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72–834CC 2001

PROTECTING AMERICA’S CRITICAL INFRASTRUCTURE: HOW SECURE ARE GOVERNMENT COMPUTER SYSTEMS?

HEARING

BEFORE THE

SUBCOMMITTEE ON

OVERSIGHT AND INVESTIGATIONS

OF THE

COMMITTEE ON ENERGY AND

COMMERCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

APRIL 5, 2001

Serial No. 107–13

Printed for the use of the Committee on Energy and Commerce

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house

2

COMMITTEE ON ENERGY AND COMMERCE

W.J. ‘‘BILLY’’ TAUZIN, Louisiana, Chairman

MICHAEL BILIRAKIS, Florida

JOE BARTON, Texas

FRED UPTON, Michigan

CLIFF STEARNS, Florida

PAUL E. GILLMOR, Ohio

JAMES C. GREENWOOD, Pennsylvania

CHRISTOPHER COX, California

NATHAN DEAL, Georgia

STEVE LARGENT, Oklahoma

RICHARD BURR, North Carolina

ED WHITFIELD, Kentucky

GREG GANSKE, Iowa

CHARLIE NORWOOD, Georgia

BARBARA CUBIN, Wyoming

JOHN SHIMKUS, Illinois

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

CHARLES ‘‘CHIP’’ PICKERING, Mississippi

VITO FOSSELLA, New York

ROY BLUNT, Missouri

TOM DAVIS, Virginia

ED BRYANT, Tennessee

ROBERT L. EHRLICH, Jr., Maryland

STEVE BUYER, Indiana

GEORGE RADANOVICH, California

CHARLES F. BASS, New Hampshire

JOSEPH R. PITTS, Pennsylvania

MARY BONO, California

GREG WALDEN, Oregon

LEE TERRY, Nebraska

JOHN D. DINGELL, Michigan

HENRY A. WAXMAN, California

EDWARD J. MARKEY, Massachusetts

RALPH M. HALL, Texas

RICK BOUCHER, Virginia

EDOLPHUS TOWNS, New York

FRANK PALLONE, Jr., New Jersey

SHERROD BROWN, Ohio

BART GORDON, Tennessee

PETER DEUTSCH, Florida

BOBBY L. RUSH, Illinois

ANNA G. ESHOO, California

BART STUPAK, Michigan

ELIOT L. ENGEL, New York

TOM SAWYER, Ohio

ALBERT R. WYNN, Maryland

GENE GREEN, Texas

KAREN MCCARTHY, Missouri

TED STRICKLAND, Ohio

DIANA DEGETTE, Colorado

THOMAS M. BARRETT, Wisconsin

BILL LUTHER, Minnesota

LOIS CAPPS, California

MICHAEL F. DOYLE, Pennsylvania

CHRISTOPHER JOHN, Louisiana

JANE HARMAN, California

DAVID V. MARVENTANO, Staff Director

JAMES D. BARNETTE, General Counsel

REID P.F. STUNTZ, Minority Staff Director and Chief Counsel

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

JAMES C. GREENWOOD, Pennsylvania, Chairman

MICHAEL BILIRAKIS, Florida

CLIFF STEARNS, Florida

PAUL E. GILLMOR, Ohio

STEVE LARGENT, Oklahoma

RICHARD BURR, North Carolina

ED WHITFIELD, Kentucky

Vice Chairman

CHARLES F. BASS, New Hampshire

W.J. ‘‘BILLY’’ TAUZIN, Louisiana

(Ex Officio)

PETER DEUTSCH, Florida

BART STUPAK, Michigan

TED STRICKLAND, Ohio

DIANA DEGETTE, Colorado

CHRISTOPHER JOHN, Louisiana

BOBBY L. RUSH, Illinois

JOHN D. DINGELL, Michigan,

(Ex Officio)

(II)

3

C O N T E N T S

Page

Testimony of:

Dacey, Robert F., Director, Information Security Issues, U.S. General

Accounting Office .......................................................................................... 53

Dick, Ronald L., Director, National Infrastructure Protection Center ........ 30

McDonald, Sallie, Assistant Commissioner, Office of Information Assurance and Critical Infrastructure, U.S. General Services Administration 26

Noonan, Tom, President and CEO, Internet Security Systems, Inc ............ 39

Podonsky, Glenn S., Director, Office of Independent Oversight and Performance Assurance, accompanied by Jason Bellone, former member

of the Computer Analysis Response Team, Federal Bureau of Investigation; Karen Matthews, formerly with Computer Forensics Laboratory,

U.S. Department of Defense; Brent Huston, author of book on

hackproofing; and Brad Peterson, Director, Office of Cyber Security

and Special Reviews, U.S. Department of Energy ..................................... 13

Tritak, John S., Director, Critical Infrastructure Assurance Office, U.S.

Department of Commerce ............................................................................. 65

Material submitted for the record by:

Kemper, Jason, III, Vice President, Government Affairs, Cryptek, letter

dated April 5, 2001, enclosing testimony for the record ............................ 76

(III)

(1)

PROTECTING AMERICA’S CRITICAL INFRASTRUCTURE: HOW SECURE ARE GOVERNMENT COMPUTER SYSTEMS?

THURSDAY, APRIL 5, 2001

HOUSE OF REPRESENTATIVES,

COMMITTEE ON ENERGY AND COMMERCE,

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS,

Washington, DC.

The subcommittee met, pursuant to notice, at 9:40 a.m., in room

2322, Rayburn House Office Building, Hon. James C. Greenwood

(chairman) presiding.

Members present: Representatives Greenwood, Tauzin, (ex officio), Strickland, and DeGette.

Also present: Representatives Norwood and Davis.

Staff present: Tom DiLenge, majority counsel; Amit Sachdev, majority counsel; Peter Kielty, legislative clerk; and Edith Holleman,

minority counsel.

Mr. GREENWOOD. This hearing of the Oversight and Investigations Subcommittee will come to order. The Chair recognizes himself for 5 minutes for the purpose of an opening statement.

Today, the subcommittee holds a hearing to assess the security

of government computer systems. In particular, we will assess how

well or how poorly they are protecting our most critical

cyberinfrastructures and operations from the threat of disgruntled

insiders, hackers, criminals, terrorists, and rogue nation-states.

Over the past 2 years this committee has conducted extensive oversight of computer security at particular government agencies, most

notably EPA, the Department of Energy, and to a lesser extent,

FDA and the Department of Commerce. Our reviews consistently

have found poor computer security planning and management and

a general lack of compliance with existing requirements of law and

policy.

We also found that, with few exceptions, the agencies were not

testing their own systems to determine whether their security

plans and policies were as effective in practice as they looked on

paper. And we found that whenever real testing of agency systems

was conducted numerous significant and easily exploitable

vulnerabilities were almost always discovered.

In response, Congress passed a law last October that reiterated

computer security requirements contained in prior Federal laws

and OMB directives mandating that agencies develop security

plans for their systems and conduct periodic risk assessments and

tests of those systems. But it also imposed a new requirement, that

2

agency inspectors general conduct an independent test of an appropriate subset of agency systems each year.

One month ago, in order to set a benchmark for measuring agency progress under this new law, I wrote to 15 Federal departments,

agencies, and commissions within this committee’s jurisdiction to

inquire about their compliance with computer security directives

and their plans to implement the new law. While a few of the agencies are still in the process of producing documentation for us, it

is fair to say that, at this point, we are not surprised or pleased

by what we are finding.

In particular, very few of the responding agencies have had any

true penetration tests of their computer systems conducted and

many of these were very limited in nature and scope, conducted as

part of financial system audits. A few other agencies have conducted automated scans of their network to search for

vulnerabilities in their configurations or operating systems which,

while worthwhile, do not reveal the real degree of potential exploits

of their systems. And several other agencies reported no scans or

penetration tests whatsoever.

Also, not surprising, the tests and scans that have been done

continue to reveal real computer security problems at these agencies:

A recent internal scan conducted by a Commerce Department bureau found more than 5,000 security ‘‘holes,’’ or known

vulnerabilities, in its networks and systems; and that of 1,200

hosts or workstations scanned, fully 30 percent suffered from category ‘‘red’’ vulnerabilities, which is the most severe rating because

of the potential to compromise an entire account.

An internal test of a Medicare contractor 2 years ago found, unbelievably, that the network system administrator’s account—let

me repeat that, the network system administrator’s account—could

be easily compromised because his password was the same as his

user name.

A recent internal test of a critical HHS operating division, using

freely available password cracking software, resulted in 60 percent

of passwords being cracked in under 10 minutes.

Unfortunately, these findings are not the exception. They are just

some of the many examples of poor computer security we are finding during the course of our review. Consistent with the broad

swath of GAO and inspector general computer security audits

across the Federal Government over the past 4 or 5 years.

I point these out not to embarrass particular agencies—actually,

they should be commended for testing their systems to find these

problems in the first place—but rather to emphasize the need for

the Federal Government to begin taking cybersecurity much more

seriously than we have been. They also clearly demonstrate the

need to increase our level of testing so that problems can like these

can be found and corrected before real damage is done.

Why is this so important? Because as we will see and hear today,

the threats and attacks on government systems are increasing and

the technology used to perpetrate such attack is becoming both

more sophisticated and more generally available. An expert team

from the Department of Energy will demonstrate this morning how

such attacks are conducted, using freely available software tools

3

found on the Internet, and they will show us the results from some

recent real-world testing the team conducted at several DOE sites.

For its part, GSA, which tracks overall security incidents at Federal civilian agencies, will testify today that in the year 2000 alone

32 agencies reported 155 known ‘‘root’’ compromises of their computer systems, the most serious type of incident tracked because

the unauthorized user was able to gain complete control of the

server or system compromised.

GSA also will testify that there were hundreds of incidents of

network reconnaissance reported by 18 different civilian agencies

last year, mostly from foreign sources and targeting our scientific

facilities. And these are only the incidents we know about. GSA estimates that only 20 percent of all known incidents are reported by

the agencies and there likely are thousands more that go undetected by the agencies themselves.

GSA and other experts in this field also estimate that nearly all

of the incidents reported on both government and private systems

could have been prevented had the system administrators fixed

well-known vulnerabilities with existing patches or configuration

changes.

While no network can ever be 100 percent secure from the most

sophisticated and novel attacks, it should not be an unreasonable

expectation that our sensitive systems would be secure from commonly known vulnerabilities.

Finally, as the title of this hearing suggests, we also will focus

today on the related issue of critical cyberinfrastructure protection,

that is, the protection of those Federal cybersystems that are truly

critical to the Nation’s security for the public’s health and welfare.

Not all computer systems are created equal, nor do they deserve

the same level of security attention.

The Clinton administration realized the need to focus the attention on threats posed to our most critical cybersystems by terrorists

or others intent on doing the Nation harm. Accordingly, in May

1998, the President issued a directive mandating the Federal agencies identify their critical assets, assess the vulnerabilities of those

assets, and then implement plans to fix the vulnerabilities by May

2003. However, several recent reports confirm what the committee’s own review has found that, 3 years later, most agencies are

still in the process of identifying their critical assets and virtually

none have made significant progress in assessing and mitigating

vulnerabilities in those systems or the private sector resources on

which these Federal systems so often rely. Given this state of affairs, it appears that we will not meet this deadline unless we dramatically increase our focus on this problem in the very near term.

Clearly, we need to do better both with respect to critical

cybersystems and to overall computer security throughout the Federal Government. I hope that today’s hearing will be the first in a

series on these important and related topics, that we can work together on both sides of the aisle and with this new administration

to improve the security of our Nation and the sensitive data held

by our Federal Government.

The Chair recognizes Mr. Strickland for an opening statement.

Mr. STRICKLAND. Mr. Chairman, thank you for holding this hearing on this very important question.

4

As one of our witnesses will testify today, the existence of the

Internet ties together a vast array of computer systems and networks. For communications, commerce, and the democratic exchange of ideas, there are enormous benefits from this full and

open access; but like any technology that is new, or relatively new,

it has a serious downside. By tying these networks together, the

Internet makes them all vulnerable to hacking by creative teenagers and others with more nefarious purposes such as fraud, identity theft, extortion, disruptions of commercial service, and terrorist

attacks.

One system can be used as a platform to attack other systems.

Without appropriate safeguards, any system can be hit, whether it

is essential to our defense and economy or it is a site that sells

goods in an electronic auction; and it appears that the attempts to

penetrate both government and private systems are increasing. We

must recognize that no system will ever be completely secure, but

the question is whether the Federal response to safeguard their

critical assets is adequate and whether it has the resources to respond fully.

A great deal was done by the previous administration to begin

to address this enormous task. President Clinton established a

Commission on Critical Infrastructure Protection in July 1996 to

look at the scope and the nature of vulnerabilities and threats to

the Nation’s critical infrastructures and to recommend a comprehensive national policy and implementation plan for protecting

them, whether public or private.

The result was the commission’s 1997 report, which found no immediate crisis threatening the infrastructure, but did find that

threat to and the vulnerability of the critical infrastructure existed.

President Clinton responded by issuing Presidential Decision Directive 63 in May 1998, which ordered the Federal agencies to identify

their critical infrastructures, take steps to protect them and work

cooperatively with private companies which control most of the infrastructure, to secure those systems also. The target date for completion was May of 2003.

Presidential Directive 63 listed the areas in which the infrastructure should be protected, and established the position of National

Coordinator for Security and for Structural Protection and

Counterterrorism in the National Security Council. It set up the

critical Infrastructure Assurance Office at the Commerce Department to support the national coordinator and the agencies and gave

the Federal Bureau of Investigation the explicit authority to expand its existing cybercrimes unit into the National Infrastructure

Protection Center.

Prior to this Presidential directive, President Clinton had already

established a Federal computer intrusion response capability,

which is housed at the General Services Administration. A national

plan for information systems protection, the first in the world by

a national government, was issued in January of 2000. And just before he left office, President Clinton nominated 18 members of the

National Infrastructure Assurance Council, which is to report on

the actions of private and public bodies to protect their critical infrastructures.

5

Three industry sectors also have established information sharing

and analysis centers.

How far along are the agencies in implementing the Presidential

directive? Certainly they are ahead of where they were 5 years ago

when cybersecurity was given little, if any, attention, but they are

not far enough along and they remain vulnerable. As we will hear

from the Commerce Department witnesses, most agencies still have

to finish identifying their critical infrastructure assets. They will

not meet the 2003 deadline without significant additional resources.

Furthermore, no one know if the structure established by the

previous administration to enforce Presidential Directive 63 will be

continued by the new administration. The old structure was not

perfect, and there are numerous overlapping and conflicting responsibilities resulting from the differing directives in PDD-63 and

various other laws. But we must request that the Bush administration tread lightly and consider whether a completely new structure

will delay even longer this very important task.

A question for the Congress to address is whether the agencies

are getting the money they need to get the job done. This body has

not been particularly responsive to appropriations for computer security, as evidenced by its rejection of most of the requests last

year for beefing up the Energy Department security, its rejection

of the $50 million request for an Institute for Information Infrastructure Protection, and an almost 50 percent reduction in GSA’s

request for funding for their needs.

One other concern I must mention, however, is privacy. GSA has

published a very disturbing newsletter that tells agencies to get

around Congress’ and the public’s concerns about being tracked by

Federal agencies by contracting out the service and calling it something else. I have attached that document to my testimony and

would like it placed in the record.

Mr. Chairman, these are all issues that I hope this subcommittee

will address in the next several months. I may have additional documents to place in the record and would request that the record

be held open for that purpose.

Thank you, Mr. Chairman.

Mr. GREENWOOD. The Chair thanks the gentleman. Without objection his attachment will be entered into the record.

[The prepared statement of Hon. Ted Strickland follows:]

PREPARED STATEMENT OF HON. TED STRICKLAND, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF OHIO

Mr. Chairman, thank you for holding this hearing on this very important question. The existence of the Internet ties together a vast array of computer systems

and networks. For communications, commerce and the democratic exchange of ideas,

there are enormous benefits from full and open access to these systems. But, like

any technological advance, it also has a serious downside. By tying these networks

together, the Internet makes them all vulnerable to hacking by creative teen-agers

and others with more nefarious purposes such as: fraud; identity theft; extortion;

disruptions of commercial service; and terrorist attacks. One system can be used as

a platform to attack other systems. Without appropriate safeguards, any system can

be hit, whether it is essential to our defense and economy, or it is a site that sells

goods in an electronic auction. And it appears that the attempts to penetrate both

government and private systems are increasing.

We must recognize that no system will ever be completely secure, but the question

is whether the federal government’s response to safeguard its critical assets is adeVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00009 Fmt 6633 Sfmt 6621 E:\HEARINGS\72834 pfrm09 PsN: 72834
6

quate, and whether it has the resources to fully respond. A great deal was done by

the previous administration to begin to address this enormous task. President Clinton established a Commission on Critical Infrastructure Protection in July of 1996

to look at the scope and nature of vulnerabilities and threats to the nation’s critical

infrastructures and recommend a comprehensive national policy and implementation plan for protecting them, whether public and private. The Commission’s 1997

report found no immediate crisis threatening the infrastructure, but did find that

the threat to and vulnerability of the critical infrastructure existed. President Clinton responded by issuing Presidential Decision Directive 63 in May of 1998. It ordered federal agencies to identify their critical infrastructures, take steps to protect

them and work cooperatively with private companies—which control most of the infrastructure—to secure those systems also. The target date for completion was May

of 2003.

PDD 63 listed the areas in which the infrastructures should be protected, and established the position of national coordinator for security, infrastructure protection

and counter-terrorism in the National Security Council. It set up the Critical Infrastructure Assurance Office at the Commerce Department to support the national coordinator and the agencies and gave the Federal Bureau of Investigation the explicit

authority to expand its existing cyber crimes unit into the National Infrastructure

Protection Center (NIPC). Prior to PDD 63, President Clinton had already established a Federal Computer Intrusion Response Capability, or ‘‘Fed CIRC’’, which is

housed at the General Services Administration. A national plan for information systems protection—the first in the world by a national government—was issued in

January of 2000. And just before he left office, President Clinton nominated 18

members of the National Infrastructure Assurance Council, which is to report on the

actions of private and public bodies to protect their critical infrastructures. Three

industry sectors also have established Information Sharing and Analysis Centers or

ISACs.

How far along are the agencies in implementing PDD 63? Certainly, they are

ahead of where they were five years ago when cyber security was given little, if any,

attention. But they are not far enough along, and they remain vulnerable. As we

will hear from the Commerce Department witnesses, most agencies still have to finish identifying their critical infrastructure assets. They will not meet the 2003 deadline without significant additional resources.

Furthermore, no one knows if the structure established by the previous administration to enforce PDD-63 will be continued in the new administration. The old

structure was not perfect, and there are numerous overlapping and conflicting responsibilities resulting from the differing directives in PDD-63 and various laws.

But the Bush Administration should tread lightly and consider whether a completely new structure will delay even longer this very important task.

A question for the Congress to address is whether the agencies are getting the

money they need to get the job done. This body has not been particularly responsive

to appropriations for computer security as evidenced by its rejection of most of the

request last year for beefing up the Energy Department’s security; its rejection of

NIST’s $50 million request for an Institute for Information Infrastructure Protection; and an almost 50 percent reduction of GSA’s request for funding for Fed CIRC.

One other concern that I must mention, however, is privacy. GSA has published

a very disturbing newsletter that tells agencies to get around Congress’ and the

public’s concerns about being tracked on the Internet by federal agencies by contracting out the surveillance to private contractors and calling it ‘‘Management Security Services.’’ I have attached that document to my testimony and would like it

placed into the record.

Mr. Chairman, these are all issues that I hope this Subcommittee will address

in the next several months. I may have additional documents to place in the record

and would like to request that the record to be held open for that purpose.

Mr. NORWOOD. Mr. Chairman, I ask unanimous consent that I

may make a brief opening statement.

Mr. GREENWOOD. Mr. Norwood, while an esteemed member of

the Energy and Commerce Committee, does not have the honor of

serving on this subcommittee. But we have the honor of his presence, and without objection, we will ask that he be offered time for

an opening statement.

Mr. NORWOOD. Thank you very much, Mr. Chairman.

I am here for two or three reasons this morning, one of which

is to thank you and to congratulate you and to tell you how pleased

7

I am that you are taking the Commerce Committee in this direction in terms of the security for our Nation. I thank you for that,

and I hope, too, you will have many other hearings.

To give you some indication of how important I think this subject

is, about right now we are teeing off the first tee in the Augusta

National this morning, my home district, and I promise you I

would have loved to have been there, but I view this as a little

more important.

The other reason I wanted to come this morning is because I am

very pleased with the witnesses and especially that you have the

President and CEO of Internet Security Systems here as a big

player in all of this. ISS has been recognized as the worldwide

leader, Mr. Chairman, in the intrusion detection and vulnerability

assessment market. In addition, ISS has become the world’s largest

provider of managed security service, and they deliver a 24-7 security monitoring and management, just sort of something we might

be interested in. And I guess I am just real tickled that a Georgia

company has played such a leading role in this extremely important area.

We have indications that this area of computer security is growing very, very rapidly. For example, ISS has been named the fifth

fastest growing technology company in North America and, listen

to this, this is based on a 5-year revenue growth of 45,000 percent.

There is some indication in that number that tells us all how important this is and must be.

This achievement demonstrates to me that this is a large emerging area that will impact today’s Internet economy.

Now, the government has taken strides—I don’t know whether to

say great or good—but at least strides in the past few years. However, as you know, much more is needed. Funding must be increased by a substantial amount if we take this seriously. As industry has considered resources and expertise, a continued partnership

with industry on this subject is going to be very critical; and it is

my understanding that ISS has played a leadership role in working

and partnering with the government on security issue s. And with

any private company you do that with some risk, but I think and

hope this relationship will continue, not just because it is good for

a Georgia company, but because it is so very needed for the national security of this Nation. And with that, Mr. Chairman, I will

submit the rest for the record and thank you for your courtesy and

kindness this morning.

Mr. GREENWOOD. The Chair thanks the gentleman. Without objection, the rest of his testimony, as well as the testimony of all

other members who may submit them, will be entered into the

record. Also a member of the committee, but not a member of the

Oversight and Investigation Subcommittee, is Mr. Davis of Virginia, and we are happy to have him here as well.

Mr. DAVIS. Thank you very much. Let me—Mr. Chairman, I ask

unanimous consent that I be able to make some comments.

Mr. GREENWOOD. Without objection.

Mr. DAVIS. Thanks for allowing me to participate in this hearing

today. I want to compliment you and your staff on the diligent

work on this pressing issue. It is vitally important that we in Congress recognize and understand the complexities we face in purVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00011 Fmt 6633 Sfmt 6602 E:\HEARINGS\72834 pfrm09 PsN: 72834
8

suing our Nation’s critical infrastructure, the systematic activities

that are essential to the minimum operation of our economy and

government.

Although 95 percent of our critical infrastructure is owned and

operated by the private sector as your Nation’s front line, the Federal Government plays an essential role in sharing information

about cyberthreats against our assets. But the evidence demonstrates that the Federal Government is dangerously behind the

curve in getting its own house in order. Simply put, we are losing

time. Since 1997, GAO has listed information security as a governmentwide high-risk area and has conducted numerous reviews

which have continuously sounded the alarm about widespread

weakness and vulnerabilities in the Federal Government’s information systems.

During March of last year, as part of a review requested by the

Subcommittee on Government Management Information and Technology, of which I was a member, GAO has found that 22 of the

largest Federal agencies were providing inadequate protection to

critical Federal operations and assets from computer-based attacks.

They were able to identify systemic weaknesses in the information

security practice of the Department of Defense, the National Aeronautics and Space Administration, the Department of State, and

the Department of Veterans Affairs; and then, as many of you

know, in September of 2000, the subcommittee gave the Federal

Government an overall D-minus on its computer security practices

report card.

Just as the Romans built the greatest network of roads at the

height of the Roman Empire and the barbarians used these same

networks to destroy the Romans, so we may face the same

vulnerabilities with the advances we have made in technology and

the interconnectivity of our networks. There is no doubt that nations are in the process of developing tools to penetrate and cripple

these networks.

At the same time, the outside world is but one source of the

threat to government information systems. Much of the threat

comes from within the government. A key challenge to making the

Federal Government more secure lies in the mindSet of many Federal agencies vis-a-vis the importance of information security to

their operations and assets.

For many, implementing best practices for controlling and protecting information resources is just a low priority. The question

before us then is, what do we do about it? What steps should Congress take to change the direction and reduce the vulnerability of

Federal operations and assets?

As one who has studied the issue for over a year, I come to the

conclusion there are two necessary components to achieving the

goal. First, I strongly believe there is a dire need for a strong central leader who can coordinate implementation of information security best practices across government. Currently, these responsibilities are shared by several Federal agencies, some of whom are before us today, which make the coordination and uniformity of information security practices a formidable obstacle.

The government information security community needs an advocate who can ensure that information security becomes an inteVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00012 Fmt 6633 Sfmt 6602 E:\HEARINGS\72834 pfrm09 PsN: 72834
9

grated component of information systems. Let me say I agree with

those who assert that funding for implementing information security measures is inadequate. I submit that having a Federal CIO

with this responsibility, as I put forth in legislation, who can champion the agency’s security needs, would be an effective voice in this

respect.

Second, we need to encourage information sharing between the

private sector and government. As many of our witnesses would

likely agree, the ownership dynamic of our Nation’s critical assets

makes crucial the development of thriving public-private partnerships for this purpose, but with the current Federal computer systems it is, in my mind, entirely reasonable that many in the private sector are wary of entering into these partnerships. At the

same time, current law is retarding the implementation of the National Infrastructure Assurance Plan. It is for this reason we introduced legislation last year that gives critical infrastructure industries the assurances they need to confidently share information

with the Federal Government.

Our measure would provide a limited FOIA exemption, civil litigation protection for shared information, and an antitrust exemption for information shared within an information sharing and

analysis. These three protections were cited by the past administration as necessary legislative remedies. This legislation would enable the ISACs to move forward without fear from industry, so that

government and industry could enjoy the mutually cooperative

partnership called for in the PDD-63.

I ask unanimous consent the rest of my statement be put in the

record, and I appreciate the opportunity to be here today.

Mr. GREENWOOD. Without objection, the gentleman’s statement

in its entirety will be placed in the record.

[The prepared statement of Hon. Tom Davis follows:]

PREPARED STATEMENT OF HON. TOM DAVIS, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF VIRGINIA

Mr. Chairman, thank you very much for allowing me to participate today in this

hearing. I want to compliment you and your staff for your diligent work on this

pressing issue.

It is vitally important that we in Congress recognize and understand the complexities we face in pursuing the protection of our nation’s critical infrastructure—those

systemic activities that are essential to the minimum operations of our economy and

government. Although 95% of our critical infrastructure is owned and operated by

the private sector, as our nation’s front line, the Federal Government plays an essential role in sharing information about cyber threats against our assets.

But the evidence demonstrates that the Federal Government is dangerously behind the curve in getting its house in order. Simply put, we are losing time. Since

1997, GAO has listed information security as a governmentwide high risk area and

has conducted numerous reviews which have continuously sounded the alarm about

widespread weaknesses and vulnerabilities in the Federal Government’s information

systems. During March of last year, as part of a review requested by the Subcommittee on Government Management, Information, and Technology, of which I

was a Member, GAO found that 22 of the largest federal agencies were providing

inadequate protection for critical federal operations and assets from computer-based

attacks. They were able to identify systemic weaknesses in the information security

practices of the Department of Defense, the National Aeronautics and Space Administration, the Department of State, and the Department of Veterans Affairs. And

then as many of you know, in September 2000, the Subcommittee gave the Federal

Government an overall D- on its computer security practices report card.

Just as the Romans built the greatest network of roads at the height of the

Roman Empire and the Barbarians later used this same network to destroy the RoVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00013 Fmt 6633 Sfmt 6621 E:\HEARINGS\72834 pfrm09 PsN: 72834
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mans, so may we face the same vulnerabilities with the advances we have made

in technology and the interconnectivity of our networks. There is no doubt that nations are in the process of developing tools to penetrate and cripple these networks.

At the same time, the outside world is but one source of the threat to government

information systems. Much of the threat comes from within the government. A key

challenge to making the Federal Government more secure lies in the mind set of

many federal agencies vis-a-vis the importance of information security to their operations and assets. For many, implementing best practices for controlling and protecting information resources is a low priority.

The question before us then is what do we do about it? What steps should Congress take to change the direction and reduce the vulnerability of federal operations

and assets?

As one who has studied these issues for over a year now, I have come to the conclusion that there are two necessary components to achieving this goal. First, I

strongly believe that there is dire need for a strong central leader who can coordinate the implementation of information security best practices across government.

Currently, these responsibilities are shared by several federal agencies (some of

whom are before us today), which makes the coordination and uniformity of information security practices a formidable obstacle. The government information security community needs an advocate who can ensure that information security becomes an integrated component of information systems. Let me also say that I agree

with those who assert that funding for implementing information security measures

is inadequate, and I submit that having a Federal CIO with this responsibility as

I have put forth in legislation, who can champion the agencies’ security needs,

would be an effective voice in this respect.

Second, we need to encourage information sharing between the private sector and

government. As many of our witnesses would likely agree, the ownership dynamic

of our nation’s critical assets makes crucial the development of thriving public/private partnerships for this purpose. Yet with the current state of Federal computer

systems, it is in my mind entirely reasonable that many in the private sector are

wary of entering into those partnerships. At the same time, current law is retarding

the implementation of the National Infrastructure Assurance Plan. It is for this reason that I introduced legislation last year that gives critical infrastructure industries the assurances they need in order to confidently share information with the

Federal Government. My measure would provide a limited FOIA exemption, civil

litigation protection for shared information, and an antitrust exemption for information shared within an Information Sharing and Analysis (ISAC). These three protections were cited by the past Administration as necessary legislative remedies in

Version 1.0 of the National Plan for Information Systems Protection and PDD-63.

This legislation would enable the ISACs to move forward without fear from industry

so that government and industry may enjoy the mutually cooperative partnership

called for in PDD-63.

As Chairman of the House Government Reform Subcommittee on Technology and

Procurement Policy, I will be continuing to explore this matter, along with Chairman Steve Horn of the Government Efficiency, Financial Management, and Intergovernmental Affairs Subcommittee. I am grateful that you, Mr. Chairman, have

also taken an active approach to addressing this problem today, and I look forward

to working with you to make the Federal Government a model for risk management

and the protection of information systems. As well, I am pleased to have the opportunity to hear the testimony of our distinguished panelists and appreciate their

being here. I want to particularly welcome here today, Mr. Tom Noonan, the President and CEO of Internet Security Systems, which is headquartered in Atlanta but

has an important presence in my district. I look forward to hearing from all of you.

Mr. GREENWOOD. The Chair recognizes the chairman of the full

committee, the gentleman from Louisiana, Mr. Tauzin, for an opening statement.

Chairman TAUZIN. Thank you, Mr. Chairman, for holding this

important hearing on the inadequacy of the Federal efforts to protect our Nation’s critical cyberinfrastructure and the vast amount

of sensitive data that is stored on Federal computer systems.

I really don’t think that many people realize the extent to which

the Federal civilian agencies collect and store so much sensitive information, whether it is medical, financial or other personal information on American citizens, confidential, proprietary data from

11

America’s corporations, cutting-edge scientific research, or whether

it is export controlled information or even sensitive law enforcement information. There are tons of it that is subject to hacking

and to compromise.

We learned, for example, in the GAO report that even the IRS

had allowed a cookie on its Web site. Nor do most people realize

the extent to which we as a Nation have become so independent

on these computer systems to assure our national economic security, and I think it would come as quite a surprise for most Americans to learn which these Federal agencies are the target of attacks

by foreign and domestic sources bent upon espionage and other

very malicious actions.

Faced with this kind of serious challenge, the Federal Government has not performed well. This committee’s oversight continues

to reveal troubling computer security deficiencies across the Federal Government, deficiencies that place critical services and sensitive data at significant risk of compromise. Here, the connection

between the security and the privacy of American citizens cannot

be ignored.

A recent inspector general’s audit of the Health Care Financing

Administration and several of its Medicare contractors, which the

committee is releasing publicly today, found numerous system control weaknesses that permitted unauthorized access to sensitive

beneficiary information. This is sensitive health care information

about Americans that we discovered could be easily compromised

in the Federal HCFA systems; and while we don’t know today

whether the information was in fact compromised, we intend to

find out whether that has in fact happened. And I can assure you,

in a private conversation I had with Secretary Thompson yesterday, he intends to see what is going on at HCFA in this critical

area and he intends to get it fixed before this is an issue of enormous importance to Americans and one that this committee, I

hope, Mr. Chairman, will continue to take a very close and diligent

look at.

The Clinton administration talked a great deal about

cybersecurity and critical infrastructure protection over the past

several years, holding Presidential summits and issuing Presidential directives. The administration, for example, said the Federal Government would serve as a model for good security practice

for the private sector, which controls much of the Nation’s infrastructure, that it might follow and emulate. Despite all the rhetoric

and the photo ops and the paper exercises, the bad news continues

to roll in with every GAO report, every inspector general’s audit,

with every congressional oversight hearing, with each day’s newspaper accounts which each real-world test of government’s computer systems security, no matter how recent, we continue to learn

how bad the situation is.

For example, two reports released this year show little progress

that Federal agencies have made in protecting critical cyberassets

in the 3 years since the President issued his PDD-63. Essentially,

we are still in the process of identifying the critical assets and their

interdependencies, which raises the question, how can we adequately protect our most critical cybersystems when we haven’t yet

identified them all.

12

This is not to say that there have not been improvements in the

area, and certainly there have been some, particularly at those

agencies that have felt the sting of public embarrassment, but overall we are barely treading water; and unless we get serious about

the effort, we will never keep up with the rapid advances of technology in this area which continue to reveal new ways to attack

cybersystems.

The technology to get into our systems is advancing much more

rapidly than the deployment of security to protect them, and in this

increasingly interconnected world, we are either going to prioritize

our resources better to meet this challenge, something that today

Congress has not yet forced the agencies to do, or we are going to

find ourselves in deep, deep trouble, and Americans are going to

wake up angrier than you can possibly imagine to learn that in

many cases their personal, sensitive data, which they shared not

voluntarily, but involuntarily with the Federal Government, has

been compromised and perhaps will be used in ways that they find

very offensive.

This committee has both the responsibility and the authority to

conduct oversight as to whether a nation’s critical and computer

systems are being adequately protected, and we intend to do that.

And I want to thank you, Mr. Chairman, for taking this job and

this assignment so seriously.

This is an extremely important hearing. If Americans are concerned about privacy and security on the Internet as they do commerce voluntarily, let me assure you their concern, as they share

sensitive information with government agencies involuntarily, is

even deeper, and our obligations here are much stronger.

Thank you for taking this seriously, and I yield back the balance

of my time.

Mr. GREENWOOD. Thanks to the chairman for his statement.

[Additional statement submitted for the record follows:]

PREPARED STATEMENT OF DIANA DEGETTE, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF COLORADO

I want to thank the Chair for holding this important hearing, and I want to thank

our witnesses for being here today.

The positive aspects of advanced technology in communications go without saying.

Enhanced inter-connectivity brings a whole new level of efficiency and speed to our

systems.

The downside is that this same inter-connectivity can create vulnerability. I think

a good analogy is when the gene pool of a certain species loses its diversity, a certain strain of virus can come in and wipe out the whole population because they

all share the same vulnerabilities.

It is certainly eye opening to learn, as I did when preparing for this hearing, that

the number of serious security breaches of federal systems is on the rise. Most

unnerving of all is the knowledge that there were over 150 incidents of the utmost

severity last year alone when an unauthorized user was able to gain complete control of a system within 32 federal civilian agencies.

The Government Information Security Reform Act, passed last year, appears to

be a step in the right direction to evaluate government computer system weaknesses

and then address the problems that exist. I expect that this subcommittee will be

among the first to gain the results of the independent tests that are due to be completed by October of this year and again in 2002.

It is reassuring to learn that action has already been taken to evaluate the government’s system weaknesses. I think the Clinton Administration deserves great

credit for recognizing the growing threats to our nations security within this area,

and taking steps to address the risk that poor federal computer security poses to

our country. The Executive Order in 1996 that established the President’s CommisVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00016 Fmt 6633 Sfmt 6621 E:\HEARINGS\72834 pfrm09 PsN: 72834
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sion on Critical Infrastructure Protection (PCCIP) was a tremendous step in officially recognizing this growing problem and bringing the public and private sector

together to address it.

In 1998, a Presidential Directive was issued to have federal officials to create and

implement a strategy for protecting the nations’ critical infrastructures, which was

another crucial step for the security of our country.

I am glad to learn that the new Administration is taking this issue seriously and

am anxious to learn more about its plans to continue this important work and who

will be in charge of coordinating this effort within each agency.

Thanks again to the witnesses for coming, and I look forward to hearing the testimony.

Mr. GREENWOOD. If there are no more opening statements by

members, I would like to turn to our cybersecurity penetration

demonstration and welcome Mr. Glenn Podonsky, Director of the

Department of Energy’s Office of Independent Oversight and Performance Assurance, and his excellent team of cyberexperts to this

hearing. And I thank you for putting together this demonstration

for the committee.

Mr. Podonsky, although you and your team technically are not

witnesses today and are not testifying before the subcommittee, it

is our general practice to swear in all persons who appear before

the subcommittee; and if you and your team have no objection, I

would like to do that now. I ask that you rise and raise your right

hand.

Do any of you have any objections to testifying under oath?

Seeing none, the Chair then advises you that under the rules of

the House and the rules of the committee, you are entitled to be

advised by counsel. Do you desire to be advised by counsel during

your testimony?

Mr. PODONSKY. No.

Ms. MATTHEWS. No.

Mr. BELLONE. No.

Mr. HUSTON. No.

Mr. PETERSON. No.

Mr. GREENWOOD. In that case, would you please rise and raise

your right hand, as you already have.

[Witnesses sworn.]

Mr. GREENWOOD. You may be seated and we recognize you, Mr.

Podonsky, and look forward to your demonstration.

TESTIMONY OF GLENN S. PODONSKY, DIRECTOR, OFFICE OF

INDEPENDENT OVERSIGHT AND PERFORMANCE ASSURANCE, ACCOMPANIED BY, JASON BELLONE, FORMER MEMBER OF THE COMPUTER ANALYSIS RESPONSE TEAM, FEDERAL BUREAU OF INVESTIGATION; KAREN MATTHEWS, FORMERLY WITH COMPUTER FORENSICS LABORATORY, U.S. DEPARTMENT OF DEFENSE; BRENT HUSTON, AUTHOR OF

BOOK ON HACKPROOFING; AND BRAD PETERSON, DIRECTOR, OFFICE OF CYBER SECURITY AND SPECIAL REVIEWS,

U.S. DEPARTMENT OF ENERGY

Mr. PODONSKY. Thank you, Mr. Chairman. We appreciate the opportunity to appear before this subcommittee for the sole purpose

of demonstrating the cyberpenetration techniques employed by my

office. As you are aware, my office provides the Secretary of Energy

with an independent view of the effectiveness of Department poliVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00017 Fmt 6633 Sfmt 6602 E:\HEARINGS\72834 pfrm09 PsN: 72834
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cies, programs and procedures in the areas of cybersecurity, safeguard security and emergency management.

Today, my staff will provide a brief demonstration of our

cybersecurity penetration capabilities. With me for the demonstration today are Mr. Jason Bellone, formerly with the FBI’s computer

analysis response team; Ms. Karen Matthews, formerly with the

Department of Defense computer forensics laboratory; Mr. Brent

Huston, author of a soon-to-be-published book on hack-proofing

your e-commerce Web site; and Mr. Brad Peterson, my Director of

the Office of Cybersecurity.

Our cybersecurity office maintains a continuous program for assessing Internet security to identify vulnerabilities that hackers

and others could exploit. As part of the program, we continuously

attempt to penetrate the DOE cybercommunity. We use this—we

do this by using off-the-shelf software of hacking programs that are

available to virtually anybody. Using these tools, we have been successful in identifying numerous vulnerabilities on DOE

cybersecurity programs, and I am pleased to report, at the same

time, those have been largely corrected by the Department.

We will take a few minutes to demonstrate the results of some

actual inspections that have taken place over the last 6 months in

order to show you the hacking techniques that we use and others

employ. After the demonstration, we would be happy to respond to

questions about the demonstration.

Let me now introduce Mr. Jason Bellone to lead the demonstration.

Mr. BELLONE. Thank you, Mr. Podonsky.

Mr. GREENWOOD. Why doesn’t it surprise me that it is the youngest member of the team?

Mr. BELLONE. We are very proud to present our cybersecurity

laboratory to you today. Although it is small in presence here, this

laboratory is a comprehensive suite of headquarters, regional and

mobile assets that we use, in effect, to attack and subsequently

performance-assess the Department’s information systems. It is our

goal here to provide as much realism as possible to illustrate our

cybersecurity penetration capabilities. The demonstration should

give you an inside look at our process, and at the same time, I

think you will see that the demonstrations will demystify the

attacker process.

Let me highlight two points before I begin. First, each demonstration you will see derives from a real penetration test conducted against government sites within the past 6 months. Sites,

however, will not be mentioned by name.

Second, all tools demonstrated are real, meaning employed as

utilities by the attacker community. Some of these products are

commercial. All are available downloads from the Internet and

most are free. Nor will they be mentioned by name.

When we assess, we don’t use rubber bullets and paint pellets.

To the greatest extent possible, we use the same process, tactics

and tools as an attacker. This process I refer to here is the

attacker’s modus operandi; hence, it is our modus operandi. We will

follow this process throughout the demo, about one level of detail

away from teaching you how to attack a system. So don’t try this

at home.

15

Without further delay, let’s begin the demonstration.

We will start with footprinting. Footprinting is a 50,000-foot

view, a snapshot, a bird’s-eye view of your targets. It is anonymous.

It is unintrusive. It is generally undetected. It is basically reconnaissance to gather a lay of the land. The ultimate goal is the who,

the what and the where of the target.

I will turn your attention to the demonstration screen. The following demo will illustrate a utility, again freely available on the

Internet, that will graphically depict the who, the what, the where

of the target. Although this operation was conducted from Maryland, the source of our efforts appear to come from Tampa, Florida.

I will refer you to line one of the table.

The table represents the path that our data flowed from, the

launch point which was redirected from Florida to Maryland. In

this case and only this case, I will tell you that we are looking at

the Department of Energy’s Web site for the purpose of illustration.

The analysis section indicates the type of system of the target. This

is the basic idea of what we are looking at, so what we have here

is the who, the what, the where data collected. We are ready to

move on to the second step of the process, which is scanning.

The scanning process enables us to generate our target, our target list, and develop an attack plan. The scanning operation employs hundreds to thousands of agents acting as virtual detectives

checking the target systems for specific vulnerabilities. Each virtual detective reports its findings back to the attacker. The probing

process emulates hostile operations and searches for known

vulnerabilities.

The data base of vulnerabilities and exploit change daily. At the

present time we test for over 900 vulnerabilities. Importantly, the

scanning operation can be conducted with what we call ‘‘low and

slow,’’ which means covertly without detection. The end result is a

vulnerability profile, or intact plan ultimately.

The next demonstration will show you exactly what the digital

detectives delivered to us from an assessment we conducted a few

months ago. I will again turn your attention to the demonstration

screen.

These results represent the output of a very robust scanning effort directed at one of our sites. This was a source of our attack

plan.

The significance of what you are looking at is this: The red icon

represents the presence of a high-risk vulnerability, meaning it is

probable for the vulnerability to result in system compromise. The

yellow represents a medium-risk vulnerability that equates to a

medium probability of system compromise. Let me drill down one

level of detail to help you understand what you look at.

If I click the red icon, the high vulnerability icon, I can drill

down to understand the exact nature of the finding. The detail supports a focused attack and later a corrective action.

The attack name is clear. It reads NBTDIC. More importantly,

the description reads as follows, a share that requires only a password may be compromised using a dictionary file. Put simply, it details exactly what we need to do to focus our attack.

Our third example is a separate product that may serve in a

similar capacity. In contrast to the commercial product we demoed,

16

this is a free utility. You will notice the presentation is similar, red

equals high risk, yellow equals medium risk.

Something interesting to note here: In the upper left-hand corner

is a summary of the findings. It is quantitative, tells us how many

targets, how many vulnerabilities, how many warnings. Let me

point out, there have been instances where the scan results did not

yield significant vulnerabilities and, hence, the process can stop

there. So each step is requisite for the next step, and with that we

are on to enumeration.

As the scan results identify specific vulnerabilities for specific

targets, we use this data to concentrate our efforts for more intrusive probing. The goal is to refine the attack plan with information

about user accounts, file-sharing and system characteristics.

The next demo will show you how to use the scan data to concentrate efforts and probe for more valuable information. I will

again turn your attention to the demonstration screen.

This utility enables us to probe for specific information relating

to the scan results. The list has several possible targets. You can

see that they are over 20 targets at the moment. So, next, although

over 20 exist, we are going to focus on one. We have a game plan

for attack then, to gain access to a user C drive. So—to remotely

gain connectivity to a user’s C drive over the Internet.

So with footprinting, scanning, and enumeration data in hand,

we are ready to gain access to the system. The demo you are about

to see is a playback of the exact same exploit that we used in the

course of our assessment; the process, the tools and the data to include the password are directly from the assessment. The demo is

technical, so I am going to narrate as we go through it, so you will

understand what you are about to see. Keep in mind, our goal here

is to run an attack on target X to gain access to the user’s C drive.

We will begin the demo.

This is Step 1. This is collecting basic configuration data. We use

this data to enter into our utility, basically an attack utility, that

will be used to crack the password. You will see that it is iterating

through special characters, through letters, through numbers and

so forth. It goes one character at a time; and for the purpose of this

demo, we did select out of our set a four-character password. Again,

it is original password from the site.

We have I, and we have A—still moving through, lasts only a few

seconds—I-A-E, and you can see it is almost there.

We now have password in hand, so we move on to step three.

Step three is to use that password to connect across the Internet

to the user’s drive. We enter the password and, voila, across the

Internet, we have total access to this person’s hard drive.

At this point, we can load anything we want or we can download

anything we want. In particular, here, we are going to load something called a key stroker logger, and we are going to download a

sniffer. We could equally upload the person’s password file at this

point. So for step five we will move on to escalating privileges.

As you could see from the demo, we gained unrestricted access

to a user’s hard drive, but an attacker would never stop here, nor

do we. The idea now is to discover how far can we go, can we propagate throughout the network?

17

What you will see next is, we will crack a password. So with this

foothold, we have downloaded the password file. The password

cracking demonstration uses a password file captured from exploits

similar to the ones we have demonstrated. The demo will highlight

the fact that cracking passwords is simply a matter of time.

The tool you are about to see is designed to serve as a password

auditing tool; that is, it is to check a department’s password policy,

eight characters, nine characters and so forth. It is publicly available and widely used in the information security community. Needless to say, it can have alternative uses to a malicious user.

Before we begin the demo, let me explain what you will be looking at. In the first column, that is the user name. When you log

in, generally you enter a user name and a password. So that would

be the user name, and the columns that are empty, those will be

where passwords appear. It is empty at this point. At the blink of

an eye you will start to see passwords appear. In the far column,

that’s the encrypted representation of the password. Let’s start to

crack.

We saw, at the blink of an eye, 25,000 words in the English dictionary and about 5 million tries occurred in a second. Less than

a minute will pass for us to have the super-user password. We talk

about root, super-user, administrator; bottom line, complete and

utter control over the system. We will let it go for a moment. It is

very far along. You see administrator, and you see it says

MOTOROL. We are about two characters away from its completing.

We find that we get to this point in under a minute most of the

time.

You also notice that it is telling us that they are not under eight

characters. However, this is still not compliant with policy. So you

can use this to support policy programs that may exist for a department.

So it is completed. We now have super-user privileges. We will

move on to the next demonstration.

You recall that we were able to upload both a key stroke logger

and a sniffer to the target’s hard drive. Commonly, we install the

logger to capture the user’s monitoring log in session. When you

come in in the morning most likely you check your e-mail and so

forth. The idea for what we do is, we load it that night so that we

can catch what you do in the morning.

I refer you to the demo screen for a large picture, fairly hard to

decipher, and that is because every key—escape, control, delete—

is captured. It also runs in stealth mode, unknowing to the user,

very hard to detect, and all of the results go to a text file which

the attacker can bring to their system. Embedded between all of

those escape keys and tab keys actually are passwords.

Of course, an attacker doesn’t stop here either, nor should we, so

we will go on to pilfering.

A sniffer is a stealth utility that will act as a wiretap, a wiretap

that will listen to traffic traversing throughout the network. The

idea of pilfering is to turn a compromised target into a listening device to capture not only what you are typing, but also what your

peers are doing. Clear text passwords, e-mail correspondence, documents are all routed to the original recipient and, at the same

time, rerouted to the attacker. In many cases, we have used this

18

to propagate our control to other areas of the network. This courtesy, with small footholds, escalating privileges and pilfering, enables us or an attacker to gain more and more control in the network.

The next short demonstration will demonstrate how a freely

available tool can turn your machine into a secret listening device.

Let me set up what you’re looking at here.

I mentioned wiretap as an example. This is one snippet, 1 second

from a wiretap, so to speak; and the purpose of this is to highlight

that we indeed have user name and password. So we have gone

from an exploit on a local machine to finding a way further on the

network to other machines now. That is the point of pilfering.

We move on to covering tracks. Covering tracks is hacker 101.

Hackers don’t want to get caught. We do not employ this tactic as

part of our process so that we can work with the sites to engage

in what we call ‘‘post-incident analysis.’’ Simply put, we leave our

traces to enable the site and us to collaborate to understand the

nature of the attack.

The following demo will demonstrate yet another freely available

tool, erasing the traces of an attack with a few button clicks. What

will be important to recognize here is that you will notice that it

is only the traces of the attacking activity that are deleted. So a

systems administrator would never be aware of what happened because all of the other logs, those that are from a normal conduct

of a computer, would still be there. A button click, the traces are

gone. Let’s move on to back doors.

For the following demo I will submit this machine. Karen will do

the heavy lifting here. Although this machine is separated by 20

feet of cable, we have executed the exact same exploitation with

hundreds to thousands of miles of separation between our lab and

the site. The message is clear that ownership and control of a resource is, to the fullest extent possible, in many cases more than

the user. The goal is to make a key that only you can use to enter,

create accounts, plant remote control services and to install Trojans. I will now start the demo.

Let me set the scene again here. Imagine yourself working in

front of this screen, doing normal business work wherever—anywhere in the world, for that matter, okay? We have exploited this

system unknowing to you, and we are now going to take over control by doing things like change colors. So you are sitting there and

this is happening to you, okay?

The other thing we are going to do is, we are going to eject the

CD on you—again, from 3,000, 2,000, 1,000 miles away—and the

other thing we might do, just to harass you a little more, is to hide

icons. There we go. The point being—these are visual examples; ultimately, it is complete control.

A popular news organization reported about this tool, and let me

quote: ‘‘he or she can access your files, monitor your key strokes,

move your mouse around the screen. If you have a Web cam, they

can watch what you are doing. If you have a microphone, they can

listen to you. It is complete power.’’

This concludes the demonstration portion of our testimony. In

closing, I will highlight the end product of this capability.

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The essence of our capability is our final product. Our product

encapsulates every element of what you have just seen—process,

tactics, tools, every vulnerability and exploit. Along with meticulous note-taking and recordkeeping, we deliver all of this information to the site in a user friendly, Web-based CD-ROM. So anything

and everything that is collected, yellow sticky and so forth, is given

to the site for corrective action. I know you are also familiar with

our paper product, which combines the technical elements with the

policy, program and procedural analysis.

Thank you.

I will now offer our technical team for technical questions, as

well as Mr. Podonsky and Mr. Peterson, who can entertain questions about our program.

Mr. GREENWOOD. Thank you. Now, I know why I can’t open my

e-mail in the morning.

I don’t know if you are able to answer this in anything like a

brief response, but what are the fundamental things that agencies

and Federal entities ought to do to protect themselves from this

kind of assault?

Mr. BELLONE. It is due diligence. This—what you are seeing here

is such a dynamic process that it is a snapshot in time when we

do an assessment. The fundamental core of doing this is to have

program, policy, procedure and technology working together. That

is why the scope of our assessments is what is important, that we

do the technical elements, but at the same time, we have a team

who looks at policy, looks at programs, looks at procedures. We put

it together so that we can understand the health of a program and

how they are able to sustain the program. It is the sustainability

that is most significant.

Mr. GREENWOOD. So what I hear you saying is that you are

never finished with your security precautions. You can’t build a

firewall or create air space and stay permanently fixed. You always

need to be——

Mr. BELLONE. The quote that I think about is, ‘‘as technology

evolves, sneakiness finds new ways of expression;’’ and that’s exactly where we are. We can assume technology will evolve, especially in this growing field of information technology. Hence, the

task is always ahead of us.

Mr. GREENWOOD. That is a fascinating, fascinating demonstration.

Are there questions from the members for the technical panel

here?

The Chair recognizes the chairman, Mr. Tauzin.

Chairman TAUZIN. Thank you very much.

I simply want to put what you have told us in layman’s terms

a little bit. Am I correct in that, with this demonstration, you have

shown us how a hacker cannot only compromise the system but

take it over and actually control the information on that system?

Is that correct?

Mr. BELLONE. Yes.

Chairman TAUZIN. You have shown us how someone who could

compromise, let’s say, a third-party payment system at HCFA to

get into that system—how they might not only gather the informaVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00023 Fmt 6633 Sfmt 6602 E:\HEARINGS\72834 pfrm09 PsN: 72834
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tion that’s in that system about patient’s health care and problems,

but that they might even alter the information on that system?

Mr. BELLONE. Absolutely.

Chairman TAUZIN. So that I take it your answer is, yes, right?

Mr. BELLONE. My answer is yes.

Chairman TAUZIN. So the person who is using the systems you

have demonstrated can actually change the medical condition or

the treatment profile or the payment requirements of that system;

is that correct?

Mr. BELLONE. That is exactly correct.

Chairman TAUZIN. And, therefore, compromise the integrity of

the payment system?

Mr. BELLONE. Absolutely.

Chairman TAUZIN. I can envision incredible fraud opportunities

with that scenario, is that right, as well as privacy problems?

Mr. BELLONE. You can assume that with what we have shown,

an attacker can gain more privileges than the user has.

Chairman TAUZIN. Say that again, ‘‘An attacker can gain more

privileges than the user.’’ What do you mean by that?

Mr. BELLONE. What I mean is that once you exploit it, you can

deny them service to that resource.

Chairman TAUZIN. So you can not only take charge of their operation, you can make it more difficult for them to actually use it

themselves?

Mr. BELLONE. Absolutely.

Chairman TAUZIN. You can deny them total use, if you want, of

these systems?

Mr. BELLONE. Absolutely.

Chairman TAUZIN. You also indicated—obviously, I am just using

health care systems as an example for us to understand this technology, but this, in the case of an energy lab, might explain how

someone might get in and compromise, with espionage intent, not

only the information in that lab, but you might do it from across

the world.

You don’t need necessarily someone working in the lab; is that

right?

Mr. BELLONE. To a certain extent. The one thing that I think the

Department of Energy recognizes is, given that risk, there are certain assets that they are not willing to subject to that risk.

Chairman TAUZIN. Well, let’s hope so.

Mr. BELLONE. Yes.

Chairman TAUZIN. But we have some confidence problem with

that.

Yes, sir.

Mr. PODONSKY. Also the fact that we exist as an organization to

continue doing these penetrations is a compliment to the current

Secretary and the Department because we are allowed, without legislation, to go anywhere that we need to and report on anything

that we find.

Chairman TAUZIN. On the technical side again, the last thing you

said was quite disturbing as well, that if you had a camera, once

this system is compromised, that you take over that camera, that

you can actually watch activities in that room in front of that

screen; is that correct?

21

Mr. BELLONE. Absolutely.

Chairman TAUZIN. And if you have a microphone, which most

computers do, you can, with this technology, install your sniffer

and actually listen in on all conversation inside that room; is that

correct?

Mr. BELLONE. Absolutely. If the machine has a microphone, that

is the case.

Chairman TAUZIN. And unless all the Federal sites in which sensitive information is being discussed are protected against this

technology, anyone from around the world using it could enter any

room where sensitive conversations are being held and eavesdrop

on those conversations without a court order covering their tracks,

without anybody ever knowing they have done it; is that correct?

Mr. BELLONE. To a certain extent, it is correct.

What I could say is that in some environments they look harder

at things like hardware, the presence of microphones and so forth,

and so that is looked very carefully upon. In other environments

where there is less, where there is not the presence of sensitive information, it is more likely that that may be the case.

Chairman TAUZIN. But it is a problem. Unless the Federal official

who is operating in front of that computer screen which has camera

and microphone capabilities is aware of what you have just shown

us, if he has no awareness of it, if it is not a priority item in his

thinking or her thinking that day, that conceivably those systems

can be compromised in the way you have demonstrated and the

conversations, the actions even in that room can be in someone

else’s domain, unknown to the Federal officials involved.

Mr. HUSTON. That is correct, sir, but you have to realize that it

should never get that far. There should be defensive measures installed in these systems to prevent that from occurring long before

that ever becomes a risk.

Chairman TAUZIN. That is, of course, the next question.

You know, I have raised in the opening statement the concern

that enough of our Federal agencies are not keenly aware, we have

not yet made them keenly aware nor instructed them nor appropriated funds for them to install these defensive systems. Is that

generally correct as well? Who can answer?

Mr. PODONSKY. Well, we are better off to keep focus on what we

do know about the Department of Energy. On the technical side,

we don’t know what all the other agencies are doing, but we do

know that because of some very good reasons, the Department was

very motivated in the last 2 years to really focus on cybersecurity.

Chairman TAUZIN. Something called public embarrassment, I

think.

Mr. PODONSKY. That often helps.

So to answer your question, from our standpoint, as we pointed

out here, not only do we continue to probe, but the people who are

responsible for filling the vulnerabilities that we find are actively

doing that as we speak on a regular basis.

Chairman TAUZIN. And I guess, as a final question, these technologies are also available for private snooping and private compromising of homes and businesses across America; is that correct?

Unless Americans are aware, keenly, of the capabilities of these

systems and take as much concern about installing defensive sysVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00025 Fmt 6633 Sfmt 6602 E:\HEARINGS\72834 pfrm09 PsN: 72834
22

tems, their private homes, their most private conferences, in many

cases their most private spaces and activities can be easily compromised by someone invading their home through these devices

and literally listening in and watching the most private of circumstances of Americans in their personal and business lives; is

that correct?

Mr. HUSTON. That is correct. However, awareness is the primary

means of defense against any security threat, and much like a

physical security threat, where you have started to see the evolution of homeowners installing alarm systems and other threat

and risk mitigation strategies, I think you will see a growth in that

marketplace, as well, for cybersystems.

Chairman TAUZIN. Thank you, Mr. Chairman.

Mr. GREENWOOD. Let me just ask a question about motivation.

Obviously, we know that there are some hackers who do this for

the sport of it, just to see what they can do, and they may or may

not have nefarious intentions other than to sneak in and see what

they can do. But what nefarious opportunities are there once you

get in?

In other words, I assume a lot of people wouldn’t get all the way

there just to hide your icons or change the colors on your screen;

that they would be there to—is there a market for the information?

Can you get information and then sell it? Is it a question of compromising and destroying internal systems for strategic purposes?

Talk, if you would, briefly about some of the motivations for

doing this.

Ms. MATTHEWS. I think the answer to your question is all of the

above and then some.

There are over 100 countries that have some sort of information

operations capabilities, and you saw what we could do with publicly

available software and hardware. If you could imagine them turning their expertise and resources to debunking those information

and operations, you can imagine what damage that could do. So the

motivations are various, depending on whether it is a teenager or

whether it is a nation-state or a terrorist organization that has motivation behind them.

Mr. GREENWOOD. And given the ability to cover tracks, it is safe

to say that this has probably happened to Federal systems, and we

don’t know what was done, have no way of knowing what was

done? They could have covered the tracks and left no trail whatsoever?

Mr. BELLONE. Part of strength and defense is having an effective

intrusion detection system—and I emphasize the word ‘‘system,’’

because what we showed you is covering tracks at a very micro

level. When we assess a site, one of our topical areas is intrusion

detection systems, meaning their ability to respond to an event and

provide that for an investigation, if you will. That is a critical component of detecting that level of activity. Sure, there are point-andclick tools available to vanish yourself from one machine, but with

a very comprehensive system of alarms, you can still detect the activity.

So there are defense elements that are available.

Mr. GREENWOOD. Mr. Strickland, do you have questions for the

panel?

23

Mr. STRICKLAND. No, sir, but I want to thank the panel. They

have been very stimulating, and I am sitting here wondering what

their IQs must be.

Mr. GREENWOOD. We can assume it is higher than ours.

Mr. Davis.

Mr. DAVIS. Thank you. You can never have 100 percent protection in an information system; do you agree with that?

Mr. BELLONE. That is correct.

Mr. DAVIS. Information security best practices really means

using effective risk management in their implementation. How do

you collaborate with your clients to assist them in meeting those

objectives?

Mr. PETERSON. We have—as part of our process, we do the technical performance testing, what Mr. Bellone has shown you today.

We then go in with our programmatic team and we take a look at

their processes, and one of the key ones would be the risk management process, you know, does the site understand the threat. Then

you do a risk assessment, understanding your critical systems and

your critical information need protection. You then devise risk mitigation strategies and a protection strategy as well.

You implement those, and then there is going to be some residual risk left over. What we do then is, we go in to see, do you understand your residual risk, has there been an appropriately designated official—has that person accepted that risk. That is what

we look for.

Mr. DAVIS. Thanks.

Mr. GREENWOOD. Ms. DeGette.

Ms. DEGETTE. Thank you, Mr. Chairman.

I want to follow up on the full committee chairman’s questions

about, if you had microphones and video capability in computers.

I would assume that for someone to be able to intercept that, the

computer would have to be on at that time. And is that a yes?

Mr. BELLONE. That is correct.

Ms. DEGETTE. And I would also assume that many meetings that

take place where secret information is discussed are not in people’s

cubicles or offices where their PC is on, but rather in a conference

room or some other venue. Would that be correct?

Mr. BELLONE. Absolutely.

Ms. DEGETTE. And in those venues, in your experience in your

agency, are there computers running in those rooms at the time

those meetings are taking place? I am trying to figure out how real

a threat this really is.

Mr. BELLONE. In the sensitive realm, there is a very clear accreditation process that looks at the room—the nature of the room, the

hardware, the software and so forth. So it is very much a controlled

environment, and because there are so many checks and balances

and procedures and signatures and so forth, generally the process

resolves or reconciles those kinds of concerns.

Ms. DEGETTE. And that is happening under current DOE protocols?

Mr. BELLONE. Accreditation process.

Mr. PODONSKY. Yes.

24

Ms. DEGETTE. And what about the training of personnel, are personnel currently, under current protocols, trained about the risks

of interception of verbal communications?

Mr. PETERSON. It is part of what we look at in our programmatic

review, we look for annual training of users—obviously more detailed training down to the systems administrator level, managers—making sure that they understand their roles and responsibilities, making sure that the site has good procedures that actually push policy down from the broad national perspective down to

the working level.

Ms. DEGETTE. Well, these particular concerns that Mr. Tauzin

was expressing are—is that part of your current training for personnel about the risks of hackers coming in and actually being able

to intercept visual or verbal discussions? Is that a policy right now?

Mr. PETERSON. Again, that is part of the risk assessment process

that is evaluated at the site level for each individual network. You

know, depending on what information they have, again it is going

to drive the level of concern. Again, that is a process at the site

level.

Then that feeds into the training based on, we know we have

these risks, we need to inform our users and our systems administrators.

Ms. DEGETTE. I understand what your general protocols are, but

specifically, are people advised of these risks?

Mr. BELLONE. One thing that comes to mind, we run through

computer-based training in yearly training sessions that go over

counterintelligence and cybersecurity, and the cybersecurity awareness training covers these elements. They talk about the exploit or

attacker threat. That is required yearly.

Ms. DEGETTE. Now, let us talk for a minute about classified systems. By the way, I apologize, I missed your demonstration. I was

caught in the cherry blossom traffic, I think.

But apparently, according to Mr. Strickland, we are never turning on our computers again because of the risk of people getting

our information, and I want to know how very real the risk is with

your Agency? Are the classified systems at your Agency connected

to the Internet?

Mr. PETERSON. We take a very close look at that. With classified

systems, there is either an air gap between the Internet and the

classified system or NSA-approved encryption.

Ms. DEGETTE. So some are connected to the Internet, but there

are protections that you believe would be effective in place?

Mr. PETERSON. Yes.

Ms. DEGETTE. How many of the classified systems, what percentage of your classified systems are connected to the Internet?

Mr. PETERSON. I am not sure if we can provide a good number

for that.

Ms. DEGETTE. If you can supplement your answer in writing, I

would appreciate it. Mr. Chairman, thank you.

[The following was received for the record:]

The Department has one classified system connected to the Internet. However, all

classified information that is transmitted over the Internet is protected using an

encryption device approved by the National Security Agency.

25

Mr. GREENWOOD. We thank you for that mind-bending demonstration. You are excused, and we will bring up the next panel.

Thank you again.

The Chair calls the witnesses, Ms. Sallie McDonald, Assistant

Commissioner, Office of Information Assurance and Critical Infrastructure of the U.S. General Services Administration; Mr. Ron

Dick, Director, National Infrastructure Protection Center of the

FBI; and Mr. Tom Noonan, President and CEO of Internet Security

Systems.

The Chair would ask unanimous consent that the gentleman

from Georgia, Mr. Isakson, be given permission to sit at the table

and introduce his constituent, Mr. Noonan.

I am going to have Mr. Isakson introduce Mr. Noonan first, and

then we will turn to Ms. McDonald for her opening statement.

Mr. ISAKSON. I commend the chairman and members of the committee for looking into an issue of major importance to the U.S.

Government. It is also an issue of major importance as well to the

private sector throughout this country.

I am particularly pleased to have the honor to introduce a citizen

of Atlanta, Georgia, Mr. Tom Noonan, Chairman and CEO of Internet Security Systems, whose software development, remote management of security systems, education and consulting is sought

worldwide. ISS is a company that has offices in Asia, Latin America, Middle East, Europe and throughout North America. They

have over 6,000 customers in the United States of America in the

management and security of their network systems.

To talk about the importance of the software that they developed

and the remote management that they have, today 21 of the top

25 banks in the United States of America are clients of ISS. The

top 10 telecommunications companies in the United States of

America are clients of ISS, and 35 government agencies in this

country, or possibly worldwide, are clients of ISS.

But probably the best compliment that I can pay to Mr. Noonan

is that 2 years or 3 years ago, following my election to Congress,

I sought the opportunity, because of my business experience and

knowing the importance of technology, to develop an advisory board

of individuals to help me deal with the myriad of privacy and safety and security issues that deal with the Internet and technology.

Tom Noonan’s name was consistently mentioned as the paramount

authority on security systems in Atlanta, and, in fact, in the

United States. It is an honor and privilege for me to introduce him.

I am going to apologize that I have to leave this table, but I have

the intellectual capacity to be a Congressman; I am not sure that

I have the capacity to sit at this table with these individuals, and

I do not want to confuse anyone here. I thank the chairman.

Mr. GREENWOOD. I thank the gentleman. The Chair recognizes

Mr. Davis.

Mr. DAVIS. Mr. Isakson, you missed one item in that introduction. That is, his company has a strong presence in Herndon, Virginia. Welcome.

Mr. GREENWOOD. The Chair recognizes Ms. Sallie McDonald for

her testimony.

26

TESTIMONY OF SALLIE McDONALD, ASSISTANT COMMISSIONER, OFFICE OF INFORMATION ASSURANCE AND CRITICAL INFRASTRUCTURE, U.S. GENERAL SERVICES ADMINISTRATION; RONALD L. DICK, DIRECTOR, NATIONAL INFRASTRUCTURE PROTECTION CENTER; AND TOM NOONAN,

PRESIDENT AND CEO, INTERNET SECURITY SYSTEMS, INC.

Ms. MCDONALD. Good morning, Mr. Chairman and members of

the committee. I am the Assistant Commissioner for the Office of

Information Assurance and Critical Infrastructure Protection. My

office is a component of GSA’s Federal Technology Service under

which the Federal Computer Incident Response Center operates.

We wish to thank you for the opportunity to offer testimony pertinent to the state of security for government information technology resources. The Federal Computer Incident Response Center,

or FedCIRC, is a central coordination activity for dealing with computer security-related incidents affecting computer systems within

the Federal civilian agencies and departments of the U.S. Government.

As government industry system interconnectivity increases, the

boundary between the two becomes more difficult to define and in

some cases they simply do not exist. Any security weakness across

the Internet has a potential of being exploited to gain unauthorized

access to one or more of the connected systems, including those of

government. Reports indicate that numerous countries have or are

developing information warfare capabilities that could be used to

target critical components of the national infrastructure, including

government systems. The National Security Agency has determined

that potential adversaries are collecting significant knowledge on

U.S. information systems and also collecting information and techniques to attack these systems.

Since October 1998, FedCIRC incident records have shown an

alarming trend in the number of attacks targeting government systems. Overall, 376 incidents were reported in 1998, affecting 2,732

Federal Government systems.

In 1999, the figure had risen to 580 reported incidents affecting

1.3 million systems. By 2000, reported incidents numbered 586;

and those incidents impacted over 576,000 government systems.

Although these numbers are alarming, it should be noted that

they reflect only those reported incidents and do not include statistics on the estimated 80 percent that go unreported. Studies indicate that the lack of reporting is not due to an organization overlooking its obligation to report, but rather a sign of the organization’s inability to recognize that its systems have been penetrated.

The increase in the number of route compromises, denial of service

attacks, network reconnaissance activities, destructive viruses and

malicious code, coupled with advances in attack sophistication,

pose immeasurable threats to government systems and the critical

missions and services they support.

With the rapid transition to a paperless government and increasing dependence on e-government solutions, the focus on secure

technology approaches must be a priority. We in government cannot afford to overlook our inherent responsibility to protect sensitive information from unauthorized disclosure. The unprecedented growth in technology is driving government to implement

27

capabilities and services so rapidly that security concerns are often

overlooked.

Mr. Chairman, my brief summary today only begins to touch on

the most significant information security challenges we have before

us. The complete text of my testimony describes in greater deal the

current and growing threat to the Federal information infrastructure. I trust that you will derive from my remarks an understanding of the cybersecurity issues, and also an appreciation for

the commitment that those in the FedCIRC and participating organizations share for the protection of components of our critical infrastructure. We appreciate your leadership and that of the committee for helping us achieve our goals and allowing us to share

information that we feel is crucial to the defenses of the Federal

information technology resources. Thank you.

[The prepared statement of Sallie McDonald follows:]

PREPARED STATEMENT OF SALLIE MCDONALD, ASSISTANT COMMISSIONER, OFFICE OF

INFORMATION ASSURANCE AND CRITICAL INFRASTRUCTURE PROTECTION, FEDERAL

TECHNOLOGY SERVICE, GENERAL SERVICES ADMINISTRATION

Good morning, Mr. Chairman and Members of the Committee. On behalf of the

Federal Technology Service of the General Services Administration let me thank you

for this opportunity to appear before you to discuss our perspective on the state of

security for government information technology resources.

As you know we operate an entity known as FedCIRC. FedCIRC stands for

the Federal Computer Incident Response Center, and is a component of GSA’s

Federal Technology Service. FedCIRC is the central coordinating activity associated

with security related incidents affecting computer systems within the Civilian Agencies and Departments of the United States Government. FedCIRC provides security

incident identification, containment and recovery services and works within the Federal community to educate agencies on effective security practices and procedures.

FedCIRC’s prevention and awareness program includes security bulletins and

advisories, hardware and software vulnerability notifications, and vulnerability

fixes.

With the recent enactment by Congress of the Government Information Security Reform Act, federal agencies and departments must report computer security

incidents to FedCIRC. FedCIRC’s role is to assist those federal agencies and departments with the containment of security incidents and to provide information and

tools to aid them with the recovery process. In January, the Office of Management

and Budget (OMB) issued implementing guidance on the new security act. In that

guidance, OMB instructed agencies to implement both technical and procedural

means to detect security incidents, report them to FedCIRC, and to use FedCIRC

to share information on common vulnerabilities. Agencies were advised to work with

their security officials and Inspectors General to remove all internal obstacles to

timely reporting and sharing. Additionally, in October of last year, the Federal CIO

Council worked with FedCIRC and developed procedural advice to agencies for efficient interaction with FedCIRC.

When an incident is reported to FedCIRC, we work with those involved to collect

pertinent information, analyze it for severity and potential impact, and offer guidance to minimize or eliminate further proliferation or damage. Additionally,

FedCIRC assists in identifying system vulnerabilities associated with the incident

and provides recommendations to prevent recurrence. Moreover, FedCIRC works

closely with the FBI’s NIPC and the national security community to ensure that incidents with potential law enforcement or national security impact are quickly reported to the appropriate authorities.

As government and industry systems and network interconnectivity increase, the

boundaries between the two begin to blur. This huge network of networks, known

of course as the Internet, includes both government and private systems. In some

fashion, through the Internet, all of these systems are interconnected. Thus, an inescapable fact of life in this Internet Age is that any risk associated with any part

of the Internet environment is ultimately assumed by all systems connected to it.

Any security weakness across the Internet has the potential of being exploited to

gain unauthorized access to one or more of the connected systems.

28

Reports from the Department of Defense and other sources tell us that over 100

countries have or are developing information warfare capabilities that could be used

to target critical components of the national infrastructure including government

systems. The National Security Agency has determined that potential adversaries

are collecting significant knowledge on U.S. information systems and also collecting

information and techniques to attack these systems. These techniques give an adversary the capability of launching attacks from anywhere in the world that are potentially impossible to trace.

Since October 1998, FedCIRC incident records have shown an increasing trend in

the number of attacks targeting government systems. Overall, there were 376 incidents reported in 1998 that affected 2,732 Federal civilian systems and 86 military

systems. In 1999, the figure had risen to 580 reported incidents affecting 1,306,271

Federal civilian systems and 614 military systems. By 2000, reported incidents

numbered 586, which impacted 575,568 Federal civilian systems and 148 of their

military counterparts. Though these numbers are in themselves ample cause for

concern, these numbers reflect only those reported incidents and do not include incidents that were not reported. Studies conducted by the Department of Defense as

well as data collected from the broad Internet community by Carnegie Mellon University’s CERT Coordination Center indicate that as many as 80% of actual security

incidents go unreported. More importantly, perhaps is the reason incidents appear

to remain unreported. In most cases incidents are not reported because the organization was unable to recognize that its systems had been penetrated or because

there were no indications of penetration or attack.

Of course computer security incidents vary in degree of severity and significance.

Many incidents, such as web page defacements, are seemingly insignificant and generally categorized as ‘‘cyber-graffiti.’’ Typically, systems that are victims of defacement have one thing in common, an overabundance of commonly known weaknesses

in their respective operating system and server software. Though the damage from

such incidents may be small, the rising number of occurrences suggests a clear pattern of inattentiveness to security problems, especially those that might be easily

resolved with publicly available software patches.

While these relatively minor incidents may amount to mostly nuisances, the more

significant incidents are those associated with the development of sophisticated attack methodologies. Such attack methodologies involve the organized distribution of

intrusion techniques across the Internet. So called ‘‘hackers’’, ‘‘crackers,’’ mischievous individuals, rogue nations and even state sponsored attacks are all threats

to systems in government and the private sector.

In particular, unauthorized intrusions into government systems containing sensitive information are also on the rise. In 2000, as I reported earlier, FedCIRC documented 586 incidents affecting government systems. 155 of those were reported

from 32 agencies and resulted in what is known as ‘‘root compromise.’’ A root

compromise means the intruder has gained full administrative or ‘‘root’’ privileges

over the targeted system. This means that any information or capability of the system is totally owned by and controllable by the intruder. With ‘‘root’’ privileges, the

intruder can cover his or her tracks because the privileges allow them to alter system logs and thereby erase any evidence of intrusion activities. In at least 5 of the

incidents involving a root compromise, access to sensitive government information

was verified. For the remaining 150 incidents, compromise of any and all information must be assumed. Root compromises were also employed in 17 separate instances where the compromised systems were used to host and then launch attacks.

Attacks of this nature are particularly egregious since they work to erode the public

trust in government systems integrity while serving to openly demonstrate security

vulnerabilities within government systems.

More recently, as a byproduct of the Y2K problem, a new type of attack has been

gaining attention. This type of attack is known as the ‘‘Distributed Denial of

Service’’ attack and is considered one of the most potentially damaging attack

methods yet to be developed. The Distributed Denial of Service or DDoS attack simply overwhelms a targeted system with so much information that the targeted system cannot grant access to legitimate users. This attack can be particularly damaging when components of the critical infrastructure such as power grid controls,

traffic controls, emergency and medical services are subject to a DDoS attack, since

these attacks render their targets effectively inoperative. And if that is not enough,

the DDoS attack, after first identifying and compromising vulnerable systems anywhere across the Internet, next deposits on those compromised systems hostile software capable of launching further attacks. Once in place, the exploited systems can

then be orchestrated to simultaneously launch attacks on a predetermined target,

flooding the target with more information than it is capable of processing. Ninety

29

three government systems were targets of DDoS attacks, many of which resulted

in the disruption of critical government services.

Perpetrators continually scan the Internet to identify systems with weak security

profiles or vulnerabilities. These reconnaissance activities focus on identifying the

active services, operating systems, software versions and any protective mechanism

that may be in place. Armed with this information, a would-be intruder can consult

publicly available information repositories and references for vulnerabilities particular to their selected target. Then they can devise attack strategies with the highest probabilities for successful compromise. Port scans, probes, network mapping applications and commonly used network administration tools are typical resources

used by an intruder to identify weaknesses in the chosen organization’s infrastructure and to simplify the intrusion effort. Incidents reported by Federal agencies to

FedCIRC during 1998 indicated a mere 157 occurrences. However in 1999 there was

a significant jump in network reconnaissance activity to 1,686 occurrences. Although

2000 showed a slight decrease, the number of reported reconnaissance incidents still

was 1,207.

The sophistication of computer viruses also poses a significant threat. While

yesterday’s viruses were destructive to files residing on a system, today’s viruses

come in many forms and self propagate by exploiting the advanced capabilities of

modern-day software applications. Computer viruses may harbor capabilities to destroy both hardware and software. They may arrive in the form of so-called ‘‘trojan

horse’’ code capable of capturing and transmitting sensitive information, user account data or administrator passwords. As legitimate software programs incorporate

more advanced capabilities, those same capabilities are being harnessed to very destructive purposes. As we observed during the ‘‘Melissa’’ and ‘‘I Love You’’ viruses,

a single email on the other side of the globe began saturating mail servers within

a few short hours. The number of virus incidents reported by Federal agencies in

1998, 1999 and 2000 totaled 55, 35, and 36 respectively. Since anti-virus defenses

are developed in response to a virus, there is a relatively significant period of time

between the capturing of the virus code and the development of a defense. Considering the near-real-time communications capabilities available to a large percentage

of the world population, microseconds can mean the difference between normal operations and system disruption.

Statistics compiled by Carnegie Mellon University’s CERT Coordination Center

show a definite correlation between the growth of software vulnerabilities and the

number of reported incidents. From 1988 to present day, the number of

vulnerabilities identified annually has increased from only single digits to well over

800. The number of reported incidents across industry and government closely track

that of the vulnerabilities, from a meager few in 1988 to almost 25,000 as of the

beginning of this year. These trends indicate that Internet connected systems are

becoming increasingly vulnerable to attack and that defensive measures are not yet

adequate to protect against exploitation of the vulnerabilities.

With the rapid transition to a paperless government and increasing dependence

on e-government solutions, the focus on secure technology approaches must be a

high priority. The unprecedented growth in technology is driving government to implement capabilities and services so rapidly that security concerns are often overlooked. The adoption of e-commerce solutions, e-government solutions and countless

forms of electronic information exchange is in danger of moving forward without

adequate consideration of the protection of the systems and the information they

store, process or transmit. We in government cannot afford to overlook our inherent

responsibility to protect sensitive information from unauthorized disclosure. The implementation of strategic defenses for the Federal Information Infrastructure can

only be realized if we act promptly to establish the proper foundation for already

overdue initiatives to combat these issues. Information sharing and collaboration on

the part of all concerned is key to the creation of effective defenses. FedCIRC, in

cooperation with every Civilian Federal Agency, Industry, Law Enforcement, the

Department of Defense and Academia, has begun building a virtual network of partners to facilitate the sharing of security relevant information and ideas. Each week,

the list of partners increases as more and more realize that this battle cannot be

fought in isolation. Every contributing piece of information from a participating

partner has the potential of unlocking a critical cyber-defense problem.

SUMMARY

Mr. Chairman, in my remarks here this morning, I have merely touched on the

most significant information security challenges we face in this Internet Age dawning before us. My goal was to inform you and this committee about the nature of

the cyber-security issues we face collectively as a nation. I also want to help you

30

appreciate the degree and level of commitment that those in FedCIRC and participating organizations share regarding the protection of the components of our Critical Infrastructure. We appreciate your leadership and that of the Committee in

helping us achieve our goals and allowing us to share information that is crucial

to the effective defense of Federal Information Technology resources.

Mr. GREENWOOD. Thank you.

Mr. Dick.

TESTIMONY OF RONALD L. DICK

Mr. DICK. Mr. Chairman, I am the Director of the National Infrastructure Protection Center which is located at the FBI. I want to

thank you today for inviting me to discuss cyber-intrusion issues

into government systems. Because of the impact that cyber-intrusions have on our national security, as well as the economic wellbeing of government and industries to provide vital goods and services to Americans, this is a very important topic.

I would ask that my full statement be entered into the record,

and I will focus on a few brief comments.

Computer intrusions into government systems are a serious problem. In my statement, I cite that we have currently 102 pending

investigations of government systems out of a total of approximately 1,219. But each case can represent multiple intrusions and

multiple victims. Thus the caseload denotes a large number of incidents. That is the bad news.

The good news is that National Security Advisor Rice’s recent

statement at the Partnership for Critical Infrastructure for Security meeting indicated the administration’s view that this is a high

priority.

Let me briefly outline some threats we face and discuss a few examples that highlight the vulnerability.

Insiders have always been a major threat. Their motive is usually against a current or former employer. In many instances they

do not need to be sophisticated because they do know the passwords, or controls are such that passwords are not changed routinely. Further, they have the greatest knowledge of how to defeat

the system’s internal controls.

In one case, a dismissed employee of the National Library of

Medicine created a back door in the system through which he could

alter and destroy data on the system. These intrusions were a

threat to public safety, as doctors from around the world depended

on the integrity of this information for diagnosis and drug prescriptions.

Computer virus writers have become a dangerous problem in the

last few years. They write their programs, often just to cause mayhem in the networks. The result is that important systems are

made or forced to come off-line for repairs. This is at a cost of billions of dollars; last year, as we all remember, the well known love

letter virus which began in the Philippines but soon spread globally. The FBI and Philippine authorities were able to trace the

virus back to its source, but because the Philippines lacked a

cybercrime statute at the time, he could not be prosecuted.

Along with viruses, hacking cases are the best known. In February 1998, just as the Center was being established, we had one

of the largest hacks ever of U.S. Government systems. Intruders

had compromised hundreds of Department of Defense computers.

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We initially thought it could be an attack from a foreign power. It

turned out to be teenagers from California and Israel. Those teens

have since been prosecuted by the U.S. Government; but it was a

wake-up call regarding cybersecurity.

While the motive was less malicious in this case than others we

had seen, it highlighted the potential for use of cyberspace to prepare the battlefield.

Let me touch further on national security threats. There are

thousands of intrusions or attempts into government systems every

year. Many of them emanate from abroad. We know many nations

are developing information warfare capabilities, as well as adapting cybertools as information-gathering trade craft. That is about

as far as I can go today, but this is an evolving area for us.

Let me talk about the response to these threats. In the middle

of the 1990’s, the Federal Government, as has been recognized already, recognized the potential dangerous problem regarding cybervulnerabilities.

In February 1998, the Attorney General authorized the creation

of the National Infrastructure Protection Center. In May 1998,

President Clinton authorized the expansion of Justice Department

efforts to a full-scale National Protection Center. The Center’s mission is for detecting, assessing, warning of, and investigating significant threats and incidents concerning our critical infrastructures. The NIPC is an interagency center. Of the 101 persons currently working in the Center, we currently have 18 detailees from

outside the FBI, and two foreign detailees. The leadership of the

Center comes from several agencies. The NIPC’s Deputy Director

is Rear Admiral James Playhall from the Navy, who is with us

today. Over the last 3 years the Center has issued 82 warning

products. Many of these products, such as the one issued last week

on the ‘‘Lion Internet Worm’’ are issued before any attacks occur.

These warning products are sent to our Federal partners, as well

as State and Federal law enforcement, international partners with

whom we have connectivity, the information sharing and analysis

centers, and others in the private sector so as to enhance security

worldwide.

What makes the NIPC unique is that we have access to information from law enforcement sources and investigations, the intelligence community, international sources, private sector contacts

and open sources. No other entity has access to such a complete

range of information.

In cyberspace, we all look the same as has been pointed out here

today in the demonstration. Thus, investigations is an important

component of what the center does. Finding out the origin of an intrusion and who is sitting behind that keyboard is a huge challenge. What makes the NIPC unique is that through the FBI, we

have access to both criminal and national security authorities to

conduct such investigations. As an interagency center, we can coordinate our investigative efforts more efficiently. If the intruder is

overseas, we can use our partners regarding investigations and

prosecutions through our legal attaches in over 40 countries around

the world. Once we have determined the facts regarding the attack

and the identity of the attacker, we can confer with the DepartVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00035 Fmt 6633 Sfmt 6602 E:\HEARINGS\72834 pfrm09 PsN: 72834
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ment of Justice, and just as importantly, policymakers, to fashion

the appropriate response.

That response may be criminal prosecution or it might be diplomatic, intelligence, or military action, or a combination of all three

of those things.

In summary, I must stress that cooperation lies at the heart of

everything that we do within the Center. We are actively engaged

with our Federal partners, domestic law enforcement, international

agencies, the private sector, and our international counterparts

across the globe. Without cooperation and information sharing, we

cannot hope to come to grips with this problem. We have made a

lot of progress, but much work remains to be done. Thank you.

[The prepared statement of Ronald L. Dick follows:]

PREPARED STATEMENT OF RONALD L. DICK, DIRECTOR, NATIONAL INFRASTRUCTURE

PROTECTION CENTER, FEDERAL BUREAU OF INVESTIGATION

Representative Greenwood, Members of the subcommittee, thank you for inviting

me here today to speak to the important issue of intrusions into government computer networks. The problem is serious. The Department of Defense reports thousands of potential cyber attacks launched against DoD systems. GAO reports that

‘‘in 1999 and 2000, the Air Force, Army, and Navy recorded a combined total of 600

and 715 [serious] cyber attacks, respectively.’’ This does not even consider attacks

on civilian agencies. Two weeks ago National Security Advisor Condoleezza Rice

stated that ‘‘The President himself is on record as stating that infrastructure protection is important to our economy and to our national security and therefore it will

be a priority for this administration.’’

Dr. Rice also stated during that same speech that, ‘‘We have to maximize our resources and energies by making sure that they are focused, instead of allowing them

to be dissipated through dispersal.’’ The need for a coordinated interagency approach to address intrusions into government networks was one of the principal reasons for having established the National Infrastructure Protection Center (NIPC).

When the NIPC was founded three years ago, it was during one of the largest intrusions ever into U.S. government systems. The lessons learned from that intrusion

and from the response to it have helped shape the NIPC.

Let me provide you with a snapshot of our caseload on government intrusions.

Currently we have 102 cases (of a current total of 1,219 pending cases) involving

computer intrusions into government systems. This includes intrusions into federal,

state and local systems, as well as the military. It should be noted that a single

case can consist of hundreds of compromised systems that have experienced thousands of intrusions. In addition, many agencies conduct investigations concerning

intrusions into their systems that are not reported to the FBI. In short, this case

load represents a large number of incidents.

Several critical elements are required to deal with intrusions into government

computer systems. There must be an interagency structure to deal with this problem. No agency should or should have to address these issues alone. Information

must be shared with law enforcement and the NIPC. We must work to ensure that

any intrusions are stemmed and the vulnerability that allowed the intrusion is

patched.

Interagency cooperation is essential in dealing with intrusions into government

systems. As I said at the outset, that is why the NIPC was created. Currently the

NIPC has representatives from the following agencies at the Center: FBI, Army,

Navy, Air Force Office of Special Investigations, Defense Criminal Investigative

Service, National Security Agency, United States Postal Service, Department of

Transportation/Federal Aviation Administration, Central Intelligence Agency, Department of Commerce/Critical Infrastructure Assurance Office, and the Department of Energy. This representation has given us the unprecedented ability to reach

back into the parent organizations of our interagency detailees on intrusions and

infrastructure protection matters. In addition, we have formed an interagency coordination cell at the Center which holds monthly meetings with U.S. Secret Service, U.S. Customs Service, representatives from DoD investigative agencies, the Offices of Inspector General of NASA, Social security administration, Departments of

Energy, State, and Education, and the U.S. Postal Service, to discuss topics of mutual concern.

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This representation is not enough, however. The PDD states that,—The NIPC will

include FBI, USSS, and other investigators experienced in computer crimes and infrastructure protection, as well as representatives detailed from the Department of

Defense, the Intelligence Community and Lead Agencies.’’ The NIPC would like to

see all lead agencies represented in the Center. The more broadly representative the

NIPC is, the better job it can do in responding to intrusions into government systems.

The NIPC is pursuing three sets of activities that address computer intrusions

into government systems: prevention, detection, and response.

PREVENTION:

Our role in preventing cyber intrusions into government systems is not to provide

advice on what hardware or software to use or to act as a federal systems administrator. Rather our role is to provide information about threats, ongoing incidents,

and exploited vulnerabilities so that government and private sector system administrators can take the appropriate protective measures. The NIPC has a variety of

products to inform the private sector and other domestic and international government agencies of the threat, including: alerts, advisories, and assessments; biweekly

CyberNotes; monthly Highlights; and topical electronic reports. These products are

designed for tiered distribution to both government and private sector entities consistent with applicable law and the need to protect intelligence sources and methods, and law enforcement investigations. For example, Highlights is a monthly publication for sharing analysis and information on critical infrastructure issues. It provides analytical insights into major trends and events affecting the nation’s critical

infrastructures. It is usually published in an unclassified format and reaches national security and civilian government agency officials as well as infrastructure

owners. CyberNotes is another NIPC publication designed to provide security and

information system professionals with timely information on cyber vulnerabilities,

hacker exploit scripts, hacker trends, virus information, and other critical infrastructure-related best practices. It is published twice a month on our website and

disseminated in hardcopy to government and private sector audiences.

The NIPC has elements responsible for both analysis and warning. What makes

the NIPC unique is that it has access to all-source intelligence from law enforcement, the intelligence community, private sector, international arena, and open

sources. No other entity has this range of information. Complete and timely reporting of incidents from private industry and government agencies allows NIPC analysts to make the linkages between government intrusions and private sector activity. We are currently working on an integrated database to allow us to more quickly

make the linkages among seemingly disparate intrusions. This database will leverage both the unique information available to the NIPC through FBI investigations

and information available from the intelligence community and open sources. Having these analytic functions at the NIPC is a central element of its ability to carry

out its preventive mission.

This initiative expands direct contacts with the private sector infrastructure owners and operators and shares information about cyber intrusions and exploited

vulnerabilities through the formation of local InfraGard chapters within the jurisdiction of each of the 56 FBI Field Offices. This is critical to infrastructure protection,

since private industry owns most of the infrastructures. Further, InfraGard’s success belies the notion that private industry will not share information with NIPC

or law enforcement. All 56 FBI field offices have InfraGard chapters. There are currently over 900 InfraGard members. The national InfraGard rollout was held on

January 5, 2001.

The NIPC is also working with the Information Sharing and Analysis Centers established under the auspices of PDD-63. For example, the North American Electric

Reliability Council (NERC) serves as the electric power ISAC. We have developed

a program with the NERC to develop an Indications and Warning System for physical and cyber attacks. Under the program, electric utility companies and other

power entities transmit incident reports to the NIPC. These reports are analyzed

and assessed to determine whether an NIPC alert, advisory, or assessment is warranted to the electric utility community. Electric power participants in the pilot program have stated that the information and analysis provided by the NIPC back to

the power companies make this program especially worthwhile. NERC has recently

decided to expand this initiative nationwide. This initiative will serve as a good example of government and industry working together to share information and the

Electrical Power Indications and Warning System will provide a model for the other

critical infrastructures. Eventually the NIPC will need to be able to have a comprehensive nation-wide system for all the infrastructures.

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The NIPC is the Sector Lead Agency for the Emergency Law Enforcement Services sector. As part of this mission, the Center has also been asked to by ELES Sector the to have the NIPC Watch and Warning Unit act as the ISAC for the sector.

The NIPC is working to implement this request.

DETECTION:

Given the ubiquitous vulnerabilities in existing Commercial Off-the-Shelf (COTS)

software, intrusions into critical systems are inevitable for the foreseeable future.

Thus detection of these intrusions is critical if the U.S. Government and critical infrastructure owners and operators are going to be able to respond. To improve our

detection capabilities, we first need to ensure that we are fully collecting, sharing,

and analyzing all extant information from all relevant sources. It is often the case

that intrusions can be discerned simply by collecting bits of information from various sources; conversely, if we don’t collate these pieces of information for analysis,

we might not detect the intrusions at all. Thus the NIPC’s role in collecting information from all sources and performing analysis in itself serves the role of detection.

Agency system administrators need to work with FedCIRC and the NIPC. PDD63 makes clear the importance of such reporting. It states, ‘‘All executive departments and agencies shall cooperate with the NIPC and provide such assistance, information and advice that the NIPC may request, to the extent permitted by law.

All executive departments shall also share with the NIPC information about threats

and warning of attacks and about actual attacks on critical government and private

sector infrastructures, to the extent permitted by law.’’ Currently OMB has instructed the agencies that they must report their intrusions to FedCIRC, but reporting to the NIPC is not mentioned. We are working with FedCIRC to define criteria

for reporting of incidents to the NIPC for analytical as well as investigative purposes.

In some cases, in response to victims’ reports, the NIPC has sponsored the development of tools to detect malicious software code. For example, in December 1999,

in anticipation of possible Y2K related malicious conduct, the NIPC posted a detection tool on its web site that allowed systems administrators to detect the presence

of certain Distributed Denial of Service (DDoS) tools on their networks. In these

cases, hackers plant tools such as Trinoo, Tribal Flood Net (TFN), TFN2K, or

Stacheldraht (German for barbed wire) on a number of unwitting victim systems.

Then when the hacker sends the command, the victim systems in turn begin sending messages against a target system. The target system is overwhelmed with the

traffic and is unable to function. Users trying to access that system are denied its

services. The NIPC’s detection tools were downloaded thousands of times and have

no doubt prevented many DDoS attacks.

The NIPC also led the FBI’s multiagency Y2K command center. NIPC personnel

were on alert during the rollover period watching for possible malicious activity

under the guise of Y2K. NIPC coordinated a nationwide watch effort and distributed

reports every four hours round the clock on the situation.

Regarding warning, if we determine that an intrusion is imminent or underway,

the NIPC Watch is responsible for formulating assessments, advisories, and alerts,

and quickly disseminating them. The substance of those products will come from analytical work done by NIPC analysts. If we determine an attack is underway, we

can notify both private sector and government entities using an array of mechanisms so they can take protective steps. In some cases these warning products can

prevent a wider attack; in other cases warnings can mitigate an attack already underway. Finally, these notices can prevent attacks from ever happening in the first

place. For example, the NIPC released an advisory on March 30, 2001 regarding the

‘‘Lion Internet Worm,’’ which is a DDoS tool targeting Unix-based systems. Based

on all-source information and analysis, the NIPC alerted systems administrators

how to look for this compromise of their system and what specific steps to take to

remove the tools if they are found. This alert was issued after consultation with

FedCIRC, JTF-CND, a private sector ISAC, and other infrastructure partners.

RESPONSE:

Despite our efforts, we know that government systems will continue to be attacked. Thus we need to determine the origin of these attacks in order to get to the

person behind the keyboard for our government to formulate the appropriate response. In the cyber world, determining what is happening is difficult at the early

stages. An event could be a system probe to find vulnerabilities or entry points, an

intrusion to steal data or plant sniffers or malicious code, an act of teenage vandalism, an attack to disrupt or deny service, or even an act of war. The crime scene

itself is totally different from the physical world in that it is dynamic—it grows, conVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00038 Fmt 6633 Sfmt 6621 E:\HEARINGS\72834 pfrm09 PsN: 72834
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tracts, and can change shape. Further, the tools used to perpetrate a major infrastructure attack can be the same ones used for other cyber intrusions (simple hacking, foreign intelligence gathering, organized crime activity to steal property, data,

etc. . . .), making identification more difficult. Determining that an event is even occurring thus can often be difficult in the cyber world, and usually a determination

cannot be made without a thorough investigation. In the physical world one can see

instantly if a building has been bombed or an airliner brought down. In the cyber

world, an intrusion may go undetected for some time.

Identification of the perpetrators and their objectives during an event is critical

especially in the initial stages. The perpetrators could be criminal hackers, teenagers, electronic protestors, terrorists, or foreign intelligence services. In order to attribute an attack, the NIPC coordinates an investigation that gathers information

from within the United Sates using either criminal investigative or foreign counterintelligence authorities, depending on the circumstances. We also rely on the assistance of other nations when appropriate. Obtaining reliable information is necessary

not only to identify the perpetrator but also to determine the size and nature of the

intrusion: how many systems are affected, what techniques are being used, and

what is the purpose of the intrusions—disruption, economic espionage, theft of

money, etc.... Relevant information could come from existing criminal investigations or other

contacts at the FBI Field Office level. It could come from the U.S. Intelligence Community, other U.S. Government agency information, through private sector contacts,

the media, other open sources, or foreign law enforcement contacts. The NIPC’s role

is to coordinate, collect, analyze, and disseminate this information. Indeed this is

one of the principal reasons the NIPC was created.

Because the Internet by its nature embodies a degree of anonymity, our government’s proper response to an attack first requires significant investigative steps. Investigators typically need a full range of criminal and/or national security authorities to determine who launched the attack. Under our system the legal authorities

for conducting investigations within the United States include: the Computer Fraud

and Abuse Act, the Economic Espionage Statute, the Electronic Communications

Privacy Act, the Foreign Intelligence Surveillance Act, as well as the relevant executive orders delineating the responsibilities of the intelligence community. Thus the

FBI can apply for court orders to get subscriber information from Internet Service

Providers, and monitor communications under the Electronic Communications Privacy Act or under the Foreign Intelligence Surveillance Act, depending on the facts

of the case as they are known at the time the order is requested. The FBI has designated the NIPC to act as the program manager for all of its computer intrusion

investigations, and the NIPC has made enormous strides in developing this critical

nationwide program. In that connection, the NIPC works closely with the Criminal

Division’s Section on Computer Crime and Intellectual Property, the Department’s

Office of Intelligence Policy and Review, and the U.S. Attorney’s Offices in coordinating legal responses.

In the event of a national-level set of intrusions into significant systems, the

NIPC will form a Cyber Crisis Action Team (C-CAT) to coordinate response activities and use the facilities of the FBI’s Strategic Information and Operations Center

(SIOC). The team will have expert investigators, computer scientists, analysts,

watch standers, and other U.S. government agency representatives. Part of the U.S.

government team might be physically located at FBI Headquarters and part of the

team may be just electronically connected. The C-CAT will immediately contact field

offices responsible for the jurisdictions where the attacks are occurring and where

the attacks may be originating. The C-CAT will continually assess the situation and

support/coordinate investigative activities, issue updated warnings, as necessary, to

all those affected by or responding to the crisis. The C-CAT will then coordinate the

investigative effort to discern the scope of the attack, the technology being used, and

the possible source and purpose of the attack.

While we have not seen an example of cyber terrorism directed against U.S. government systems, the NIPC’s placement in the FBI’s counterterrorism division will

allow for a seamless FBI response in the event of a terrorist action that encompasses both cyber and physical attacks. The NIPC and the other elements of the

FBI’s Counterterrorism Division have conducted joint operations and readiness exercises in the FBI’s SIOC. We are prepared to respond if called upon.

Case Examples

Over the past several years we have seen a wide range of cyber threats ranging

from defacement of websites by juveniles to sophisticated intrusions sponsored by

foreign powers, and everything in between. Some of these are obviously more significant than others. The theft of national security information from a government

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agency or the interruption of electrical power to a major metropolitan area would

have greater consequences for national security, public safety, and the economy

than the defacement of a web-site. But even the less serious categories have real

consequences and, ultimately, can undermine confidence in e-commerce and violate

privacy or property rights. A web site hack that shuts down an e-commerce site can

have disastrous consequences for a business. An intrusion that results in the theft

of credit card numbers from an online vendor can result in significant financial loss

and, more broadly, reduce consumers’ willingness to engage in e-commerce. Because

of these implications, it is critical that we have in place the programs and resources

to investigate and, ultimately, to deter these sorts of crimes.

In addition, because it is often difficult to determine whether an intrusion or denial of service attack, for instance, is the work of an individual with criminal motives or foreign nation state, we must treat each case as potentially serious until

we gather sufficient information to determine the nature, purpose, scope, and perpetrator of the attack. While we cannot discuss ongoing investigations, we can discuss

closed cases that involve FBI and other agency investigations in which the intruder’s methods and motivation were similar to what we are currently seeing. A few

illustrative are described below:

In hacker cases, the attacker’s motivation is just to see how far he can intrude

into a system. This seems to be the motivation for the California teens in the wellknown Solar Sunrise case. In this case the intruders exploited a well known vulnerability in computers that run on the Sun Solaris operating system. By exploiting

this vulnerability, the intruder can gain root access (total control) of the system. As

in the Solar Sunrise case, the intruders can then install their own accounts on the

system and create backdoors into the system from which they can then install additional programs to find passwords. They also had the ability to alter, remove, or destroy data on those systems. This case demonstrated to the interagency community

how difficult it is to identify an intruder until all of the facts are gathered through

an investigation, and why assumptions cannot be made until sufficient facts are

available. The incident also vividly demonstrated the vulnerabilities that exist in

our networks; if these individuals were able to assume ‘‘root access’’ to certain unclassified DoD systems, it is not difficult to imagine what hostile adversaries with

greater skills and resources would be able to do. Finally, Solar Sunrise demonstrated the need for interagency coordination to deal with such attacks. The perpetrators in this case were two 16 and an 18 years old.

We have also seen cases of hacking and mischief for what might be termed personal reasons. For example, Eric Burns, a.k.a Zyklon, hacked into the White House

web site as well as other sites. This case was worked jointly by the U.S. Secret Service and the FBI. He was caught and pled guilty to one count of 18 U.S.C.1030. In

November 1999 he was sentenced to 15 months in prison, 3 years supervised release, and ordered to pay $36,240 in restitution and a $100 fine.

In another example, the Melissa Macro Virus was reportedly named after an exotic dancer from Florida; this virus wreaked havoc on government and private sector

networks in March 1999. He pled guilty to one federal count of violating 18 U.S.C.

1030 and four state counts. He admitted to causing $80 million in damage as well.

David Smith, the author of the virus, faces a maximum sentence of five years and

$250,000 on the federal charge. He is currently awaiting sentencing. This is a good

example of how federal and state governments are increasingly coordinating investigations and prosecutions in combating computer crime.

In another case, system penetration coupled with theft can be the motivation. A

Florida youth admitted to breaking into 13 computers at the Marshall Space Flight

Center in Huntsville, Alabama in June 1999 and downloading $1.7 million in NASA

proprietary software that supports the International Space Station’s environmental

systems. NASA has estimated the cost to repair the damage at $41,000. The subject

has also admitted to entering Defense Department systems of the Defense Threat

Reduction Agency, intercepting 3,300 e-mail messages, and stealing passwords from

Pentagon computers. This case was investigated by NASA. He was sentenced to six

months in a juvenile detention center for hacking into NASA computers which support the International Space Station.

Virus writers have become a more prevalent threat in recent years. We have seen

virus writers unleash havoc on the Internet for a variety of motivations. In May

2000 companies and individuals around the world were stricken by the ‘‘Love Bug,’’

a virus (or, technically, a ‘‘worm’’) that traveled as an attachment to an e-mail message and propagated itself extremely rapidly through the address books of Microsoft

Outlook users. The virus/worm also reportedly penetrated at least 14 federal

agenciesCincluding the Department of Defense (DOD), the Social Security Administration, the Central Intelligence Agency, the Immigration and Naturalization Service, the Department of Energy, the Department of Agriculture, the Department of

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Education, the National Aeronautics and Space Administration (NASA), along with

the House and Senate.

Investigative work by the FBI’s New York Field Office, with assistance from the

NIPC, traced the source of the virus to the Philippines within 24 hours. The FBI

then worked, through the FBI Legal Attache ́ in Manila, with the Philippines’ National Bureau of Investigation, to identify the perpetrator. The speed with which the

virus was traced back to its source is unprecedented. The prosecution in the Philippines was hampered by the lack of a specific computer crime statute. Nevertheless, Onel de Guzman was charged on June 29, 2000 with fraud, theft, malicious

mischief, and violation of the Devices Regulation Act. However, those charges were

dropped in August by Philippine judicial authorities. As a postscript, it is important

to note that the Philippines’ government on June 14, 2000 reacted quickly and approved the E-Commerce Act, which now specifically criminalizes computer hacking

and virus propagation. The Philippine government will not be hindered by insufficient charging authorities should an incident like this one ever occur again. Also,

the NIPC continues to work with other nations to provide guidance on the need to

update criminal law statutes.

In some cases, we have been able to prevent the release of disastrous viruses

against public systems. On March 29, 2000, FBI Houston initiated an investigation

when it was discovered that certain small businesses in the Houston area had been

targeted by someone who was using their Internet accounts in an unauthorized

manner and causing their hard drives to be erased. On March 30, 2000, FBI Houston conducted a search warrant on a residence of an individual who allegedly created a computer ‘‘worm’’ that seeks out computers on the Internet. This ‘‘worm’’ looks for computer networks that have certain sharing capabilities enabled, and

uses them for the mass replication of the worm. The worm causes the hard drives

of randomly selected computers to be erased. The computers whose hard drives are

not erased actively scan the Internet for other computers to infect and force the infected computers to use their modems to dial 911. Because each infected computer

can scan approximately 2,550 computers at a time, this worm could have the potential to create a denial of service attack against the E911 system. The NIPC issued

a warning to the public through the NIPC webpage, SANS, NLETS, InfraGard, and

teletypes to government agencies. On May 15, 2000 Franklin Wayne Adams of

Houston was charged by a federal grand jury with knowingly causing the transmission of a program onto the Internet which caused damage to a protected computer system by threatening public health and safety and by causing loss aggregated to at least $5000. Adams was also charged with unauthorized access to electronic or wire communications while those communications were in electronic storage. He faces 5 years in prison and a $250,000 fine.

Revenge by disgruntled employees seems to be another strong motivation for attacks. Insiders do not need a great deal of knowledge about computer intrusions,

because their knowledge of victim systems often allows them to gain unrestricted

access to cause damage to the system or to steal system data. For example, in July

1997 Shakuntla Devi Singla used her insider knowledge and another employee’s

password and logon identification to delete data from a U.S. Coast Guard personnel

database system. It took 115 agency employees over 1800 hours to recover and reenter the lost data. Ms. Singla was convicted and sentenced to five months in prison,

five months home detention, and ordered to pay $35,000 in restitution.

Another case involved a National Library of Medicine (NLM) employee. In January and February 1999 the National Library of Medicine computer system, relied

on by hundreds of thousands of doctors and medical professionals from around the

world for the latest information on diseases, treatments, drugs, and dosage units,

suffered a series of intrusions where system administrator passwords were obtained

and hundreds of files downloaded, including sensitive medical ‘‘alert’’ files and programming files that kept the system running properly. The intrusions were a significant threat to public safety and resulted in a monetary loss in excess of $25,000.

FBI investigation identified the intruder as Montgomery Johns Gray, III, a former

computer programmer for NLM, whose access to the computer system had been revoked. Gray was able to access the system through a ‘‘backdoor’’ he had created in

the programming code. Due to the threat to public safety, a search warrant was executed for Gray’s computers and Gray was arrested by the FBI within a few days

of the intrusions. Subsequent examination of the seized computers disclosed evidence of the intrusion as well as images of child pornography. Gray was convicted

by a jury in December 1999 on three counts for violation of 18 U.S.C. 1030. Subsequently, Gray pleaded guilty to receiving obscene images through the Internet, in

violation of 47 U.S.C. 223. Montgomery Johns Gray III was sentenced to 5 months

prison, 5 months halfway house, 3 years probation and ordered to pay $10,000 in

restitution and assessments.

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We are also seeing the increased use of cyber intrusions by criminal groups who

attack systems for purposes of monetary gain. In September, 1999, two members of

a group dubbed the ‘‘Phonemasters’’ were sentenced after their conviction for theft

and possession of unauthorized access devices (18 USC § 1029) and unauthorized access to a federal interest computer (18 USC § 1030). The ‘‘Phonemasters’’ were an

international group of criminals who penetrated the computer systems of MCI,

Sprint, AT&T, Equifax, and even the National Crime Information Center. The

Phonemasters’ methods included ‘‘dumpster diving’’ to gather old phone books and

technical manuals for systems. They used this information to trick employees into

giving up their logon and password information. The group then used this information to break into victim systems. One member of this group, Mr. Calvin Cantrell,

downloaded thousands of Sprint calling card numbers, which he sold to a Canadian

individual, who passed them on to someone in Ohio. These numbers made their way

to an individual in Switzerland and eventually ended up in the hands of organized

crime groups in Italy. Cantrell was sentenced to two years as a result of his guilty

plea, while one of his associates, Cory Lindsay, was sentenced to 41 months.

Terrorists groups are increasingly using new information technology and the

Internet to formulate plans, raise funds, spread propaganda, and to communicate

securely. In his statement on the worldwide threat in 2000, Director of Central Intelligence George Tenet testified that terrorists groups, ‘‘including Hizbollah,

HAMAS, the Abu Nidal organization, and Bin Laden’s al Qa’ida organization are

using computerized files, e-mail, and encryption to support their operations.’’ In one

example, convicted terrorist Ramzi Yousef, the mastermind of the World Trade Center bombing, stored detailed plans to destroy United States airliners on encrypted

files on his laptop computer. While we have not yet seen these groups employ cyber

tools as a weapon to use against critical infrastructures, their reliance on information technology and acquisition of computer expertise are clear warning signs. Moreover, we have seen other terrorist groups, such as the Internet Black Tigers (who

are reportedly affiliated with the Tamil Tigers), engage in attacks on foreign government web-sites and email servers. During the riots on the West Bank in the fall

of 2000, Israeli government sites were subjected to e-mail flooding and ‘‘ping’’ attacks. The attacks allegedly originated with Islamic elements trying to inundate the

systems with email messages. As one can see from these examples overseas, ‘‘cyber

terrorism’’—meaning the use of cyber tools to shut down critical national infrastructures (such as energy, transportation, or government operations) for the purpose of

coercing or intimidating a government or civilian population—is thus a very real

threat.

We have worked closely with our international partners on computer intrusion

cases, including cases in which hackers have illegally accessed U.S. government systems. In 1999 the FBI cooperated with New Scotland Yard in the United Kingdom

on a case in which a UK citizen confessed to breaking into U.S. Navy systems. He

was further suspected of intruding into other systems, including that of the U.S.

Senate. He was sentenced to a term of 3 years on a probation-like status.

We believe that foreign intelligence services have adapted to using cyber tools as

part of their information gathering tradecraft. While I cannot go into specific cases,

there are overseas probes against U.S. government systems every day. It would be

naı ̈ve to ignore the possibilty or even probability that foreign powers were behind

some or all of these probes. The motivation of such intelligence gathering is obvious.

By combining law enforcement and intelligence community assets and authorities

under one Center, the NIPC can work with other agencies of the U.S. government

to detect these foreign intrusion attempts.

The prospect of ‘‘information warfare’’ by foreign militaries against our critical infrastructures is perhaps the greatest potential cyber threat to our national security.

We know that many foreign nations are developing information warfare doctrine,

programs, and capabilities for use against the United States or other nations. Knowing that they cannot match our military might with conventional or ‘‘kinetic’’ weapons, nations see cyber attacks on our critical infrastructures or military operations

as a way to hit what they perceive as America’s Achilles heel B our growing dependence on information technology in government and commercial operations. For example, two Chinese military officers recently published a book that called for the

use of unconventional measures, including the propagation of computer viruses, to

counterbalance the military power of the United States.

CONCLUSION

While the NIPC has accomplished much over the last three years in building the

first nationallevel operational capability to respond to cyber intrusions, much work

remains. We have learned from cases that successful network investigation is highly

39

dependent on expert investigators and analysts, with state-of-the-art equipment and

training. We have built that capability both in the FBI Field Offices and at NIPC

Headquarters, but we have much work ahead if we are to build our resources and

capability to keep pace with the changing technology and growing threat environment, while at the same time being able to respond to several major incidents at

once. We are building the international, agency to agency, government to private sector,

and law enforcement partnerships that are vital to this effort. The NIPC is well

suited to foster these partnerships since it has analysis, information sharing, outreach, and investigative missions. We are working with the executives in the infrastructure protection community with the goal of fostering the development of safe

and secure networks for our critical infrastructures. While this is a daunting task,

we are making progress.

Within the federal sector, we have seen how much can be accomplished when

agencies work together, share information, and coordinate their activities as much

as legally permissible. But on this score, too, more can be done to achieve the interagency and publicprivate partnerships called for by PDD63. We need to ensure that

all relevant agencies are sharing information about threats and incidents with the

NIPC and devoting personnel and other resources to the Center so that we can continue to build a truly interagency, ‘‘national’’ center. Finally, we must work with

Congress to make sure that policy makers understand the threats we face in the

Information Age and what measures are necessary to secure our Nation against

them. I look forward to working with the Members and Staff of this Committee to

address these vitally important issues.

Thank you.

Mr. GREENWOOD. We thank you for your testimony.

Mr. Noonan.

TESTIMONY OF TOM NOONAN

Mr. NOONAN. Mr. Chairman, thank you for having me today, and

other members of the committee. I am very pleased to be here to

talk about an issue that we are both passionate about, and an issue

of, I believe, very critical national security.

Although the folks from the DOE are not here, I thank them because I recognize some of the technology that we pioneered about

8 years ago, and they are using it today effectively to protect the

DOE, as are other government agencies, and I am always pleased

to see our technology in use.

I am here today to provide you with some background information on threat assessment, on the vulnerabilities and threats that

we see in the commercial sector, on the vulnerabilities and threats

that we see in working with some 26 foreign governments outside

of the United States as well as some 9,000 commercial customers

around the globe.

Every day we get involved in one side or the other of hacking,

either protecting networks from hackers, cyber thieves and others;

or addressing vulnerabilities, fixing the weaknesses necessary to

protect those systems. These individuals typically use the Internet

to address their own pursuits, including international

cyberterrorism, causing havoc and mayhem. I am far less concerned about teenage hackers, although they seem to make the

press more often, and become far more concerned with the sophisticated attacks against not just our government but our industry.

As a company, we monitor and manage the security of companies

around the world through security operations centers we have located in Sweden, the U.S., Japan, the Philippines, Italy, Rio de Janeiro, and Atlanta, Georgia. So we have an interconnected network

of security operation centers monitoring companies and detecting

and tracking threats around the world.

40

Over the years, I have watched computer vulnerabilities increase

dramatically. The Internet is so useful for the reasons that it is so

vulnerable. I would like to share two analogies. The first analogy

I would like to use is to compare a computer to that of a house.

Most of you are familiar with your house. You typically have a

front door, a back door, and some windows that periodically you

lock or monitor through your system. Every single computer connected to the Internet has the equivalent of 65,536 doors and windows, and many of them cannot be locked. They cannot be locked

because you are using those doors and windows for legitimate access. So the real challenge becomes, with all of these doors and

windows, how do we ultimately determine which need to be locked

and which need to be left open, and those that are left open, how

are they monitored to assure proper use and access of the system?

If you multiply 65,000 times all of the computers on the Internet,

that is how many potential ways to access computers there are. It

is simply not a problem that we can address manually. We have

to use technology and automation as part of that solution.

So just as physical security companies like ADT or Honeywell or

Brinks monitor physical locations, security companies, ours being

one of them, have not only pioneered the technology to provide this

monitoring—some of the tools you saw from the DOE, for instance—but also to deliver that as a service. I think that is an area

that government ought to responsibly look at as we move forward:

the area of managed security systems.

My second analogy compares computer security to a chess game.

In a chess game, the goal is to protect the king. In information security, the goal is to protect information but otherwise provide legitimate access to it for nonmalicious purposes. But a knowledgeable chess player is required to maneuver and play the chess game,

just like a knowledgeable security person is required to help coordinate and manage the overall security posture of a system.

I think we are fooling ourselves if we think that every single user

of every computer is going to be aware enough to check their own

systems for back doors, to deal with the problems that are so deeply routed in the technology underneath this. Just as a chess game

environment is constantly changing, so is the network. New applications, new users, new trading partners, new introductions of sensitive data, et cetera. Over the years, as the Internet has become

more used in business and more acceptable to the masses, it has

been attacked at an increasing rate.

Incidents occur when hackers maneuver through a system, take

advantage of the vulnerabilities and cause a system breach.

So as to your question, Mr. Chairman, there is a whole new currency on the Internet, it is called the back door. Today I could easily trade two DOTs for one GM or a Procter & Gamble for another

back door in some other case. So on the Internet, back doors or accounts are being used as a new currency, and they are being traded

frequently.

Vulnerabilities are holes or weaknesses and problems that exist

in the computer systems, as we saw from the DOE demonstration,

and these incidents include everything from credit card theft,

which seems to be where the consumers’ fear is, to the compromise

of very sensitive systems. And it comes down to three things:

41

One, confidentiality. Is and can the information be protected?

Two, integrity. Can it be changed to questions that came from

the Chair?

And, last, is it available? Denial of service, which you have

heard, the ability to completely shut down or destroy data is possible here.

So what I would like to do is introduce three slides to demonstrate what is happening in industry. The first slide demonstrates top security breaches. As you can see, 4 percent of the

breaches are actually physical security breaches such as breaking

into a window or getting through a locked door.

Let us look beyond that into where the real computer security

problems are. Twenty percent are system unavailability breaches

or denial of service breaches. We learned about those in February

of last year when some of the most important commerce sites on

the Internet were taken off line by malicious activity.

Also, as Mr. Dick has commented on, the ‘‘ILUVYOU’’ e-mail

virus cost industry billions of dollars. Electronic exploits represent

about 20 percent of the breaches. An example of an electronic exploit is finding a hole and installing a back door. The gentleman

from the DOE showed you how easy that is. Last, 25 percent of the

breaches are loss of privacy or confidentiality breaches such as

when someone compromises a record or data base and removes information. Twenty-six percent are malicious code breaches, things

like when a hacker sends an attachment with a malicious payload

and, when opened, it deletes files automatically.

To give you an idea how fast incidents are occurring, the second

slide examines the increase in one type of breach: the virus. If you

look at the threat spectrum, on one side you have the traditional

virus all of the way up through denial of service attacks, trojans,

worms, electronic compromise of data bases and operating systems.

But if you look at this slide, you can see that viruses in October

1999 alone, there were more than 2,000 new known viruses. In November 1999, there were over 2,400. In December 1999, over 2,500

more were added. In October 2000, there were 30,678 new viruses

being tracked; and in November of 2000, there were some 23,962

new viruses. What we are seeing here is exponential growth of an

issue that is getting out of hand and causing significant damage

and problems to the global computing infrastructure.

I would like to give you a better idea of how incidents generally

occur and how computer security companies protect against these

incidents.

The third slide is an example of a Website where crackers can

get information to help them break into a system. This is a Website

that I have deattributed. Being in the protection business, I don’t

like to pass along where people can go get these weapons. This actually came from an African hacking site, and in this hacking site

it is basically the equivalent of being able to anonymously walk

down to your corner store, pick up an anthrax bomb and a couple

of grenades, and be able to launch them from your own computer

anonymously and without any visibility as to who you are. These

happen to be computer exploits.

42

You can take back doors that monitor and take advantage of

microphones, denial of service attacks, you have a whole smorgasbord up here to fill your palate.

This site lists new vulnerabilities that have been discovered and

programs that allow anyone to use these exploits to damage a system. There are literally thousands of these sites on the Internet,

so you do not have to be very sophisticated or have a high IQ to

cause a lot of damage to our infrastructure.

We monitor the Websites that discover the latest trends. In addition, thousands of private chat rooms exist where more sophisticated crackers trade hacking tools over the Internet.

We are pleased that the government is interested in taking computer security seriously. The United States spends billions of dollars buying weapons and gaining intelligence to protect our country. Our computer systems must be adequately protected or our entire infrastructure could be compromised by one single person with

one single computer.

Even though the task is complicated, computer systems can be

protected. I think today we focused on how easy they are to break

in. I think it might be helpful someday to have a session on how

effectively we can protect the computer systems today because this

is where we are going to take action. I think the government has

taken great strides in the past few years, but much more is needed.

I think we are moving from the topical to the awareness to let us

start taking some action here.

As industry has considerable resources and expertise, a continued partnership with industry is crucial. In addition, computer systems should be a priority, and leadership and coordination are necessary in the government. The government has done well with the

resources it has been given. However, computer security specialists

we believe are required to implement and coordinate many different security products and services to adequately secure a system.

In my company alone, the average salary of one of my 2,000 employees is around $80,000. I don’t know of an industry where the

average employee from the mailman to the CEO is $80,000. Computer security experts are scarce. They are in short supply and

they are expensive. To help address the cost of computer security,

I think we ought to focus not just on what do we do to protect our

infrastructure, but we ought to extend these efforts to educational

efforts that we can undertake to train the personnel coming out of

our schools, not just our engineering schools, but our colleges and

universities. Computer programmers should be trained in computer

security. Today they are not. Today they are trained in how do you

make the best feature. What they do not focus on is the vulnerability that they leave behind.

Specialized programs in computer security should be encouraged,

and we are strongly supportive of the universities that are implementing them today. I look forward to a continuing dialog on computer security issues. Working together, we are confident we can

adequately secure our country’s assets and information. Thank you.

[The prepared statement of Tom Noonan follows:]

43

PREPARED STATEMENT OF TOM NOONAN, PRESIDENT AND CEO, INTERNET SECURITY

SYSTEMSGOOD MORNING, MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE. I AM

PLEASED TO APPEAR BEFORE YOU TODAY TO DISCUSS AN ISSUE OF GREAT IMPORTANCE TO OUR COUNTRY.

BACKGROUND

In 1991, the founder and Chief Technology Officer of Internet Security Systems,

Chris Klaus, became interested in government security while interning at the Department of Energy. Chris then began working on a groundbreaking technology that

actively identified and fixed computer security weaknesses. The next year, while attending Georgia Institute of Technology (‘‘Georgia Tech’’), Chris released his product

for free on the Internet. He received thousands of requests for his invention, and

decided that he should sell it. In 1994, I met Chris over the Internet and teamed

with him to form Internet Security Systems. I was then working for a computer

company, having attended GA Tech and Harvard Business School. Chris and I then

launched the company’s first product, Internet Scanner, and went public in March

1998. And yes, we’re a profitable company, even in today’s market. Today, Internet

Security Systems is the worldwide leader in security management software. For

nearly 10 years, which is several lifetimes in Internet time, we have been involved

in computer security, watching the area grow from the outset. Chris Klaus (who is

now 26) is one of a handful of premiere experts in the world on computer security,

and Internet Security Systems is a widely recognized pioneer in computer security.

Computer security is all we do. We have nearly 2,000 employees in 18 countries focused exclusively on computer security. Altogether, we now have more than 8,000

customers, including 68 percent of the Fortune 500, and 21 of the 25 largest U.S.

commercial banks. We also serve the ten largest telecommunication companies, numerous U.S. government agencies, and other non-U.S. governments.

VULNERABILITIES

I’m here today to provide you with some background information on threat assessment. Every day, Internet Security Systems stops criminal hackers and cyberthieves by addressing vulnerabilities in computers. The individuals who use the

Internet for business to business warfare, for international cyber-terrorism, or to

cause havoc and mayhem in our technology infrastructure. Internet Security Systems is involved in every aspect of computer security, whether in making the security products or in managing them. We also monitor networks and systems around

the clock (24 x 7 x 365) from the US, Japan, South America, and Europe in our

Security Operations Centers (‘‘SOCs’’). We search for attacks and misuse, identify

and prioritize security risks, and generate reports explaining the security risks and

what can be done to fix them. At the heart of our solution is our team of worldclass security experts focused on uncovering and protecting against the latest

threats. This team of 200 global specialists, dubbed the X-Force, understands exactly how to transform the complex technical challenges into an effective, practical,

and affordable strategy. Because of all of these capabilities, companies and governments turn to us as their trusted computer security advisor.

Over the years, I have watched computer vulnerabilities increase dramatically.

The Internet is so useful for the very reasons that it is so vulnerable. To give you

an idea of what we are dealing with, I’d like to share two analogies. First, I’ll compare a computer to a house. Every computer connected to the Internet has the

equivalent of 65,536 doors and windows which need to be locked and monitored to

make sure no one breaks in. Multiply 65,536 by every computer in every company

and you begin to see the extent of the problem. Just as physical security companies

like ADT monitor your physical doors and windows, computer security companies

must lock and monitor the doors and windows of computers.

My second analogy compares this complicated area of computer security to a

Chess game. In a Chess game, the goal is to protect the king—or mission critical

information. The other Chess pieces protect the king. But a knowledgeable Chess

player is required to maneuver the Chess pieces. With computer security, the goal

is to protect the information. A variety of computer security products, including Intrusion Detection Systems (IDS) and vulnerability assessment, function as Chess

pieces, and protect and watch the information. These products are absolutely essential. However, you also need to have a computer security expert to manage these

products, just as you have to have a knowledgeable Chess player maneuver the

Chess pieces. Just as a Chess game environment is constantly changing, the computer security environment is also constantly changing. Computer security companies, such as Internet Security Systems, produce the products and perform the servVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00047 Fmt 6633 Sfmt 6621 E:\HEARINGS\72834 pfrm09 PsN: 72834
44

ices that protect the information and manage the products so that they function in

the proper way.

Over the years, as the Internet has become more used in business and more accessible to the masses, it has been attacked at an increasing rate. Incidents occur when

hackers maneuver through a system, take advantage of the vulnerabilities, and

cause a system breach. Vulnerabilities are holes, weaknesses, and problems that

exist in computer systems. Incidents include credit card theft or other information

theft. The first slide documents the top security breaches. 4% of these breaches are

actual physical security breaches, such as breaking a window or getting in through

a locked door. 20% are system unavailability breaches or denial-of-service breaches,

such as the ‘‘ILUVYOU’’ email virus. Electronic exploits represent 20% of the

breaches. An example of an electronic exploit is finding a hole where you can install

a backdoor to get into a computer system. 25% of the breaches are loss of privacy

or confidentiality breaches, such as when a cracker breaks into a database server

and gains access to credit card information. 26% are malicious code breaches, such

as when a hacker sends an email with an attachment that when opened, deletes

files on the computer system. 5% of the breaches are other breaches.

To give you an idea of how fast incidents are occurring, the second slide examines

the increase in just one type of breach, the virus. Viruses, such as the ‘‘ILUVYOU’’

virus are mini computer programs that flood a computer system with email so that

the system slows down or crashes. Viruses can also destroy information on a computer system. In October 1999 alone there were more than 2000 new known viruses.

In November 1999, there were 2,427 new viruses. In December 1999, 2,586 were

added. Look at how these numbers have dramatically increased in 2000. In October

2000, there were 30,678 new viruses. In November 2000, there were 23,962 new viruses. In December 2000, there were 16,762 new viruses. Keep in mind that the

vast impact caused by the ‘‘ILUVYOU’’ virus was caused by only one of these viruses.

To give you a better idea of how incidents generally occur, and how computer security companies protect against these incidents, the third slide is an example of

a Web site where crackers can get information that will help them break into a system. Because we are in the protection business, we have modified this site and removed the identifying information. This site lists new vulnerabilities that have been

discovered, and includes programs that allow anyone to use these to exploit

vulnerabilities to damage a system. There are thousands of similar Web sites. Our

X-Force monitors the most important Web sites to discover the latest trends. In addition, thousands of private chat rooms exist where more sophisticated crackers

trade hacking tools over the Internet. Our X-Force gains access to important chat

rooms and monitors them as well.

RECOMMENDATIONS

We are pleased that the Government is interested in taking computer security seriously. The United States spends billions of dollars buying weapons and gaining

intelligence to protect our country from more conventional types of attack. Our computer systems must also be adequately protected, or our entire infrastructure could

be compromised by one person with one computer. Even though the task is complicated, computer systems can be protected.

The Government has taken great strides in the past few years. However, much,

much more is needed. As industry has considerable resources and expertise, a continued partnership with industry is crucial. In addition, computer security must be

a priority, and leadership and coordination are necessary in the Government. International leadership is also required. Perhaps most importantly, funding for secure

Government systems must be increased by a substantial amount, and outsourcing

should be considered as an option. The Government often does well with the resources it has been given. However, computer security specialists are required to implement and coordinate many different security products and services to adequately

secure a system. As computer security expertise is extremely rare, the cost of computer security specialists is astronomical. In my company alone, the average salary

of my 2000 employees is around $80,000. To help address the cost of computer security, educational efforts must be undertaken to train the personnel required. Computer programmers in universities should be trained in computer security. Currently, they are not. In addition, specialized programs in computer security should

be encouraged.

Thank you for inviting me here today. I look forward to a continuing dialog on

the computer security issue, and hope that, working together, we can adequately secure our country’s assets and information.

45

Mr. GREENWOOD. Thank you very much for your extraordinary

testimony.

The Chair recognizes himself for 5 minutes for questions.

Ms. McDonald, on your chart, the route compromises, 155 last

year, are those the kind of compromises that we saw in the demonstration where you can essentially take over an entire system?

Ms. MCDONALD. Yes.

Mr. GREENWOOD. Question for Mr. Dick. You referred to the

issue of who is sitting behind the keyboard. Can you elaborate on

what the FBI has discovered as to who these perpetrators are? We

know that there are teenagers who will hack into systems for the

fun of it. But in terms of identified perpetrators, can you share

with us what their motivations have been?

Mr. DICK. In the physical world, the range and motives associated with who are perpetrating these kinds of acts runs the full

gamut. As Tom was referring to, we have the teenage hackers that

are doing it for sport and notoriety on the Internet, to the other

range where we have state-sponsored activities associated with trying to discern how to conduct information warfare.

What we see in the range of what we refer to as southern

vulnerabilities, you have a high volume of, let us say, the hackers

that are going into systems for the honor or recognition of it— which is relatively low impact as far as our national security and

economic well-being—which is going down the virus writers, which

does have an economic impact on us, to criminal organizations. We

are now seeing both U.S. and foreign criminal organizations attacking systems for credit card information, and then going back and

extorting the businesses out of funds for not recognizing or exposing that they have been vulnerable to espionage and so forth.

Mr. GREENWOOD. What are the kind of penalties that have been

exacted against these perpetrators, and do you believe the penalties are adequate under the current Federal statutes?

Mr. DICK. For violations of Title 18, section 1030, the penalties

are 10 years in jail for each violation. The maximum penalties associated probably are adequate.

Now, have the courts, based upon the sentencing guidelines, levied those kinds of penalties to subjects which have been convicted?

Not at this point. It is very similar to white collar crime investigations where the penalties are perceived by some to be less than

adequate. But I think with time, that will change also.

Mr. GREENWOOD. What about international cooperation? You referenced the case in the Philippines where they were not—their

laws did not permit us to prosecute that perpetrator. Are there in

process efforts to create international agreements or treaties with

regard to these hackers?

Mr. DICK. Yes. There are a number of things ongoing right now

through the G-8 and the Council of Europe to implement laws that

will more standardize not only our ability to prosecute, but our

ability to access information.

One of the difficulties in investigating these cases is almost 99

percent of the time, we are going to end up overseas in some faction of the case because of particular hot point or place that they

intruded into overseas to get into the U.S. system exists. So we

have to go to a foreign entity just to get the information as to what

46

occurred over there. There are efforts going on and more could be

done. There is a lot of emphasis on that at this point in time.

Mr. GREENWOOD. Thank you.

Mr. Noonan, I think you made some reference in your testimony

to Federal customers that you have, U.S. Government customers.

Mr. NOONAN. Yes.

Mr. GREENWOOD. Do they tend to be the inspectors general buying your services and software so they can check on the departments, or do they tend to be the managers of those departments

buying your software so as to provide the protections necessary?

Mr. NOONAN. Historically they have been more the watchdog or

audit, inspector general type function, meaning using the technology to determine where the systems are vulnerable.

Today we are beginning, and just beginning to see the beginnings

of more widespread use in intrusion detection. Vulnerability detection and intrusion detection are kind of the yin and yang. One

finds the holes, and the other watches to make sure that the other

does not exploit the holes.

Operationally, you want to see the units, using both vulnerability

detection to fortify the environment and intrusion detection to monitor it to ensure that it is being used judiciously.

Historically it has been mainly the watchdog part. That is just

now beginning to turn to more operational use.

Mr. GREENWOOD. Do you and your competitors aggressively market your services to the systems managers within the Federal Government? Do you have conferences and exhibits and so forth where

these Federal managers can come and survey this technology?

Mr. NOONAN. Yes, we do, as do many in the industry. One thing

that is of particular note is movement in this area has really just

begun in the last 6 to 9 months in terms of active technologies that

can be deployed to protect the infrastructure. If I had to take a

guess, I would probably say that 5 percent, maybe, of the government actually is protected with these types of technologies operationally. And I could be off by as much as 5 percent. Regardless,

I think we have a long way to go.

Ms. MCDONALD. Mr. Chairman, one of the things that we are

doing in FedCIRC this fiscal year is evolving into an intrusion detection system that is called Managed Security Services, much like

what Mr. Noonan’s company offers.

We are encouraging Federal agencies to deploy managed security

services; and hopefully we are responsible for maybe some of that

5 percent, if 5 percent exists. It is our intention in the FedCIRC

organization to, after we have encouraged agencies to implement

managed security services and intrusion detection systems, that we

will develop an analysis capability within FedCIRC so that these

intrusion detection systems will feed up into the FedCIRC program

office and we will be able to get a picture, a much better picture

across government as to what is actually occurring.

With this step we feel that we can move from the 20 percent of

the incidents that are being discovered to closer to the 100 percent.

Mr. GREENWOOD. Mr. Noonan, since the bad guys can use your

services or at least your software, do you have any process of

screening out the bad guys?

47

Mr. NOONAN. Mr. Chairman, it would be very difficult for the

bad guys to use our technology. Each is encrypted with a special

key. Each user that licenses the software is required to provide information and sign a license agreement. So our systems are not

freely available, and they do not operate unless you have a key

generated by us, and each key is specific to that user.

So if the DOE licensed our vulnerability system, they could not

use it on the Department of Transportation computers because it

would not match up with their IP addresses.

Mr. GREENWOOD. The Chair recognizes the gentleman, Mr.

Strickland.

Mr. STRICKLAND. Ms. McDonald, I have a copy here of a March

2001 newsletter from FedCIRC about the demise of the FedNet,

which has been described as a conceptualized weapon to defend the

Federal information infrastructure by tracking anomalous behavior. According to this newsletter, FedNet was buried because of

concerns of the public, media, and Congress because it was a threat

to privacy rights. Are you familiar with this?

Ms. MCDONALD. I am familiar with that, sir. If I could

explain—— Mr. STRICKLAND. If you could explain to me what you do not

agree with.

Ms. MCDONALD. We did not bury FedNet. FedNet first came to

the public’s attention in a New York Times article in 1998. That

article said that FedNet was a system that was going to be run by

the FBI, and that it was going to monitor all citizens’ e-mails, including the content of those e-mails, in the United States. FedNet

was actually a program the GSA was sponsoring, not the FBI, and

the idea was to develop an intrusion detection network with all of

the Federal civilian agencies.

Because of the bad publicity that it got, we revamped the program. We now call it the managed security services, which is what

I alluded to. And what we have done, so that agencies have confidence in what we are doing in the FedCIRC program, is we are

encouraging agencies to establish intrusion detection systems within their own organizations and then work with FedCIRC on a voluntary basis.

One of the important facts of this entire area is trust. We lost

a lot of trust with the FedNet program, which is why we chose to

rename it managed security services. And as the industry has matured, and as Mr. Noonan has testified, these services are commercially available and we are encouraging agencies to procure these

services themselves and then work with FedCIRC.

Mr. STRICKLAND. Ms. McDonald, this is your publication?

Ms. MCDONALD. That’s correct.

Mr. STRICKLAND. It indicates that Federal civilian agencies for

questionable activities, to provide those same agencies a vehicle to

obtain those services from private industry. I think we are talking

about the services that were envisioned in FedNet. FedCIRC is preparing a new offering that would employ private industry and will

consist of a variety of information security services under the caveat managed security services.

Now, is this an attempt by the GSA to go—to sneak around behind the back of Congress and set up, if not the same system, cerVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00051 Fmt 6633 Sfmt 6602 E:\HEARINGS\72834 pfrm09 PsN: 72834
48

tainly a similar system, as a way of avoiding the kind of criticism

that was directed toward the previous effort?

Ms. MCDONALD. Absolutely not. The idea was to make it much

more palatable to the Federal civilian agencies, to put them in control of the systems because they would be the ones that would be

procuring what is now a commercially available service. FedNet as

it was designed or thought of in 1998 didn’t really exist. But that

shows the maturity in this entire field. Now these services are

available commercially, and it is important for agencies to trust the

FedCIRC operation. So we are encouraging them to deploy these

services and then share the results of those systems with us.

Mr. STRICKLAND. Yes. If you can just speak to this question.

Under the services available from the managed security services

program, will the public be able to have confidence that all of their

communications will not be tracked or trackable?

Ms. MCDONALD. Absolutely.

Mr. STRICKLAND. That is still a concern?

Ms. MCDONALD. That was a misunderstanding from the New

York Times article. These systems are going to be deployed only at

Federal agencies looking at Federal agency systems, and they will

not be looking at the content of those systems.

Mr. STRICKLAND. So you are saying to me, if a private citizen attempts or does gather information from some Federal source, some

Federal agency, that it will not be possible to track that communication to identify it?

Ms. MCDONALD. That’s correct. Unless that private citizen does

something like the Department of Energy demonstrated this morning, it won’t show up on an intrusion detection system if it is a normal, approved-type activity.

Mr. STRICKLAND. Reference is made to anomalous behavior. Do

you have a definition of what that would be?

Ms. MCDONALD. Behavior that is beyond the normal. For instance, most of us work 9-to-5 jobs. Profiles are developed on a

user. If all of a sudden somebody was working at their job at 2

a.m., that would fall into that type of behavior, and that would kick

out on the intrusion detection system.

Mr. STRICKLAND. I suspect that a lot of committee and staff

members of the House of Representatives would be identified as engaging in anomalous behavior because many of them work at

strange hours.

Ms. MCDONALD. That is true. I am sure that if you looked at Mr.

Noonan’s company’s hours, his hours would be quite different than

perhaps a Federal agency’s hours. But with an intrusion detection

system, you profile the culture that occurs in your organization. So

perhaps maybe the staffers are not working at 2 o’clock in the

afternoon.

Mr. STRICKLAND. It seems to me that the result of this could be,

the profiling, a very innocent behavior on the part of American citizens that seem to have work habits that were perceived by someone as anomalous. Is that not something that the American public

should have some reasonable concern about?

Ms. MCDONALD. Let me say that this whole area of technology,

as you very well know, opens up a tremendous amount of privacy

49

concerns, and people’s activities can be tracked. It is something

that we need to balance with the need to protect.

Mr. STRICKLAND. I appreciate the difficulty of the issue that we

are discussing today. I think it is important to be open and have

full disclosure. I think it is important that the concerns that resulted in the initial action to not proceed be fully explored.

Mr. Chairman, I do think this is a matter that we should continue to follow and to explore as we look more deeply into this.

Ms. MCDONALD. We would be glad to work with you on that.

Thank you.

Mr. STRICKLAND. Thank you.

Mr. GREENWOOD. The Chair thanks the gentleman and recognizes the gentlelady from Colorado.

Ms. DEGETTE. Thank you, Mr. Chairman.

We have been hearing a lot of pretty chilling testimony this

morning about the risks of this cyberterrorism and other kinds of

compromises of our systems.

I am just sitting here wondering—for example, this slide that

Mr. Noonan put up with this Website from—not the Website, but

this slide from Africa. And I think you said that we wonder if people from places like Africa couldn’t hack into our systems and even

launch nuclear weapons or biological warfare.

Mr. Dick, in your written testimony you say we have not seen

an example of cyberterrorism. With all of this activity going on, I

guess I am wondering why we have not seen an example of

cyberterrorism yet.

Mr. DICK. In the continuum of incidents and times, over time as

people get familiar with the technology, the tools, even get greater

availability out on the Internet, you are going to see the volume of

activity go up. Eventually we are going to see it.

Ms. DEGETTE. Why do you think that we have not seen it yet?

Mr. NOONAN. I was just going to comment on that. I think we

have seen it. We see it in industry. It is just a microcosm. It is not

the same necessarily as in the physical world. I have seen entire

customer records destroyed. That is terrorism to a business.

Ms. DEGETTE. And that is certainly serious to us. What is your

definition of cyberterrorism?

Mr. NOONAN. I think that is a very good question. The tools that

I represented—and that is actually a Website which has been copied now and made into a slide. You can click on any one of those

and download those weapons, if you will.

My definition of cyberterrorism for a commercial industry is anything that causes significant problems with the availability, the

confidentiality, or the integrity of those systems. We can now have

very small incidences of cyberterrorism, or very coordinated, largescale attacks.

Mr. DICK. My definition is different. What he described there,

those would be criminal acts that we would investigate under

criminal authorities.

When we talk about terrorism in the Department of Justice and

from an investigation standpoint, we have governed by certain laws

and by who are defined as foreign powers. So my definition is much

more restrictive.

Ms. DEGETTE. What is your definition?

50

Mr. DICK. Basically those foreign powers that are attacking the

United States and its assets for political motives as opposed to

some sort of economic reason.

Ms. DEGETTE. Why do you think that we have not had any incidence of cyberterrorism on the scale of what Mr. Noonan describes?

Mr. DICK. My statement says we have not had any that we can

attribute to any foreign powers, organizations, and acts at this

point in time. I am not saying that there never has been.

Ms. DEGETTE. So you think that we might have had

cyberterrorism, but we do not know?

Mr. DICK. I have no empirical data that says specifically.

Ms. DEGETTE. First of all, I think we should figure out what our

definition of cyberterrorism is. That might be helpful in this analysis. It might be helpful to the public when we think about the

safety of our government and Internet systems. I agree with Mr.

Strickland that we need a lot more research and hearings on this.

But the reason that I am concerned about this issue is because we

are here today talking about compromise of government computer

systems, and I am trying to figure out what the very real risk is

of, say, someone hacking into our military intelligence systems or

our defense systems and actually launching these biological weapons or nuclear weapons or obtaining top secret information.

I understand that there are a lot of incidents, but what is the

real risk here?

Mr. DICK. When we say, ‘‘terrorism,’’ we are looking at things

that are politically motivated in an attempt to intimidate our society or policies, or change policies, as opposed to affect a business’s

way of doing business.

Ms. DEGETTE. Why do you think that we have not had this happen? Do we have pretty good integrity of those critical systems and

what we need to do is work on other systems? Ms. McDonald, do

you have an opinion on this?

Ms. MCDONALD. I think we are lucky that we have not had it

happen.

Ms. DEGETTE. Mr. Noonan, do you have any comments?

Mr. NOONAN. I think we have a lot of problems. I think in terms

of the infrastructure, I think that it is very, very widespread; and

whether I would comment on whether we have had cyberterrorism

or not, I know we have had compromises. I have tracked them and

watched them in and out of our own government and agencies.

What networks the Pentagon actually uses to launch nuclear

weapons, I don’t know. I hope that those are not easily accessible

from the Internet. But I know that we have had compromises.

Whether we want to call that terrorism or not is up to us.

Ms. DEGETTE. Shifting direction a little bit, Mr. Noonan, these

65,000 doors that you talk about, and computers that allow unauthorized entries, those are part of the operating systems that come

with computers when people obtain them?

Mr. NOONAN. That’s correct. That is a world standard.

Ms. DEGETTE. Right. I would think that a good portion of the

blame for the vulnerabilities in operating systems would lie on the

developers of those products; wouldn’t you agree?

51

Mr. NOONAN. Not entirely, but partially, yes; because the Internet standard, PCPIP, which we use all over the world, is open by

design, and this is the fundamental challenge.

Ms. DEGETTE. In fact, Microsoft says customers want openness,

not closed doors, correct?

Mr. NOONAN. Absolutely. So the conundrum is how do you secure

the integrity of the system when it is based on an open design.

Ms. DEGETTE. Do you have any ideas how to do that?

Mr. NOONAN. Absolutely. I absolutely do.

Ms. DEGETTE. Would you share one?

Mr. NOONAN. I believe we are entering an age where everything

is going to be microprocessor driven, not just our computers, but

the Internet will be the base foundation for command and control

systems for distribution tracking systems, for satellite tracking systems, for everything that we do that needs information. The only

way that we are going to secure these systems out into the future

is if each individual system on the network has its own capability

to intelligently monitor itself and discern between good and bad behavior.

Ms. DEGETTE. Thank you. I have one last question, and that is

to Ms. McDonald. I assume that is your chart behind you?

Ms. MCDONALD. Yes. It is based upon our data.

Ms. DEGETTE. My question to you is of the route compromises on

that chart which are in red, it says a route compromise means that

the intruder has gained full administrative or route privileges over

the targeted system, meaning that any information or capability of

the system is totally owned and is controllable by the intruder.

Ms. MCDONALD. That’s correct.

Ms. DEGETTE. How many of those route compromises have been

to confidential or secret data?

Ms. MCDONALD. To my knowledge, none.

Ms. DEGETTE. Thank you.

Mr. Chairman, I can see that we have a lot more work to do. I

want to thank this excellent panel and the previous one.

Mr. GREENWOOD. The Chair is going to recognize himself for a

second round of questions, and I turn to you first, Ms. McDonald.

Of the 586 incidents reported in 2000, is it true that at least several of those are known to have resulted in the compromise of sensitive agency information; and if so, can you give us some sense of

the type of information that was compromised?

Ms. MCDONALD. Every Federal civilian agency, as we have heard

this morning, maintains very sensitive information on American

citizens. I can tell you that most of the increases that we have

seen, and most of the incidents in the year 2000 had to do with scientific research and environmentally involved agencies. Again, because this is an area that FedCIRC needs to develop the trust of

the agencies that we work with, I could not go into identifying

which particular agencies and what systems.

But generally the scientific area is—as Mr. Noonan alluded to,

the whole Internet is very open. And it was developed by the scientific area and they, as part of their research, are a very open

community.

Mr. GREENWOOD. Your testimony notes there has been a rise in

reconnaissance activities, scans of government computers by forVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00055 Fmt 6633 Sfmt 6602 E:\HEARINGS\72834 pfrm09 PsN: 72834
52

eign sources over the past year, up from 60 percent in 1999 to 75

percent in 2000. Are we talking about terrorism activities, teenage

hackers from abroad, espionage, or a combination of these; and how

does FedCIRC determine if a scan is by a foreign source, and what

information are these foreign sources trying to gain access to?

Ms. MCDONALD. Well, we can determine whether it’s a foreign

address where these scans are coming from. If with working with

the agency we feel that it is a nation-state then we work with Mr.

Dick’s area or the NSA and transfer that information over to them.

We do not investigate incidents. Our job is to report incidents, assist agencies to recover from incidents, and to give agencies the

tools that they need in order to protect themselves.

Mr. GREENWOOD. Mr. Dick, according to a Washington Post article dated March 21 of this year, your current assessment of computer security at Federal facilities is that they are extremely vulnerable to potentially crippling cyberattacks. Is that an accurate

assessment of your view; and if so, what is that view based on?

Mr. DICK. It is an accurate assessment of my view of not only

government systems but private sector systems as has been demonstrated in this committee today. There are numerous tools out

there for which to exploit the vulnerabilities in those systems; and

unless there is due diligence on the part of systems administrators,

CEOs and executive managements of government agencies, as well

as the private sector as a whole, you’re going to have

vulnerabilities and that includes due diligence not only in the implementation of firewalls and intrusion detection software, but as

has been pointed out earlier, continually updating and correcting

your systems.

For example, we are conducting an investigation currently, or

several investigations, regarding known vulnerabilities to certain

operating systems. These intruders are going in, as I alluded to

earlier, and taking credit card numbers and then extorting the

businesses. In December of this year we issued a warning based

upon our investigative efforts to the public saying that these are

the known vulnerabilities in this operating system which need to

be repaired because of this. We got very little play.

In March we became much more public after coordinating with

the information sharing and analysis centers and our other partners and came out with a very—a much more public announcement

and beat the drum louder, if you will, to try and get these

vulnerabilities fixed because there are known patches that can prevent this. Because of that, one of the information sharing and analysis centers indicated that we were able to prevent over 1,600 attempts.

So the point is that it is continual vigilance and implementation

in security; and unless you do that, you are vulnerable.

Mr. GREENWOOD. GSA told this committee—told our staff that in

excess of 95 percent of the intrusions into Federal computers could

have been prevented had well-known vulnerabilities been patched

with existing remedies. What does that say about the state of our

computer security and vigilance, Ms. McDonald?

Ms. MCDONALD. It doesn’t say a lot.

Mr. GREENWOOD. Actually, it does say a lot.

53

Ms. MCDONALD. Well, yes it does; but not what I would like to

say about it. One of the things that we’re doing in the Fed service

area, recognizing this being an issue, is working with a number of

companies to see what capabilities they have to offer the Federal

Government for a patch distribution system so that we can profile

the agency systems to determine where—what type systems they

have, where they stand on their patches, and then, as patches come

out, feed them down to the agencies in a hope that that will encourage them to apply the patches and therefore allow them to recover from—— Mr. GREENWOOD. Well, you’re hoping that it will encourage them,

but are they required? If you do an advisory indicating a vulnerability in a known patch and you distribute that to the Federal

agency, is the Federal agency required—— Ms. MCDONALD. No.

Mr. GREENWOOD. [continuing] under any—— Ms. MCDONALD. No. This would only allow us the knowledge

that the patch was delivered to them, and we can establish the system so that we can see if they actually took the patch; but they’re

under no requirement to apply the patch.

Mr. GREENWOOD. Do you keep records of to what extent your encouragement works in the patches?

Ms. MCDONALD. We will, once we implement the system.

Mr. GREENWOOD. Okay. The Chair thanks all three of our witnesses for their superb testimony and you are excused. And I would

call the second panel, consisting of Mr. Robert Dacey, director of information security systems at the U.S. General Accounting Office,

and Mr. John S. Tritak, director of Critical Infrastructure Assurance Office of the U.S. Department of Commerce.

I’m going to do what I failed to do in the last panel and that is

remind you this committee is holding an investigative hearing and

when doing so it has had the practice of taking testimony under

oath. Do either of you have any objection to testify under oath?

Mr. DACEY. No.

Mr. TRITAK. Not at all.

Mr. GREENWOOD. You’re also then advised that under the rules

of the House and under the rules of the committee you’re entitled

to be advised by counsel. Do you desire to be advised by counsel

during your testimony?

Mr. DACEY. I do not.

Mr. TRITAK. I do not.

Mr. GREENWOOD. In that case, will you rise and raise your right

hand and I will swear you in.

[Witnesses sworn.]

Thank you. Please be seated.

We will recognize Mr. Dacey for his testimony for 5 minutes.

TESTIMONY OF ROBERT F. DACEY, DIRECTOR, INFORMATION

SECURITY ISSUES, U.S. GENERAL ACCOUNTING OFFICE; AND

JOHN S. TRITAK, DIRECTOR, CRITICAL INFRASTRUCTURE

ASSURANCE OFFICE, U.S. DEPARTMENT OF COMMERCE

Mr. DACEY. Mr. Chairman, I am pleased to be here this afternoon to discuss information security in the Federal Government.

Evaluations by GAO and the Inspectors General continue to show

54

that computer security over the government’s unclassified systems

are fraught with serious and widespread weaknesses. The risk associated with these weaknesses as has been discussed earlier are

heightened by the increasing interconnectivity of our systems, as

well as the use of the Internet. While the government cannot estimate the actual damage and loss, principally because many incidents are either not identified or not reported, I’d like to provide

several examples that illustrate the effect that can happen to Federal agencies.

First, there can be theft or misuse of Federal Government resources. For example, one individual embezzled over $435,000 at

the Department of Defense. At EPA, a hacker chat room was surreptitiously installed on an agency server. An EPA system was

used by hackers to launch attacks against others, and numerous

Federal Web sites have been reportedly defaced.

Ineffective security can also result in inappropriate disclosure or

misuse of sensitive personal and proprietary business information.

For example, sensitive information was reported stolen by the Department of Defense. IRS employees have browsed taxpayer records

and used information obtained to commit financial and other

crimes. Social security information has been sold to facilitate identity theft.

Another effect is potential disruption of business operations. For

example, operations at several agencies were disrupted by the ‘‘I

love you’’ virus. Also, users were locked out of EPA systems using

some of the techniques we saw demonstrated earlier today.

And third, DOE stood down its Internet connections on several

occasions. The last can result in modification or destruction of programs or data. For example, sensitive information was corrupted

and malicious software installed at the Department of Defense.

While agencies’ operations and risks vary, the types of weaknesses reported are strikingly similar. In general, systems did not

have adequate controls to prevent and detect unauthorized changes

to systems software, to prevent or detect unauthorized access to facilities, systems, programs and data, and to ensure the continuity

of business operations.

We and the Inspectors General made scores of recommendations

to improve security, and in 2001 we again reported information security as a high-risk area, as we have in 1997 and 1999.

I would like to point out that GAO employs similar tests to those

that were demonstrated this morning and would like to add that

even though those generally result in our ability to gain root access

or other access to systems, we sometimes are just as successful in

guessing passwords and using social engineering to gain access to

those systems.

Even if agencies do implement the corrective actions that have

been identified, all too often subsequent reviews have uncovered

the same types of vulnerabilities. As we’ve reported in the past,

these weaknesses continue to exist principally because agencies

have not established effective computer security management programs. Effective programs would allow for processes and procedures to assess risks, to ensure that controls are adequately put in

place to address those risks, to have a regular process of raising

55

awareness by the employees, and last, to have a process to monitor

the effectiveness of security on an ongoing basis.

While we have seen that some agencies have implemented policies and procedures and have established risk awareness programs,

little has been done by most agencies to actively monitor the effectiveness of the controls, unlike what was demonstrated today by

the Department of Energy.

The Congress has expressed concern about the serious and pervasive nature of computer security and recently passed legislation

that would require some additional reporting and work to be done.

Specifically, the legislation requires that agencies establish computer security management programs over all operations and assets of the agency.

Second, the legislation requires both agency and Inspector General annual reviews to be performed, and the information from

those reviews could be very helpful in oversight and monitoring of

agencies’ progress.

Other actions have been initiated across government, including

several agencies that have taken important steps to improve computer security. The Federal Chief Information Officers Council has

issued a guide for measuring agency progress, which we assisted

in developing; and the prior administration has issued a national

plan for information systems protection as well as the current administration issuing the first annual update on the status of critical infrastructure.

It is important to maintain the momentum of these efforts and

ensure that the activities currently underway are coordinated

under a comprehensive strategy and that the roles and responsibilities of the numerous organizations with central responsibilities for

computer security are clearly defined.

Mr. Chairman, that concludes our statement. I would be pleased

to answer any questions that you or the members of the subcommittee may have.

[The prepared statement of Robert F. Dacey follows:]

PREPARED STATEMENT OF ROBERT F. DACEY, DIRECTOR, INFORMATION SECURITY

ISSUES, GENERAL ACCOUNTING OFFICE

Mr. Chairman and Members of the Subcommittee: I am pleased to be here today

to discuss our analysis of information security audits at federal agencies. As with

other large organizations, federal agencies rely extensively on computerized systems

and electronic data to support their missions. Accordingly, the security of these systems and data is essential to avoiding disruptions in critical operations, data tampering, fraud, and inappropriate disclosure of sensitive information.

Today, I will summarize the results of our analysis of information security audits

performed by us and by agency inspectors general since July 1999 at 24 major federal departments and agencies. In summarizing these results, I will discuss the

types of pervasive weaknesses that we and agency inspectors general have identified. I will then describe the serious risks that these weaknesses pose at selected

individual agencies of particular interest to this subcommittee, and the major common weaknesses that agencies need to address. Finally, I will describe the management improvements that are needed to resolve these weaknesses and the significant

challenges that remain.

BACKGROUND

Dramatic increases in computer interconnectivity, especially in the use of the

Internet, are revolutionizing the way our government, our nation, and much of the

world communicate and conduct business. The benefits have been enormous. Vast

amounts of information are now literally at our fingertips, facilitating research on

56

1 Critical Infrastructure Protection: ‘‘ILOVEYOU’’ Computer Virus Highlights Need for Improved Alert and Coordination Capabilities (GAO/T-AIMD-00-181, May 18, 2000); Information

Security: ‘‘ILOVEYOU’’ Computer Virus Emphasizes Critical Need for Agency and Governmentwide Improvements (GAO/T-AIMD-00-171, May 10, 2000); Information Security: The Melissa

Computer Virus Demonstrates Urgent Need for Stronger Protection Over Systems and Sensitive

Data (GAO/T-AIMD-99-146, April 15, 1999). 2 In its Daily Reports, the National Infrastructure Protection Center states that these summaries are for information purposes only and do not constitute any verification of the information contained in the reports or endorsement by the FBI.

virtually every topic imaginable; financial and other business transactions can be

executed almost instantaneously, often on a 24-hour-a-day basis; and electronic

mail, Internet web sites, and computer bulletin boards allow us to communicate

quickly and easily with a virtually unlimited number of individuals and groups.

In addition to such benefits, however, this widespread interconnectivity poses significant risks to our computer systems and, more important, to the critical operations and infrastructures they support. For example, telecommunications, power

distribution, water supply, public health services, and national defense—including

the military’s warfighting capability—law enforcement, government services, and

emergency services all depend on the security of their computer operations. The

speed and accessibility that create the enormous benefits of the computer age likewise, if not properly controlled, allow individuals and organizations to inexpensively

eavesdrop on or interfere with these operations from remote locations for mischievous or malicious purposes, including fraud or sabotage.

Reports of attacks and disruptions abound. The March 2001 report of the ‘‘Computer Crime and Security Survey,’’ conducted by the Computer Security Institute

and the Federal Bureau of Investigation’s San Francisco Computer Intrusion Squad,

showed that 85 percent of respondents (primarily large corporations and government agencies) had detected computer security breaches within the last 12 months.

Disruptions caused by virus attacks, such as the ILOVEYOU virus in May 2000 and

1999’s Melissa virus, have illustrated the potential for damage that such attacks

hold.1 A sampling of reports summarized in Daily Reports by the FBI’s National Infrastructure Protection Center 2 during two recent weeks in March illustrates the

problem further:

• Hackers suspected of having links to a foreign government successfully broke into

the Sandia National Laboratory’s computer system and were able to access sensitive classified information. (Source: Washington Times, March 16, 2001.)

• A hacker group by the name of ‘‘PoizonB0x’’ defaced numerous government web

sites, including those of the Department of Transportation, the Administrative

Office of the U.S. Courts, the National Science Foundation, the National Oceanic and Atmospheric Administration, the Princeton Plasma Physics Laboratory, the General Services Administration, the U.S. Geological Survey, the Bureau of Land Management, and the Office of Science & Technology Policy.

(Source: Attrition.org., March 19, 2001.)

• The ‘‘Russian Hacker Association’’ is offering over the Internet an e-mail bombing

system that will destroy a persons ‘‘web enemy’’ for a fee. (Source: UK Ministry

of Defense Joint Security Coordination Center)

• Two San Diego men allegedly crashed a company’s computer system by rerouting

tens of thousands of unsolicited e-mails through its servers. (Source: ZDNet

News, March 18, 2001.)

Government officials are increasingly concerned about attacks from individuals

and groups with malicious intent, such as crime, terrorism, foreign intelligence

gathering, and acts of war. According to the FBI, terrorists, transnational criminals,

and intelligence services are quickly becoming aware of and using information exploitation tools such as computer viruses, Trojan horses, worms, logic bombs, and

eavesdropping sniffers that can destroy, intercept, or degrade the integrity of and

deny access to data. As greater amounts of money are transferred through computer

systems, as more sensitive economic and commercial information is exchanged electronically, and as the nation’s defense and intelligence communities increasingly

rely on commercially available information technology, the likelihood that information attacks will threaten vital national interests increases. In addition, the disgruntled organization insider is a significant threat, since such individuals often have

knowledge that allows them to gain unrestricted access and inflict damage or steal

assets without a great deal of knowledge about computer intrusions.

Since 1996, our analyses of information security at major federal agencies have

shown that federal systems were not being adequately protected from these threats,

even though these systems process, store, and transmit enormous amounts of sensitive data and are indispensable to many federal agency operations. In September

57

3 Information Security: Opportunities for Improved OMB Oversight of Agency Practices (GAO/

AIMD-96-110, September 24, 1996). 4 Information Security: Serious Weaknesses Place Critical Fedearl Operations and Assets at

Risk (GAO/AIMD-98-92, September 23, 1998); Information Security: Serious and Widespread

Weaknesses Persist at Federal Agencies (GAO/AIMD-00-295, September 6, 2000). 5 High-Risk Series: Information Management and Technology (GAO/HR-97-9, February 1,

1997); High-Risk Series: An Update (GAO/HR-99-1, January 1999); High Risk Series: An Update

(GAO-01-263, January 2001).

1996, we reported that serious weaknesses had been found at 10 of the 15 largest

federal agencies, and we concluded that poor information security was a widespread

federal problem with potentially devastating consequences.3 In 1998 and in 2000,

we analyzed audit results for 24 of the largest federal agencies: both analyses found

that all 24 agencies had significant information security weaknesses.4 As a result

of these analyses, we have identified information security as a high-risk issue in reports to the Congress since 1997-most recently in January 2001.5

WEAKNESSES REMAIN PERVASIVE

Evaluations published since July 1999 show that federal computer systems are

riddled with weaknesses that continue to put critical operations and assets at risk.

Significant weaknesses have been identified in each of the 24 agencies covered by

our review. These weaknesses covered all six major areas of general controls—the

policies, procedures, and technical controls that apply to all or a large segment of

an entity’s information systems and help ensure their proper operation. These six

areas are (1) security program management, which provides the framework for ensuring that risks are understood and that effective controls are selected and implemented, (2) access controls, which ensure that only authorized individuals can read,

alter, or delete data, (3) software development and change controls, which ensure

that only authorized software programs are implemented, (4) segregation of duties,

which reduces the risk that one individual can independently perform inappropriate

actions without detection, (5) operating systems controls, which protect sensitive

programs that support multiple applications from tampering and misuse, and (6)

service continuity, which ensures that computer-dependent operations experience no

significant disruptions.

Weaknesses in these areas placed a broad range of critical operations and assets

at risk for fraud, misuse, and disruption. In addition, they placed an enormous

amount of highly sensitive data—much of it pertaining to individual taxpayers and

beneficiaries—at risk of inappropriate disclosure.

The scope of audit work performed has continued to expand to more fully cover

all six major areas of general controls at each agency. Not surprisingly, this has led

to the identification of additional areas of weakness at some agencies. While these

increases in reported weaknesses are disturbing, they do not necessarily mean that

information security at federal agencies is getting worse. They more likely indicate

that information security weaknesses are becoming more fully understood-an important step toward addressing the overall problem. Nevertheless, our analysis leaves

no doubt that serious, pervasive weaknesses persist. As auditors increase their proficiency and the body of audit evidence expands, it is probable that additional significant deficiencies will be identified.

Most of the audits covered in our analysis were performed as part of financial

statement audits. At some agencies with primarily financial missions, such as the

Department of the Treasury and the Social Security Administration, these audits

covered the bulk of mission-related operations. However, at agencies whose missions

are primarily nonfinancial, such as the Departments of Defense and Justice, the audits may provide a less complete picture of the agency’s overall security posture because the audit objectives focused on the financial statements and did not include

evaluations of systems supporting nonfinancial operations.

In response to congressional interest, during fiscal years 1999 and 2000, we expanded our audit focus to cover a wider range of nonfinancial operations. We expect

this trend to continue.

RISKS TO FEDERAL OPERATIONS, ASSETS, AND CONFIDENTIALITY ARE SUBSTANTIAL

To fully understand the significance of the weaknesses we identified, it is necessary to link them to the risks they present to federal operations and assets. Virtually all federal operations are supported by automated systems and electronic

data, and agencies would find it difficult, if not impossible, to carry out their missions and account for their resources without these information assets. Hence, the

degree of risk caused by security weaknesses is extremely high.

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6 Information Security: IRS Electronic Filing Systems (GAO-01-306, February 16, 2001). 7 Information Security: Vulnerabilities in DOE’s Systems for Unclassified Civilian Research

(GAO/AIMD-00-140, June 9, 2000). 8 Report on the Department of Energy’s Consolidated Financial Statements, DOE/IG-FS-01-01,

February 16, 2001. 9 Report on the Financial Statement Audit of the Department of Health and Human Services

for Fiscal Year 2000, A-17-00-00014, February 26, 2001.

The weaknesses identified place a broad array of federal operations and assets at

risk of fraud, misuse, and disruption. For example, weaknesses at the Department

of the Treasury increase the risk of fraud associated with billions of dollars of federal payments and collections, and weaknesses at the Department of Defense increase the vulnerability of various military operations. Further, information security

weaknesses place enormous amounts of confidential data, ranging from personal

and tax data to proprietary business information, at risk of inappropriate disclosure.

For example, in 1999, a Social Security Administration employee pled guilty to unauthorized access to the administration’s systems. The related investigation determined that the employee had made many unauthorized queries, including obtaining

earnings information for members of the local business community.

Such risks, if inadequately addressed, may limit government’s ability to take advantage of new technology and improve federal services through electronic means.

For example, this past February, we reported on serious control weaknesses in the

Internal Revenue Service’s (IRS) electronic filing system, noting that failure to

maintain adequate security could erode public confidence in electronic filing, jeopardize the Service’s ability to meet its goal of 80 percent of returns being filed electronically by 2007, and deprive it of financial and other anticipated benefits. Specifically, we found that, during the 2000 tax filing season, IRS did not adequately secure access to its electronic filing systems or to the electronically transmitted tax

return data those systems contained. We demonstrated that unauthorized individuals, both internal and external to IRS, could have gained access to these systems

and viewed, copied, modified, or deleted taxpayer data. In addition, the weaknesses

we identified jeopardized the security of the sensitive business, financial, and taxpayer data on other critical IRS systems that were connected to the electonic filing

systems. The IRS Commissioner has stated that, in response to recommendations

we made, IRS has completed corrective action for all of the critical access control

vulnerabilities we identified and that, as a result, the electronic filing systems now

satisfactorily meet critical federal security requirements to protect the taxpayer.6 As

part of our audit follow up activities, we plan to evaluate the effectiveness of IRS’s

corrective actions.

I would now like to describe the risks associated with specific recent audit findings at agencies of particular interest to this subcommittee.

• Information technology is essential to the Department of Energy’s (DOE) scientific research mission, which is supported by a large and diverse set of computing

systems, including very powerful supercomputers located at DOE laboratories across

the nation. In June 2000, we reported that computer systems at DOE laboratories

supporting civilian research had become a popular target of the hacker community,

with the result that the threat of attacks had grown dramatically in recent years.7

Further, because of security breaches, several laboratories had been forced to temporarily disconnect their networks from the Internet, disrupting the laboratories’ ability to do scientific research for up to a full week on at least two occasions. In February 2001, the DOE’s Inspector General reported network vulnerabilities and access control weaknesses in unclassified systems that increased the risk that malicious destruction or alteration of data or the processing of unauthorized operations

could occur.8

• In February, the Department of Health and Human Services’ Inspector General

again reported serious control weaknesses affecting the integrity, confidentiality,

and availability of data maintained by the department.9 Most significant were weaknesses associated with the department’s Health Care Financing Administration,

which was responsible, during fiscal year 2000, for processing more than $200 billion in medicare expenditures. HCFA relies on extensive data processing operations

at its central office to maintain administrative data, such as Medicare enrollment,

eligibility, and paid claims data, and to process all payments for managed care.

HCFA also relies on Medicare contractors, who use multiple shared systems to collect and process personal health, financial, and medical data associated with Medicare claims. Significant weaknesses were also reported for the Food and Drug Administration and the department’s Division of Financial Operations.

• The Environmental Protection Agency (EPA) relies on its computer systems to

collect and maintain a wealth of environmental data under various statutory and

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10 Information Security: Fundamental Weaknesses Place EPA Data and Operations at Risk

(GAO/AIMD-00-215 July 6, 2000). 11 EPA’s Internet Connectivity Controls, Office of Inspector General Report Audit (Redacted

Version), September 5, 1997. 12 Audit Rewport on EPA’s Fiscal 2000 Financial Statements, Office of the Inspector General

Audit Report 2001-1-00107, February 28, 2001.

regulatory requirements. EPA makes much of its information available to the public

through Internet access in order to encourage public awareness of and participation

in managing human health and environmental risks and to meet statutory requirements. EPA also maintains confidential data from private businesses, data of varying sensitivity on human health and environmental risks, financial and contract

data, and personal information on its employees. Consequently, EPA’s information

security program must accommodate the often competing goals of making much of

its environmental information widely accessible while maintaining data integrity,

availability, and appropriate confidentiality. In July 2000, we reported serious and

pervasive problems that essentially rendered EPA’s agencywide information security

program ineffective.10 Our tests of computer-based controls concluded that the computer operating systems and agencywide computer network that support most of

EPA’s mission-related and financial operations were riddled with security weak- nesses. In addition, EPA’s records showed that its vulnerabilities had been exploited by

both external and internal sources, as illustrated by the following examples.

—In June 1998, EPA was notified that one of its computers was used by a remote

intruder as a means of gaining unauthorized access to a state university’s com- puters. The problem report stated that vendor-supplied software updates were

available to correct the vulnerability, but EPA had not installed them. —In July 1999, a chat room was set up on a network server at one of EPA’s regional

financial management centers for hackers to post notes and, in effect, conduct

on-line electronic conversations. —In February 1999, a sophisticated penetration affected three of EPA’s computers.

EPA was unaware of this penetration until notified by the FBI. —In June 1999, an intruder penetrated an Internet web server at EPA’s National

Computer Center by exploiting a control weakness specifically identified by EPA

about 3 years earlier during a previous penetration of a different system. The

vulnerability continued to exist because EPA had not implemented vendor software updates (patches), some of which had been available since 1996.

—On two occasions during 1998, extraordinarily large volumes of network traffic—

synonymous with a commonly used denial-of-service hacker technique—affected

computers at one of EPA’s field offices. In one case, an Internet user significantly slowed EPA’s network activity and interrupted network service for over

450 EPA computer users. In a second case, an intruder used EPA computers

to successfully launch a denial-of-service attack against an Internet service provider.

—In September 1999, an individual gained access to an EPA computer and altered

the computer’s access controls, thereby blocking authorized EPA employees from

accessing files. This individual was no longer officially affiliated with EPA at

the time of the intrusion, indicating a serious weakness in EPA’s process for applying changes in personnel status to computer accounts.

Of particular concern was that many of the most serious weaknesses we identified-those related to inadequate protection from intrusions through the Internet and

poor security planning-had been previously reported to EPA management in 1997

by EPA’s inspector general.11 The negative effects of such weaknesses are illustrated by EPA’s own records, which show several serious computer security incidents since early 1998 that have resulted in damage and disruption to agency operations. As a result of these weaknesses, EPA’s computer systems and the operations

that rely on them were highly vulnerable to tampering, disruption, and misuse from

both internal and external sources.

EPA management has developed and begun to implement a detailed action plan

to address reported weaknesses. However, the agency does not expect to complete

these corrective actions until 2002 and continued to report a material weakness in

this area in its fiscal year 2000 report on internal controls under the Federal Managers’ Financial Integrity Act of 1982.12

• The Department of Commerce is responsible for systems that the department

has designated as critical for national security, national economic security, and public health and safety. Its member bureaus include the National Oceanic and Atmospheric Administration, the Patent and Trademark Office, the Bureau of the Census,

and the International Trade Administration. During December 2000 and January

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13Department of Commerce’s Fiscal year 2000 Consolidated Financial Statements, Inspector

General Audit Report No. FSD-12849-1-0001.

2001, Commerce ’s inspector general reported significant computer security weaknesses in several of the department’s bureaus and, last month, reported multiple

material information security weaknesses affecting the department’s ability to

produce accurate data for financial statements. These included a lack of formal, current security plans and weaknesses in controls over access to systems and over software development and changes.13 At the request of the full committee, we are currently evaluating information security controls at selected other Commerce bureaus.

WHILE NATURE OF RISK VARIES, CONTROL WEAKNESSES ACROSS AGENCIES ARE

STRIKINGLY SIMILAR

The nature of agency operations and their related risks vary. However, striking

similarities remain in the specific types of general control weaknesses reported and

in their serious negative impact on an agency’s ability to ensure the integrity, availability, and appropriate confidentiality of its computerized operations—and therefore on what corrective actions they must take. The sections that follow describe the

six areas of general controls and the specific weaknesses that were most widespread

at the agencies covered by our analysis.

Security Program Management

Each organization needs a set of management procedures and an organizational

framework for identifying and assessing risks, deciding what policies and controls

are needed, periodically evaluating the effectiveness of these policies and controls,

and acting to address any identified weaknesses. These are the fundamental activities that allow an organization to manage its information security risks cost effectively, rather than react to individual problems in an ad-hoc manner only after a

violation has been detected or an audit finding reported.

Despite the importance of this aspect of an information security program, poor security program management continues to be a widespread problem. Virtually all of

the agencies for which this aspect of security was reviewed had deficiencies. Specifically, many had not developed security plans for major systems based on risk, had

not documented security policies, and had not implemented a program for testing

and evaluating the effectiveness of the controls they relied on. As a result, agencies

• were not fully aware of the information security risks to their operations,

• had accepted an unknown level of risk by default rather than consciously deciding

what level of risk was tolerable,

• had a false sense of security because they were relying on controls that were not

effective, and

• could not make informed judgments as to whether they were spending too little

or too much of their resources on security.

With the October 2000 enactment of the government information security reform

provisions of the fiscal year 2001 National Defense Authorization Act, agencies are

now required by law to adopt the practices described above, including annual management evaluations of agency security.

Access Controls

Access controls limit or detect inappropriate access to computer resources (data,

equipment, and facilities), thereby protecting these resources against unauthorized

modification, loss, and disclosure. Access controls include physical protections—such

as gates and guards—as well as logical controls, which are controls built into software that require users to authenticate themselves through the use of secret passwords or other identifiers and limit the files and other resources that an authenticated user can access and the actions that he or she can execute. Without adequate

access controls, unauthorized individuals, including outside intruders and terminated employees, can surreptitiously read and copy sensitive data and make undetected changes or deletions for malicious purposes or personal gain. Even authorized

users can unintentionally modify or delete data or execute changes that are outside

their span of authority.

For access controls to be effective, they must be properly implemented and maintained. First, an organization must analyze the responsibilities of individual computer users to determine what type of access (e.g., read, modify, delete) they need

to fulfill their responsibilities. Then, specific control techniques, such as specialized

access control software, must be implemented to restrict access to these authorized

functions. Such software can be used to limit a user’s activities associated with specific systems or files and to keep records of individual users’ actions on the comVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00064 Fmt 6633 Sfmt 6621 E:\HEARINGS\72834 pfrm09 PsN: 72834
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puter. Finally, access authorizations and related controls must be maintained and

adjusted on an ongoing basis to accommodate new and terminated employees, and

changes in users’ responsibilities and related access needs.

Significant access control weaknesses were reported for all of the agencies covered

by our analysis, as evidenced by the following examples:

• Accounts and passwords for individuals no longer associated with the agency were

not deleted or disabled; neither were they adjusted for those whose responsibilities, and thus need to access certain files, changed. At one agency, as a result,

former employees and contractors could and in many cases did still read, modify, copy, or delete data. At this same agency, even after 160 days of inactivity,

7,500 out of 30,000 users’ accounts had not been deactivated. • Users were not required to periodically change their passwords. • Managers did not precisely identify and document access needs for individual

users or groups of users. Instead, they provided overly broad access privileges

to very large groups of users. As a result, far more individuals than necessary

had the ability to browse and, sometimes, modify or delete sensitive or critical

information. At one agency, all 1,100 users were granted access to sensitive system directories and settings. At another agency, 20,000 users had been provided

access to one system without written authorization. • Use of default, easily guessed, and unencrypted passwords significantly increased

the risk of unauthorized access. During testing at one agency, we were able to

guess many passwords based on our knowledge of commonly used passwords

and were able to observe computer users’ keying in passwords and then use

those passwords to obtain ‘‘high level’’ system administration privileges. • Software access controls were improperly implemented, resulting in unintended

access or gaps in access-control coverage. At one agency data center, all users,

including programmers and computer operators, had the capability to read sensitive production data, increasing the risk that such sensitive information could

be disclosed to unauthorized individuals. Also at this agency, certain users had

the unrestricted ability to transfer system files across the network, increasing

the risk that unauthorized individuals could gain access to the sensitive data

or programs.

To illustrate the risks associated with poor authentication and access controls, in

recent years we have begun to incorporate network vulnerability testing into our audits of information security. Such tests involve attempting—with agency cooperation—to gain unauthorized access to sensitive files and data by searching for ways

to circumvent existing controls, often from remote locations. Our auditors have been

successful, in almost every test, in readily gaining unauthorized access that would

allow intruders to read, modify, or delete data for whatever purpose they had in

mind. Further, user activity was inadequately monitored. At one agency, much of

the activity associated with our intrusion testing was not recognized and recorded,

and the problem reports that were recorded did not recognize the magnitude of our

activity or the severity of the security breaches we initiated.

Application Software Development and Change Controls

Application software development and change controls prevent unauthorized software programs or modifications to programs from being implemented. Key aspects

of such controls are ensuring that (1) software changes are properly authorized by

the managers responsible for the agency program or operations that the application

supports, (2) new and modified software programs are tested and approved prior to

their implementation, and (3) approved software programs are maintained in carefully controlled libraries to protect them from unauthorized changes and to ensure

that different versions are not misidentified.

Such controls can prevent both errors in software programming as well as malicious efforts to insert unauthorized computer program code. Without adequate controls, incompletely tested or unapproved software can result in erroneous data processing that, depending on the application, could lead to losses or faulty outcomes.

In addition, individuals could surreptitiously modify software programs to include

processing steps or features that could later be exploited for personal gain or sabotage.

Weaknesses in software program change controls were identified for almost all of

the agencies where such controls were evaluated. Examples of weaknesses in this

area included the following:

• Testing procedures were undisciplined and did not ensure that implemented software operated as intended. For example, at one agency, senior officials authorized some systems for processing without testing access controls to ensure that

they had been implemented and were operating effectively. At another, documentation was not retained to demonstrate user testing and acceptance.

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• Implementation procedures did not ensure that only authorized software was

used. In particular, procedures did not ensure that emergency changes were

subsequently tested and formally approved for continued use and that implementation of ‘‘locally developed’’ (unauthorized) software programs was prevented or detected.

• Agencies’ policies and procedures frequently did not address the maintenance and

protection of program libraries.

Segregation of Duties

Segregation of duties refers to the policies, procedures, and organizational structure that help ensure that one individual cannot independently control all key aspects of a process or computer-related operation and thereby conduct unauthorized

actions or gain unauthorized access to assets or records without detection. For example, one computer programmer should not be allowed to independently write,

test, and approve program changes.

Although segregation of duties alone will not ensure that only authorized activities occur, inadequate segregation of duties increases the risk that erroneous or

fraudulent transactions could be processed, improper program changes implemented, and computer resources damaged or destroyed. For example,

• an individual who was independently responsible for authorizing, processing, and

reviewing payroll transactions could inappropriately increase payments to selected individuals without detection; or

• a computer programmer responsible for authorizing, writing, testing, and distributing program modifications could either inadvertently or deliberately implement computer programs that did not process transactions in accordance with

management’s policies or that included malicious code.

Controls to ensure appropriate segregation of duties consist mainly of documenting, communicating, and enforcing policies on group and individual responsibilities. Enforcement can be accomplished by a combination of physical and logical access controls and by effective supervisory review.

Segregation of duties weaknesses were identified at most of the agencies covered

by our analysis. Common problems involved computer programmers and operators

who were authorized to perform a variety of duties, thus providing them the ability

to independently modify, circumvent, and disable system security features. For example, at one data center, a single individual could independently develop, test, review, and approve software changes for implementation.

Segregation of duties problems were also identified related to transaction processing. For example, at one agency, 11 staff members involved with procurement

had system access privileges that allowed them to individually request, approve,

and record the receipt of purchased items. In addition, 9 of the 11 had system access

privileges that allowed them to edit the vendor file, which could result in fictitious

vendors being added to the file for fraudulent purposes. For fiscal year 1999, we

identified 60 purchases, totaling about $300,000, that were requested, approved, and

receipt-recorded by the same individual.

Operating System Controls

Operating system software controls limit and monitor access to the powerful programs and sensitive files associated with the computer systems operation. Generally, one set of system software is used to support and control a variety of applications that may run on the same computer hardware. System software helps control

and coordinate the input, processing, output, and data storage associated with all

of the applications that run on the system. Some system software can change data

and program code on files without leaving an audit trail or can be used to modify

or delete audit trails. Examples of system software include the operating system,

system utilities, program library systems, file maintenance software, security software, data communications systems, and database management systems.

Controls over access to and modification of system software are essential in providing reasonable assurance that operating system-based security controls are not

compromised and that the system will not be impaired. If controls in this area are

inadequate, unauthorized individuals might use system software to circumvent security controls to read, modify, or delete critical or sensitive information and programs. Also, authorized users of the system may gain unauthorized privileges to

conduct unauthorized actions or to circumvent edits and other controls built into application programs. Such weaknesses seriously diminish the reliability of information produced by all of the applications supported by the computer system and increase the risk of fraud, sabotage, and inappropriate disclosure. Further, system

software programmers are often more technically proficient than other data procVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00066 Fmt 6633 Sfmt 6621 E:\HEARINGS\72834 pfrm09 PsN: 72834
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essing personnel and, thus, have a greater ability to perform unauthorized actions

if controls in this area are weak.

The control concerns for system software are similar to the access control issues

and software program change control issues discussed earlier. However, because of

the high level of risk associated with system software activities, most entities have

a separate set of control procedures that apply to them.

Weaknesses were identified at each of the agencies for which operating system

controls were reviewed. A common type of problem reported was insufficiently restricted access that made it possible for knowledgeable individuals to disable or circumvent controls in a variety of ways. For example, at one agency, system support

personnel had the ability to change data in the system audit log. As a result, they

could have engaged in a wide array of inappropriate and unauthorized activity and

could have subsequently deleted related segments of the audit log, thus diminishing

the likelihood that their actions would be detected.

Further, pervasive vulnerabilities in network configuration exposed agency systems to attack. These vulnerabilities stemmed from agencies’ failure to (1) install

and maintain effective perimeter security, such as firewalls and screening routers,

(2) implement current software patches, and (3) protect against commonly known

methods of attack.

Service Continuity

Finally, service continuity controls ensure that when unexpected events occur,

critical operations will continue without undue interruption and that crucial, sensitive data are protected. For this reason, an agency should have (1) procedures in

place to protect information resources and minimize the risk of unplanned interruptions and (2) a plan to recover critical operations, should interruptions occur. These

plans should consider the activities performed at general support facilities, such as

data processing centers, as well as the activities performed by users of specific applications. To determine whether recovery plans will work as intended, they should be

tested periodically in disaster simulation exercises.

Losing the capability to process, retrieve, and protect information maintained

electronically can significantly affect an agency’s ability to accomplish its mission.

If controls are inadequate, even relatively minor interruptions can result in lost or

incorrectly processed data, which can cause financial losses, expensive recovery efforts, and inaccurate or incomplete financial or management information. Controls

to ensure service continuity should address the entire range of potential disruptions.

These may include relatively minor interruptions, such as temporary power failures

or accidental loss or erasure of files, as well as major disasters, such as fires or natural disasters that would require reestablishing operations at a remote location.

Service continuity controls include (1) taking steps, such as routinely making

backup copies of files, to prevent and minimize potential damage and interruption,

(2) developing and documenting a comprehensive contingency plan, and (3) periodically testing the contingency plan and adjusting it as appropriate.

Service continuity control weaknesses were reported for most of the agencies covered by our analysis. Examples of weaknesses included the following:

• Plans were incomplete because operations and supporting resources had not been

fully analyzed to determine which were the most critical and would need to be

resumed as soon as possible should a disruption occur.

• Disaster recovery plans were not fully tested to identify their weaknesses. At one

agency, periodic walkthroughs or unannounced tests of the disaster recovery

plan had not been performed. Conducting these types of tests provides a scenario more likely to be encountered in the event of an actual disaster.

IMPROVED SECURITY PROGRAM MANAGEMENT IS ESSENTIAL

The audit reports cited in this statement and in our prior information security reports include many recommendations to individual agencies that address specific

weaknesses in the areas I have just described. It is each individual agency’s responsibility to ensure that these recommendations are implemented. Agencies have

taken steps to address problems and many have good remedial efforts underway.

However, these efforts will not be fully effective and lasting unless they are supported by a strong agencywide security management framework.

Establishing such a management framework requires that agencies take a comprehensive approach that involves both (1) senior agency program managers who

understand which aspects of their missions are the most critical and sensitive and

(2) technical experts who know the agencies’ systems and can suggest appropriate

technical security control techniques. We studied the practices of organizations with

superior security programs and summarized our findings in a May 1998 executive

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guide entitled Information Security Management: Learning From Leading Organizations (GAO/AIMD-98-68). Our study found that these organizations managed their

information security risks through a cycle of risk management activities that included

• assessing risks and determining protection needs, • selecting and implementing cost-effective policies and controls to meet these

needs, • promoting awareness of policies and controls and of the risks that prompted their

adoption among those responsible for complying with them, and • implementing a program of routine tests and examinations for evaluating the effectiveness of policies and related controls and reporting the resulting conclusions to those who can take appropriate corrective action.

In addition, a strong, centralized focal point can help ensure that the major elements of the risk management cycle are carried out and serve as a communications

link among organizational units. Such coordination is especially important in today’s highly networked computing environments. This cycle of risk management activities

is depicted below.

This cycle of activity, as described in our May 1998 executive guide, is consistent

with guidance on information security program management provided to agencies

by the Office of Management and Budget (OMB) and by NIST. In addition, the

guide has been endorsed by the federal Chief Information Officers (CIO) Council as

a useful resource for agency managers. We believe that implementing such a cycle

of activity is the key to ensuring that information security risks are adequately considered and addressed on an ongoing basis.

While instituting this framework is essential, there are several steps that agencies can take immediately. Specifically, they can (1) increase awareness, (2) ensure

that existing controls are operating effectively, (3) ensure that software patches are

up-to-date, (4) use automated scanning and testing tools to quickly identify problems, (5) propagate their best practices, and (6) ensure that their most common

vulnerabilities are addressed. None of these actions alone will ensure good security.

However, they take advantage of readily available information and tools and, thus,

do not involve significant new resources. As a result, they are steps that can be

made without delay.

NEW LEGAL REQUIREMENTS PROVIDE BASIS FOR IMPROVED MANAGEMENT AND

OVERSIGHT

Due to concerns about the repeated reports of computer security weaknesses at

federal agencies, in 2000, the Congress passed government information security reform provisions require agencies to implement the activities I have just described.

These provisions were enacted in late 2000 as part of the fiscal year 2001

NationalDefense Authorization Act. In addition to requiring these management improvements, the new provisions require annual evaluations of agency information

security programs by both management and agency inspectors general. The results

of these reviews, which are initially scheduled to become available in late 2001, will

provide a more complete picture of the status of federal information security than

currently exists, thereby providing the Congress and OMB an improved means of

overseeing agency progress and identifying areas needing improvement.

IMPROVEMENT EFFORTS ARE UNDERWAY, BUT MANY CHALLENGES REMAIN

During the last two years, a number of improvement efforts have been initiated.

Several agencies have taken significant steps to redesign and strengthen their information security programs; the Federal Chief Information Officers Council has issued

a guide for measuring agency progress, which we assisted in developing; and the

President issued a National Plan for Information Systems Protection and designated

the related goals of computer security and critical infrastructure protection as a priority management objective in his fiscal year 2001 budget. These actions are laudable. However, recent reports and events indicate that they are not keeping pace

with the growing threats and that critical operations and assets continue to be highly vulnerable to computer-based attacks.

While OMB, the Chief Information Officers Council, and the various federal entities involved in critical infrastructure protection have expanded their efforts, it will

be important to maintain the momentum. As we have noted in previous reports and

testimonies, there are actions that can be taken on a governmentwide basis to enhance agencies’ abilities to implement effective information security.

First, it is important that the federal strategy delineate the roles and responsibilities of the numerous entities involved in federal information security and related

aspects of critical infrastructure protection. Under current law, OMB is responsible

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for overseeing and coordinating federal agency security; and NIST, with assistance

from the National Security Agency (NSA), is responsible for establishing related

standards. In addition, interagency bodies, such as the CIO Council and the entities

created under Presidential Decision Directive 63 on critical infrastructure protection

are attempting to coordinate agency initiatives. While these organizations have developed fundamentally sound policies and guidance and have undertaken potentially

useful initiatives, effective improvements are not taking place, and it is unclear how

the activities of these many organizations interrelate, who should be held accountable for their success or failure, and whether they will effectively and efficiently

support national goals.

Second, more specific guidance to agencies on the controls that they need to implement could help ensure adequate protection. Currently agencies have wide discretion in deciding what computer security controls to implement and the level of

rigor with which they enforce these controls. In theory, this is appropriate since, as

OMB and NIST guidance states, the level of protection that agencies provide should

be commensurate with the risk to agency operations and assets. In essence, one set

of specific controls will not be appropriate for all types of systems and data.

However, our studies of best practices at leading organizations have shown that

more specific guidance is important. In particular, specific mandatory standards for

varying risk levels can clarify expectations for information protection, including

audit criteria; provide a standard framework for assessing information security risk;

and help ensure that shared data are appropriately protected. Implementing such

standards for federal agencies would require developing a single set of information

classification categories for use by all agencies to define the criticality and sensitivity of the various types of information they maintain. It would also necessitate

establishing minimum mandatory requirements for protecting information in each

classification category.

Third, routine periodic audits, such as those required in the government information security reforms recently enacted, would allow for more meaningful performance measurement. Ensuring effective implementation of agency information security and critical infrastructure protection plans will require monitoring to determine

if milestones are being met and testing to determine if policies and controls are operating as intended.

Fourth, the Congress and the executive branch can use of audit results to monitor

agency performance and take whatever action is deemed advisable to remedy identified problems. Such oversight is essential to holding agencies accountable for their

performance as was demonstrated by the OMB and congressional efforts to oversee

the year 2000 computer challenge.

Fifth, it is important for agencies to have the technical expertise they need to select, implement, and maintain controls that protect their computer systems. Similarly, the federal government must maximize the value of its technical staff by sharing expertise and information. As the year 2000 challenge showed, the availability

of adequate technical expertise has been a continuing concern to agencies.

Sixth, agencies can allocate resources sufficient to support their computer security

and infrastructure protection activities. Funding for security is already embedded to

some extent in agency budgets for computer system development efforts and routine

network and system management and maintenance. However, some additional

amounts are likely to be needed to address specific weaknesses and new tasks. OMB

and congressional oversight of future spending on computer security will be important to ensuring that agencies are not using the funds they receive to continue ad

hoc, piecemeal security fixes not supported by a strong agency risk management

framework.

Mr. Chairman, this concludes my statement. I would be pleased to answer any

questions that you or other members of the Subcommittee may have at this time.

Mr. GREENWOOD. Thank you, Mr. Dacey.

Mr. Tritak.

TESTIMONY OF JOHN S. TRITAK

Mr. TRITAK. Thank you, Mr. Chairman. I welcome the opportunity to appear before this subcommittee to discuss internal Federal Government efforts in securing its critical infrastructures. I

ask that my written statement be introduced into the record at this

time.

Mr. GREENWOOD. It will be.

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Mr. TRITAK. My opening remarks will focus primarily on those efforts through the end of the Clinton administration. A detailed discussion of those efforts are provided in the President’s report to the

Congress which was published in January and was prepared both

by the National Security Council and my office, the Critical Infrastructure Assurance Office, in coordination with Federal Governments and agencies that actually reported on their activities.

Mr. Chairman, as you know, the administration is currently conducting a thorough review of its critical infrastructure protection

policy. While the results of that review are still several weeks

away, several things we already know, which I think should be discussed here.

First, President Bush himself has indicated that critical infrastructure protection is important to U.S. Economic and national security and will be a priority of his administration.

Second, and the point goes to remarks made by Congressman

Tauzin, National Security Adviser Rice has recently stated with regard to government agency organizations that on the one hand no

single government agency can handle all of the critical infrastructure assurance problems for the Federal Government. All agencies

are stakeholders and have a role in the solution. That said, however, coordination among governments naturally occurring stovepipes must take place and must take place better than it has in

the past. Moreover there must be a common point of contact that

is accessible both to private industry and the government, Federal

Government, the Congress, and the American people in addressing

this issue.

A third point was also made by Dr. Rice. She stated that the

Federal Government bears a direct responsibility to ensure that it

can deliver essential services and perform critical functions necessary for the Nation’s defense, the health and welfare and safety

of its citizens. I think this statement deserves a little explanation

because it makes a very important point about critical infrastructure policy.

In the first instance, critical infrastructure protection is about assured delivery of vital services that are provided by key sectors of

government and the economy, including electric power, oil and gas,

telecommunications, banking and finance, transportation, water,

health and emergency services. To the extent these infrastructures

depend on computer systems and networks to deliver those vital

services, and increasingly they do, to that extent critical infrastructure policy must be concerned with computer security and information assurance.

Now, under Presidential directive 63 the previous administration

established as one of its goals the achievement of the ability to protect the Nation’s critical infrastructures from deliberate attacks.

That could significantly diminish the government’s ability to perform national security missions and ensure the public health and

safety of the American people.

When I first took office, this office, I often asked how are we

going to know when we’ve achieved this goal and what does it take

to achieve it. I had more than a passing interest in the question

because one of the mandates under PDD-63 for my office is to asVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00070 Fmt 6633 Sfmt 6602 E:\HEARINGS\72834 pfrm09 PsN: 72834
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sist Federal agencies in assessing their dependence on critical infrastructures.

Ultimately, our response was to develop what we call ‘‘project

matrix.’’ That decision came out of a sense of frustration both within our own office as well as some government agencies asking the

question how do we go about doing this, managing this very large

problem.

Now project matrix basically takes a systems-analysis approach

to the critical infrastructure problem. It starts by asking each participating department and agency what services do you provide

that are necessary to the Nation’s defense, the orderly functioning

of the economy, or the health, welfare and safety of Americans.

More importantly, of those services, which if disrupted even for

short periods of time could have a significant and immediate impact on the public.

You will note, Mr. Chairman, that there’s a time-sensitivity element that is important to our analysis. I have to explain why. We

believe that those types of services, those types of critical and timesensitive services, and the systems that are necessary for their delivery, are at the greatest risk if attacked and therefore deserve

priority attention in terms of security. Let me give you an example.

Timely hurricane warnings would be deemed under our approach

as a critical service; and, therefore, NOAA’s national hurricane

warning center would be deemed a critical asset. This is because

disruption of timely warnings of hurricanes during a hurricane season could have absolutely catastrophic effects on the public.

The matrix approach requires agencies also to think functionally

rather than bureaucratically. It is not enough in the case of the national hurricane warning center to determine whether it alone is

secure. So, too, must all the other government and private sector

entities necessary to the performance of the center’s warning operations be secure as well. In many instances, vital functions performed by one agency depend on services provided by another. Assured delivery of critical services are only as good as the weakest

link in the delivery chain.

Having essentially mapped a critical government service across

government agencies and between government and the private sector, we are now—agencies are better able then to direct their efforts toward determining whether or not that service is vulnerable

to disruption and immediate disruption. Among other things, this

sort of approach also helps rationalize the budgetary process and

prioritizing your security activities within an agency.

Let me say in conclusion, Mr. Chairman, a number of things.

First, critical infrastructure policy is inherently a risk-management

problem. A number of people here today have all indicated there’s

no such thing as perfect security. We need to know what is at risk

however; and we need to decide how to manage those risks, balancing costs and consequences.

Also, critical infrastructure protection is concerned with computer security, but it is not synonymous with it. There are very

good reasons for having good computer security besides those in

support of critical infrastructure policy. We’ve heard about many.

Privacy of data bases that have information about citizens is critical, whether or not it would meet the standard of creating an imVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00071 Fmt 6633 Sfmt 6602 E:\HEARINGS\72834 pfrm09 PsN: 72834
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mediate impact and harm on the public in some broader sense. Protecting classified systems is important regardless of what is contained in them.

Now, how we decide to allocate resources for all computer security demands within the Federal Government is essentially a public-policy choice, a choice the administration is currently weighing

in its review. That said, if securing critical government services are

to be a priority, particularly time-sensitive ones, then going

through a process along the lines I’ve just described is required. In

addition, having identified government—critical government assets

essential to delivery of critical services, priority must also be given

to assessing their vulnerabilities and developing and implementing

remediation plans in those instances where vulnerabilities exist.

And I can’t overemphasize that last point. Just because a government asset is critical doesn’t necessarily mean it’s vulnerable to

cyberattacks. If it is not connected to the Internet, if it is not connected to any part of the world, it by definition would not be vulnerable to outside attack, putting aside the internal problems you

may have with disgruntled employees, which we all acknowledge is

a problem.

For example, I use the hurricane warning center as an example

of how we go through the analytic process. I didn’t by any means

want to imply it is necessarily vulnerable to attack. In fact, from

what I know, it’s quite secure. What is the point, however, and

what I wish to leave you with is that unless you know how the government’s crown jewels function and how having identified those

elements all other relevant government assets and private assets

that are essential to the functioning of those crown jewels you don’t

know whether you’re vulnerable or not; and, therefore, you don’t

know whether you’re secure or not against cyber-based attacks.

That concludes my remarks, Mr. Chairman; and I welcome any

questions you may have.

[The prepared statement of John S. Tritak follows:]

PREPARED STATEMENT OF JOHN S. TRITAK, DIRECTOR, CRITICAL INFRASTRUCTURE

ASSURANCE OFFICE

Mr. Chairman, members of the Subcommittee, it is an honor to appear before you

today to discuss the status, as of the time that the Bush Administration took office,

of Federal government efforts to secure internal critical systems and infrastructure

within Departments and Agencies. These efforts are described in some detail in the

Report of the President of the United States on the Status of Federal Critical Infrastructure Protection Activities, January 2001.

This Subcommittee has shown exceptional leadership on a broad range of national

and economic security issues and I am grateful for the opportunity to work closely

with you and the Congress to find ways to advance infrastructure assurance for all

Americans. As you know, the Bush Administration currently is conducting a thorough review of our critical infrastructure protection policy. We expect the results of

that review over the next couple of months. President Bush has indicated already,

however, that securing our nation’s critical infrastructures will be a priority of his

Administration. Your decision to hold this hearing could not be more timely. We all

recognize that no viable solutions will be developed or implemented without the executive and legislative branches working together.

I believe the work of your subcommittee, along with that of others, will make an

important contribution to establishing a new consensus on safeguarding critical government services against cyber attacks.

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BACKGROUND

America has long depended on a complex of systems—or critical infrastructures— to assure the delivery of services vital to its national defense, economic prosperity,

and social well-being. These infrastructures include telecommunications, water supplies, electric power, oil and gas delivery and storage, banking and finance, transportation, and vital human and government services.

The Information Age has fundamentally altered the nature and extent of our dependency on these infrastructures. Increasingly, our government, economy, and society are being connected together into an ever expanding and interdependent digital

nervous system of computers and information systems. With this interdependence

come new vulnerabilities. One person with a computer, a modem, and a telephone

line anywhere in the world potentially can break into sensitive government files,

shut down an airport’s air traffic control system, or cause a power outage in an entire region.

Events such as the 1995 bombing of the Murrah Federal Building in Oklahoma

City demonstrated that the Federal government needed to address new types of

threats and vulnerabilities, many of which the nation was unprepared to defend

against. In response to the Murrah Building tragedy and other events, an interagency working group was formed to examine the nature of the threat, our

vulnerabilities, and possible long-term solutions for this aspect of our national security. The National Security Council’s Critical Infrastructure Working Group (CIWG)

included representatives from the defense, intelligence, law enforcement and national security communities. The working group identified both physical and cyber

threats and recommended formation of a Presidential Commission to address more

thoroughly many of these growing concerns.

In July 1996 the President’s Commission on Critical Infrastructure Protection

(PCCIP) was established by Executive Order 13010. The bipartisan PCCIP included

senior representatives from private industry, government, and academia; its Advisory Committee consisted of industry leaders who provided counsel to the Commission.

After examining infrastructure issues for over a year, the Commission issued its

report, Critical Foundations: Protecting America’s Infrastructures. The Report

reached four significant conclusions:

• First, critical infrastructure protection is central to our national defense, including

national security and national economic power;

• Second, growing complexity and interdependence between critical infrastructures

may create the increased risk that rather minor and routine disturbances can

cascade into national security emergencies;

• Third, vulnerabilities are increasing steadily and the means to exploit weaknesses

are readily available; practical measures and mechanisms, the Commission argued, must be urgently undertaken before we are confronted with a national crisis; and

• Fourth, laying a foundation for security will depend on new forms of cooperation

with the private sector, which owns and operates a majority of these critical infrastructure facilities.

PDD-63

On May 22, 1998, Presidential Decision Directive 63 (PDD-63) was issued to

achieve and maintain the capability to protect our nation’s critical infrastructures

from acts that would significantly diminish the abilities of:

• The Federal government to perform essential national security missions and to

ensure the general public health and safety;

• State and local governments to maintain order and to deliver minimum essential

public services; and

• The private sector to ensure the orderly functioning of the economy and the delivery of essential telecommunications, energy, financial, and transportation services.

To achieve these ends, PDD-63 articulates a strategy of:

• Creating a public-private partnership to address the problem of information technology security;

• Raising awareness of the importance of cyber security in the government and in

the private sector;

• Stimulating market forces to increase the demand for cyber security and to create

standards or best practices;

• funding or facilitating research into new information technology systems with improved security inherent in their design;

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• Working with educational facilities to increase the number of students specializing in cyber security; and • Helping to prevent, mitigate, or respond to major cyber attacks by building an information sharing system among government agencies, among corporations, and

between government and industry.

The Federal government’s basic approach to critical infrastructure protection, as

reflected in PDD-63, has been built around a strong policy preference for consensusbuilding and voluntary cooperation rather than regulatory actions. In an economy

as complex as ours, and with technology changing as quickly as it is, cooperation

offers the best and surest way to achieve our shared goals in this emerging area.

However, the government’s approach also recognizes the need for coordinated actions to improve its internal defenses and the nation’s overall posture against these

new threats.

PDD-63 called for the Federal government to produce a detailed plan to protect

and defend the nation against cyber disruptions. Version 1 of this effort, entitled

The National Plan for Information Systems Protection, was released in January

2000, and represents the first attempt by a national government to design a comprehensive approach to protect its critical infrastructures. This initial version of the

plan focused mainly on domestic efforts being undertaken by the Federal government to protect the nation’s critical cyber-based infrastructures. The next version

of the plan, due out this summer, will focus on the efforts of the infrastructure owners and operators, as well as the risk management and broader business community.

Under PDD-63, Federal Agencies have a number of distinct responsibilities:

• All agencies are required to protect their own internal critical infrastructures, especially their cyber systems.

• Some agencies with special expertise or functional responsibilities are tasked with

providing services to the government as a whole.

• A number of agencies also are charged with developing partnerships with private

industry in their sectors of the economy.

I will focus the remainder of my remarks on the first responsibility—securing internal critical systems. Specifically, I will discuss the work of my office, the Critical

Infrastructure Assurance Office, in assisting agencies to identify and prioritize these

systems. I also will discuss briefly Federal Government efforts to formulate security

and best practices standards that apply to information, security, and critical infrastructure assets.

Time constraints prevent me from fully describing the internal efforts of each federal agency to secure their critical systems. I urge the subcommittee to review the

status reports of each Department and Agency provided in Section III of the President’s January Report. Likewise, I strongly recommend that the subcommittee

study the agencies’ sector partnership efforts described in Section II of the Report.

These efforts are as important to overall national critical infrastructure assurance

as the internal activities that have been undertaken within the Federal government.

I would welcome the opportunity to brief the sub-committee on another occasion on

the work of the CIAO and the federal lead agencies (Commerce, Energy, Treasury,

Transportation, Justice, Health and Human Services, EPA and Defense) in promoting meaningful public-private partnerships.

IDENTIFYING CRITICAL FEDERAL INFRASTRUCTURES AND SYSTEMS: PROJECT MATRIX

In response to PDD 63, my office established Project Matrix last year to ‘‘coordinate analyses of the U.S. Government’s own dependencies on critical infrastructures.’’

This is a government-wide issue. Federal Departments and Agencies do not operate independently of one another. Due to significant advances in information technology, the public and private sectors have become inextricably intertwined. As a

result, there is limited utility in each Federal Department and Agency viewing

physical and cyber security only in the context of its own organization. Project Matrix provides each Federal Department and Agency an expanded, more comprehensive, realistic, and useful view of the world within which it actually functions. The

Administration, Congress, and private sector providers of the nation’s critical infrastructures will require such information to implement cost efficient and effective

physical and cyber security enhancement measures in the future. Project Matrix

provides a common methodology and approach and allows the government to develop a clearer picture of cross-agency interdependencies.

Participating in Project Matrix helps each Federal Department and Agency identify the assets, nodes and networks, and associated infrastructure dependencies and

interdependencies that are required for it to fulfill its national security, economic

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stability, and critical public health and safety responsibilities to the American people. A number of Departments and Agencies refer to Project Matrix in their reports.

Project Matrix also helps each participating Federal Department and Agency:

• Identify the nodes and networks that should receive robust cyber and physical

vulnerability assessments;

• Conduct near-term risk management assessments;

• Justify funding requests for high-priority security enhancement measures in the

areas of physical security, information system security, industrial security,

emergency preparedness, counter-intelligence, counter-terrorism; and

• Review actual business processes to better understand and improve the efficiencies of its organization’s functions and information technology architectures.

Project Matrix involves a three-step process. In Step 1, the Project Matrix team

identifies and prioritizes each Federal Department’s and Agency’s PDD 63 relevant

assets. In Step 2, the team provides a business process topology on, and identifies

significant points of failure associated with, each Department’s or Agency’s most

critical assets. In Step 3, the team identifies the infrastructure dependencies associated with select assets identified in Step 1 and analyzed in-depth in Step 2.

In FY 2001, the Project Matrix team will complete the documentation of its entire

analytical process for use throughout the public and private sectors, improve its

Step One automated data collection tool, and develop compatible automated Step

Two and Three tools.

INTEGRATING SECURITY INTO THE CAPITAL PLANNING AND BUDGET PROCESSES

In February 2000, OMB issued important new guidance to the agencies on incorporating and funding security in information technology investments. In brief, this

policy states that funding will not be provided for agency requests that fail to demonstrate how security is built into and funded as part of each system.

This policy carries through on the requirements of the Clinger-Cohen Act of 1996

and emphasizes that security must be incorporated in and practiced throughout the

life cycle of each agency’s system and program. To accomplish this, beginning with

the FY 2002 budget, each agency budget request to OMB for information technology

funding must, among other things:

• Demonstrate life cycle security costs for each system;

• Include a security plan that complies with applicable policy;

• Show specific methods used to ensure that risks are understood, continually assessed, and effectively controlled; and

• Demonstrate that security is an integral part of the agency’s enterprise architecture including interdependencies and interrelationships.

THE GOVERNMENT INFORMATION SECURITY REFORM ACT

On October 30, 2000 the President signed into law the FY 2001 Defense Authorization Act (P.L. 106398) including Title X, subtitle G, ‘‘Government Information Security Reform (Security Act).’’ The security provision amends the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) and primarily addresses the program management and program evaluation aspects of security.

In concert with OMB policy, the Security Act requires agencies to incorporate and

practice risk-based and cost-effective security throughout the life cycle of each agency system and thus firmly ties security to the agencies’ capital planning and budget

processes.

The Security Act also requires on an annual basis:

• Agency program reviews;

• Inspector General evaluations of agency security programs;

• Agency reports to OMB; and

• An OMB report to Congress.

The annual review and reporting requirements will promote consistent, ongoing

assessments of government security performance. Recently a uniform method for

agency program reviews has been developed.

THE CIO AND CFO COUNCILS: STANDARDS AND BEST PRACTICES

Standardizing the security controls for government systems has a conceptual appeal because it can reduce the complexity and expense of developing, implementing,

and monitoring security on a system-by-system basis. This is increasingly important

given the government’s shortage of expert information security personnel. Government computer security almost certainly would improve if specific standards were

prescribed and implemented for each government information system.

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However, specific standards for all systems—a ‘‘one-size-fits-all’’ security approach—may not accommodate the vastly different operational requirements of each

information system and could unnecessarily impede business operations. Executive

branch agencies operate more than 26,000 major information systems, many of

which directly interact with the public, industry, or State and local governments.

Just as each system has its own unique operational requirements, so too are its security requirements unique.

The CIO Council and the CFO Council recognize both the benefits and potential

problems with standardized security approaches. They have undertaken the following important initiatives:

Securing Electronic Government Transactions to the Public—Resource Guide: The

CIO Council, the CFO Council, and the Information Technology Association of

America are working together to develop a benchmark for risk-based, cost-effective

security for three types of electronic government services:

• Web-based information services; • Government procurement; and • Financial transactions with the public.

A resource guide for securing electronic transactions with the public will be released in 2001 to assist agency CIOs in promoting electronic government initiatives

within their agencies. Together with the CFO Council initiative for agency financial

systems, this effort may prove to be an effective pilot for establishing similar benchmarks for other discrete classes of programs and information systems.

Best Security Practices: The CIO Council, led by the U.S. Agency for International

Development and NIST, has developed a web-based repository of sound Federal

agency security practices that have worked in the real world. The CIO Council’s Best Security Practices initiative collects, documents, and disseminates these practices to help agencies reduce the cost of developing and testing new security controls, improve the speed of implementation, and increase the quality of their security programs.

The goal is to populate the repository with more than 100 practices by mid 2001

and continually expand offerings from then on. In their guidance to the agencies on

implementing the Government Information Security Reform Act, OMB has instructed agencies to use the CIO Council’s best practices initiative to fulfill the new

act’s requirement to share best practices.

Measuring Performance—Federal Information Technology Security Assessment

Framework: Over the past year, the CIO Council, working with NIST, OMB, and

the GAO, developed the Federal Information Technology Security Assessment

Framework. The framework, issued in December 2000, provides agencies with a selfassessment methodology to determine the current status of their security programs

and, where necessary, establish a target for improvement. In developing the framework, the CIO Council recognizes that the security needs for the tens of thousands

of Federal information systems differ and must be addressed in different ways.

The framework comprises five levels to guide agency self assessments and to assist them in prioritizing efforts for improvement:

• Level 1 reflects a documented security policy;

• Level 2 shows documented procedures and controls to implement the policy;

• Level 3 indicates that the procedures and controls have in fact been implemented;

• Level 4 shows that the procedures and controls are continually tested and reviewed; and

• Level 5 demonstrates that procedures and controls are fully integrated into a comprehensive program.

Each level represents a more complete and effective security program. Agencies

should bring all systems and programs to level 4 and ultimately level 5. OMB and

the CIO Council have alerted agencies that when individual systems do not meet

the framework’s level 4 requirements, the system may not meet OMB’s security

funding criteria.

As mentioned earlier, the new Government Information Security Reform Act emphasizes the importance of assessing security effectiveness and requires annual

agency reporting to OMB of the results of the agency security reviews. OMB has

instructed agencies to use the framework to fulfill their assessment and reporting

obligations under the Security Act.

CONCLUSION

While much has been accomplished in recent years, much more needs to be done

to ensure our critical government systems are adequately protected from cyber attack. I look forward to working with members of this subcommittee, and the entire

Congress, as we address the challenges ahead. I look forward to your questions.

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Mr. GREENWOOD. Thank you. Appreciate your testimony.

I will direct some questions to Mr. Dacey, if I may. Overall, if

you had to give the Federal agencies the GAO has reviewed a collective grade A through F, i.e., passing or failing, how would you

rate them as a group?

Mr. DACEY. I think overall the types of weaknesses we’ve seen,

again, are pervasive. In terms of a grade, I’ll leave that to Chairman Horn. He’s given grades last year, and I am not sure they’ve

changed a whole lot since then.

Mr. GREENWOOD. Would this grade be different for defense

versus military agencies than civilian agencies? How would you

compare them?

Mr. DACEY. I just wanted to clarify, the main part of the work

that’s been done has been on unclassified systems. So with respect

to those, we’re finding similar types of vulnerabilities in both.

Mr. GREENWOOD. The committee’s reviews of computer security

at various Federal agencies has largely found that security has

been mostly a paperwork exercise up to now. Do you agree with

that?

Mr. DACEY. There are certain areas, I guess, in terms of a paperwork exercise, that there are documented policies in many cases

that aren’t carried through in terms of execution. Also, there are

many places where the policies aren’t even documented. One of the

areas that we look at is, again, whether the agencies have a process such as Energy to really determine what the effectiveness of

their controls are. We’ve many times identified vulnerabilities for

the first time to agencies; and although they have been generally

very responsive, it’s a process that we think ought to take place in

the management role, not as an audit function. So that is, I guess,

how I’d answer that question.

Mr. GREENWOOD. It’s safe to say that every agency ought to be

constantly testing its own security systems; isn’t that a fair statement?

Mr. DACEY. I think there needs to be a regular process for that

type of testing. Part of that is called for in the new legislation. The

reports on that new legislation will be due out in the fall to Congress, and those should illustrate some of the issues and also indicate whether, in fact, that testing is being done. I believe in your

opening statement you referred to the fact, based on evidence you

obtained, that that wasn’t being done. That is consistent with our—

what we have seen actually. We’ve seen very little done by most

agencies to assess the effectiveness of their security.

Mr. GREENWOOD. You mentioned in your testimony some examples of unauthorized access, security breaches, compromised networks and data from GAO’s body of work across Federal agencies.

These are not just hypothetical, are they?

Mr. DACEY. No. We have seen incidents where that has actually

occurred, which I gave in my oral statement. The question really

too is some of these vulnerabilities are, or were, sensitive when we

found them, at least could have led to all kinds of other things that

weren’t detected. I would agree based upon the comments earlier

that a large number of incidents that are occurring are probably

not detected and reported. That is an area where we really need

to get better systems because you can’t protect the systems a hunVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00077 Fmt 6633 Sfmt 6602 E:\HEARINGS\72834 pfrm09 PsN: 72834
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dred percent, as was discussed earlier; but you need to do the best

you can to really implement known patches and address known

vulnerabilities. Many of the tools and Web sites that were referred

to earlier that provide evidence of ways in which systems can be

hacked can also be used by agencies to identify those same types

of weaknesses in their system and fix them. So I think that is an

important area that needs to be addressed.

Mr. GREENWOOD. It seems to me, as I think Ms. McDonald said,

they encourage the use of patches; but there’s no requirement that

the patches be used, and perhaps we ought to consider a mechanism to make them mandatory.

Mr. Tritak, could you describe for the committee a worst-case

scenario for a cyberattack or information-warfare attack on one of

our Nation’s critical infrastructures, just to make us all feel good?

Mr. TRITAK. Yeah, make me feel real good. If I may a little bit,

sir, sort of qualify my remarks by saying the following: I’ve heard

conversations earlier talk about cyberterrorism, information warfare; and that is a shorthand that we all use in describing certain

types of threats. I think I prefer when I address these things is to

turn around a little bit and not using cyberadjectives to modify traditional nouns but to say in a sense, for example, instead of

cyberterrorism, I refer to it as terrorist activities that attempt to

exploit cyberspace to achieve certain terrorist goals and objectives.

Okay. And in an information warfare context, I think if we’re using

the term properly, we’re in a state of war in which a country is utilizing or exploiting the cyberspace and vulnerabilities in the cyberspace to achieve certain goals and certain objectives.

Now let me give you an idea of the kinds of things I think would

be played out in that context. Let’s pretend we go back, and we

have to, God forbid, have to deal with Iraq again in a way that we

had to deal with Iraq before. I think Iraq and the leadership of Iraq

probably would prefer not to have to go toe to toe with the Americans the way it had to go toe to toe the first time around. One of

the things it probably would attempt to do if it could—and I’m not

saying any of this they can actually achieve, because I think it is

very difficult to do this, but let’s just suppose the intent would be

to disrupt the deployment—mobilization and deployment of U.S.

Forces in the United States and project them overseas and then

also the logistics efforts going from Europe points of demarcation

in Europe finally to the Middle East. To the extent they could

achieve something like that, it could have strategic implications. So

I think we need to look at it in that sense.

Now if you’re talking about in the case of a war where in a sense

they would attempt to achieve through cyberattacks what bombers

used to achieve, for example, then you would think of things that

could cause mass problems, disruptions of 911, introduction of biological chemical weapons at the same time, the possibility of trying

to hack into dams and potentially open floodgates, anything that

would cause the kind of hysteria and potential loss of life that we

tried to do in World War II or whatever.

That is the kind of thing I think we all have to be concerned

about because I think that is the sort of thing people would be

thinking about if they were going to war with us and they wanted

to exploit the cyberspace in order to achieve their military and poVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00078 Fmt 6633 Sfmt 6602 E:\HEARINGS\72834 pfrm09 PsN: 72834
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litical objectives. I want to also emphasize it’s not clear that they

could achieve that; and in fact, this the beauty of now as well as

the curse of today is the fact that we haven’t seen the worst because the worst that can be done over cyberspace is a function of

interconnectivity and being hooked in. And we’re still in the fairly

early stages of doing this. Our society, our government, our economy are being transformed by information technologies; and increasingly we’re going to be depending on wireless technologies in

addition to the online versions.

So I think that over time the potential for serious problems conducted over cyberspace will go up. That is why I applaud the efforts that you’re trying to do now. Let’s not wait for that eventuality. Let’s take aggressive action now and perhaps preempt the

problem altogether.

Mr. GREENWOOD. Well, while these worst-case scenarios are theoretical, the fact of the matter is would you agree with us that the

only thing that stands between us and the worst-case scenario is

the extent to which the Federal agencies involved utilize the billions of dollars that we’ve appropriated to them and the tools, the

technological tools that are available to protect against those scenarios?

Mr. TRITAK. Yes. I think that to the extent that Federal agencies

are increasingly relying on information technology to do key services in national defense and to the extent that those services are

linked into the ever-expanding digital nervous system that is spanning the country and the globe, you are exposing yourself to a risk

that you have never had before; and if you are not safeguarding

yourself against that, the potential for the kinds of concerns that

you have, I think, can’t be ignored.

Mr. GREENWOOD. The means will always be there; the motivation

will always be there. The only protection is the security systems,

and the only long-range protection against those scenarios is constant vigilance, constant testing of our systems to protect us.

Mr. TRITAK. Yes.

Mr. GREENWOOD. Okay. A recent report by a committee of Inspectors General issued just last week found PDD-63 implementation to be progressing very slowly at most Federal agencies. They

surveyed 15 Federal agencies including some key ones for PDD-63

purposes and found that quote ‘‘many agency infrastructure plans

were incomplete,’’ that quote ‘‘most agencies had not identified

their critical assets yet and that almost none of the agencies had

completed vulnerability assessments of those assets or developed

remediation plans.’’ Do you concur, Mr. Tritak, with this assessment, and why are we so far in the hole on this?

Mr. TRITAK. Well, a couple things. I think that there’s some truth

to what you have said. I can’t articulate for you in full to what extent that is the case in each agency situation. What I can tell you

is in the case of the work that we’re doing with agencies under the

project matrix all efforts that have been done so far are in the area

of identifying the assets.

I just want to qualify one piece about that because some of these

assets may have been assessed for vulnerabilities during Y2K, for

example, and for other reasons—and we can’t necessarily assume

that nothing has been done—but I think one of the points I am tryVerDate 11-MAY-2000 08:41 Oct 22, 2001 Jkt 073508 PO 00000 Frm 00079 Fmt 6633 Sfmt 6602 E:\HEARINGS\72834 pfrm09 PsN: 72834
76

ing to get across to this committee is unless you understand the

full—the way the systems operate in critical services and you have

addressed every single aspect of that service for vulnerabilities, you

don’t know whether that service is assured or not. I think in that

regard we have a long way to go, a real long way to go.

Mr. GREENWOOD. Okay. We thank you both for your testimony.

The Chair seeks unanimous consent that documents that have

been agreed to by the staff majority and minority be admitted into

the record and that the record remain open for 30 days for additional statements and materials. With that, this committee thanks

all of its witnesses and adjourns.

[Whereupon, at 12:15 p.m., the subcommittee was adjourned.]

[Additional material submitted for the record follows:]

CRYPTEK

SECURE COMMUNICATIONS, LLC

April 5, 2001

The Honorable W.J. ‘‘BILLY’’ TAUZIN

Chairman

House Energy and Commerce Committee

2125 Rayburn House Office Building

Washington, DC 20515-6115

DEAR MR. CHAIRMAN, I am submitting the following testimony and presentation

for the record at the suggestion of Mr. Gary A. Dionne, a member of your Committee’s professional staff. My firm is the developer and manufacturer of a network security product known as DiamondTEK. TM DiamondTEK is the only network security component to ever successfully complete the National Security Agency’s (NSA)

B2 level evaluation. What this means is that DiamondTEK is approved by the NSA

to handle data of multiple levels of classification on a single workstation over a single network connection. This can translate in significant cost savings for government users who must worry about keeping data of various classification levels separate and secure.

This technology is also invaluable to users of sensitive, valuable data in the commercial marketplace. An example that comes immediately to mind is ensuring the

confidentiality of patient medical records. Another industry that could benefit from

such technology is the financial services industries and any organization involved

with funds transfer. One misplaced ‘‘byte’’ could mean the loss of billions of dollars.

Cryptek developed DiamondTEK with internal R&D funds to meet stringent NSA

requirements. The company has continued to invest in the technology, resulting in

the worlds most ‘‘trusted’’ and secure network security product. This leading edge

capability is available today for government and commercial users worldwide

(Cryptek recently received a blanket export license from the Department of Commerce to export to any commercial or government entity in the world with the exception of the seven terrorist-sponsoring nations).

I wanted to ensure that the Committee was aware that this technology was available as you consider various encryption and privacy issues during this Congress.

Cryptek stands prepared to brief you, other Committee Members or staff on our

unique products and capabilities and answer questions you may have.

Thank you for your consideration of this information.

Sincerely,

JACKSON KEMPER, III

Vice President, Government Affairs

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