar previously
identified significant control deficiencies. We have also recommended
that agencies fully implement comprehensive, agency-wide information
security programs, including by correcting weaknesses in specific areas
of their programs. The effective implementation of these
recommendations will strengthen the security posture at these agencies.
In addition, securing the control systems that monitor and control
sensitive processes and physical functions supporting many of our
Nation's critical infrastructures is a National priority, and we have
identified vulnerabilities in these systems. For example, in September
2007, we reported that critical infrastructure control systems faced
increasing risks due to cyber threats, system vulnerabilities, and the
serious potential impact of possible attacks.\6\ Specifically, we
determined that critical infrastructure owners faced both technical and
organizational challenges to securing control systems, such as limited
processing capabilities and developing compelling business cases for
investing in control systems security, among others. We further
identified Federal initiatives under way to help secure these control
systems, but noted that more needed to be done to coordinate these
efforts and address shortfalls. We made recommendations to the
Department of Homeland Security to develop a strategy for coordinating
control systems security efforts and enhance information sharing with
relevant stakeholders. Since this report, the Department formed the
Industrial Control Systems Cyber Emergency Response Team to provide
industrial control system stakeholders with situational awareness and
analytical support to effectively manage risk. In addition, it has
taken several actions, such as developing a catalog of recommended
security practices for control systems, developing a cybersecurity
evaluation tool that allows asset owners to assess their control
systems and overall security posture, and collaborating with others to
promote control standards and system security. We have not evaluated
these activities to assess their effectiveness in improving the
security of control systems against cyber threats.
---------------------------------------------------------------------------
\6\ GAO, Critical Infrastructure Protection: Multiple Efforts to
Secure Control Systems Are Under Way, but Challenges Remain, GAO-07-
1036 (Washington, DC: Sept. 10, 2007).
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In May 2008, we reported that the Tennessee Valley Authority's
(TVA) corporate network contained security weaknesses that could lead
to the disruption of control systems networks and devices connected to
that network.\7\ We made 19 recommendations to improve the
implementation of information security program activities for the
control systems governing TVA's critical infrastructures and 73
recommendations to address weaknesses in information security controls.
TVA concurred with the recommendations and has taken steps to implement
them.
---------------------------------------------------------------------------
\7\ GAO, Information Security: TVA Needs to Address Weaknesses in
Control Systems and Networks, GAO-08-526 (Washington, DC: May 21,
2008).
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In addition to those present in Federal systems and systems
supporting critical infrastructure, vulnerabilities in mobile computing
devices used by individuals or organizations may provide openings to
cyber threats. For example, consumers and Federal agencies are
increasing their use of mobile devices to communicate and access
services over the internet. The use of these devices offers many
benefits including ease of sending and checking messages and remotely
accessing information on-line; however, it can also introduce
information security risks if not properly protected. We have on-going
work to determine: (1) What common security threats and vulnerabilities
affect generally available cellphones, smartphones, and tablets; (2)
what security features and practices have been identified to mitigate
the risks associated with these vulnerabilities; and (3) the extent to
which Government and private entities are addressing security
vulnerabilities of mobile devices.
number of cybersecurity incidents reported by federal agencies
continues to rise, and recent incidents illustrate serious risk
Federal agencies have reported increasing numbers of security
incidents that placed sensitive information at risk, with potentially
serious impacts on Federal operations, assets, and people. When
incidents occur, agencies are to notify the Federal information
security incident center--US-CERT. Over the past 6 years, the number of
incidents reported by Federal agencies to US-CERT has increased from
5,503 incidents in fiscal year 2006 to 42,887 incidents in fiscal year
2011, an increase of nearly 680 percent (see fig. 2).\8\
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\8\ According to US-CERT, the growth in the number of incidents is
attributable, in part, to agencies improving detection and reporting of
security incidents on their respective networks.
[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]
Agencies reported the types of incidents and events based on US-
CERT-defined categories. As indicated in figure 3, the two most
prevalent types of incidents and events reported to US-CERT during
fiscal year 2011 were unconfirmed incidents under investigation and
malicious code.
[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]
Reported attacks and unintentional incidents involving Federal,
private, and critical infrastructure systems demonstrate that the
impact of a serious attack could be significant. These agencies and
organizations have experienced a wide range of incidents involving data
loss or theft, computer intrusions, and privacy breaches, underscoring
the need for improved security practices. The following examples from
news media and other public sources illustrate that a broad array of
information and assets remain at risk.
In April 2012, hackers breached a server at the Utah
Department of Health to access thousands of Medicaid records.
Included in the breach were Medicaid recipients and clients of
the Children's Health Insurance Plan. About 280,000 people had
their Social Security numbers exposed. In addition, another
350,000 people listed in the eligibility inquiries may have had
other sensitive data stolen, including names, birth dates, and
addresses.
In March 2012, it was reported that a security breach at
Global Payments, a firm that processed payments for Visa and
Mastercard, could compromise the credit- and debit-card
information of millions of Americans. Subsequent to the
reported breach, the company's stock fell more than 9 percent
before trading in its stock was halted. Visa also removed the
company from its list of approved processors.
In February 2012, the inspector general at the National
Aeronautics and Space Administration testified that an
unencrypted notebook computer had been stolen from the agency
in March 2011. The theft resulted in the loss of the algorithms
used to command and control the International Space Station.
In March 2012, a news wire service reported that the senior
commander of the North Atlantic Treaty Organization (NATO) had
been the target of repeated cyber attacks using the social
networking website Facebook that were believed to have
originated in China. According to the article, hackers
repeatedly tried to dupe those close to the commander by
setting up fake Facebook accounts in his name in the hope that
his acquaintances would make contact and answer private
messages, potentially divulging sensitive information about the
commander or themselves.
In March 2012, it was reported that Blue Cross Blue Shield
of Tennessee paid out a settlement of $1.5 million to the U.S.
Department of Health and Human Services arising from potential
violations stemming from the theft of 57 unencrypted computer
hard drives that contained protected health information of over
1 million individuals.
In January 2012, the Department of Commerce discovered that
the computer network of the Department's Economic Development
Administration (EDA) was hit with a virus, forcing EDA to
disable e-mail services and internet access pending
investigation into the cause and scope of the problem, which
persisted for over 12 weeks.
In June 2011, a major bank reported that hackers had broken
into its systems and gained access to the personal information
of hundreds of thousands of customers. Through the bank's on-
line banking system, the attackers were able to view certain
private customer information.
Citi reissued over 200,000 cards after a May 2011 website
breach. About 360,000 of its approximately 23.5 million North
American card accounts were affected, resulting in the
potential for misuse of cardholder personal information.
In April 2011, Sony disclosed that it suffered a massive
breach in its video game on-line network that led to the theft
of personal information, including the names, addresses, and
possibly credit card data belonging to 77 million user
accounts.
In February 2011, media reports stated that computer hackers
had broken into and stolen proprietary information worth
millions of dollars from the networks of six U.S. and European
energy companies.
In July 2010, a sophisticated computer attack, known as
Stuxnet, was discovered. It targeted control systems used to
operate industrial processes in the energy, nuclear, and other
critical sectors, reportedly causing physical damage. It is
designed to exploit a combination of vulnerabilities to gain
access to its target and modify code to change the process.
A retailer reported in May 2011 that it had suffered a
breach of its customers' card data. The company discovered
tampering with the personal identification number (PIN) pads at
its checkout lanes in stores across 20 States.
In August 2006, two circulation pumps at Unit 3 of the
Browns Ferry, Alabama, nuclear power plant failed, forcing the
unit to be shut down manually. The failure of the pumps was
traced to excessive traffic on the control system network,
possibly caused by the failure of another control system
device.
These incidents illustrate the serious impact that cyber threats
can have on Federal agency operations, the operations of critical
infrastructures, and the security of sensitive personal and financial
information.
In summary, the cyber threats facing the Nation are evolving and
growing, with a wide array of potential threat actors having access to
increasingly sophisticated techniques for exploiting system
vulnerabilities. The danger posed by these threats is heightened by the
weaknesses that continue to exist in Federal information systems and
systems supporting critical infrastructures. Ensuring the security of
these systems is critical to avoiding potentially devastating impacts,
including loss, disclosure, or modification of personal or sensitive
information; disruption or destruction of critical infrastructure; and
damage to our National and economic security.
Chairman McCaul, Ranking Member Keating, and Members of the
subcommittee, this concludes my statement. I would be happy to answer
any questions you have at this time.
Mr. McCaul. Thank you for your testimony.
The Chairman now recognizes Mr. McClure.
STATEMENT OF STUART MC CLURE, CHIEF TECHNOLOGY OFFICER, MC AFEE
Mr. McClure. Thank you Chairman, thank you Members. So . .
. I am the global CTO for McAfee. Ultimately I am responsible
for all the technology that comes out of the company and all
the protective measures that we put in place. But I also used
to run the labs within McAfee. The labs are responsible for all
malware that comes in and a quick turnaround to protect our
customers.
Now, when I was running the labs, it was probably about
2005-2006, we had upwards of about maybe 1,000 samples every
single day that came into our networks that we had to go and
respond to and build signatures and countermeasures for. Today
we receive 80,000 that must be responded to. These are unique,
these are malicious, and they are something that we have to
find protective countermeasures to.
This is a huge exponential problem that we have. If I had a
blank check to write to hire as many people as I wanted, to put
as many controls in place as I wanted, I could not do it to
respond to all of these threats. It is a huge, huge problem.
Another part of my background, I also wrote a very
successful computer security book called ``Hacking Exposed.''
The whole point behind the book was to expose how the hacker
thinks, how the hacker works and achieves its primary goals and
targets, and leaves very stealthily. That book has been very
successful in helping administrators understand, and ITs as
well, to understand how they work, because I do, really,
believe passionately that if you cannot understand how they
work, you will never be able to prevent them effectively. We
are starting to see that today.
Now, one thing I wanted to share with you is so many years
ago we used to talk mostly amongst us--I have been doing this a
long time, about 20-plus years--and we would say, well, at
least this cyber thing has not gotten to the physical world, it
can't really kill anybody. That was the idea. So we got to put
our heads down on the pillows and actually feel pretty good
about that.
But I can tell you right now, definitively, I can
personally kill somebody with my computer. I have already
demonstrated this potential many times, and it is something
that I want to make sure I get across, that the link between
cyber and physical is here.
Now, I am--the demo that I have done in the past has been
around, a particular insulin pump, okay, but it proves the
point, which is that given no connection to this particular
pump, I can overdose, okay, the insulin that is in there. This
is just indicative of the bigger and broader problem.
It became really personal for me when my friend, who is a
diabetic and has the exact pump, I asked him, hey, can I borrow
your pump real quick, I am just going to test it out, you know,
trust me, there is no problem here. He would not do it, he was
freaked out. He flat refused, and to be honest I think it
compromised a friendship in a way. But it drove home the point
for me, which is this stuff, the technology that helps people
either in biomed or otherwise protects and keeps people alive.
So it is something to think about as we go forward.
Now, we always talk about the threats basically in three
areas: Motivation, opportunity, and ability. Of course you have
heard a lot about the motivation, financial, ego-driven,
hacktivism, purpose, you name it, we see it all the time.
Opportunity. The big problem in this formula is the
opportunity. There are so many opportunities. The number of
devices are just exploding out there, and they are all
interconnected 24/7, everything from your mobile devices to
tablets to insulin pumps to critical infrastructure for that
matter. Also the vulnerabilities that are present on them are
growing all the time, and that is the core of the problem,
these vulnerabilities on the assets. The ability is only
getting better.
So every day, more and more people get smarter and smarter,
the tool kits get easier and easier to download and buy on-
line. It is those variables in that formula are the big
problem, and they are not going anywhere but up. So what we
have to do is think about it, I think, in a better way. So
information sharing is absolutely critical and key. I have been
talking about that for a long time. We have to be able to share
that valuable data. We can clear the privacy issues. I really--
I believe that it doesn't take much to allow the critical data
to be shared effectively in a timely manner.
But the other part that we have to think about is security
by design. This is the big problem. We develop software, we
develop hardware, and quite frankly no one--very, very few
think about security in that design process and in the
planning. It is that process that we have to try to instill in
the coming years to truly affect the core problem; otherwise,
all we are doing is affecting the symptoms. It would be like
taking a decongestant or a pain reliever when you have a cold,
rather than eating healthy and exercising and building your
immunity.
So with that, I want to say thank you very much for your
time.
[The prepared statement of Mr. McClure follows:]
Prepared Statement of Stuart McClure
April 24, 2012
Good afternoon Chairman McCaul, Ranking Member Keating, and other
Members of the subcommittee. I am Stuart McClure, Executive Vice
President and Worldwide Chief Technology Officer for McAfee. Thank you
for requesting my views on this important topic.
You asked me to focus on the cyber threat, so my testimony will
focus on threats to consumers, to intellectual property, and to
critical infrastructure. During my discussion I will attempt to
highlight the following points:
The world's continual drive to innovate has driven
unprecedented connectivity which has given rise to exploding
numbers of cyber threats and attacks.
The only way to definitively solve this problem--and it is
solvable--is through ``security by design.''
There are policy initiatives, such as enhanced information
sharing and other measures, that would dramatically help
respond to these threats.
First I would like to provide some background on my professional
experience and on McAfee.
As Global CTO, I work closely with senior leaders at McAfee to
ensure strong collaboration on customer requirements, knowledge
sharing, strategy, development efforts, advanced threat research, and
technology patents. Prior to joining McAfee, I held positions as
executive director of security services for Kaiser Permanente, a $34
billion health care organization; served as senior vice president of
global threats and research at McAfee Labs, where I led an elite global
security threats team; and was founder, president, and chief technology
officer of Foundstone, which was acquired by McAfee in 2004.
I have dedicated my entire professional life to the practice of
cybersecurity. My first book, Hacking Exposed, was published in 1999
and has been translated into more than 30 languages and has become the
definitive best-selling computer security book teaching the good guys
how the bad guys think and attack. I have demonstrated literally
hundreds of hacker techniques in front of live audiences for the better
part of 20 years, as I believe a picture is worth a 1,000 words and a
demo is worth millions.
mcafee's role in cybersecurity
McAfee, Inc. protects businesses, consumers, and the Government/
public sector from cyber-attacks, viruses, and a wide range of on-line
security threats. Headquartered in Santa Clara, California, and Plano,
Texas, McAfee is the world's largest dedicated security technology
company and is a proven force in combating the world's toughest
security challenges. McAfee is a wholly-owned subsidiary of Intel
Corporation.
McAfee delivers proactive and proven solutions, services, and
global threat intelligence that help secure systems and networks around
the world, allowing users to safely connect to the internet and browse
and shop the web more securely. Fueled by an award-winning research
team, McAfee creates innovative products that empower home users,
businesses, the public sector, and service providers by enabling them
to prove compliance with regulations, protect data, prevent
disruptions, identify vulnerabilities, and continuously monitor and
improve their security.
To help organizations take full advantage of their security
infrastructure, McAfee launched the Security Innovation Alliance, which
brings together more than 150 partners, large and small, to allow
organizations access into our extensible management platform and
thereby detect and prevent attacks in real time.
the double edge of connectivity
Today, we are always on and always connected. The world of
instantaneous communication and constant connectivity we have come to
take for granted is limited only by our powers of creativity and
innovation--and those seem to have no end. For years policymakers have
heard of the numerous benefits that this interconnected, always-on
world can and does bring to the areas of education, health and
medicine, energy, and transportation, as well as to individual well-
being and the American economy at large. Indeed, the Federal
Communications Commission has now redefined ``universal service'' from
a program designed to create universal telephone service, to a program
that will create Nation-wide high-speed broadband access. There is no
turning back from this path, nor should we want to.
The reality, however, is that this same world of connectivity also
creates risk. Risk is dictated by three factors: Opportunity,
motivation, and ability. If you are able to affect any one or more of
these factors, you reduce the overall risk. In today's environment, all
three factors--opportunity, motivation, and ability--are growing
inordinately.
Let me start with motivation. By now you have heard much about a
variety of criminal actors who are highly motivated--either by money,
National pride, religion, or some other compelling factor. These actors
have huge amounts to gain with hardly anything to lose; our laws and
penalties, in addition to our inability to enforce them, make cyber
crime extremely attractive and profitable. There are few real
deterrents to cyber crime and there is much to gain.
Add to this the fact that the level of ability of most cyber
criminals has increased dramatically from the days of the pimply
teenager working out of his garage. Now there are serious professionals
and even companies for hire. Simply put, attacks are relatively easy to
perform, leveraging thousands and even millions of computers to attack
a single target, creating virtual armies that are far less expensive
and more dynamic than physical armies. The tools and techniques are
well-documented, easy to find, and the range of a malicious individual
armed with a laptop and an internet connection surpasses that of any
ICBM.
Who has the opportunity? Certainly insiders--those with knowledge
of the organization and its most sensitive data and systems--have
optimum opportunity. But in the highly interconnected world, a cyber
attacker certainly does not have to BE inside an organization to GET
inside it. Indeed, almost any device that we use regularly--mobile
phone, tablet, laptop, thumb drive, automobile, and even a medical
device--is perfectly capable of letting an attacker inside. Anything
that you can connect to, or that can be connected to--through USB,
wired network connection, WiFi network connection, Bluetooth, RFID--is
enough to let a cyber criminal in.
Yet the other great reality about a world that is becoming
increasingly interconnected is the degree to which connected devices
are helping individuals address significant challenges, and many of
these challenges are highly personal. For example, diabetics can now
use insulin pumps that are connected wirelessly; homeowners can set
their burglar alarm or control the temperature of their homes remotely;
patients with heart conditions can stay home while doctors monitor
their conditions from their offices; students in rural areas can take
classes at major universities; motorists can have their car's door
locks unlocked from remote or be routed to their exact destination and
soon might be able to drive on smart highways.
This list is by no means exhaustive. Innovative companies have
every incentive to offer more and more goods and services addressing
the most fundamental needs of consumers while at the same time make
them more interconnected. This is a powerful market trend that will
continue in the future. But unless the devices are locked down and
secured by design, the cyber criminals will be given even more
opportunities to profit, plunder, and pillage.
the risk to individuals and consumers
Most consumers expect that when they go on-line, they will be safe,
their information will be private, and their kids will be protected as
long as they do not go on websites from which their parents have barred
them. But this is an illusion. For every control, there is a bypass.
The threats that individuals and consumers face run the gamut from
identity theft to loss of financial or personal information, to
infection of their systems and destruction of hardware, software, and
data. The advent of new mobile technology, particularly smartphones and
tablets, has opened up new attack vectors for hackers.
According to a recent House Science Committee witness from Idaho
National Labs, Dr. Rangam Subramanian, every key economic sector will
soon be dependent on wireless: Energy and power, public safety,
finance, health care, transportation, entertainment, and more. Yet for
all the convenience and innovation that wireless brings, it also
introduces even more opportunities for hackers.
Many Americans now engage in personal banking, shopping, and other
services by accessing Wi-Fi hot spots on their smartphones, which can
lead them directly into traps set by cyber criminals. And the wireless
revolution is only in its infancy. Cisco's U.S. mobile data forecast
projects that mobile data traffic will increase 16 times from 2011 to
2016 for a compound annual growth rate of 74 percent. By 2016, mobile
data traffic will be equivalent to four times the volume of the entire
U.S. internet in 2005. The United States is a leader in the area of
wireless innovation, and it is to our National advantage to have that
leadership continue. The key is to ensure that that innovation
incorporates security by design.
Following are just some of the most recent threats to consumers:
Social networking sites.--The social networking phenomenon has
overtaken pornography as the No. 1 internet activity and has brought
traditionally non-computer savvy users onto the internet in droves. As
an example, if Facebook were a country, it would be the 3rd largest in
the world with over 850 million users. And cyber criminals know this.
The attack surface area is large, but they might, for example, send
what appears to be a harmless video but when clicked on it downloads a
malicious virus.
Mobile devices.--While PCs remain the bigger targets, smartphones--
which of course are miniature, mobile computers--are quickly capturing
cyber criminals' attention, with instances of mobile malware increasing
by 600% from 2010 to 2011. McAfee Labs again saw the Android platform
firmly ensconced as the No. 1 target for writers of mobile malware.
However, it is a misconception that Mac platforms are invulnerable to
attack. As Apple recently learned with the Flashback Trojan, even their
MacBooks can be victims, with over 600,000 infections to date. The
hackers go where the numbers are, and the more ubiquitous iPhones and
iPads become, the more they will be targeted by hackers.
Mobile apps.--In 2011, apps that appeared legitimate were bundled
with malware and distributed over Google's Android Marketplace. Google
was able to remotely detect and delete more than 50 infected
applications from thousands of Android devices. Every day, consumers
download apps from unknown apps stores without a second thought. We
advise consumers to download apps only from well-known, reputable app
stores, check reviews and apps ratings before downloading them, read
the fine print to check what permissions the app is accessing, and
install a comprehensive mobile security product, including those from
McAfee or other vendors.
Phishing scams and IRS scams.--During the tax season, in
particular, hackers are known to conduct scams that involved phishing--
a way of attempting to acquire information such as usernames,
passwords, and credit card details by masquerading as a trustworthy
entity. Some criminal actors masquerade as the IRS or an entity closely
related to the IRS. We advise consumers never to respond to or click on
links within unsolicited emails requesting that they enter personal
data or visit a website to update account information--especially from
the IRS, as they do not send out emails to consumers.
Perhaps one of the most unsettling examples of individuals being
exposed to cyber attacks on a personal level entails the use of
personal medical devices. Recently a McAfee researcher identified a
security flaw in a wirelessly-enabled insulin pump, which allows the
device to be controlled by a hacker and subsequently administer a
potentially lethal dose of insulin to diabetes patients. While there
are several security holes in the device, the principal vulnerability
comes from the wireless connection between the glucose monitoring
system and the pump itself, which is vital to determining how much
insulin is dispensed.
Since that story was publicized, I've heard from several friends
who either used the pump in question themselves or whose child did.
When they asked me if their pumps--and thus their lives--were
vulnerable to cyber attack, I had to answer ``yes.'' Again, medical
device manufacturers are making great strides in reducing inconvenience
for individuals, yet at what price? Unless devices are built from the
ground up with security by design, the price could be high.
Another example is automobiles. Many security researchers have
noticed an alarming number of vectors of attack inside today's
increasingly computerized cars. They have discovered that cars are as
insecure as PCs were some 20 years ago, fraught with ways into the
system and vulnerabilities to attack. In fact, researchers from the
University of Washington and the University of California, San Diego,
have released findings over the past 2 years detailing how they could
not only open a locked car without the keys but they could remotely
penetrate a car's IVI (in-vehicle infotainment) system to then take
over control of much of the car's features, including disabling airbag
and brakes. Both these examples show that in our highly interconnected
world, you don't have to be sitting at a computer or holding a
smartphone to be vulnerable to cyber attack.
the risk to intellectual property
One of the most insidious types of threats to individuals,
corporations, organizations, Government agencies, and the economy as a
whole is the theft of intellectual property. Today, malware developers
combine web, host, and network vulnerabilities with spam, rootkits
(invisible malware that hides within authorized software in a
computer's operating system), spyware, worms (which target computers
rather than software programs but which can clog communications
bandwidth and overload computers or networks,) and other means of
attack. Malware also can be distributed indirectly by networks of
computers that have been corrupted by a criminal--known as a
``botnet,'' or a collection of compromised computers connected to the
internet.
Then there is the type of attack known as an Advanced Persistent
Threat (APT), which has received much attention recently. The APT is
essentially an insidious, persistent intruder meant to fly below the
radar screen and quietly explore and steal the contents of the target
network.
In the past 3 years, McAfee has uncovered numerous APTs affecting
tens of thousands of organizations worldwide. These attacks are
significant because they were managed by well-coordinated, organized
teams that succeeded in extracting billions of dollars of intellectual
property from leading global companies in the information technology,
defense, and energy sectors--strategic industries vital to any
country's long-term economic success and National security. These low-
profile attacks are often more dangerous than high-profile incursions
because they are a type of cyber espionage, providing silent, on-going
access to protected institutional information. And these APTs are not
limited in scope; they can affect any company, government body, or
nation, regardless of sector, size, or geography.
However, as the United States is the largest producer of
intellectual property in the world, we are an especially rich target.
The onslaught of increasingly sophisticated targeted attacks is
reflected in growing information breach statistics. A 2010 survey found
that 60 percent of organizations report a ``chronic and recurring
loss'' of sensitive information. The average cost of a data breach
reached $7.2 million in 2010 and cost companies $214 per compromised
data record, according to the Ponemon Institute. And that's just the
cost to respond internally to a data breach. If a company's
intellectual property is stolen, it could decimate an organization.
We do not have statistics for all of the IP breached, as
organizations can be reluctant to report IP theft, fearing that it will
cause customers and markets to lose confidence. Again, by building
products and systems that are secure from the ground up, these fears,
costs, and substantial drain of American competitive innovation could
be greatly reduced.
the risk to critical systems and infrastructure
As policymakers have begun to recognize, a cyber attack--or series
of cyber attacks--to the Nation's critical infrastructure could be
tremendously devastating to our way of life. Let's take the electrical
grid, by far the most vulnerable of our critical infrastructures.
Almost every aspect of American life depends on electricity--from
producing goods to saving lives, from defending the country to
conducting electronic banking and commerce, from simple communications
to feeding our families safely. Yet the systems used to manage our
electricity, the supervisory control and data acquisition, or SCADA
systems, are antiquated, running on commonly available operating
systems, and with their design having changed little since their
introduction decades ago. They were never designed or built securely,
and they certainly were not meant to be connected to the internet. And
even today, we find that many electric companies still use vendor-
supplied default passwords because they allow easy access in times of
crisis or for maintenance and repair.
A report by CSIS and McAfee interviewing executives in the energy
and power sector found that a large majority of them had reported cyber
attacks, and about 55% of these attacks targeted SCADA. In 2009, nearly
half of the respondents said that they had never faced large-scale
denial of service attacks or network infiltrations. By 2010, those
numbers had changed dramatically; 80 percent had faced a large-scale
denial-of-service attack, and 85 percent had experienced network
infiltrations. Meanwhile, a quarter of the interviewees reported daily
or weekly denial-of-service attacks on a large scale. A similar number
reported that they had been the victim of extortion through network
attacks or the threat of network attacks. Nearly two-thirds reported
they frequently (at least monthly) found malware designed for sabotage
on their system.
Attacks on systems like SCADA can give hackers direct control of
operational systems, creating the potential for large-scale power
outages or man-made environmental disasters. Yet in the United States,
many companies have not adopted security measures for their SCADA
systems, and many report their SCADA systems connected to IP networks
or the internet, making these systems even more susceptible to attacks.
What happens when there are multiple, simultaneous failures or
system manipulations in the electric grid? Industry experts acknowledge
that the grid is not currently equipped to handle this situation. While
the experts say that the odds of a natural event or a physical attack
creating this situation have been quite low, they are not prepared to
say that for cyber--which all agree is the threat most likely to give
rise to this kind of power failure.
What could happen? Imagine that cyber criminals have been gaining
access to various parts of the power grid for years. They have
infiltrated enough systems to make it possible to knock out power for
the entire Northeast grid. They launch an attack in winter and power
goes down throughout the area. Not only do people lose heat, light,
refrigeration, cooking facilities, communication, and entertainment,
but the systems that pump our water from reservoirs--and those that
purify the water in the reservoirs--are affected. No potable water,
perhaps no water at all, and no capacities for managing sewage.
Even if stores have back-up generators, they cannot order the
inventory because their systems are electronic. Banking comes to a halt
because funds can no longer move electronically. Gas stations can no
longer sell gasoline. Commerce effectively ends because order
fulfillment systems are down, payment systems are down, and
communication is down. Those consumers with phone service through the
internet--including those triple play plans offered by major
providers--are out of luck because their service is no longer over the
traditional land-line telephone network. Hospitals and medical centers,
which might also have independent generators, can care for only the
most critical patients, as they cannot check on patients' insurance
status or connect with the outside world electronically. While many of
these sectors have emergency back-up systems to enable them to maintain
operations during a power failure, those back-up systems are meant to
be temporary--not long-term.
I personally experienced something like this as a child living on
the island of Guam. A devastating and powerful typhoon knocked out
power for many weeks and we had to run back and forth between the
slowly moving water truck driving down the street and the house's
bathtub where we emptied the bucket and ran back. The memory of that
time is vivid, but it was not nearly as bad as it might have been had
the situation gone on longer.
security by design
Adding security features into systems after they have been
developed is a losing battle. Remember the sunroof of the 1980's? The
only way to get one was to get it installed aftermarket. Manufacturers
did not offer one as an option on new cars. And many of them leaked
badly. Today, every manufacturer offers a sunroof as an option to your
new car--and they never leak!
Cybersecurity has to be the same: It must be baked into the
equipment, systems, and networks at the very start of the design
process. Security must be intrinsic to an organization's thought
processes, its business processes, and its design, development, and
manufacturing processes. It must be embedded in a product or network
element so that it becomes an integral part of the product's or
element's functioning. This approach is not only more effective; it is
less cumbersome and less expensive than trying to lock down systems
that are inherently insecure.
policy recommendations
Given the level of the cybersecurity threat, the Government has a
legitimate interest in ensuring that our country is protected from
cyber attacks. The first order of business must be for the Government
to fully protect its own institutions, and we support rapid passage of
FISMA reform legislation. The Government also has an obligation to work
with our companies and citizens to improve the level of security at
work and in the home. I believe that positive incentives are superior
to regulation in achieving the desired National outcome: A cyber-secure
Nation. Using positive incentives rather than negative ones, such as
Government mandates, is the most effective way to drive higher levels
of trust and actual cooperation between the private sector and
Government--all vital to producing real success. Having the private
sector fully commit--customers and vendors of IT products and
services--to the principles and implementation of security by design
will do much to help make our country more secure in the future.
There are a variety of legislative approaches focused on positive
incentives in play right now that I believe can make a major
contribution to addressing our country's cybersecurity challenges. Many
of the recommendations of Representative Thornberry's (R-Texas)
Cybersecurity Task Force are a step in the right direction in that they
address a wide range of incentives such as information sharing,
insurance reforms, and tax credits. And over the past few years there
has been good bipartisan collaboration on a number of cyber
initiatives, including additional investment in cybersecurity research
and FISMA reform, to name just a few.
In this same spirit, better information sharing would be
particularly effective in encouraging the kind of public-private
partnerships we need to move forward in cybersecurity. There have been
several proposed Government solutions, and many of them share McAfee's
goal that Government facilitate collaboration and encourage trusted
working relationships to the benefit of all parties in the internet
ecosystem.
Better enabling information sharing is critical for addressing the
cyber threat. This would help organizations execute with the alacrity
shown by our cyber adversaries, as previously described. There are also
other positive incentives that can help address some of our Nation's
fundamental challenges--challenges in hiring the right type of
cybersecurity experts, regulatory disincentives, economic
disincentives, and the immaturity of the insurance market, which has
limited the growth of the kind of insurance programs needed for
companies to insure against catastrophic losses:
Litigation/Legal Reform.--Imposing limitations on liability
for damages as well as for non-economic losses would remove a
serious obstacle to information security investments--i.e., the
risk of losses for which responsibility is assigned
notwithstanding a company's good faith investments in adequate
information security. Eliminating that risk, at least for
companies that meet high, ``best practices'' security
standards, would encourage more security on a company-by-
company basis. This approach can help create positive
incentives for disclosure through liability relief for
responsible organizations to improve the Nation's overall
cybersecurity posture.
Competitions, Scholarships, and Research and Development
Funding.--Cybersecurity competitions and challenges, as well as
scholarship and creativity to programs, can help identify and
recruit talented individuals to the field to augment the future
cybersecurity workforce. Similarly, research and development
grants foster innovation and advance basic and applied
solutions. Recognizing this, several legislative proposals
under consideration contain provisions designed to help
industry meet the cybersecurity challenges of tomorrow and
train the next generation of experts.
Tax Incentives.--Accelerated depreciation or refundable tax
credits are being considered to encourage critical
infrastructure industries to make additional investments in
cybersecurity technologies, solutions, and human capital. The
same approaches could be effectively applied to small
businesses. Despite the current environment where balancing the
budget is a critical priority, we cannot afford to be
shortsighted. Cybersecurity-related tax incentives would prove
to be a legitimate, long-term investment in security that would
protect our National security and economic interests.
Insurance Reforms.--Many companies defer investments in
improved security out of a concern that, even with improved
security, they are not protected from liability for losses that
occur. Similarly, insurance carriers are reluctant to create a
vigorous marketplace for cybersecurity insurance, thereby
hindering investment. Government should give consideration to
implementing reinsurance programs to help underwrite the
development of cybersecurity insurance programs. Over time,
these reinsurance programs could be phased out as insurance
markets gained experience with cybersecurity coverage.
conclusion
As Global CTO for the world's largest dedicated security company, I
carry a heavy burden, but one to which I have dedicated my entire
career: To protect the world from cybersecurity attacks. But I stay
focused on this task because I believe I can make a difference to
provide a safer world for our children.
Thank you for giving me the opportunity to take part in this
hearing on behalf of McAfee. The cybersecurity challenge faced by our
country is a serious matter that requires an evolution in the way in
which both the public and private sectors collaborate. Each sector has
its own set of core capabilities. Only the Government can implement the
complex set of organizational and policy responses necessary to counter
the growing cybersecurity threat. Leading information technology
companies and their customers are uniquely positioned to act as early
warning systems that can identify and help address cybersecurity
attacks. Information technology companies focused on cybersecurity, in
particular, have the resources and the economic incentives to continue
to invent and develop the technologies and solutions needed to stay
ahead of sophisticated cyber attackers. Aligning Government incentives
with a National objective of achieving security by design in all of our
systems is consistent with the best American tradition of
collaboration. The public and private sectors have made important
strides to address the cybersecurity challenge. As we work together to
further evolve our collaboration models, we can succeed in protecting
our homeland from the threat of cyber attacks.
Mr. McCaul. Thank you Mr. McClure. I agree with you that I
think we have made the jump from virtual to physical as well.
With that, the Chairman recognizes Dr. Flynn for his
testimony.
STATEMENT OF STEPHEN E. FLYNN, FOUNDING CO-DIRECTOR, GEORGE J.
KOSTAS RESEARCH INSTITUTE FOR HOMELAND SECURITY, NORTHEASTERN
UNIVERSITY
Mr. Flynn. Thank you very much Mr. Chairman, Ranking Member
Keating, Ranking Member Thompson. It is an honor to be before
you all, distinguished Members of the subcommittee. I would
like to build on the conversation we have had already today,
the testimony we have already had today, and essentially assign
an explanation point I think to the risk.
As I see it, this subcommittee certainly well understands
the serious nature of the challenge, but we really have as a
country not stepped up to this risk.
I want to share with you a scenario that was actually
developed by the National Institute of Standards and
Technology, the NIST, in an attack on the U.S. electric grid to
kind of drive home the stakes involved with this. According to
the NIST study, they provide the following scenario. Using war
dialers, simple computer programs that dial consecutive phone
numbers looking for modems, an adversary finds modems connected
to programmable breakers of the electric power transmission
control systems, they crack the passwords that control access
to the breakers and change the control settings to cause local
power outages and damage equipment. The adversary lowers the
settings from 500 amps to 200 amps on some circuit breakers,
taking those lines out of service, and then diverting power to
neighboring lines. At the same time the adversary raises the
settings on the neighboring lines to 900 amps which prevents
the circuit breakers from tripping, plus overloading the lines.
This causes significant damage to transformers and other
critical equipment, resulting in lengthy repair outages.
This is not a particularly sophisticated attack and it can
be carried out remotely by anybody with anonymity. The harm it
could cause will be far beyond the disruption of service and
the loss of data. When you can successfully disable a portion
of the power grid, you can generate cascading consequences.
When transformers fail, so too will water distribution, waste
management, transportation, communications, and many emergency
Government services. People who take medicines that require
refrigeration will quickly face the prospect of going without
those drugs.
Given the average of a 12-month lead that is required to
replace a damaged transformer today with a new one if we had a
mass damage of that scale in a local regional level, the
economic and societal disruption would be enormous.
There are lots of potential target or opportunity, as Mr.
McClure laid out. We have a power grid that operates with 5,300
power plants that, combined, produce 1,075 gigawatts that is
moved from power plants to 140 homes and businesses via 211
miles of high-voltage transmission lines and thousands of
substations.
Again, the cyber world and the physical world is here. The
things that we are talking about messing with are things that
we rely on and largely take for granted. The issue is primarily
that these attacks can go after the industrial control systems
that are central to their operation. As these vulnerable
industrial control systems are used remotely to manage
everything from waste, water, oil pipelines, refineries, and
power generation plants, transportation systems, mass transit
to maritime port operations, an attack on these systems can
produce not only a catastrophic disruption, but destruction,
loss of life. Here we really need to wake up and recognize that
we have a problem that hackers cannot only break into systems
but take control of them. Doing things like turning off alarms
or sending bad data to falsely trigger alarms can essentially
cause the kind of mischief we just heard Mr. McClure can do
with an insulin device.
So, given this urgency, flashing back to my own career in
the Coast Guard, the model should be ``all hands on deck.'' But
I would argue that to date, American universities and academic
institutions have been largely left on the sidelines. We talk
about private-public, but we fail to engage the various
institutions that are involved in developing so many of these
technologies and developing the culture which we have to
operate in, for better or for worse. Universities, I would
argue, can play a key role in helping us to move forward in the
face of this risk. They can offer expertise to play an honest
broker role between the private and public sectors.
Universities can bridge that expertise and trust gap by its
convening of power and offering technical advice where it can
be helpful. They also can--another point Mr. McClure just made,
the importance of baking in cybersecurity. Universities have
been and will continue to be the incubators for information
technology and applications. The time for thinking about
incorporating safeguards is when they are under development,
not after they are being widely used by consumers and industry.
When security measures are an afterthought, they often end up
being costly and suboptimal.
Developing and maintaining standards that can mitigate
cyber threats, vulnerabilities, and consequences and help to
sustain or rapidly recover central functions and trust, needs
to become an organic part of critical infrastructures, systems,
and networks. Academic institutions need to be made an active
partner in that effort.
Finally, the need to develop a culture of cybersecurity. At
the end of the day, we are going to need young people involved
with this, and we have got a lot of them in the academic and
university world. We should go there to try to get them
involved, to be part of the solution, not potentially be a part
of the problem.
In conclusion, I would like to recommend to the committee
to consider really actively embracing some of the proposed
legislation that Ranking Member Keating has been advancing to
advance regional university-based cybersecurity research
centers ideally located in several places in part of the
country. We need to mobilize civil society, we need to mobilize
intellectual capital we have in this country to address this
very urgent problem.
Thank you very much Mr. Chairman.
[The prepared statement of Mr. Flynn follows:]
Prepared Statement of Stephen E. Flynn
April 24, 2012
Chairman McCaul, Ranking Member Keating, distinguished Members of
the subcommittee, thank you for the opportunity to testify about the
serious and growing cybersecurity threat facing consumers, industry,
and government at all levels in the United States. The significant
vulnerability of critical infrastructure such as the electric grid and
transportation infrastructure, information and financial systems, and
everyday American consumers to cyber threats is why today's hearing is
so timely and why urgent action by Congress is so needed.
My name is Stephen Flynn. I am the founding Co-Director of the
Kostas Research Institute for Homeland Security and professor of
Political Science at Northeastern University in Boston, Massachusetts.
I am also a member of the Homeland Security Project at the Bipartisan
Policy Center that is led by 9/11 Commission co-chairs Governor Tom
Kean and Congressman Lee Hamilton. The Nation's exposure to a growing
array of cybersecurity threats is one of deep concern to the co-chairs
and all the members of our group of distinguished National security and
homeland security leaders.
At the Kostas Institute, our mission is to help advance resilience
in the face of 21st Century risks so that America can better withstand,
nimbly respond, rapidly recover, and adapt to man-made and natural
disruptions. As such, we are working with our Northeastern colleagues
in the College of Computer & Information Science, College of
Engineering, and College of Social Sciences and Humanities to make
cybersecurity a primary area of focus. We are a particularly interested
in better safeguarding industrial control systems that are key to the
operation of much of the Nation's critical physical infrastructure.
The Kostas Institute is housed in a new 70,000-square-foot research
facility located in the heart of the metro-Boston high-technology
corridor where it provides a secure environment for innovative
translational research conducted by private-public-academic
multidisciplinary research teams. Northeastern is also home to the
Institute for Information Assurance, which is one of the National
Security Agency's (NSA) Centers of Excellence. In addition, the
university is a member, along with MIT, Harvard, Boston University, and
the University of Massachusetts, of the Advanced Cyber Security Center
hosted at the MITRE Corporation in Bedford, Massachusetts. Given the
historic leadership role that Northeastern, our neighboring
universities, and the information technology industry that is
concentrated in the metro-Boston area have played in high-tech
development, we feel a special responsibility to help manage, stem, and
mitigate the growing risks to critical systems from cyber threats. To
this end, we are committed to bringing together expert researchers and
practitioners to identify risks and their potential consequences, to
develop next-generation secure applications and computing architecture,
and to promote best practices with our counterparts around the United
States and globally.
nature of the cybersecurity threat
The cybersecurity threat is one of the most serious economic and
National security challenges we face as a Nation. Quite simply, the
United States is at risk of becoming a victim of its own success. Our
position as the world's dominant economic power can be attributed in no
small part to the speed at which Americans have developed and embraced
information technology systems and applications. But while we have been
leading and benefiting from the information age, there has been too
little consideration to the security implications of our growing
reliance on information technologies.
A particularly worrisome vulnerability is the extent to which over
the past decade, more and more Internet Protocol (IP) devices have been
replacing proprietary hardware, software, and communications protocols
for the Nation's physical infrastructure. As industrial control systems
(ICS) become increasingly accessible to the Internet, cyber attacks can
be launched at the electrical power grid; water and waste management
systems; oil pipelines, refineries, and power-generation plants; and
transportation systems ranging from mass-transit to maritime port
operations. An attack on these systems by a state or non-state actor,
not only places at risk the continuity of service or the compromise of
databases, but the potential for catastrophic loss of life and
destruction of property. This is because computer hackers are not only
able to infiltrate systems, but they are increasingly in a position to
actually take control of such systems--turning off alarms or sending
bad data that falsely triggers an alarm. Unfortunately, bad actors need
not be terribly sophisticated in order to accomplish substantial harm.
Because of the interconnectivity of our networks, successful disabling
of just one critical system can generate cascading consequences across
multiple systems.
The U.S. power grid is particularly vulnerable to the risk of cyber
attacks and given the reliance on power by all other sectors, it
deserves special and urgent attention. As with other large and
disbursed infrastructures that make up America's critical industrial
landscape, managing the electric grid depends on the operation of
supervisory control and data acquisition (SCADA) systems and
distributed control systems (DCS). SCADA systems make it possible to
control geographically dispersed assets remotely by acquiring status
data and monitoring alarms. Based on the information received from the
remote station control devices, automatic or operator-driven
supervisory commands can be provided from a centralized location. These
field devices can perform such functions as opening and closing
breakers and operating the speed of motors based on the data received
from sensor systems. Distributed control systems (DCS) are typically
facility-centric and used to control localized industrial processes
such as the flow of steam into turbines to support generation of power
in an electric plant. DCS and SCADA systems are networked together so
that the operation of a power generation facility can be well-
coordinated with the demand for transmission and distribution.\1\
---------------------------------------------------------------------------
\1\ U.S. Department of Commerce. Guide to Industrial Control
Systems (ICS) Security, (Special Publication 800-82, Jun. 2011) by K.
Stouffer, J. Falco and K. Scarfone.
---------------------------------------------------------------------------
When most industrial control systems (ICS) were originally
installed to help operate components of the power grid, they relied on
logic functions that were executed by electrical hardware such as
relays, switches, and mechanical timers. Security generally involved
physically protecting access to the consoles that controlled the
system. But, over time, microprocessors, personal computers, and
networking technologies were incorporated into ICS designs. Then in the
late 1990's, more and more Internet Protocol (IP) devices were embraced
so as to allow managers to gain better access to real-time systems data
on their corporate networks. These networks are, in turn, often
connected to the internet. The inevitable result of this increased
reliance on standard computers and operating systems is to make ICS
more vulnerable to computer hackers.\2\
---------------------------------------------------------------------------
\2\ Ibid.
---------------------------------------------------------------------------
Tampering with DCS and SCADA systems can have serious personal
safety consequences since industrial control systems directly control
assets in the physical world. According to a June 2011 report by the
National Institute of Standards and Technology (NIST), cybersecurity
breaches of industrial control systems could include unauthorized
changes to the instructions, commands, or alarm thresholds that result
in disabling, damaging, or shutting down key components. Alternatively,
false information about the status of systems can be sent that cause
human operators to make adjustments or to take emergency actions that
inadvertently cause harm. If a cyber attack leads to a power-generating
unit being taken off-line because of the loss of monitoring and control
capabilities, it could result in a loss of power to a transmission
substation, triggering failures across the power grid if other
substations are not able to carry the added load. The resultant
blackouts would affect oil and natural gas production, water treatment
facilities, wastewater collection systems, refinery operations, and
pipeline transport systems.\3\
---------------------------------------------------------------------------
\3\ Ibid.
[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]
Source: Department of Homeland Security.\4\
---------------------------------------------------------------------------
\4\ National Aeronautics and Space Administration. NASA Science
News. Severe Space Weather--Social and Economic Impacts. June 2009 at
http://science.nasa.gov/science-news/science-at-nasa/2009/
21jan_severespaceweather/.
---------------------------------------------------------------------------
A possible scenario hypothesized by the NIST is illustrative:
Using war dialers--simple computer programs that dial consecutive phone
numbers looking for modems--an adversary finds modems connected to the
programmable breakers of the electric power transmission control
system, cracks the passwords that control access to the breakers, and
changes the control settings to cause local power outages and damage
equipment. The adversary lowers the settings from 500 Ampere (A) to 200
A on some circuit breakers, taking those lines out of service and
diverting power to neighboring lines. At the same time, the adversary
raises the settings on neighboring lines to 900 A, preventing the
circuit breakers from tripping, thus overloading the lines. This causes
significant damage to transformers and other critical equipment,
resulting in lengthy repair outages.\5\
---------------------------------------------------------------------------
\5\ U.S. Department of Commerce. Guide to Industrial Control
Systems (ICS) Security, (Special Publication 800-82, Jun. 2011) by K.
Stouffer, J. Falco and K. Scarfone. 3-17.
When transformers fail, so too will water distribution,
transportation, communications, and many emergency and Government
services. Given the 12-month lead time typically required to replace a
damaged transformer with a new one,\6\ the local and regional economic
and societal disruption caused by a cyber attacks that that disable or
destroy the mechanical functioning of key components of the power grid
would be devastating.
---------------------------------------------------------------------------
\6\ National Aeronautics and Space Administration. NASA Science
News. Solar Shield--Protecting the North American Power Grid. October
26, 2010 at http://science.nasa.gov/sciencenews/science-at-nasa/2010/
26oct_solarshield/.
---------------------------------------------------------------------------
Beyond this exposure of long-standing industrial infrastructure to
cyber threats, there is a serious risk to the emerging computing
environment as well. As mobile devices, from smart phones to iPads have
proliferated, so too has mobile malware reflecting the painful reality
that security still receives insufficient attention by the private
sector responsible for rushing to market new informational technology
tools and applications. According to a March 2012 company survey
conducted at a major IT conference, 68 percent of security
professionals reported currently having no way of identifying known
mobile device vulnerabilities that could be affecting their
networks.\7\ Mobile devices are being targeted to steal users'
authentication credentials and financial information. Moreover, as new
social networks emerge, users tend not to appreciate the permanent
availability of data, which can facilitate hackers' identity theft and
identity cloning efforts. It is these growing ubiquitous links on the
internet that makes all Americans vulnerable to cyber threats that can
damage very practical aspects of our lives.
---------------------------------------------------------------------------
\7\ ``Mobile Device Vulnerability Management Flagged as Top Concern
for Security Professionals in 2012,'' Press Release by Tenable Press
Security (Apr 2, 2012) http://finance.yahoo.com/news/mobile-device-
vulnerability-management-flagged140900613.html.
---------------------------------------------------------------------------
the case for making universities full-fledged cyber security partners
The potential contribution of American universities and academic
institutions in advancing cybersecurity has been largely overlooked by
the Executive Branch. There are three reasons why this oversight must
be redressed.
(1) The need for expertise and for an honest broker to support
public-private partnerships.--Universities can help bridge the
expertise and trust gap between the public sector and private
sector in developing standards, and--when appropriate--
regulations. Universities can play this role by serving as
neutral conveners between the public and private sectors and as
arbiters of technical issues. Serving in this capacity should
be seen as attractive to both the private sector and public
sector, given the unique challenges for each associated with
advancing cybersecurity.
The private sector, left largely on its own, has struggled to
establish and enforce cybersecurity standards. In some
instances this is because the information asymmetry associated
with moral hazard; i.e., the developer of technologies and
applications pass along risks because the costs will be
disproportionately or wholly borne by the IT users that are
attracted to the benefits of the tool, but lack an
understanding of their resultant exposure to cyber threats and
the associated consequences. There is also the tragedy of the
commons dilemma arising from the fact that an entire system or
network can be compromised by an attack on its weakest link. If
compliance with a security standard is only voluntary, the
vigilant company must worry that one or more of its competitors
will find irresistible the temptation to forego the added cost
of adopting the measure in a bid to boost market share or
profits. As a result, the system remains vulnerable to
disruption even if the vigilant company places itself at a
competitive disadvantage by investing in the security measure.
The traditional way to deal with the problem associated with moral
hazard and the tragedy of the commons dilemma is by adopting
regulations that are well-enforced. But, effective regulations
largely depend on the public sector having the requisite
expertise to develop and oversee them. Unfortunately, in the
case of cybersecurity, the Federal Government continues to face
significant challenges with recruiting and retaining personnel
with the appropriate technical background. This is particularly
true of the Department of Homeland Security and other Federal
agencies outside the Department of Defense, the National
Security Agency, and the intelligence community.
Universities and the academic community should be enlisted to
assist in addressing this deficit. Universities can help the
private sector identify reasonable security options that can be
embedded into critical infrastructures without causing undue
disruption to dynamic and complex systems. Universities can
also provide the public sector with the expertise that
Government policy makers and officials need to keep up with the
rapid pace and the growing complexity of information
technologies and applications. Beyond the Office of University
Programs within the DHS Science and Technology Directorate,
Secretary Janet Napolitano has embraced the need for such
coordination with the university community by recently
establishing a Homeland Security Academic Advisory Council
(HSAAC). HSAAC has been created so that the Department has a
structured way to receive advice and input from university
leaders who voluntary serve on the Council, including
Northeastern University's President, Joseph E. Aoun. In 2011,
Secretary Napolitano has also created an Office for Academic
Engagement and appointed an Executive Director to serve within
her office.
(2) The imperative to ``bake-in'' cybersecurity.--Universities have
been and will continue to be incubators for information
technology and applications. The time for thinking about
incorporating safeguards is when they are under development,
not after they are being widely used by consumers and industry.
When security measures are an afterthought, they often end up
being costly and suboptimal. Developing and maintaining
standards that can mitigate cyber threats, vulnerabilities, and
consequences, and help to sustain or rapidly recover essential
functions and trust need to become an organic part of critical
infrastructures, systems, and networks. Academic institutions
need to be made an active partner in that effort.
(3) The need to develop a culture of cybersecurity.--Cybersecurity
needs to be embedded in our information-age culture. Everyone
needs to have a better understanding of cyber risks. This will
require collaborative efforts that actively engage civil
society, not just companies and Government agencies. There's no
better way to develop this culture than by starting with young
people who are attending academic institutions. An important
way to advance this is to integrate cybersecurity within and
across academic curriculums. Universities should be assigned a
prominent role in conducting research, developing courses, and
teaching as many informational technology users and providers
as possible about the cyber dangers that we face and the
security strategies and tactics that we need to embrace. The
goal should be to create a new generation of students with the
sophisticated skills to harness the opportunities of the
information age without becoming victims of its dark side.
the need for a coordinated research & development strategy
While pockets of knowledge exist about new and emerging cyber
threats and the techniques for better safeguarding systems from attack,
too many owners and operators of critical infrastructure continue to
embrace information-age tools, including wireless and mobile devices,
without adequately understanding the associated vulnerabilities and
consequences. Faced with significant resource constraints, the Federal
Government is largely trapped in the present, racing to respond to
known threats to critical assets, often at the expense of developing
the means to better anticipate new threats, to map out the associated
risks, and to devise appropriate responses. There is also a National
security imperative to develop offensive capabilities to deter or
respond to attacks by state actors. It's in these areas that academic
partners working together with industry and governments at all levels
can be particularly helpful.
I applaud Chairman Dan Lungren and the efforts by Ranking Member
Keating to introduce legislation that recognizes that preparing for and
combatting cyber warfare requires robust academic, industry, and
Federal research partnerships to design and implement secure systems
for critical infrastructure. Yet, to date, the Nation's cybersecurity
leaders have not yet fully engaged the academic research community in
this effort. Meanwhile, industry is focused more on the near- and
medium-term tasks of developing new products and applications. As the
National Academies have noted, it largely falls to the Federal
Government to play the indispensible role in sponsoring fundamental
research that is key to developing the information technology talent
that is used by industry and other parts of the economy. Chairman
Lungren's proposed legislation appropriately recognizes the vital
importance of a coordinated Federal program of research and development
to advance cybersecurity.
In 2010, the DoD-commissioned JASON Report, Science of
Cybersecurity, outlined the need to establish cybersecurity science-
based centers within universities and other research institutions.\8\
These Federally-funded centers would provide Government sponsors with
access to the regional clusters of innovative ideas and academic
experts while concurrently facilitating exposure by researchers to
agency experience and expertise in managing cyber threats to Government
networks. One priority should be to map the risk and potential
cascading consequences associated with cyber attacks on critical
physical infrastructure. A second priority should be to advance
research that can support the development of technology and automated
approaches to detect and mitigate attacks. And another priority should
be to enrich our understanding of the human and social aspects of
managing cyber vulnerabilities since advancing cyber security involves
much more than technical problems.
---------------------------------------------------------------------------
\8\ ``Science of Cyber-Security'' JASON, The MITRE Corp. JSR-10-102
(Nov 2010) http://www.fas.org/irp/agency/dod/jason/cyber.pdf.
---------------------------------------------------------------------------
regional university-based cybersecurity research centers
Since information and communications networks are largely owned and
operated by the private sector, regional university-based cybersecurity
research centers should be assigned the task of facilitating an
exchange among industry, Government, and academic partners to test data
and transition new ideas into the rapid adoption of research and
technology development innovations. Regional university-based centers
should be assigned as their primary mission, developing strategies to
improve the security and resilience of information infrastructure and
reducing the vulnerability, mitigating the consequences, and speeding
the recovery of critical infrastructure in the face of cyber attacks.
As a stepping-off point, these regional university-based research
centers should be tasked with working with U.S. National research
laboratories to develop a detailed profile of the physical-cyber risk
to the electric grid and developing options for mitigating that risk.
Understanding the technical elements of the cyber threat to the power
grid is a complex, multi-disciplinary challenge, that requires an
understanding of networking and protocols, software and machine
architecture, formal methods and high-performance computing,
nanotechnology, and quantum and compressive imaging, to name a few.
Implementing potential solutions will involve an intricate array of not
just technical tools, but appropriate procedural protocols, public
policy, and regulations. To accomplish this task, the Department of
Energy and the Department of Defense should actively support a directed
research program that involves a collaborative effort amongst the U.S.
National research laboratories, electric utilities, and the university-
based cybersecurity research community to simulate real-life
conditions, systems, and infrastructure, that would lead to the
discovery, testing, and analysis of state-of-the-art tools,
technologies, and software in a scientifically rigorous manner.
Concurrently, the research program should identify policy guidelines
and incentives for quickly integrating those tools, technologies, and
software into the power grid to bolster its resilience in the face of
the cyber threat. This effort should be undertaken with close
collaboration with Canada given the interconnected nature of the
regional grids in the East and West with the provinces of Canada.
economic drivers
Advances in networking and information technology are key economic
drivers, crucial to maintaining America's global competitive position
in energy and transportation, food and manufacturing, education and
life-long learning, health care, and National and homeland security. If
the recent past is a guide, these advances will also accelerate the
pace of discovery in nearly all other fields. In the end, capitalizing
on America's peerless standing in higher education by creating regional
university-based centers to advance cybersecurity, will provide a rich
return on investment for the Nation.
conclusion
Beyond the risk of a detonation of a weapon of mass destruction on
U.S. soil, no security challenge is currently more serious to the
United States than the on-going risk of cyber attacks. The security of
our public and private cyber networks is vital to assuring the
reliability of the electric grid, transportation systems, and banking
and financial systems, and consumers. Continued research collaboration
with academic and industry partners is an important function for the
Federal Government and vital to improving homeland security. Such
partnerships provide an important return on investment as Government
receives solutions tailored to its security needs, university partners
employ some of their best researchers and students in an effort to
develop new technologies, and the next generation of STEM professionals
get the skills and training they need to enter into homeland security
careers that benefit the Nation. I strongly recommend that this
subcommittee direct the Department of Homeland Security to build on
Secretary Napolitano's recent academic engagement efforts by more
actively incorporate university partners, including establishing
regional university-based cybersecurity research centers, to support
the DHS's efforts to develop public-private approaches to preventing,
responding, and recovering from future cyber attacks.
Thank you again for the opportunity to testify today. I would be
happy to answer any questions you may have.
Mr. McCaul. Thank you Dr. Flynn.
In fact, I offered an amendment, and Ms. Clarke was helpful
with that amendment, that would basically look at these
consortiums, university-based and fusion center. The bill that
I introduced, that passed unanimously out of the Science and
Technology Committee will be on the floor this Thursday, does
create a public-private partnership between the universities
and the public sector and the private sector in a task force.
So I think that is a step in the right direction.
I completely agree with your analysis on that point, that
universities can play such a critical role. We also have a
Federal scholarship program for service in the Federal
Government in that bill.
So with that, I just want to--one of the reasons we wanted
to have this hearing--we have historic legislation on the floor
on cybersecurity for the first time in many years, and we
wanted to call to the attention of the American people and to
Members of Congress as to what the real threat is. I have been
dealing with this issue for a long time, but I think it is
important that the American people, who most of them don't
understand this issue, have a better idea of what is at risk.
You know, when I look at the theft of intellectual property
to the tune of $1 trillion, that is a serious economic issue
for the United States; when I look at countries like China who
have stolen our Joint Strike Fighters, F-35 and F-22s, stolen
those blueprints so they can manufacture those planes and then
guard against those planes; when you look at China and Russia
who have hacked into every Federal agency in the Federal
Government, including the Pentagon.
You know, we talk about the analogy, agents of a foreign
power caught with paper files walking out with classified or
nonclassified information, it will be all over the papers. But
yet in the virtual world, that is happening and no one seems to
know or really pay attention to it.
Then the final piece. There is the espionage, the stealing
of military secrets, satellite technology, rocket technology
out of NASA, it is prevalent, it is everywhere; and when I look
at the cyber warfare piece, that is the one that keeps me up at
night the most.
As we know, the genie is out of the bottle, just like
nuclear weapons. It can be turned against us. We know what our
offensive capability is and it is pretty darn impressive. That
capability turned against us, I think is what frightens us, and
who would have the motivation to do that.
So my first question is to Mr. Henry. You said that we are
really just hitting the tip of the iceberg and that the biggest
threats are below the waterline. Can you expand on what these
bigger threats are beneath the tip of the iceberg?
Mr. Henry. Yes, sir. Thank you. Let me, if I could just
clarify my statement that I made about the sense of urgency. I
certainly recognize everything this committee is doing. My
concern is the holistic response of our society, public,
private, other Government agencies, and citizens themselves. So
I wanted to make sure that was clear. That was my concern.
When I talk about below the iceberg, I really talk about
what is being seen on the classified side. Certainly in this
environment, I can't go into details. But when you have people
like General Alexander from NSA, and General Hayden, former CIA
and NSA, and Admiral McConnell, the Director of National
Intelligence, Joel Brenner, the National Counterintelligence
Executive, when you have people, they have all seen below the
waterline. When they are standing up saying what they are
saying, I think people need to listen to that and understand
that when you have got the senior leadership of the Government
talking about how significant and substantial this threat is,
they have seen below the waterline, they have seen that big
piece of iceberg the average person just never gets to see.
What they hear about and see about in the media is really just
a very small portion. I think some of the witnesses here kind
of alluded to that and talked about some of the concerns about
SCADA systems, industrial control systems, some of the threats
to, as you mentioned, our cleared defense contractors. The
threats there are so voluminous and so large and the
implications--while certainly a threat of a credit card being
stolen is absolutely important and I recognize that--but when
you talk about the plans to our next generation weapon systems
and our adversary being able to prepare a defense today or to
build devices that can counter or actually exceed our
capabilities, that is a significant danger to this Nation and
people have to understand that.
Mr. McCaul. When we talk about cyber Pearl Harbor, and I
have the director of NSA telling me it is not a question of if
but when, where do you see the biggest threat coming from?
Mr. Lewis. I think it is two of the groups I mentioned, Mr.
Chairman. I don't worry about China and Russia. They are not
going to start a war just for fun. But I don't know if I would
say that for Iran or North Korea when they get the
capabilities. I know the full committee is going to have a
hearing on Iran on Thursday, but they have a little bit of a
grudge match. They feel like we are somehow responsible for
Stuxnet and they are trying to create a cyber army.
The other group to watch, and the group that is more
interesting that I think we have all raised, are these hacker
groups who have anarchic or anti-Government tendencies, very
strong cyber skills, some of them have excellent hackers
involved. There are so many vulnerabilities and there are so
many tools that eventually--you know, the line I always refer
to is a headline we saw last year about how Anonymous declares
war on Orlando, right? Well, what that meant was they defaced
the Orlando City website. Maybe a year from now they will be
able to do a little bit more, and I think we are on track to
find that out the hard way.
Mr. McCaul. Well, my concern with those groups is that they
sometimes may be--organized crime may be the real perpetrator,
but they take the credit for it and sort of provide a ruse.
I see my time is expired. I can ask a lot more questions,
but thank you for being here today.
With that, I recognize the Ranking Member Mr. Keating.
Mr. Keating. Thank you, Mr. Chairman.
Two things that were raised. The idea of incorporating
protections into the design work, and another issue that was
raised was the fact that you had companies that have been
victims of attack and haven't been forthright in acknowledging
what that is or the extent of it, what damages they had or what
happened.
I think those two things call into question again the role
that academia can play in this regard, being more neutral and
being part of design.
With that, I would like to ask Dr. Flynn what on-going
research projects are in place, not only in your university but
around the country that you are aware of? How can Congress act
to extend those and make that more beneficial in our efforts
against cybersecurity attacks?
Mr. Flynn. Thank you very much for your question, Ranking
Member Keating. It is probably a bit overstated to say they
have been missing in action, but it is not too much overstated.
I mean to a large extent, we really have not engaged our
academic community to work at this problem at the outset of it.
Clearly we have some infrastructure in place. The Department of
Homeland Security has centers of excellence that have been set
up, the National Security Agency has created similar kinds of
output. So you have some outreach to engage some of this
enormous intellectual capital we have. But we really haven't
gone into the universities and given the challenge, the kind of
things that we have done in past history where we have really
embraced that intellectual capital and focused it and channeled
it in a constructive way.
In our area of the country up in the Northeast, in fact,
five universities--Harvard, MIT, Boston University, University
of Massachusetts, and my own Northeastern University--have come
together with some private-sector players to build an advance
cybersecurity center. Some of the folks who were in on the
origin of helping to drive the information age feel some
responsibility to help work it. But to the extent that kind of
regional effort, we have clusters of expertise, and we have
them in Texas, we have them in Seattle, we have them in big
pockets across our country, the sense that we can harness that,
I think through regional efforts, will be an enormously
positive contribution, both to set the alarm, set the
challenge, engage folks and then ultimately to work toward some
solutions.
Mr. Keating. Thank you, Dr. Flynn.
You mentioned, and Mr. McClure mentioned, that there are
actual, now, transitions into physical danger; people can be
murdered. I wanted to first address this to Mr. Henry and then
anyone else that might want to comment on this.
But what can we do in Congress to--I am a former prosecutor
myself--what can be done to extend--I would imagine the
jurisdictional issues would be difficult even if you are
successful in finding out who is responsible for these actions.
But Mr. Henry, what can be done here in Congress to help that
effort, because it will help not only bring people to justice
that are responsible, but it would help as a deterrent as well.
I would imagine one of the things that is difficult in this is
finding a deterrent when people do this, because they might
feel that they are, in a criminal sense, judgment-proof or not
being able to prosecuted. So do you have any suggestions as to
what we can do in Congress in that regard?
Mr. Henry. Yes, sir. I think that you hit on it right
there. With the Computer Fraud and Abuse Act primarily, we are
looking at stiffening the penalties for the breaches and for
those who are stealing information. I think that the deterrence
is critical. I said that we have an adversary problem. These
are adversaries who are launching viruses, who are launching
Trojans, who are breaking into computers. There are people, and
by reaching out and touching these people and taking them off
the playing field, we are having an impact on the threat. It is
a way for us to mitigate the threat. Stiffer penalties that are
more rigorous, certainly from an enforcement perspective or an
investigation perspective, I think we will have a larger impact
and will raise the cost of adversaries for what they do on a
day-to-day basis.
Mr. Keating. What can we do in terms of international
cooperation in this regard? Because they can be launched from
any country, any jurisdiction.
Mr. Henry. Absolutely. Anybody, anywhere in the world with
an internet connection and a $500 laptop is a potential subject
in any investigation. The attribution, to who may have done
that type of attack, is a critical piece.
When I was in the FBI, we worked very, very closely with
foreign partners. The Bureau continues to do that, as well as
other agencies, where we actually put FBI agents into the
National police agencies of a number of countries in Eastern
Europe and Western Europe, physically sitting side by side,
working these investigations. I think we have to continue that
both from an intelligence-sharing perspective and from
collaborative investigations.
Mr. Keating. We have security treaties with other
countries. Can you see that being expanded in terms of
cybersecurity treaties with other countries around the world
and expanding that to a greater level?
Mr. Henry. I think that has got to be a constant dialogue.
I mean, this is a problem that doesn't face just the United
States. It faces good societies and good people around the
world. People are using this as a tool and as a weapon to
promote their means and to promote their criminal operations.
We have to have that dialogue regularly.
Mr. Keating. Thank you, Mr. Chairman.
Mr. McCaul. I thank the Ranking Member. The Chairman now
recognizes the Ranking Member of the full committee, Mr.
Thompson, for 5 minutes.
Mr. Thompson. Thank you very much, Mr. Chairman. I agree
with all of the comments that have been made relative to the
seriousness of this issue. I listened with great interest to
our panel of witnesses, and I am going to kind of ask for a
little more help from you with my questions.
If you were sitting in our seat, having to craft
legislation that would provide the tools that you think would
be necessary to get our hands around this issue, given what you
know and the seriousness of this issue, what two or three
things do you think that kind of cybersecurity legislation
would need? Mr. Henry, I will start with you.
Mr. Henry. The first one, for me, that I think is the most
critical is data breach reform, data breach reporting.
Currently there are, as the committee knows, I am sure, 47
State data breach laws. There is a lot of confusion that I see
in the private sector, from organizations that are breached, on
to whom to report and when to report. I think the failure to
report is a problem for all of us. I think that those
companies, those infrastructures in those organizations are
being used by our adversaries. They are part of the problem. If
that is not reported, if there is not some type of remediation
done, that continues to be a problem.
From my perspective, when I was in the FBI, in some of our
most successful cases where we were able to effectively reach
out across oceans and put our hands on people, it was really
the times when organizations came forward very quickly, which
enabled us to get attribution through analysis of their network
in collaboration with them. That is really, really critical. So
data breach reporting.
The second one is intelligence sharing, the ability for the
Government to share broadly across infrastructure, to help
raise the defenses, and to make organizations much more secure
by providing some of those signatures that are not necessarily
out in the hands of the general public but will enable critical
infrastructure and organizations as a whole to better protect
themselves.
Mr. Thompson. Mr. Lewis.
Mr. Lewis. Thank you. There are some very useful bills in
the House and they will do some good things. But the ultimate
test will be: Do you give the Government more authority to
mandate security, to protect critical infrastructure
facilities? If we don't do that this year, an attack is
inevitable. Now, I know that there is a lot of contention on
this issue, and I know there are questions about the ability of
some agencies to carry out this function. But the ultimate test
will be, do we require better security for critical
infrastructure? If the answer is no, the Congress will have
failed.
There are good things on the information-sharing side, on
the research side, but the ultimate test is critical
infrastructure.
Mr. Thompson. Mr. Wilshusen.
Mr. Wilshusen. I would also echo what each of my colleagues
have mentioned, but I will also talk to clearly define what the
roles and responsibilities of the Federal agencies are in
Federal Governments with respect to not only protecting and
securing its own systems but also the support and assistance
they can provide to the private sector and protecting
particularly critical infrastructure sectors.
Mr. McClure. I agree on the information sharing. I think it
is absolutely key. But the only downside is that it is very
reactive. The proactive side of it would be to really think
about, how do you provide guidelines, either incentives or
mandates, around secure by design? You know, a power plant
might not be able to control how a PLC is designed from
Germany, but they can absolutely not buy that PLC if it is not
secure. So it is up to them, and I think we can provide better
guidance, sir, on that.
Mr. Flynn. Everything I have heard so far are things that I
would endorse. I would certainly endorse the legislation, Mr.
Chairman, you are trying to advance as well with the Ranking
Member.
I would add, one of the areas that we really need to do a
better job at the risk mapping; particularly across
infrastructure, we have got a sector-by-sector approach. When
you hit one, what we don't have is a very good understanding of
how the loss of that one could impact on others. So I know the
Department of Energy is looking into this. But this is
something, I think with legislative support, let's map what the
consequences are of these attacks. That is a great motivator
for people to get into the prevention mode. I think that could
be very important.
The other key area I think is, err on the side of openness.
The hearing is doing, I think, a great public service. But a
lot of the approach we have taken to date is work that is below
the surface. You are not going to get the American people
willing to invest, companies willing to invest, unless we talk
about the problem with greater candor and with more
specificity. I think we need to essentially err on the side of
being more open about the risk to vulnerabilities, but
obviously develop solutions for attacking these problems. Thank
you.
Mr. Thompson. Thank you. I yield back, Mr. Chairman.
Mr. McCaul. I thank the Ranking Member.
The Chairman now recognizes the gentleman from Missouri,
Mr. Long.
Mr. Long. Thank you. Thank you all for taking your time to
be here today on this important subject. I would be remiss, Dr.
Flynn, if I didn't mention that for the last few months, I have
had a young lady from your university, Northeastern, interning
in my office. If she is emblematic of your university and of
college students today, I would say that this country has a
very bright future.
Mr. Flynn. They are all exactly like her.
Mr. Long. All righty. Send me some more, will you?
In 1941, my dad was a junior in high school. So he and
people of his vintage can tell you where they were during the
attack on Pearl Harbor. I can tell you where I was when JFK got
assassinated. I can also tell you where--most people 16 years
and older can probably tell you where they were on 9/11. We all
remember that. I think I can predict with great certainty where
I will be when we have our first devastating cyber attack. I
have two options: I will either be in a full committee hearing
on cybersecurity or a subcommittee on cybersecurity. We are
good at talking things to death. It seems like we go over this
again and again and again, but I have yet to really have anyone
add any concrete steps that we can take to prevent such a
horrific attack.
So, Mr. Lewis, if I were to ask you--I heard one a minute
ago--but your top three priorities or things that we can do,
take to the Congress to try to address this situation, because
we keep talking it and talking it and talking it. The top three
things that we can do. Just pick out three things that you
think are the most vital that we can truly make an impact on
this situation at preventing cyber attacks.
Mr. Lewis. You know a lot of the legislation that is before
the House and before the Senate does good stuff, but it doesn't
do enough. So we have got to think about a comprehensive
approach. For me, the most important step that we are not
taking is thinking about how to deal with the issues of
critical infrastructure vulnerability. The difference between
now and, say, 5 years ago--5 years ago, it was difficult to say
how to secure networks. Now I think we can tell you how to
secure networks. People will not do it, though, unless----
Mr. Long. Let me ask you--let me interrupt you for a
second.
Mr. Lewis. Sure.
Mr. Long. Before I came to Congress I was in a business
where there was a large group of people that all needed to
access, from several different companies, but access the same
information on the internet. We would carry a fob with us that
had--I think it was a nine-digit number and that number would
change about every 90 seconds. So if you wanted to log onto
your computer--systems like that, would those be beneficial on
a wider scale, or not?
Mr. Lewis. Remember, what was it, last year we had a story
about--it was a false story but people got all excited because
they thought that Springfield, Illinois, had their water system
hacked. That turned out to be not true. But the story behind it
was actually a little scarier, because they weren't hacked. The
contractor was calling in from Russia. I thought to myself,
``That is bad in so many ways, right?'' So yes, having a
requirement for people to better authenticate themselves when
they log into critical infrastructure networks would be a good
step. There are other things we can do. But right now----
When I told you about this search software that would find
vulnerabilities, the easiest vulnerability to find is--you all
know when you have bought a computer, when you have bought a
router, that it comes configured with the username as
``administrator'' and the password is ``password.'' If you go
out and look at critical infrastructure, you will find some
networks have not been reconfigured. So getting people to
reconfigure, getting people to better authenticate, getting
people to think about what they have attached to their systems,
all of these would make a big difference.
When you talk to companies and you say to them, ``Do you
have your control systems connected to the internet?'' Almost
all of them say no, right? When they say that, they believe it.
Now it turns out they are always wrong, right, they don't know
because these are a lot of computers. Nothing malicious here.
But getting people to have a better understanding of what is
connected to the internet, how it connects, and who can use it,
these are all things we can do, but it won't happen magically.
So that is where Congress could make a very big difference.
Mr. Long. Okay. You were talking about Springfield,
Illinois, a false story out of there.
Springfield, Missouri, my hometown. I have said this before
in committee hearings. But we had a small title loan company
that, over the weekend, had $440,000 removed from their account
and it went to Pakistan, which we don't know if it went on to
benefit al-Qaeda or what from that point.
But one real quick wrap-up question for Mr. Henry: Why am I
concerned if it is China, Russia, Iran, why do I care where
these attacks come from? Don't we need to be concerned with
combating the problem more than where it is coming from?
Everybody goes back to where it might be coming from.
Mr. Henry. Well, sir, I think that it is really important
for us to understand who the adversary is so we can take other
actions. I say that we have an adversary problem. I think there
are things we can do as a Government to define for the
adversaries what the red lines are and what the repercussions
are for crossing those red lines. So if in fact we were able to
identify that a particular country took the plans to our next-
generation fighter plane, that we would take actions, as a
country, against them, whatever it may be, whether it be
diplomatic, economic, or military.
Mr. Long. But to prevent that from happening the next
time----
Mr. Henry. So from my perspective, I think if we, as people
who are monitoring security on networks, have an understanding
of who the adversary is, the tactics, techniques, procedures
that they are using, the information that they are going after,
we can get a better sight picture of who that adversary is, and
it helps us to better defend. It helps us from a strategic
perspective.
If you are protecting the network and you know a particular
country is looking for plans to a particular device, you can
change how that data is stored, you can change how it is
transmitted, you can change how it is maintained on the
network. There are actually procedures that network owners can
take to better defend themselves.
So I believe that using intelligence and by being
proactive, you can be predictive and then preventive. You can
predict who is going to attack what and where, and it helps you
prevent.
Mr. Long. I am way past my time. I yield back.
Mr. McCaul. I thank the gentleman.
Just on the point of specific recommendations, I wanted to
brag on my colleague, Mr. Lewis. The CSIS report made many
specific recommendations. Some have been taken up by the
Congress and some have not, but I want to thank you again for
that great work.
With that, I recognize the gentlelady from New York, Ms.
Clarke.
Ms. Clarke. Thank you very much Mr. Chairman. I thank our
Ranking Member for this very important Oversight,
Investigations, and Management Subcommittee hearing. I want to
associate my comments with the comments of Mr. Long about
frustration when it comes to to this conversation about the
urgent action that is required to protect our Nation's
infrastructure from the constant barrage and bombardment, the
attack on our systems, because it just seems as though we just
keep having this conversation. Understanding the threat that we
are under, understanding the constant attack that we are under,
but we are not making the types of headway that we need to
make.
All of us have a role to play here. We have a legislative
role to play. It seems that we tinker at the margins. I am very
concerned that--you know, as a New Yorker, someone who could
not have imagined that airplanes could be turned into missiles,
that we are not imagining the real devastation that we could be
under with the click of a mouse at any point in time. So,
gentlemen, I think--you know your expertise is well noted.
One of the things that I would like to ask of you is
whether you have had an opportunity to review the bill that was
passed out of the Homeland Security Committee for cybersecurity
and whether any of you are in a position to comment on that
legislation?
This is Cybersecurity Week. There are a number of bills
that are moving to the floor to be passed this week, but none
of which have the level of comprehensiveness as the bill that
was passed out of this committee; yet that won't be taken up
this week. So I am just trying to figure out how serious we are
here and what each of you respectively believes should be the
next move of this legislative body when it comes to
legislation.
Don't all click at once. I don't want to put anyone on the
spot. Some folks may not have had an opportunity to see it yet.
But Mr. Lewis, you are nodding so maybe you can----
Mr. Lewis. Yes. I think I am the stuck key on this one
initially.
The original bill that emerged from the committee I think
was a very strong bill and would have gone a long way to
putting us in a better position than we are today. I think a
lot of people were surprised when we saw the amendment. The
easiest way to describe it is the original bill was, I believe,
45 pages and the amended bill was 34 pages. So the question you
want to ask is: What was in those 11 pages that came out? If I
had any advice, it might be to add those 11 pages back in.
These are always difficult issues.
If I have learned one lesson this year, it is that you
shouldn't try to do major legislation in an election year. But
I think this is a case where we can put the two bills side by
side and see one--and I applaud the authors of it--one was very
strong. The other is less strong. So maybe we need to
reconsider.
Mr. McClure. I am not detailed around some of the bills
that have come up. But I will say that we have always found
that incentives tend to motivate quite a bit, but they have to
be specific. Anything around, for example, finding the problem
before a bad guy does or finding the vulnerabilities, for
example, and then patching and fixing them in an acceptable
window of time, what we call the window of exposure, right?
We are also enforcing, as we talked about earlier,
enforcing strong authentication. It is really hitting--if you
can just hit the 80/20 rule of security, which is that 80
percent of the risk is represented by 20 percent of the
problems, you are going to go a long, long way to making it
simple to do, but also very impactful.
Mr. Flynn. If I might just add, clearly one of the core
issues has been, to what extent should Government play a more
enforcement role. Clearly one of the issues that we have seen
laid out here is the market has not been able unto itself to
figure out how to put together adequate standards that are
essentially being enforced within the market to deal with this
risk. What has been particularly a problem is information
providers interacting with critical infrastructure owners,
people in the physical world who often are unaware of the
vulnerabilities that they are investing in.
There is a moral hazard problem there. We typically deal
with moral hazard through some form of standard-setting and
enforcement of that standard. The bottom line here is that this
is an interesting philosophical battle. But at a practical
level, we need a much more mature process for identifying
standards and figuring out how to enforce them. So where I
think we should be more creative is around third parties as a
fee-based approach, whatever is required here. But at the end
of the day, purely voluntary approaches I think will not get us
to where we need to be.
Ms. Clarke. Thank you, Mr. Chairman. I yield back.
Mr. McCaul. Thank you. The Chairman now recognizes the
gentleman from South Carolina, Mr. Duncan.
Mr. Duncan. Thank you, Mr. Chairman. Just a quick question:
If Congressman Long sent a tweet out during a hearing on
cybersecurity, is that a contradiction?
I just got a Facebook message from someone that said,
``Please vote `no' on SISA, SOPA, PIPA, and H.R. 1981.''
There is dramatic concern within the populace that there
will be a Government overreach as we try to protect American
systems on the private sector and the public sector. So I think
we have got to tread lightly. What has been a concern of mine
is: Where do we cross the line as a Government trying to
protect our citizens when it comes to civil liberties and
private information that will be not only captured during this
process but possibly retained? We had a long debate about
retention of that and when it should be eradicated from the
computer files. But is it ever really eradicated? There are a
lot of questions that came to mind during that debate that I
think are definitely worthy of further discussion, especially
this week.
But Mr. McClure, I have got a question for you: What is the
role of the public sector in protecting the United States
Government institutional systems and the role of the private
sector, primarily the free market, which I firmly believe that
the free market can do it better than any Government entity?
A case in point would have been Cash for Clunkers. If a
private entity would have been running that program, I don't
think we would have seen the problems that we saw from the
dealers.
So primarily the free market, in finding solutions to
protect American systems, both public and private. So where is
that balance? From the Federal Government, the public sector,
trying to protect its institutions and also raise awareness of
this, but the private sector and the free market finding those
solutions for us.
Mr. McClure. Well, I think that when it comes to the
private sector, obviously the buck is what motivates, right? So
if they can either sell more stuff, more products, more
widgets, because it is secure or because it is more secure than
a competitor, that draws a lot of interest. So from an
incentive perspective, that works out quite well.
I think when you start to move to the public sector, there
is little incentive around that of making an extra buck. So
from that perspective, I think you know more mandates and more
guidelines have to be enforced. Now, where the two come
together, in my book, is they really haven't, up until this
point, and they need to in some form or fashion bring together
both sides at the top levels to--not just for information
sharing but also for helping to set and establish the
guidelines that each other will be measured against, if you
will, around security. Because this is very--it is actually
quite simple to prevent a lot of bad stuff from happening that
is just not happening. That has been the frustration in doing
this for 20-plus years, is we know what solves this problem. It
is just an issue of getting people to move and act to do it,
and making it a priority within their organization. That is the
bottom line.
Mr. Duncan. I know academia is working with both. So I am
going to ask you to step out of that and ask--we have got some
public entities there. Do y'all want to answer that question?
Do you want to chime in on that?
Mr. Lewis. Well, two points: It is a good question. The
first is knowing the work that Chairman Rogers and Ranking
Member Ruppersberger have done on the bill. It is not SOPA,
right? There is an effort to try to tag SOPA to it because
everyone hates SOPA and they go ballistic when they hear it.
They have made an effort to protect privacy. I think the
changes in that bill are essential. You know, they update old
legislation from the 1980s, from dial phones and copper wires,
to let Government and companies work together better. So when I
look at the bill, I don't think it poses a great risk to
privacy. I realize there are concerns. Perhaps when it goes to
conference or when it moves along in the voting process, those
can be addressed.
Mr. Duncan. Thank you, Mr. Chairman. I don't have anything
further. I yield back.
Mr. McCaul. Thank you. The Chairman now recognizes the
gentleman from Illinois, Mr. Davis.
Mr. Davis. Thank you very much, Mr. Chairman. Thank you,
gentlemen, very much for being here.
I guess we have always been concerned about the economic
impact and never have we been more concerned about it than now.
I often hear people try to estimate, say, what the cost of
security operations are, what the impact of 9/11 has been on
our economy, and what the economy would be like perhaps if we
had not experienced that attack, and all of the different
things that we have had to do to try to prevent it from
occurring.
There are estimates and studies that have suggested that
there might be as much of an annual cost of about $40 billion a
year from cyber attacks. Do any of us know how that information
was arrived at, or the basis upon which those estimates are
being made?
Mr. Wilshusen. I would just say from our view, we don't
know exactly how that information has been derived or the
methodology. Indeed, in many cases we have found that cyber
crime is often underreported and the amounts and estimates that
are made, they vary widely from, you know, tens of billions to
hundreds of billions. So the actual amount that has been the
result of cyber crime, it is hard to really difficult. But it
is likely to be a very large number.
Mr. Lewis. If I could just add to that. I used to think
that people just used a magic eight ball and if they didn't
like the number, they flipped it. But there are a couple of
things we can look at.
The first is I would note that the National Intelligence
Council is attempting to estimate the cost of cyber losses. The
Economic Intelligence Unit, which is a branch of the Economist
magazine is doing it. Cambridge University is doing an
estimate. So in the next year, we might see three estimates.
One thing you could look at is you could look at Germany
which did its own estimate of its losses through cyber
espionage, economic espionage. I believe the figure they came
up with was about $24 billion. Now the U.S. economy is five
times as large as the German economy, so that gives you a
range. We don't have a good figure, but we are working on it.
It looks to me like it will be in the low hundreds of billions.
Mr. Flynn. I was just going to add, Congressman, that I
think you made a very compelling analogy. The cost often is
what happens after a catastrophic event. So when we have a
cyber Pearl Harbor, that is where we really start to see the
numbers, in part because of the rush to deal with the
uncertainty.
The case I try to make to my private-sector friends when we
talk about these issues, we are, No. 1, trying to prevent
things, but we are also trying to prevent the overreaction, the
associated cost. That is why getting standards at the outset,
agreed upon, that pass the smile test, those are critical in
terms of protecting our economy, protecting the market against
these kinds of threats.
Mr. Davis. There are some people who think that we might be
engaged in a bit of overkill in terms of how much time, energy,
effort, money, everything else that we are putting into the
notion of trying to create as secure an environment as we can
possibly have. What would you say to people who express that
kind of thought?
Mr. McClure. I would say that it is a little shortsighted,
that it is as big as you hear, and probably three to four
times. I have done countless, hundreds and hundreds of
investigations, incident response exercises, and have cleaned
up after. I can tell you that the estimates that have come from
all those engagements are typically far diluted because of
their--No. 1, just inability to actually quantify the loss. The
attempts to do it are quite flawed, especially because of the
urgency of the remediation attempts. So for me, it is highly
underestimated.
Mr. Davis. So you would still say the old adage that an
ounce of prevention is worth much more than a pound of cure?
Mr. McClure. Without a doubt.
Mr. Davis. Thank you, gentlemen, very much. Thank you, Mr.
Chairman. I yield back.
Mr. McCaul. I thank the gentleman. Let me just in closing
say, first of all, thank you for being here. You provide great
insight.
We do have four bills going forward this week. With respect
to the bill that passed out of this committee, I do believe it
has the core components that the Secretary and the director of
NSA asked for, and that is codification of existing legal
authorities and an information-sharing system through the
National Cybersecurity and Communications Integrations Center.
We also have the ISECS out there as well.
I know the intel bill also makes DHS a hub for cyber threat
information sharing within the Government. I think anytime we
deal with the private sector, we always have to be careful of
that balance of incentivizing versus unduly burdensome
mandates. It is always a balance between security and that. I
would always prefer to incentivize when possible. But this is a
very, very important, serious issue. And it is my sincere hope,
as I mentioned to the Ranking Member of the full committee--you
being Ranking on the cybersecurity committee--that we can work
together on this important legislation. The issue is too
important for the American people. I think everybody standing
up here or sitting here at the dais understands that.
So with that, we thank the witnesses again. Without
objection, this hearing is adjourned.
[Whereupon, at 3:35 p.m., the subcommittee was adjourned.]
A P P E N D I X
----------
Statement of John Watters, Chairman and CEO, iSIGHT Partners, Inc.
April 24, 2012
Chairman McCaul, Vice Chairman Long, Ranking Member Keating, and
other distinguished Members of the subcommittee, thank you for the
opportunity to offer testimony to the Subcommittee on Oversight,
Investigations, and Management.
My name is John Watters and I am the Founder, Chairman, and CEO of
iSIGHT Partners, Inc, a highly-specialized cyber risk management
company. We launched over 5 years ago to help the public and private
sectors assess and adapt their security measures against the rapidly
intensifying cyber threat environment. The insights we provide into
adversarial capability drives efficient resource utilization and focus
on key threat concerns as opposed to noise that cannot be translated
into mitigation. At our core, iSIGHT Partners has a world-class cyber
threat intelligence capability delivering research, analysis, and a
``community defense'' against emerging threats from around the globe.
Threats to the cyber environment where our citizens, critical
infrastructure, industry, and governments operate have intensified
dramatically in recent years. This should come as no surprise, as the
efficiency, effectiveness, and anonymity of cyber attacks have expanded
to encompass every traditional threat category. Criminals understand
that stealing no longer requires putting themselves in danger by
committing traditional crimes using a weapon, such as bank robbery. In
today's high-tech world, criminals easily and efficiently steal
millions of dollars simply by creating aliases and obtaining a few
keystrokes from their victims using tools readily available in
underground forums. Nationalist actors recognize that they need not
risk human assets to gain access to vital National interests when they
can navigate the connected world of computers to establish a virtual
presence and route information back home without a passport or visa and
without leaving an evidentiary trail. The shift from the physical space
to cyber space has already transpired, and the resulting risks to
industries and governments are substantial and growing. Unfortunately,
we continue to look internally for ways to combat cyber crime, when the
solution requires that we look externally.
Given the incredibly complex set of challenges we face in securely
and efficiently managing our businesses and the Government while
contending with these increased risks, we must embrace change as a
constant and adapt accordingly. Absent an adaptive defense to an
adaptive threat environment, we will fall further behind in our ability
to prevent successful attacks targeting our interests. And small
businesses, as the innovation engine of our country, are able to focus
on not only confronting but actually outstripping the adversary's rapid
pace.
In the past, in what could now be called ``Cybersecurity 1.0,'' we
resourced internal environments with a layered approach of people,
processes, and technologies. This approach began at the perimeter and
layered back to the core, where critical operations and information
reside. However, as technologies have become more advanced and
interconnected, these layers have shrunk, and the adversary's ability
to traverse our networks has grown tremendously. In some cases, this
phenomenon relates to bad security practices, such as password reuse.
In other ways, the complexity of our own environments increases likely
ingress and attack points through which adversaries can gain access to
our critical information. While our defenses are enhanced because we
can correlate events from different devices in different layers, the
reality is that our adversaries have watched our slow adaptation and
responded accordingly with more sophisticated and coordinated attacks;
they are adapting to our moves, but we are slow to comprehend and adapt
to theirs.
However, improvements to our cybersecurity posture should not go
unnoticed. Now that we have resourced our environment and refined our
overall security posture, our future success in combating cyber threats
resides in our ability to tactically and operationally adapt our
defense to new and emerging attack methodologies. We now have a
security infrastructure that we can manage, but the question is whether
we manage it with insight into our adversaries and their capabilities
or continue to blindly attempt to secure critical intellectual property
and information. In summary, ``Cybersecurity 1.0'' was vulnerability-
based, and we benchmarked ourselves against regulations and what we
thought were best practices. However, absent adversary insight, we will
continue to hunt in our own environment for vulnerabilities that, in
many cases, have already been exploited and try to close those security
gaps. We have taken this approach for more than a decade with very
little success. To more effectively combat cybercrime, we must move
away from the old model and begin to benchmark our countermeasure
posture in light of current attacks executed within our borders and
from abroad and adapt our defenses accordingly.
Now we need to exceed the innovation pace of our adversaries. As
our country's global advantage has traditionally centered on the
creativity spawned by small businesses, it is imperative we feed this
innovation engine and embrace industry advances in this mission.
Consequently, ``Cybersecurity 2.0'' must better manage our environment
in light of the adversary's capabilities and attack methods and defend
against the ``new normal'' of increased threat pace and capabilities.
Addressing how to effectively manage decentralized environments
associated with National infrastructure, global businesses and globally
distributed networks where our sensitive data, processes, and
intellectual property reside is the challenge. We need to decentralize
our awareness outward beyond our perimeter. Rather than focus on what
we alone see, our goal should be to build a common shared understanding
of the threats we face with a focus on knowledge rather than more data.
Just as important, we need to learn from each other's experiences. The
key message is that one entity's reactive can be the next entity's
proactive if these insights are rapidly shared. In others words, where
we have common concerns and common threats with which to contend, we
need common insights with shared solutions to combat those shared
problems. Given the broad range of motivations behind adversaries using
very similar attack methods, sharing individual lessons learned to
create a ``community defense'' will enable businesses and Government to
more effectively combat cyber crime.
The strategy of volunteer coordination or using a variety of
Government entities for sharing is riddled with challenges. For
example, one of the more critical challenges facing the traditional
intelligence mission lies in the classification structure that renders
real-time information sharing across common stakeholders--most managing
unclassified networks--unfeasible. These security restrictions
essentially prevent cyber threat intelligence analysis from being
shared. In other words, most of the intelligence sourcing from the
Federal sector takes place in secure environments, and the resulting
analysis of attacks is inherently difficult to share.
In addition, the current construct of information sharing is
limited by the absence of a trusted intermediary that can convert
shared information into actionable intelligence and rapidly deliver
that intelligence to each community member. To convert this idea into
action and enable entities to proactively support the entire community,
each community member must help fund tactical, operational, and
strategic intelligence information gathering.
We need a global window into and network of all research resources.
Federal security activities tend to focus deeply on a relatively tight
set of specific cyber threats. However, global commercial entities do
not have that luxury because their people, information, and networks
are globally distributed. Therefore, they must gain access to emerging
threat data and victim data from around the world, rather than from one
specific nation, sector, or entity. This requires community-building
around the world, developing relationships and focusing on the transfer
of knowledge rather than simply deploying machine sensors that witness
technical indicators and events. Without the context associated with
the indicators, it is impossible to attribute an attack to the
appropriate threat category and source data that is associated with the
analysis. Absent context, community members cannot effectively assess
whether they are seeing something of critical importance or just
another spam attack.
In summary, we need an analytical pace that matches the rapidly
developing pace of cyber threats. This is a resource- and time-
intensive activity requiring complete integration of global insight, an
analytical team and structure that processes information into
structured analytical products and a delivery method that enables
community members to filter analysis based on the appropriate and
specific customer and operation. An executive in one department of the
Federal Government has a very different set of needs from a security
operations center analyst in a fusion center, which is different from
the fraud prevention team of an on-line bank with branches in Europe
and South America. In short, intelligence analysis must address
tactical, operational, and strategic needs while supplying various
views of the analysis for each community member's category and sector.
Since June 1, 2010, iSIGHT Partners has been fortunate to provide
these capabilities in support of the entire Federal, State, and local
civilian government through a single enterprise contract with the
Department of Homeland Security's (DHS) United States Computer
Emergency Readiness Team (US-CERT). Over the past 9 months alone,
iSIGHT Partners has delivered more than 18,000 intelligence reports and
updates with more than 8,500 associated technical threat indicators.
During the same 9-month period, we responded to nearly 500 analysis
requests while holding nearly 200 meetings with those we support. Most
recently, US-CERT has begun leveraging a large number of our indicators
as part of its Joint Cybersecurity Services Pilot. These threat
indicators connect to specific intelligence analyses which enable each
unique organization to tune their own security environment to detect
and defend against specific cyber attacks that have been observed and
analyzed. As threat indicators are triggered, defenders now have
context about what attack was just defeated based on its connection to
associated analysis. To that end, for example, Section 935 of the Ike
Skelton National Defense Authorization Act for Fiscal Year 2011
established the requirement for progress reports from the Department of
Defense requiring just this sort of shift toward contextual knowledge.
And as many of our Government users have recognized, this is a game-
changer for Government security operations. Enabling context and threat
categorization in real time also enables defenders to prioritize
resources and focus on serious cyber threats rather than taking the
traditional approach of attempting to deal with all attacks equally.
This contracting approach demonstrates the forward-leaning,
innovative leadership within US-CERT and DHS. In today's budget
climate, and as recognized by the current administration's Federal
Information Technology Shared Services Strategy paradigm of ``Shared
First,'' common problems must be addressed with common solutions. The
ability to contract and deliver this shared solution across the mission
space is a case study illustrating that fact. Through this program,
visibility into global cyber attacks against commercial and Government
entities has improved tremendously. Together with US-CERT, iSIGHT
Partners has driven a public-private partnership, an operational level
of information sharing, a mechanism to detect and defeat emerging cyber
attacks while learning from other community experiences and maintained
the integrity of non-classified cyber threat intelligence shared
unconstrained among Federal, State, and local civilian government
members. This approach has provided insight into each member's cyber
defense experiences without disclosing an individual victim's
identity--this is what ``community defense'' is all about.
Change in the cyber threat environment will be constant, and the
cyber adversaries our country faces are excellent at sharing
information and learning from each other's experiences. While we have
made some progress in sharing information through coordination centers,
in order to surpass the innovation pace of our adversaries,
entrepreneurial companies like iSIGHT Partners have demonstrated a
clear capability to embrace this reality. In the end, if we do not
shift to an adaptive defense based on continuously updated, actionable,
and sharable threat intelligence, our National interests will remain at
great risk.
Thank you again for this opportunity to testify. Most importantly,
I want to thank each of you for your contributions to the country and
your leadership in working what is quickly emerging as one of the most
important challenges facing the United States.
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