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82–237 2014

HOW SECURE IS VETERANS’ PRIVACY 

INFORMATION? 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATIONS 

OF THE

COMMITTEE ON VETERANS’ AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

TUESDAY, JUNE 4, 2013 

Serial No. 113–21 

Printed for the use of the Committee on Veterans’ Affairs 

( 

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COMMITTEE ON VETERANS’ AFFAIRS 

JEFF MILLER, Florida, Chairman 

DOUG LAMBORN, Colorado 

GUS M. BILIRAKIS, Florida 

DAVID P. ROE, Tennessee 

BILL FLORES, Texas 

JEFF DENHAM, California 

JON RUNYAN, New Jersey 

DAN BENISHEK, Michigan 

TIM HUELSKAMP, Kansas 

MARK E. AMODEI, Nevada 

MIKE COFFMAN, Colorado 

BRAD R. WENSTRUP, Ohio 

PAUL COOK, California 

JACKIE WALORSKI, Indiana 

MICHAEL H. MICHAUD, Maine, Ranking 

Minority Member 

CORRINE BROWN, Florida 

MARK TAKANO, California 

JULIA BROWNLEY, California 

DINA TITUS, Nevada 

ANN KIRKPATRICK, Arizona 

RAUL RUIZ, California 

GLORIA NEGRETE MCLEOD, California 

ANN M. KUSTER, New Hampshire 

BETO O’ROURKE, Texas 

TIMOTHY J. WALZ, Minnesota 

HELEN W. TOLAR, Staff Director and Chief Counsel 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS 

MIKE COFFMAN, Colorado, Chairman 

DOUG LAMBORN, Colorado 

DAVID P. ROE, Tennessee 

TIM HUELSKAMP, Kansas 

DAN BENISHEK, Michigan 

JACKIE WALORSKI, Indiana 

ANN KIRKPATRICK, Arizona, Ranking 

Minority Member 

MARK TAKANO, California 

ANN M. KUSTER, New Hampshire 

BETO O’ROURKE, Texas 

TIMOTHY J. WALZ, Minnesota 

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Veterans’ Affairs are also published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to 

prepare both printed and electronic versions of the hearing record, the process of converting 

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process 

is further refined. 

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C O N T E N T S 

June 4, 2013 

Page 

How Secure Is Veterans’ Privacy Information? ..................................................... 1 

OPENING STATEMENTS 

Hon. Mike Coffman, Chairman, Subcommittee on Oversight and Investigations ....................................................................................................................... 1 

Prepared Statement of Hon. Coffman ............................................................. 54 

Hon. Ann Kirkpatrick, Ranking Minority Member, Subcommittee on Oversight and Investigations ...................................................................................... 2 

Prepared Statement of Hon. Kirkpatrick ....................................................... 55 

Hon. Jackie Walorski, Member, Committee on Veterans’ Affairs, U.S. House 

of Representatives, Prepared Statement only ................................................... 55 

WITNESSES 

Linda A. Halliday, Assistant Inspector General for Audits and Evaluations, 

Office of Inspector General, U.S. Department of Veterans Affairs .................. 3 

Prepared Statement of Ms. Halliday .............................................................. 55 

Accompanied by: 

Ms. Sondra McCauley, Deputy Assistant Inspector General for Audits 

and Evaluations, Office of Inspector General, U.S. Department of 

Veterans Affairs 

Mr. Michael Bowman, Director, Information Technology and Security 

Audits Division, Office of Inspector General, U.S. Department of 

Veterans Affairs 

Stephen W. Warren, Acting Assistant Secretary for Information and Technology, U.S. Department of Veterans Affairs .................................................... 17 

Prepared Statement of Mr. Warren ................................................................ 61 

Accompanied by: 

Mr. Stan Lowe, Deputy Assistant Secretary for Information Security, 

Office of Information and Technology, U.S. Department of Veterans 

Affairs 

Jerry L. Davis, Former Deputy Assistant Secretary for Information Security, 

Office of Information and Technology, U.S. Department of Veterans Affairs . 41 

Prepared Statement of Mr. Davis ................................................................... 62 

Executive Summary of Mr. Davis ................................................................... 65 

QUESTIONS FOR THE RECORD 

Letter From: Hon. Coffman, Chairman, Subcommittee on Oversight & Investigations, To: U.S. Department of Veterans Affairs .......................................... 65 

Questions From: Hon. Coffman, To: U.S. Department of Veterans Affairs ........ 66 

Questions From: Hon. Huelskamp, To: U.S. Department of Veterans Affairs ... 67 

Questions and Responses From: U.S. Department of Veterans Affairs .............. 67 

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HOW SECURE IS VETERANS’ PRIVACY 

INFORMATION? 

Tuesday, June 4, 2013 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON VETERANS’ AFFAIRS, 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, 

Washington, D.C. 

The Subcommittee met, pursuant to notice, at 2:50 p.m., in Room 

334, Cannon House Office Building, Hon. Mike Coffman [Chairman 

of the Subcommittee] presiding. 

Present: Representatives Coffman, Lamborn, Roe, Huelskamp, 

Walorski, Kirkpatrick, O’Rourke, and Walz. 

OPENING STATEMENT OF CHAIRMAN COFFMAN 

Mr. COFFMAN. Good afternoon. I would like to welcome everyone 

to today’s hearing titled ‘‘How Secure is Veterans’ Private Information?’’ Reports from VA’s Office of Inspector General, private inspector consultants brought on by VA, and this Subcommittee’s 

own investigation have revealed tremendous problems within VA’s 

Office of Information and Technology. Some of these issues have 

been made public in the Inspector General reports which outline 

mismanagement of human measures and the lack of much-needed 

technical expertise. 

Other issues have been less publicized, such as those captured in 

the Deloitte, quote/unquote, ‘‘DeepDive’’ that identified gaps in 

OI&T’s organizational structure and a poorly executed business 

model. The latter report recognized the growth of VA by 33 percent 

since 2006, growth that is mirrored by the expansion of VA’s computer network. Unfortunately, there has not been a comparable 

growth in the technical personnel needed to manage security of 

VA’s sprawling network. 

These failures have created problems for both the Department 

and for veterans. The Inspector General substantiated that VA was 

transmitting sensitive data, including personally identifiable information and internal network routing information, over an 

unencrypted telecommunications carrier network, both violations of 

Federal regulation and basic IT security. The IG also noted that 

VA has not implemented technical configuration controls to ensure 

encryption of sensitive data, despite VA and Federal information 

security requirements. 

Similarly, it is evident that software patches are not up-to-date 

across the network, too many users have administrative access, security software is not up-to-date on older computers, and computer 

ports are not properly secured. There is little to no security of file 

transfer protocol and Web pages are vulnerable, allowing unauthorVACREP180 with DISTILLER

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ized access to veterans’ unprotected personal information within 

the system. 

While these issues alone give cause for grave concern, this Subcommittee’s investigation has identified even greater problems. The 

entire veteran database in VA, containing personally identifiable 

information on roughly 20 million veterans, is not encrypted, and 

evidence suggests that it has repeatedly been compromised since 

2010 by foreign actors, including China and possibly by Russia. 

Recently, the Subcommittee discussed VA’s authorization to operate, a formal declaration that authorizes operation of a product on 

VA’s network which explicitly accepts the risk to agency operators 

and was told that, quote, ‘‘VA’s secrecy posture was never at risk,’’ 

unquote. In fact, VA’s security posture has been an unacceptable 

risk for at least 3 years as sophisticated actors use weaknesses in 

VA’s security posture to exploit the system and remove veterans’ 

information and system passwords. While VA knew foreign intruders had been in the network, the Department was never sure what 

exactly these foreign actors took because the outgoing data was 

encrypted by the trespassers. 

These actors have had constant access to VA systems and data, 

information which included unencrypted databases containing hundreds of thousands to millions of instances of veterans’ information, 

such as veterans’ and dependents’ names, Social Security numbers, 

dates of birth, and protected health information. Notwithstanding 

these problems, VA has waived or arbitrarily extended accreditation of its security system on its network. It is evident that VA’s 

waivers or extensions of accreditation only appear to resolve material weaknesses without actually resolving those weaknesses. 

VA’s IT management knowingly accepted the security risk by 

waiving the security requirements even though such waivers are 

not appropriate. This lapse in computer security and the subsequent attempts by VA officials to conceal this problem are intolerable, and I look forward to a candid discussion about these issues. 

I now yield to Ranking Member Kirkpatrick for her opening 

statement. 

[THE PREPARED STATEMENT OF CHAIRMAN COFFMAN APPEARS IN

THE APPENDIX]

OPENING STATEMENT OF HON. ANN KIRKPATRICK 

Mrs. KIRKPATRICK. Thank you, Mr. Chairman. 

As the Department of Veterans Affairs works hard to serve the 

needs of today’s veterans, they must work equally hard to protect 

their personal information. Today’s hearing is an attempt to determine whether a veteran’s private information is secure. 

Mr. Chairman, veterans need to know that when they ask the 

VA for services and benefits that they have earned, the information 

they submit in order to get those benefits will not be compromised 

under any circumstances. I hope that the VA came prepared today 

to provide assurances to Congress and veterans that their information technology systems are secure. We expect VA to also answer 

our questions directly and honestly. As we get questions from veterans in our district, we want to provide complete and honest answers to them. 

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Congress received a letter from Mr. Jerry L. Davis, now a former 

employee at the VA, who states that, quote, ‘‘There is a clear and 

present danger and risk of exposure and compromise of sensitive 

data,’’ end quote. 

Mrs. KIRKPATRICK. I share the Chairman’s concern on whether 

VA is following the required government practices and policies regarding the monitoring and remediation of system risk. 

Two OIG reports, from 2012 and 2013, raised additional concerns. The 2012 report questions whether the agency has the proper strategic human capital management program to meet missioncritical system capabilities as the VA moves into the 21st century. 

The second, 2013, OIG report faults VA for failing to secure private 

information by not encrypting health data transmitted to outpatient clinics and external business partners. The VA must address the concerns raised and assure veterans who come to the VA 

for assistance that their personal information is secure. 

I want to thank everyone for being here today. I would also like 

to thank the witnesses for their testimony and for answering questions about the security of veterans’ private information at the Department of Veterans Affairs. 

Thank you, Mr. Chairman. I yield back. 

[THE PREPARED STATEMENT OF HON. KIRKPATRICK APPEARS IN

THE APPENDIX]

Mr. COFFMAN. Thank you, Ranking Member Kirkpatrick. 

I would now like to welcome our first panel to the witness table. 

On this panel we will hear from Ms. Linda Halliday, Assistant Inspector General for Audits and Evaluations from the VA’s Office of 

Inspector General. Accompanying Ms. Halliday is Ms. Sondra 

McCauley, Deputy Assistant Inspector General for Audits and 

Evaluations, and Mr. Michael Bowman, Director of the Information 

Technology and Security Audits Division. 

Before I recognize the panel, I ask that you please rise and raise 

your right hand. 

[Witnesses sworn.] 

Mr. COFFMAN. Ms. Halliday, you are now recognized for 5 minutes. 

TESTIMONY OF LINDA A. HALLIDAY, ASSISTANT INSPECTOR 

GENERAL FOR AUDITS AND EVALUATIONS, OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT OF VETERANS AFFAIRS, ACCOMPANIED BY SONDRA MCCAULEY, DEPUTY ASSISTANT INSPECTOR GENERAL FOR AUDITS AND EVALUATIONS, OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT 

OF VETERANS AFFAIRS, AND MICHAEL BOWMAN, DIRECTOR, 

INFORMATION TECHNOLOGY AND SECURITY AUDITS DIVISION, OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT 

OF VETERANS AFFAIRS 

Ms. HALLIDAY. Mr. Chairman and Members of the Subcommittee, 

thank you for the opportunity to testify on VA’s security of veterans private information. With me today are Ms. Sondra 

McCauley, my deputy, and Mr. Michael Bowman, the Director of 

the OIG’s Information Technology Security Division. 

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Secure systems and networks are essential to VA’s programs and 

operations for delivering benefits and services to our Nation’s veterans, yet OIG reports continue to disclose a pattern of ineffective 

information security which places VA at unnecessary risk. For 

more than 10 consecutive years, our consolidated financial statement audit reports have identified IT security as a material weakness. 

We also perform annual reviews of VA’s compliance with the requirements of the Federal Information Security Management Act, 

known as FISMA. This act serves as a catalyst for developing the 

framework to protect agency IT systems and sensitive information. 

As last year’s FISMA audit progressed, we did note VA focused 

more efforts to standardize information security controls. Mid-year 

in 2012, VA initiated CRISP, the Continuous Readiness and Information Security Program, to ensure year-round monitoring and to 

establish a team responsible for resolving the IT material weakness. However, CRISP was not in place long enough to adequately 

improve the material weakness for last year’s FISMA report. The 

report will be issued this month and will include 32 recommendations for improving VA’s information security program. 

We found repeat weaknesses and vulnerabilities in four key 

areas. In the area of system access, we found password standards 

that were not consistently implemented and user accounts that 

were not enforcing minimal access privileges. 

In the area of configuration management, we found critical systems lacked appropriate baseline controls and up-to-date vulnerability patches. Also, the policies and procedures for authorizing, 

testing, and approval of system changes were not consistently implemented. 

In the area of security management, VA still had to address 

about 4,000 outstanding security vulnerabilities. We found its risk 

assessments and security plans were outdated and in some instances were not consistently put in place to reflect VA’s current 

IT environment or Federal standards. 

In the fourth area, contingency planning, we found some plans 

were not fully tested or updated, and in addition, backup tapes 

were not always encrypted prior to being sent to offsite storage. 

More importantly, we continue to identify significant technical 

weaknesses in databases, servers, network devices supporting sensitive data exchanges among VA facilities. Many of these weaknesses are due to inconsistent program enforcement and ineffective 

communication between VA management and field offices. 

In addition to FISMA, OIG projects over the past 2 years have 

identified information security deficiencies, placing sensitive veterans data at risk of unauthorized access, loss, or disclosure. Specifically, we reported on a broad range of security concerns, including VA’s transmission of sensitive data and internal network routing information over an unencrypted carrier network, and VA’s external data-sharing agreements and system interconnections which 

resulted in unsecured electronic and hard copy data at VA medical 

centers and co-located research facilities. We reported that 48 percent of VA’s 400,000 encryption software licenses, valued at about 

$5.1 million, remained unused, leaving VA computers vulnerable. 

And we reported on a backlog of personnel background checks 

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which were inappropriately prohibiting some 3,000 contractors 

from working on awarded contracts. 

In summary, our audit reports and findings and recommendations provide a roadmap for VA to improve its information security 

program, and VA needs to focus on addressing previously reported 

security issues related to the IT material weakness, they need to 

remediate high-risk system issues in their Plans of Actions and 

Milestones, and they need to establish effective processes for continuous monitoring and to perform vulnerability assessments. 

Mr. Chairman, this concludes my statement, and we would be 

happy to answer any questions you or the Subcommittee may have. 

[THE PREPARED STATEMENT OF LINDA A. HALLIDAY APPEARS IN

THE APPENDIX]

Mr. COFFMAN. Thank, Ms. Halliday. 

How effective are VA facilities with protecting sensitive veteran 

data? 

Ms. HALLIDAY. Well, based on our oversight, we’re continuing to 

find information security vulnerabilities at almost every VA medical center we visit. We visit 20 to 30 VAMCs a year as part of our 

FISMA work and we consistently find problems. The types of 

vulnerabilities include weak passwords, missing software patches, 

lack of software updates, excessive permissions, and unnecessary 

user accounts left on the system. 

Mr. COFFMAN. What are the foremost reasons why, after all this 

time, information security is still a major concern at the VA? 

Ms. HALLIDAY. I would say that ineffective access controls, ineffective configuration management controls, I think ineffective management of systems interconnection and inadequate contractor 

oversight would be a fourth major reason. 

Mr. COFFMAN. Ms. Halliday, based on your ongoing oversight 

work, is VA likely to get rid of its IT security material weaknesses 

this year? 

Ms. HALLIDAY. At this point it is too early to conclude. We do expect that the CRISP initiative, which is starting to provide continuous monitoring, will be in place for the entire 12 months of this 

fiscal year 2013 FISMA review. Our concern, while we’re seeing 

weaknesses occur with less frequency, they are still occurring and 

they are repeat occurrences and vulnerabilities that we have reported on in fiscal year 2012 and earlier years. 

Mr. COFFMAN. What are VA’s most significant risks related to 

adequately protecting its systems and sensitive data? 

Ms. HALLIDAY. The first would probably be ineffective access controls. That’s where critical systems had accounts with default passwords that were considered weak passwords, i.e. easy to guess. 

User accounts with access rights that were not appropriate. In 

other words, you want to make sure that all users have a need for 

that information and that they have a security level appropriate to 

that need. We also identify unsecured electronic and hard copy research data at VA medical centers and co-located research facilities. 

So that covers access controls. Then we have inconsistent configuration management controls. Systems include key databases 

supporting critical applications, but they are not patched timely or 

secured and configured to mitigate previously known information 

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vulnerabilities. We have ineffective management of system interconnections. That’s VA sensitive data such as health records and 

internal Internet protocol, addresses. They are transmitted between VA medical centers and the community-based outpatient 

clinics using unencrypted protocols. And then access control and 

configuration management. These are all very significant risks that 

VA faces. 

As far as inadequate contractor oversight, contractors without 

the appropriate security clearances are gaining access to some VA 

mission critical systems, and we did a report on not having security 

clearances in place before gaining access to the systems with contractors. 

Mr. COFFMAN. Moving forward, what steps can VA take to prevent the loss of sensitive data? 

Ms. HALLIDAY. I think VA really needs to improve its continuous 

monitoring process to ensure all the controls are operating as intended, and it needs to address the external organizations that it 

works with to make sure that they are adequately protecting sensitive veteran data in accordance with the VA policy and FISMA 

requirements. VA needs to ensure all service provider contracts include provisions to implement information security protections in 

accordance with their policies and procedures. 

Mr. COFFMAN. Thank you. 

Ranking Member Kirkpatrick. 

Mrs. KIRKPATRICK. You testified that there’s a 10-year period of 

weakness and vulnerability. So there was a report given to the VA 

year after year after year. In that 10-year span, did you see an increase in vulnerability and weakness? A decrease? Can you quantify that for me over that 10-year period? 

Ms. HALLIDAY. We do an audit of VA’s consolidated financial 

statements annually and our contractors look at all of the controls 

associated with information security. They have felt that it has 

been a material weakness in VA for 10 full years. 

Mrs. KIRKPATRICK. Has it been the same level of weakness and 

vulnerability? What I mean is, has it been getting worse for a while 

or has it gotten better? 

Ms. HALLIDAY. I don’t think you ever get the exact same level of 

vulnerability. I think our concern, we report out on these various 

problems based on the testing. A couple years ago, VA’s Plan of Actions and Milestones addressing security vulnerabilities was almost 

at 15,000 items that were outstanding and unaddressed. This past 

year VA has gotten it down to about 4,000, but that’s still 4,000 

security weaknesses and vulnerabilities that haven’t been addressed. It is too many. 

Mrs. KIRKPATRICK. Do you think that the CRISP program is 

helping them address those vulnerabilities more quickly? 

Ms. HALLIDAY. Based on the preliminary and early testing, yes. 

We are still seeing and identifying security weaknesses and 

vulnerabilities, but to a lesser extent that we’ve seen that in the 

past. I would also have to say that VA is actively working with us 

to try and make sure that they understand what we are finding as 

part of our FISMA testing, understand the full scope so that they 

can put the right fixes in place. 

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Mrs. KIRKPATRICK. That was going to be one of my questions. 

When you issue a report, do you actually have a conversation with 

leadership at the VA about what needs to be implemented? 

Ms. HALLIDAY. Absolutely. 

Mrs. KIRKPATRICK. And is that on an ongoing basis? 

Ms. HALLIDAY. Yes, it is. With this information security material 

weakness rising to the last material weakness in the Department’s 

financial statements, the Secretary on down through his chain of 

command has had it on their radar. They are working very hard. 

And we have made sure that we have been communicating with 

the Department. For example, that if we employ certain tools in 

our oversight to scan their systems, they are also acquiring those 

same state-of-the-art tools. So I think that there is an effort there, 

and at least this year and part of last year the communications 

have been better between what OIG is doing in the field, finding, 

and getting it remediated. 

Mrs. KIRKPATRICK. I have one last question. I have a concern in 

your audit report. You say that you are concerned with a lack of 

human resources, and your statement says OIT experienced vacancies and excessive turnover in key leadership positions responsible 

for OIT’s strategic human capital management program. Could you 

tell the Committee a little bit more about that? What do you mean 

by excessive turnover? 

Ms. HALLIDAY. I’m going to ask Sondra McCauley to take that. 

Mrs. KIRKPATRICK. If you could just quantify that and give some 

reasons why you think that’s happening. 

Ms. MCCAULEY. Excessive turnover in terms of the leadership 

within OIT in terms of managing the program. Turnover in terms 

of the program managers and project managers needed to manage 

each specific project, if you will, as well as a reliance on contractors 

to do a lot of the jobs that we really need government personnel 

to do. 

Mrs. KIRKPATRICK. And why do you think that there is that excessive turnover? 

Ms. MCCAULEY. Some of it was attributed to a lack of planning, 

that is the need for a human capital plan to really focus in on the 

succession planning at the leadership level. But also to better identify the skills that were needed to help manage these IT programs, 

and what would be a better contractor-to-FTE ratio to manage the 

programs. 

Mrs. KIRKPATRICK. Okay. Thank you. I yield back, Mr. Chairman. 

Mr. COFFMAN. Thank you, Ranking Member Kirkpatrick. 

Mr. Lamborn, you are recognized for 5 minutes. 

Mr. LAMBORN. Thank you, Mr. Chairman. And before I ask my 

questions, I want to thank you, Mr. Chairman, for having this 

hearing. This is such an important topic. And there is so much 

going on here that I was frankly not really aware of and should 

have been, and we need to be aware what’s going on. So thank you 

for your leadership. This is so critical. 

Ms. Halliday, I am stunned about what’s going on here. And you 

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tacks against other systems. VA has at times been the victim of 

such malicious intent.’’ 

Can you tell us what you know about these malicious attacks on 

the VA’s sensitive information? Who committed these? 

Ms. HALLIDAY. I will let Mr. Bowman speak to this one. It is in 

his area. 

Mr. BOWMAN. Thank you. 

We were informed of an intrusion by foreign countries through 

the Network Security Operations Center. The specifics of that, the 

foreign countries have actually compromised the domain controller 

and gained access to email accounts and were taking email information of the senior leadership at VA. The difficult part was, is VA 

was unsure how the foreign countries gained access to the networks and what was actually being transmitted out of the VA networks back to the original source. That’s the one that’s most current that I’m aware of. We also reference 2006 with the stolen 

laptop and the loss of the 26 million records. But those are the two 

main things that come to mind. 

As far as our ongoing FISMA work, we do continue to identify 

weaknesses with the critical databases that does host sensitive 

data, and the Web applications that are facing the Internet do have 

well-known vulnerabilities that could be exploited from the Internet. And these are ongoing from year-to-year. So there are significant risks out there that are related to this. 

Mr. LAMBORN. And why don’t we know how much was taken? 

Mr. BOWMAN. A lot of it is having the right tools in place, such 

as intrusion-detection systems, and audit logs turned on. In some 

cases, VA doesn’t have audit logs enabled, so it is unaware of how 

these systems have been infiltrated and what data has been captured and what has been transmitted. Good Intrusion Detection 

Systems on all the network segments are important to identify the 

attack signatures. 

Mr. LAMBORN. Okay. What is the kind of sensitive information 

concerning a veteran like in my district back in Colorado Springs 

that could have been compromised? 

Mr. BOWMAN. It is more personal identifiable information that 

could be used to commit fraud. Let’s say a malicious intruder gains 

access to a database and has the Social Security number, name, 

and the date of birth, they could use that to commit credit card 

fraud. And that’s the main risk to veterans. 

Mr. LAMBORN. And with the 20 or so million veterans who are 

on the system, the VA doesn’t know how few or how many of their 

sensitive information like Social Security numbers have been compromised? 

Mr. BOWMAN. That’s a potential risk. 

Mr. LAMBORN. It could be all of them? 

Mr. BOWMAN. Yes, without having audit logging enabled, you 

don’t know what has been compromised or how often those systems 

have been accessed in an unauthorized manner. 

Mr. LAMBORN. Would either of you ladies like to add to what I’ve 

been asking? 

Ms. HALLIDAY. No, I think Mike answered it perfectly. 

Mr. LAMBORN. I’m just amazed at this. I mean, this is serious. 

And the VA has known about this for up to 10 years now? 

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Mr. BOWMAN. We’ve reported significant vulnerabilities for well 

over 10 years, as indicated by the IT material weakness. In the last 

5 years, we have increased our assessment of the security controls 

through our user vulnerability assessment tools, database tools, 

Web app tools, so we think our evaluation is more comprehensive. 

In the last 5 years, we’ve shown consistent vulnerabilities from 

year to year that put the VA systems at risk. 

Mr. LAMBORN. And you mentioned potential state actors with 

malicious intent. Was that fairly recent that those attempts or 

those actions were detected? 

Mr. BOWMAN. I heard about that within the last year and a half. 

Mr. LAMBORN. So there’s a pattern of knowing about this for 10 

years leading up to a malicious capture of who knows how many 

Social Security numbers or other sensitive pieces of information of 

up to 20 million veterans within the last year and a half. Is that 

a proper understanding? 

Mr. BOWMAN. It is possible. We don’t know. 

Mr. LAMBORN. Thank you, Mr. Chairman. I yield back. 

Mr. COFFMAN. Thank you, Mr. Lamborn. 

Mr. O’Rourke for 5 minutes. 

Mr. O’ROURKE. Thank you, Mr. Chair. 

For Ms. Halliday, I actually wanted to follow up on some questions Mr. Lamborn was asking. For a veteran back home in the districts we represent, specifically, have we seen any consequences 

that we’ve been able to document in terms of their information 

being stolen and used by someone who has broken into this system? And not necessarily in my district, but can you point to some 

examples of how this has affected people that we represent? 

Ms. HALLIDAY. VA has an NSOC program where you report security incidents to them. They will prioritize it and start to work on 

the severity of those incidents. There is normally a good record 

then given of the facts of what happened and they will look at the 

controls and try to put the remediation in place. There are hundreds of incidents reported on an annual basis. 

Mr. O’ROURKE. And can you take us through one to illustrate the 

consequences? For example, Social Security information was taken. 

They used that to impersonate that veteran to try to take benefits 

or to obtain credit cards or— 

Ms. HALLIDAY. I do not have an example. 

Mr. O’ROURKE. Okay. Let me just ask you or Mr. Bowman, do 

you know of examples that have been documented, specific consequences? I mean, I agree with what everyone has said so far, the 

overall problem and the threat represented by these security 

vulnerabilities is unacceptable and needs to be addressed and 

needs to be fixed, but I also want to understand the human dimension of this, what problems it has already caused for veterans, if 

any, if you’ve been able to document them. I am assuming there 

have been. So anyhow, that’s something we would like to follow up 

on. 

Then I guess for Mr. Bowman, what’s the expectation in terms 

of being able to address these? When should this Committee expect 

to hear back from Ms. Halliday at a future hearing that these findings and problems that have been uncovered have been addressed 

to our satisfaction and that we feel that we have a reasonable level 

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of security, these threats have been closed, and we are now happy 

with that system? What’s a date that you could point us towards? 

Mr. BOWMAN. VA plans to implement a fully developed continuous monitoring program within the next 6 to 8 months. Using 

that, they should have a better visibility of the security posture of 

their IT systems. We have 32 outstanding recommendations from 

our FISMA work that need to be addressed to improve the security 

posture. It will probably take VA well over a year, year and a half 

to get a good handle on that and address those issues. 

So if we could possibly convene maybe a year from now, VA may 

be able to communicate some significant progress in their IT security program; we will be able to communicate that as well. 

Mr. O’ROURKE. And just to make sure that I understand what 

you just said, within 12 to 18 months those 32 recommendations 

would be implemented? 

Mr. BOWMAN. I don’t know for sure, but I think that’s a reasonable timeline if VA takes an aggressive approach for improving its 

security program. 

Mr. O’ROURKE. Okay. 

Ms. HALLIDAY. Sir, we just received the official comments from 

Mr. Warren on the 32 recommendations and the implementation 

plans that they will deploy regarding those 32 recommendations. 

There are various timeframes associated with that. But our first 

conclusion will come at the end of this year’s audit of the consolidated financial statements as to whether they would drop that material weakness or not, and all of the testing will be happening over 

the summer. So that report is issued on November 15th, and it will 

assess whether the material weakness remains or it drops to a significant deficiency. At this point, since VA has not fully implemented its continuous monitoring, Mike is exactly correct that it is 

probably going to take longer than a few months to take care of 

this. 

Mr. O’ROURKE. Okay. Thank you. 

Mr. Chairman, I yield back. 

Mr. COFFMAN. Thank you, Mr. O’Rourke. 

Dr. Roe for 5 minutes. 

Mr. ROE. I thank the Chairman. 

Ms. Halliday, thank you and your team for the excellent work 

you’ve done and certainly informing our Committee of the problems. I guess my concern is, is that this mirrors and patterns many 

of the other hearings I’ve been to where we can’t seem to get the 

electronic health record fixed year after year, and it looks like that 

security is a problem year after year. We just passed a bill in the 

House, CISPA. 

Most of us in this room have been to classified briefings on the 

security risks that this country has from outside bad actors. And 

I’ve got to go home this weekend, as every member up here does, 

and when this information gets out, veterans are going to come to 

me, there are many veterans sitting right up here at this dais, and 

they are going to say, are my records secure? And I’m going to have 

to look them in the eye and say, no, they are not, from what I’ve 

heard. And that’s not a very acceptable answer, especially after 10 

years, and especially after we know the risks in the government. 

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You haven’t looked at every other phase, but do other departments in the U.S. Government share these same problems? In 

other words, is this a systemic-wide problem across government or 

is this just VA specific? And you may not be able to answer that 

question. 

Ms. HALLIDAY. I can’t give you a definitive answer, but it is a 

problem for those agencies that are dealing with privacy-type information. 

Mr. ROE. You know, we’ve been asked as a Congress, we’ve been 

instructed in private that it is a severe problem for business. We’ve 

been asked to look at some privacy issues about how you—and we 

have a department of government that’s not even doing what we’re 

asking business to do right now. 

I think there are a couple of things that I would like to ask just 

briefly, and government-wide we don’t know. How will we know 

that when we do go home, when can we say that this information 

will be secure? And we certainly know how when you steal private 

information, whether it is through somebody getting your debit 

card number or whatever, what it is used for, it is basically just 

to steal from you. So is that it, just mainly you think, or is it access 

to other government agencies through the VA? Is this the back 

door to some other agencies? 

Ms. HALLIDAY. When we can say that the security of veterans information has been taken care of, I think will be at the point when 

VA addresses all the recommendations in the reports that we have 

made with regards to FISMA. We’ve given them a roadmap to fix 

things. It is such a decentralized organization that they have to 

bring a culture of accountability, personal accountability for every 

action, and they need to make sure they have a consistent implementation of the policies and procedures. We don’t quite see that 

yet with the FISMA testing or the testing done as part of the consolidated financial statements. 

Mr. ROE. Let’s say you go to a VA medical center somewhere, 

and you mentioned that some of the software wasn’t up to date, 

passwords, you can figure it out, 111, whatever, four 1s in a row, 

whatever. Who is responsible for that and what penalty is it if you 

don’t do anything? 

Ms. HALLIDAY. The responsibility lies with the CIO in the Department of Veterans Affairs and it tiers down through that organization. 

Mr. ROE. Okay. When a breach occurs, what does VA do then? 

When you know you’ve been hacked or there is an attempt. Let’s 

see you haven’t been breached, but you know that your firewall has 

been pinged, what do you do? 

Ms. HALLIDAY. You assess the severity of it based on the facts 

you can determine. You get a team together to look at how to fix 

whatever controls are needed to be fixed related to what happened. 

And VA has been trying to do that, but they have a significant 

number of security incidents. 

Mr. ROE. And I’m thinking, I am a veteran, I’m sitting here 

thinking okay, we’ve lost a laptop computer with 20 million bits of 

information on it and the system is not secure now. That doesn’t 

give me a lot of confidence if I go to the VA to hand over my Social 

Security number and all that. 

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Ms. HALLIDAY. Right. VA did mandate cybersecurity and privacy 

awareness training nationwide to bring down a level of personal accountability to every individual that’s doing work and touching veteran-sensitive information to make sure it brought accountability 

to this process and requires individuals to sign a statement that 

they will protect the veteran’s information. So that is a step in the 

right direction. 

Mr. ROE. Ms. Halliday, thank you. And I think we have our 

marching orders, and we will hear from the other two panels. But 

I think in 12 months we should be able to sit here, or less, and be 

able to look our veterans in the eye and say to them that your information is as secure as we can do it. I understand there is nothing that’s 100 percent, I got that. But it is relatively secure. Am 

I correct in that? 

Ms. HALLIDAY. Absolutely. Both the prior VA Secretary and the 

current have asked for the gold standard in protecting VA’s veterans information, and I think the expectation should be nothing 

less. 

Mr. ROE. Thank you, Mr. Chairman. I yield back. 

Mr. COFFMAN. Mr. Walz for 5 minutes. 

Mr. WALZ. Thank you, Mr. Chairman. 

Ms. Halliday and your team, thank you once again for coming. 

Again, we have been through these hearings and we listen to 

them. I guess the part I’m getting at is, and many of us, myself 

included, I’ve been advocating for more sharing of data, especially 

between DoD and VA, been advocating for being able to get some 

of that information to some of our partners, like the county veteran 

service officers, to help with claim processing, been advocating for 

bringing private medical data into the system to help speed the 

claims process. 

With that being said, with the VA and its research partners, how 

do they do the formal agreements between them? And I guess the 

point I’m getting at here is, is this issue we’re addressing—and I 

would assume you have lots of contact with your private sector 

counterparts and best practices—this very same thing happens in 

the private sector, correct, but there’s no requirement for them to 

report when there is a breach. Is that correct? 

Ms. HALLIDAY. Pretty much, yes. 

Mr. WALZ. How are these agreements done and if there’s a 

breach at a research institution on the private sector side, how do 

we know they are reporting that breach back and who is ultimately 

responsible in those agreements? 

Ms. HALLIDAY. Basically, you need a formal agreement that outlines the roles and responsibilities of both the external partner and 

VA. In that particular instance, we see some real inconsistencies 

and some of these agreements are not being put in place. 

The second you would like to do is make sure that, whatever arrangement VA is entering into, that organization has commensurate controls with VA so that they can adhere to VA’s policies and 

procedures. 

Mr. WALZ. But they are not required to adhere to FISMA, is that 

correct, private entity? 

Ms. HALLIDAY. Right. But you can establish those terms in these 

agreements. 

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Mr. WALZ. Okay. 

Ms. HALLIDAY. And that’s where you should do that. Because if 

you have one side, securing veterans’ information very tightly and 

another handling it very loosely, you have a problem. 

Mr. WALZ. Is it safe to say we then do not know the scope of the 

problem yet if those are lacking, because there are many, many of 

these agreements. 

Ms. HALLIDAY. Absolutely. 

Mr. WALZ. Okay. So we have no idea on the scope of that. 

Ms. HALLIDAY. Right. 

Mr. WALZ. When you look at this, where is the model? Is there 

an entity, an institution that’s out there that is the gold standard 

of best practices, how should this be done? I mean, there are standards and protocols that should be implemented. Who is doing it on 

the scale of VA? Is Citibank doing it? Is Credit Suisse doing it? 

Who is doing it that it looks correct? Because the targets here 

aren’t necessarily targets because they are veterans. They are targets because they are easy, is that correct, or they are trying to 

make it easy in many cases. Can you give me an example of who 

is the gold standard? 

Ms. HALLIDAY. We can’t give you an example. 

Mr. WALZ. Is that for lack of your knowledge on what others are 

doing or is that because there might not be one? 

Ms. HALLIDAY. I would say more lack of our having direct knowledge of who is actually performing specific practices. Some people 

might attest that they do have a gold standard, but when you look 

behind it and you see breaches and problems with that. We haven’t 

looked at that so I can’t really answer. 

Mr. WALZ. If we had some of them here to talk to us about the 

problems they are having, that might help us get an understanding 

of this and let the VA bring some of those things in. 

Ms. HALLIDAY. I think there’s always an opportunity to bring in 

best practices from the outside and from other Federal agencies. 

Mr. WALZ. Okay. So if we implement all the protocols that you’ve 

put out there, and I think you gave me the number of 4,000 potential weaknesses or vulnerabilities, if we implemented all of those 

and were able to do it, what’s the cost associated with that? I understand what the cost of not doing it is great. It is a breach of 

trust and security of our veterans. What’s the implication? Is that 

not something you factor in when you do your assessment? 

Ms. HALLIDAY. Sir, I would not have that answer, but you should 

ask VA. 

Mr. WALZ. Okay. Very good. 

All right. Well, again, I thank you for your service. It is invaluable. As I always say, the more that we can do to support the IG, 

the better government we get out of it. So thank you. 

Ms. HALLIDAY. Thank you. 

Mr. COFFMAN. Mr. Huelskamp for 5 minutes. 

Mr. HUELSKAMP. Thank you, Mr. Chairman. I appreciate you 

providing the opportunity for this hearing. And I must say I have 

a lot of words to describe my feelings, and embarrassed by the actions or lack thereof by the VA might be one of those. Shocked. 

Surprised. I guess I will probably be even more surprised by later 

testimony. 

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But if I understand correctly, one of the things that you did mention, that there was a violation or personal emails of the Secretary 

and high-level staff were compromised. And can you describe that 

a little bit further? 

Mr. BOWMAN. My understanding is that when the domain controllers got compromised, they got access to the senior leadership 

email accounts, and there is information that indicates that those 

emails were exported outside the VA network. 

The value of them is unknown. What they did with those emails 

is unknown. But whenever you compromise a domain controller, essentially you own the enterprise. That’s the seriousness of it. 

Mr. HUELSKAMP. I appreciate that. You own access to 20 million 

records, plus that of their dependents. What was the VA response 

when you brought that to their attention? 

Mr. BOWMAN. It wasn’t formally communicated to me. I heard it 

in a meeting that was discussed between the NSOC. And they 

probably were unaware I was listening in, but that is just what I 

heard, just by observing some of these meetings and VA describing 

these events. 

Mr. HUELSKAMP. And this is very shocking, Mr. Chairman. I 

know we have a letter in front of us from a very high-ranking official at the VA that says, quote, ‘‘VA’s security posture was never 

at risk.’’ Was never at risk. And that’s a quote from a high-ranking 

official. And I would guess that perhaps they used email to put this 

together. Can you imagine the thought that the folks that were 

hacking the system were actually reading this email as they were 

exporting 20 million private records. And you indicated we do have 

evidence potentially of external state-sponsored espionage that 

might be occurring to the VA. One of you had indicated that was 

a possibility? 

Mr. BOWMAN. That’s my understanding. 

Mr. HUELSKAMP. Okay. And did you bring this to the VA’s attention and what was their response? 

Mr. BOWMAN. We haven’t. With the FISMA work, we haven’t 

specifically addressed that issue. We do get into incident handling 

and monitoring. And we identify every year there are network connections that aren’t being monitored by VA. So the risk is that you 

could have systems compromised, data being transmitted externally, and VA could be unaware of it. 

Mr. HUELSKAMP. They could be unaware that the information is 

actually leaving. And if asked, they could potentially, even under 

oath say we know of no such transmission, which if I understand 

correctly might absolutely be true and would suggest obviously 

when you’ve given up control of the system like you indicated you 

would have actually no idea of the threat then? 

Mr. BOWMAN. That’s correct. 

Ms. HALLIDAY. Sir, one of the things that we do as part of our 

oversight is gain an understanding of what is happening in the VA 

environment, and then we send information to our contractor who 

is doing the actual FISMA assessment to put the right work steps 

in place to do full evaluations, to understand and properly assess 

the risks. That’s all happening as part of the FISMA process. 

Mr. HUELSKAMP. And I appreciate your work. You have a very 

difficult task of identifying the problems and hopefully providing 

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some solutions, but it is up to the VA, maybe after 10 years, to finally implement some of those. 

The latest thing I see in your report is an incident from March 

2013 in which sensitive, private, perhaps medical and personal 

data was transmitted over an unencrypted telecommunications carrier network. Can you tell me what happened when that personal 

data was transmitted unencrypted? Apparently VA did not know 

they were doing that. What’s their response? You indicate that the 

management acknowledged this practice and formally accepted the 

security risk. Did they identify who was at risk, how they were at 

risk, and did they close this security gap? 

Mr. BOWMAN. Yes, we received a hotline complaint discussing the 

transmission of unencrypted data between the medical centers and 

the community-based outpatient clinics using unencrypted protocols over a telecommunication carrier network. We went and discussed with the network engineers and various levels with VA, and 

they admitted that this is a common practice. 

Mr. HUELSKAMP. They admitted this is a common practice. 

Mr. BOWMAN. It is a common practice. But a mitigating factor is, 

is they logically segment that traffic from other customer traffic. 

The downside of that is it still needs to be encrypted, and there are 

technological solutions that can encrypt that traffic when it is outside of VA’s span of control. Now, VA responded to that report by 

saying they plan to implement encryption controls, so that will improve that risk of losing that data as it leaves VA’s span of control. 

Mr. HUELSKAMP. I’m sorry, Mr. Chairman, one last question. 

So they planned. Do you know if they actually have implemented 

the encryption to protect sensitive data? 

Mr. BOWMAN. My understanding is that edge router encryption 

controls have not been implemented yet. 

Mr. HUELSKAMP. I yield back, Mr. Chairman. 

Mr. COFFMAN. Ms. Walorski for 5 minutes. 

Mrs. WALORSKI. Thank you, Mr. Chairman. 

I appreciate the report, I appreciate the information. I will tell 

you, when I was in the Indiana House, we did hold companies responsible for these massive breaches of identify theft, especially 

when a Social Security number was in the breach. And so we did 

have legislation and we still do, and I think 17 or 18 other States 

now have it as well, holding private companies responsible, and if 

there’s a breach that the buck does stop with them for immediate 

information sharing, in some cases freezing credit reports. 

So my first question is on this information as it is leaked to a 

veteran in my district, say their Social Security number was 

accessed, are any of those Social Security numbers redacted or is 

this just free-flowing raw data that’s going out the door? 

Mr. BOWMAN. Well, we don’t have knowledge of any specific cases 

of data loss, other than the 2006 example, and in those cases VA 

is responsible for providing credit reporting services to the veterans 

who may have been harmed by this. But what we try to indicate, 

is that using unencrypted protocols, the risks remain, that the potential is there, and that VA needs to implement these proactive 

controls so these type of events do not occur going forward. 

Mrs. WALORSKI. But in light of the answers to the various questions up here, there obviously has been more than just one incident 

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in 2006 when that information has been available. And so, you 

know, I think about this in my district. I have 52,000 veterans in 

my district and then their extended families, and I’m thinking, you 

know, if this happened in the private sector, automatically this 

would have triggered—just the suspicion and the not knowing 

would have triggered an automatic credit freeze to the people that 

would be living in my district. 

So I’m looking at this from the standpoint of saying, you know, 

sending out an APB when I get out of here that says to the 52,000 

vets in my district, better check your credit report because we have 

no idea that your information has not been breached, and to continually check that. And as we continue to tell people to go access 

their VSOs and go access their facilities because there’s a long wait 

and the things we deal with on the veteran side, is how at risk 

they are with sharing that information in today’s day with these 

violations. 

In the private sector, this type of an entity would never survive. 

The lawsuits that would come would shut them down because of 

private information being at risk and being taken and nobody responsible. So it is absolutely baffling to me that in addition to some 

of the other things that we have heard in this report, that the buck 

stops with the CIO, and we have had nothing but turnover, as 

you’ve reported, in this entity of this area of the VA to begin with. 

Has anybody ever been disciplined based upon the findings of your 

reports? 

Ms. HALLIDAY. We can only make a recommendation. It is up to 

the Department to take the administrative action. That’s the extent 

of our authority. 

Mrs. WALORSKI. Have any of your recommendations involved 

issues of employees or incompetence or training or things actually 

for the people who are actually working there taking this information? 

Ms. HALLIDAY. Yes, I would say several, especially with our administrative investigations. It’s looking at very specific personal accountability for actions. 

Mrs. WALORSKI. And are you asking specifically that supervisors 

and managers and CIOs and these kind of people that have been 

in charge, where the buck stops with this information, that they be 

disciplined, if not terminated? 

Ms. HALLIDAY. We make a recommendation for appropriate administrative action and then generally give a discussion with 

that— 

Mrs. WALORSKI. And is the appropriate action usually termination? I’m not familiar with the protocol. What is the appropriate 

action on something like this large of a risk to this many people? 

Ms. HALLIDAY. You would have to look at the severity of the incident, determine the exposure, determine what the accountability 

was. Was there intent? Was this a mistake that they may not have 

been able to prevent? And then when you do that, you apply the 

Douglas factors for discipline actions in the Federal Government? 

Mrs. WALORSKI. But my understanding would be, in the last 10 

years, based upon the previous questioning, that the 40 or so outstanding compliance issues that you have advocated that they follow, had those been followed in the last couple of years, we would 

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have remedied this situation. So there has to be some kind of accountability still, and disciplinary actions, and the buck stops 

someplace with this staff, correct? 

Ms. HALLIDAY. We absolutely think the Department should have 

implemented many of the FISMA recommendations and tightened 

controls early, and they would have less security incidents. 

Mrs. WALORSKI. Thank you. 

Thank you, Mr. Chairman. I yield back. 

Mr. COFFMAN. Thank you, panel. I appreciate your testimony. 

You are now excused. 

I now invite the second panel to the witness table. 

On this panel, we will hear from Mr. Stephen Warren, Acting Assistant Secretary for Information and Technology at the Department of Veterans Affairs. Accompanying Mr. Warren is Mr. Stan 

Lowe, Deputy Assistant Secretary for Information Security from 

the Office of Information and Technology at the Department of Veterans Affairs. 

Before I recognize the panel, I ask that you please rise and raise 

your right hand. 

[Witness sworn.] 

Mr. COFFMAN. You may be seated. 

Mr. Warren, you are now recognized for 5 minutes. 

TESTIMONY OF STEPHEN W. WARREN, ACTING ASSISTANT 

SECRETARY FOR INFORMATION AND TECHNOLOGY, U.S. DEPARTMENT OF VETERANS AFFAIRS, ACCOMPANIED BY STAN 

LOWE, DEPUTY ASSISTANT SECRETARY FOR INFORMATION 

SECURITY, OFFICE OF INFORMATION AND TECHNOLOGY, 

U.S. DEPARTMENT OF VETERANS AFFAIRS 

Mr. WARREN. Chairman Coffman, Ranking Member Kirkpatrick, 

Members of the Subcommittee, thank you for inviting me to testify 

regarding the Department of Veterans Affairs Information Technology Security Program. Accompanying me today is Mr. Stanley 

Lowe, Deputy Assistant Secretary for Information Security. 

There is no higher priority than protecting the data that VA 

holds on our Nation’s veterans. I, as well as the many IT employees 

at VA—over 56 percent are veterans themselves—take this responsibility very seriously. 

As the Committee knows, the Department received a wake-up 

call from the stolen laptop incident in 2006. As a result, the VA 

consolidated its disparate IT functions into a single, unified IT organization. VA’s consolidated IT organization is responsible for providing the tools, services, and systems that are necessary to protect 

veterans’ information at 153 hospitals, 853 community-based outpatient clinics, 57 benefit processing offices, and over 160 cemeteries or memorial cites. Our network supports over 400,000 users 

and over 750,000 individual devices. We are committed to protecting the information we hold on millions of veterans, their beneficiaries, and more than 300,000 VA employees. 

As we all know, IT security threats continue to evolve. To that 

end, we have implemented our continuous monitoring program, 

which continuously checks all IT systems and monitors every device attached to the VA network. VA launched the Continuous 

Readiness in Information Security Program, or CRISP, in 2012 to 

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proactively address process and policy deficiencies, as well as architecture and configuration issues. 

As part of the CRISP effort, the VA conducts rigorous vulnerability scanning, continuous monitoring of patching and software 

inventory, implementing port security, anti-virus services, and 

encryption of nonmedical IT desktops and laptops. 

Through Web Application Security Assessments, VA is able to 

identify critical vulnerabilities and potential exploits in VA systems. We protect the network infrastructure by identifying all network assets, critical database stores, all external connections, and 

provide the Trusted Internet Connection Gateways services. 

In the past year, VA has measurably improved its security. The 

Department has ensured that over 98 percent of VA staff have received the mandatory security training they need to protect the information of veterans and their families. Only staff turnover prevents us from reaching 100 percent. 

After the 2006 incident, VA worked to ensure its laptop computers were encrypted to provide another layer of protection. Currently, over 98 percent of VA’s nonmedical IT laptops are 

encrypted. The Department aims to complete the encryption of the 

final 2 percent by June 30. 

VA has a robust data breach notification process using a Data 

Breach Core Team. When the team determines that a potential 

breach may have occurred, they notify affected individuals and 

offer credit monitoring. VA also posts a monthly report of data 

breach notification on its Web site, and this report is provided to 

Congress, in addition to the required quarterly data breach report. 

VA has become one of the very best large organizations of providing notification if a potential breach occurred. This law requires 

notification within 60 days. A review of VA’s incident tracking system over the current fiscal year indicates that VA takes, on average, 25 days to provide notice. VA’s standards and practices exceed 

even the strictest Federal, State laws and policies. 

I would like to update you on our progress to extend VA’s authority to operate, or ATOs. Before giving you this update, I would like 

to assure the Committee in the strongest terms that at no time was 

veterans’ data placed at risk by this process. The signing of an 

ATO represents the final step in what is otherwise a continual 

process of security and management reviews. 

As the Committee is aware, VA has been working to extend nearly 600 ATOs over the last several months. We have worked to assure that requirements for each ATO are properly conducted and 

documented. VA trusts the ATO validation process and the work of 

the information security officers, facility CIOs, and system owners 

to ensure system security. This paper-based process validates that 

critical steps are being taken to protect our veterans’ data. 

Mr. Chairman, VA places the highest priority on safeguarding 

veterans’ and employees’ personnel information. We are committed 

to information security. And although work remains, VA has made 

significant improvements in the last few years and strives to meet 

those highest standards in protecting our Nation’s veterans’ sensitive information. 

Thank you for your continued support of veterans, their families, 

and our efforts to protect veterans and their information. I am preVACREP180 with DISTILLER

19 

pared to answer any questions by the Ranking Member, the Chairman, or the Members. 

[THE PREPARED STATEMENT OF STEPHEN W. WARREN APPEARS IN

THE APPENDIX]

Mr. COFFMAN. Mr. Warren, given your knowledge of visitors in 

the network since 2010, and understanding that there were significant security weaknesses, why would you insist on conveying the 

message that veteran data is not at risk? 

Mr. WARREN. Thank you, Chairman. I think that that actually 

is a great question to ask within the construct of information protection. 

I think it’s very important to note that my partners in the Inspector General’s Office used words such as could, might, potential, 

possible, is possible. When an audit takes place, when a review 

takes place, the focus is on what could happen. But remember, the 

existence of a risk is not the same as the removal of information 

out of the network. 

Several things need to exist. What needs to exist is the potential, 

and we try to drive those down as quick as we can. There needs 

to be an actor who has access and the ability to get to where that 

risk is. They need to be able to do that in such a way that they 

are not seen, and then they need to be able to move the information out of the network through all the sensors and past the gateway, as well as past our partners in DHS who are watching outside 

our gateway, and then remove it. So the piece we need to be very 

careful of is, we’re talking about potentials, we’re not talking about 

actuals. And so the— 

Mr. COFFMAN. I’m sorry. How do you define the difference between an actual and a potential? And I’m looking at an internal report on August 15, 2012, and it talks about an actual—at least it 

talks about that the network was penetrated. So how do you define 

actual versus potential? 

Mr. WARREN. Sir, I don’t have that report in front of me. 

Mr. COFFMAN. Well, I’ll make it available to you. 

Mr. WARREN. And I will gladly respond to the record, sir, in 

terms of that specific incident. 

Mr. COFFMAN. Sure. Okay. 

Mr. COFFMAN. Please define the difference between actual and 

potential. 

Mr. WARREN. Potential is—and we’ll do as an example your home 

computer. So if you do not update your— 

Mr. COFFMAN. How about we just stick with the VA system. Let’s 

talk about that. 

Mr. WARREN. Sure. We can talk about a desktop computer. Once 

a month Microsoft puts out a set of patches on Tuesdays. So every 

Tuesday, once a month, the first Tuesday Microsoft sends out a full 

set of patches. If we do not incorporate those patches into the system, the potential for somebody going to a Web site and the potential being exploited goes up. But the VA has a very aggressive program to make sure those desktop patches happen once a month as 

Microsoft puts it out. So if you don’t do them and you don’t do it 

over multiple months, the potential for the desktop to be compromised and the system itself to be compromised goes up. 

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Mr. COFFMAN. It’s my understanding you have not instituted all 

the patches in the VA system. Is that correct? 

Mr. WARREN. I’m sorry, I missed the first part. 

Mr. COFFMAN. That you have not instituted all of the patches 

prescribed for the VA system. 

Mr. WARREN. I would tell you, Mr. Chairman, that we have a 

very aggressive program to make sure the desktop computers are 

patched. 

Mr. COFFMAN. You’re not answering my question. 

Mr. WARREN. The intent is not— 

Mr. COFFMAN. To the VA system. Is it true that not all the 

patches have been applied as prescribed in the VA system? In the 

information network. 

Mr. WARREN. Sir, there are about 750,000 devices in the network. So if you’re asking does every single one of those devices 

have every single one of the patches that their manufacturers put 

out, the answer would be no because there are multiple times when 

that patch will actually break the application that you need to use, 

and therefore there is a waiver in place that says you don’t patch 

that system because not working is actually worse than a potential 

risk within an environment which is— 

Mr. COFFMAN. Mr. Warren, why did you not previously disclose 

to the Committee that VA has had serious and continuous compromises of systems and data by nation-state sponsored actors? 

Mr. WARREN. With all due respect, I do not believe it is a true 

statement, as you laid it out, that the VA has been continually 

compromised by foreign nation states. We have a strong partnership with Homeland Security, which watches the boundary for the 

Department. 

Mr. COFFMAN. Mr. Warren, has a foreign entity targeted and 

penetrated our network? 

Mr. WARREN. I am aware of a single incident that our network 

operation center identified. 

Mr. COFFMAN. And when was that? 

Mr. WARREN. It was last year. I will need to get back for the 

record in terms of the specific date. 

Mr. COFFMAN. Very well. And I will make this internal document 

available to you. And I think you can be informed that there actually have been quite a few breaches. 

Ranking Member Kirkpatrick. 

Mrs. KIRKPATRICK. Thank you, Mr. Chairman. I’d like to follow 

that line of questioning. 

Mr. Warren, if a system is compromised, would you know? Or is 

it possible for it to be compromised and you to not know? 

Mr. WARREN. I would tell you, with the controls that we emplace, 

with continuous monitoring, as well as the work that we do at our 

boundaries with Homeland Security and our NSOC, the probability 

of somebody being in the network and compromising a system 

without us knowing it is very, very low. But I can’t argue the absolute. 

Mrs. KIRKPATRICK. Can you provide for the Committee how many 

times the system has been hacked since the beginning of this year? 

Mr. WARREN. I will gladly provide that for the record. 

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Mrs. KIRKPATRICK. Thank you. Was it your testimony that it 

takes you 25 days to notify the veteran that their personal information may have been compromised? 

Mr. WARREN. Yes, ma’am. If I could expand on that. 

Mrs. KIRKPATRICK. Would you expand on that, because that really concerns me. In 25 days everything could be wiped out for that 

person. 

Mr. WARREN. Certainly, ma’am. What happens is as soon as— 

and VA has a 1-hour reporting requirement—as soon as an employee believes the potential of something happening, they’re supposed to notify our NSOC, and it is part of the reporting we do. 

At that point, we pull the team together and we ask the question: 

What and why? Is it real? And if it turns out we have an issue, 

the Data Breach Team—which meets once a week, which is made 

up of career staff who are outside the chain of command—they do 

the analysis of that potential breach and they determine if the potential was high enough that data had left. And normally, if there 

is just a little potential, the Department goes ahead and reaches 

out to all of those veterans with credit monitoring for a year. And 

the 25-day period is the time for the notification to the NSOC, the 

establishment of the team, the analysis of the data to make sure 

what was reported was actual. And in many cases—in fact, in most 

cases—it’s the potential that is reported, and we reach out to veterans anyway and we offer that credit reporting. 

Mrs. KIRKPATRICK. How many times have you had to notify veterans within the last year? 

Mr. WARREN. Ma’am, I will get you that for the record in terms 

of the number of times that we notified veterans and offered credit 

reporting as a result of a potential data breach. 

Mrs. KIRKPATRICK. Thank you. And was it also your testimony 

that by June 30 of this year your system will be encrypted? 

Mr. WARREN. Actually, my testimony, ma’am, was that for all 

nonmedical IT laptops. So the ones that are under my responsibility, we will have the last of those encrypted. 

Mrs. KIRKPATRICK. But the medical laptops will not be 

encrypted? 

Mr. WARREN. No, ma’am. And, Ranking Member, the difficulty 

we have with medical devices is they’re constrained by their certification from the FDA. And the concern is by putting encryption on 

that laptop, a medical device that has a laptop in it, you will actually impede the ability of that medical device to do its job. 

And so we’ve had lots of conversations with the FDA to figure 

out how you can do that. But when a device is certified that has 

a medical device in it, the condition of the device at the time of certification constrains what you can do afterwards. And so to handle 

that, we actually have a separate area, an isolated area in the VA 

network where we put those medical devices that are based on IT 

equipment. And we also go further by working with our partners 

in VHA where we start testing those devices to see if there is an 

impact to its job in terms of delivering care, or if we impact their 

certification boundary. And in cases where it isn’t—and there is a 

tool called bar-code medication, which is what the nurses move 

through the wards—we are able to show that there was no impact, 

those medical device laptops are now encrypted. And so we work 

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our way through that with our partners in the health administration and the biomed folks. 

Mrs. KIRKPATRICK. I have one last question. Are you familiar 

with or have you heard the Inspector General talk about the fact 

there has been excessive turnover in key leadership positions and 

there’s a lack of human resources in the IT departments? Do you 

agree with that statement? 

Mr. WARREN. I would tell you that an organization going through 

transformation is a difficult place to work because everything is 

moving around you. And so we have had transition of staff. We’ve 

had transition of staff going out and coming in. This year, I believe 

I am 100 folks below my ceiling of about 8,500 individuals. 

Mrs. KIRKPATRICK. Do you have a strategy to address that so you 

have adequate human resources? 

Mr. WARREN. We do active recruiting. We work with the HR organization to figure out how do I do pools so I can make sure I’ve 

got project managers lined up, to make sure I have individuals 

lined up to bring them in. 

We also have a very strong focus on veterans. As an example, 

last year, 75 percent of my new hires were veterans, because that’s 

very important to me, as a veteran, to make sure we’re bringing 

our clients, if you will, into the organization to help us do a better 

job. 

Mrs. KIRKPATRICK. Thank you, Mr. Warren. I yield back. 

Mr. COFFMAN. Mr. Warren, please be reminded that during the 

course of this oversight hearing and Committee investigation, it is 

a Federal crime, pursuant to 18 United States Code section 1001, 

in pertinent part, knowingly and willfully to falsify, conceal, or 

cover up a material fact, or to make any materially false, fictitious 

or fraudulent statement. 

Mr. Lamborn, you have 5 minutes. 

Mr. LAMBORN. Thank you, Mr. Chairman. 

Mr. Warren, members of the previous panel testified under oath 

that foreign state actors have accessed sensitive information of veterans within the last 2 years and that the VA does not know how 

much information was stolen. Would you agree with that statement? 

Mr. WARREN. I would say, Congressman Lamborn, there is that 

potential. I would tell you that, working with our partners at 

Homeland Security in terms of where they watch our gateway—so 

it’s not just the VA connected to the world and everything happens, 

we have Homeland Security, if you will, at the gate. So I have our 

team on our side and Homeland Security on the other side. And between the two of us, we watch all the traffic going back and forth. 

So the ability of material to move, yes, there is always a potential. We referred to a particular incident that the Inspector General 

talked about. I was aware of that incident. So I would tell you that 

one, we know happened. With the other ones, it’s still the potential 

and the probable, in terms of— 

Mr. LAMBORN. And of the one that you will admit has happened, 

we don’t know how much information was taken because it was 

encrypted before being exported. Isn’t that correct? So we don’t 

know how little or how much the data was that was stolen? 

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Mr. WARREN. Sir, my recollection of that report—and what I’d 

like to do is go back and review that report to give you the answer 

in terms of what came out and what the report was able to tell us 

given the conditions that existed. 

Mr. LAMBORN. What kind of dependent information is put into 

some veterans’ files? 

Mr. WARREN. I would tell you, Congressman Lamborn, the veteran files are held in many locations in the VA, in many systems, 

whether in the electronic health record or whether in the new— 

used as part of the new VBMS system, as well as all the other systems. So the information necessary to provide benefits or services 

is what we— 

Mr. LAMBORN. So it can include the names and Social Security 

numbers of dependents. 

Mr. WARREN. If that’s required as part of the claim or service 

process, sir. 

Mr. LAMBORN. Another problem I have is—and this happened to 

me recently. I got a credit card in the mail. It turns out that my 

credit card issuer had been compromised, so everyone had to get 

a new credit card. And we had to go back and change the numbers 

on all our accounts. It was a big hassle. Fortunately, nothing was 

stolen that I know of. But what happens when a Social Security 

number is stolen? You can’t replace that. I mean, we’re talking 

about something really serious here. Are you aware of how serious 

this is? 

Mr. WARREN. Congressman Lamborn, we take any potential incident and any incident very seriously. I take it personally. It’s one 

of the reasons why the VA offers credit monitoring. So even when 

there is a potential, we reach out to the veteran and we offer them 

that credit monitoring for a year. We also have a 1-800 number 

that we’ve made available to veterans if they have any questions 

so that they can reach out to us if by chance something does happen, so we can help them, walk them through that process. 

Mr. LAMBORN. You said earlier that we place the highest priority 

on protecting this information, and yet members of the OIG indicated that for more than 10 consecutive years, independent public 

accounting firms under contract with OIG have identified information technology security controls in the VA as a material weakness. 

How can that condition have persisted for 10 years if that’s your 

highest priority? 

Mr. WARREN. Congressman Lamborn, thank you for that question. I would tell you that material weakness is actually a financial 

term. It’s the same type of term used as part of Sarbanes-Oxley in 

terms of laying those financial controls on the organization. So the 

material weakness says there is a question about whether the financial data in the system is secure or not. 

So material weakness, yes. I will tell you that, as an organization, the Department wasn’t going, we’ve got a material weakness, 

move on. Every year we took the inputs—and I’ve only been with 

the VA for 7 of those 10 years—every year I’ve been there we took 

those inputs and we laid out what we needed to do. We laid the 

resources on it. We put focus on training. And I will tell you it 

wasn’t enough. And so 2 years ago, this major effort of doing 

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tion, but taking the whole organization, because information protection is not just an IT thing. 

Mr. LAMBORN. Well, I’ll agree with one thing you’ve just said 

when you said it wasn’t enough. I certainly agree with that. 

And how do we know that there isn’t going to be some kind of 

document dump by a foreign actor, you know, WikiLeaks or something like that? I mean, there are so many things—health care 

records. There is such sensitive information in health care records. 

So we’re not just talking about Social Security numbers, there’s 

health care records. We shouldn’t be here today, and I am sad that 

we are at this juncture right now. 

Mr. Chairman, I yield back. 

Mr. COFFMAN. Thank you, Mr. Lamborn. 

Mr. O’Rourke. 

Mr. O’ROURKE. Thank you, Mr. Chairman. 

For Mr. Warren, I’m not as conversant in the details of these 

issues and the different systems and protocols involved as I would 

like to be, but I think it’s fair to say that the picture you paint of 

the VA’s IT system and the vulnerabilities is very different than 

the one that we just heard from, from Ms. Halliday. And I think 

you heard many of us say that what we heard presented was unacceptable in terms of the vulnerabilities, unacceptable in terms of 

the amount of time that the VA has known about those 

vulnerabilities without successfully addressing them, some concerns about when information was reported to this Committee and 

others in terms of breaches to the system and retrieval of information by foreign actors. 

Can you just, so in general terms that I can understand, address 

that discrepancy from what we just heard to what you’re presenting? You seem to be saying that things are generally under 

control. 

Mr. WARREN. I would tell you the state of security and the work 

we need to do is something that I wrestle with all the time. Am 

I satisfied with where we are? No, I’m not. Can we do better in 

terms of fixing the things that our partners in the IG and the audit 

community have identified? Yes. And we are dedicated to doing 

that. 

But the difference that you are hearing from myself versus the 

audit community is, they have to deal with potential: Is there a 

chance? Is there any opportunity for something like that to happen? And the answer will always be yes. It will always be yes, that 

there is a potential. So if you ever ask me, or even if you ask me 

today, can I guarantee that everything is perfect and wonderful? I 

could not give you that guarantee because it’s constantly changing, 

the technology constantly changes. 

So my focus is more of a very pragmatic operational person 

whose job is to try and make sure we continue to deliver those benefits and services in a way that has the least risk, the one that 

does not put our veterans’ information at risk while we do that. 

And again, is it where I want it to be? No. Do we continue to drive 

on getting it to where we need to be? Yes. 

Mr. O’ROURKE. In terms of the 32 recommended steps that need 

to be implemented—and I asked the IG’s Office about what the 

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timeframe would be to implement those—do you agree that it’s a 

12-to-18-month implementation timeframe? 

Mr. WARREN. Yes, sir. And in fact, when the report gets published, you will find there is a departmental response. And it actually lays out what it is that we have in place and what we are 

going to do. And I believe the latest date I have when I signed out 

that document with all the different organizations was September 

2014 for some of the longer items. And I believe that fits within 

that 12-to-18-month period. 

But there are many things that are happening now. We have 

some significant things coming online at the end of August. There 

are things taking place between now and August. But the longer, 

harder ones take that extra time to get there. 

Mr. O’ROURKE. And so there are no fundamental differences between your office and the IG’s report in terms of what they just described to us in their findings, their vulnerabilities, and the seriousness of those vulnerabilities and threats? 

Mr. WARREN. I will tell you, there were many reports referred to 

in the prior panel. You will find that if you look at the report and 

you look in the appendix, the place where the Department did not 

agree with the findings, you will find a statement in there that 

says—again, we always thank our partners to come in. We see 

them as part of the team. They give us that outside view. But 

where we disagreed with what their observations were, we normally state that in the document. 

So, given the Chairman’s reminder, I need to make sure that 

where the Department did not agree, we stated in the report. And 

we also state what it is we’re doing as a result of what they find 

and what our plan of actions are. And then we give a quarterly update to all of the things that we said we are going to do. And as 

the Acting Assistant Secretary, I sign off on every one of those 

quarterly reports in terms of what we said we were going to do, 

what did we do to ensure that we are responsive not only to what 

the Inspector General identified, but ensuring that we’re doing everything we need to do to protect our veterans data. 

Mr. O’ROURKE. Let me ask one more question. You’ve used the 

terms ‘‘possible,’’ ‘‘probable’’ and ‘‘actual’’ several times in response 

to our questions. A question I asked of the previous panel, can you 

tell us of an actual incident where, because of a security vulnerability, private information from a veteran was retrieved by someone to negatively impact that veteran, whether they stole their Social Security number or other personal data that was then used to 

harm that veteran? 

Mr. WARREN. I am aware of several incidents, and I will describe 

one for you. It’s an individual who accessed—he was a system administrator—again, not foreign, but domestic—accessed the database and used the information to do identity theft. When identified, 

we refer those to the IG and they bring in criminal investigations. 

So, in that regard, there was an individual who breached the system. It is always referred to law enforcement. It is always referred 

to law enforcement. And then we provide credit monitoring, and we 

also work with the law enforcement folks to make sure that they 

have full access to do what they need to do. 

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So I will tell you, large organization, lots of people, there are 

going to be folks who do bad things. As we find them, we refer 

them to law enforcement for them to take action. And then we just 

keep, as a result of what we saw—what then do we do, right; how 

did that person get in there. So you will see there is a very strong 

personal accountability program the Department is bringing onboard to go ask the question, are we hiring the right people? Do 

they have the right credentials? Are there flags here on their personnel records such that we really shouldn’t be putting them into 

a position of trust—not an IT thing, but the broader aspect of how 

you hire folks and how you make sure you’re bringing in the right 

folks. 

Mr. O’ROURKE. Thank you. 

Thank you, Mr. Chairman. 

Mr. COFFMAN. Just real quick. When the OIG, in their report, 

said that your system got hacked by foreign actors, do you refute 

that as part of your response? 

Mr. WARREN. So, again, I believe you’re referring to that August 

report. Let me just make sure what you’re referring to, Mr. Chairman, if I can. I don’t have enough information to answer your question, sir. 

Mr. COFFMAN. So you’re not aware—in the OIG report, in their 

testimony, when they were up here, they referenced that your system got hacked by foreign actors. First of all, do you acknowledge 

that? 

Mr. WARREN. I believe I already have in my testimony, Mr. 

Chairman. 

Mr. COFFMAN. Yes or no? 

Mr. WARREN. Yes. 

Mr. COFFMAN. Very well. 

Dr. Poe for 5 minutes. 

Mr. ROE. Thank you, Mr. Chairman. 

And a couple of questions that Congressman Lamborn talked 

about. 

One of the reasons that, the way I understand this from listening 

this afternoon, that you might not know what information is going 

out is that the information that people were after was not 

encrypted. But on the way out the door it was encrypted, so you 

couldn’t read what was gone. So you could truthfully sit there and 

say we don’t know what’s been stolen because you really don’t 

know. And it should just have been the other way around; we 

should have had the data encrypted so that nobody could have gotten a hold of it or done anything with it. Am I right or wrong with 

that? Did I misunderstand? 

Mr. WARREN. No, Congressman Roe, you are actually laying it 

out appropriately. And again, with the report that we’re referring 

to, glad to do a private briefing to the Committee with the details 

because of some of the issues around it. 

I will tell you that the area where the individuals were, were in 

the email area, in terms of pulling emails out. The one compensating controller, the thing we do as well, is many of our emails 

are encrypted. So the reference to unencrypted is information in 

databases. This particular information—which I believe has been 

referred to—deals with folks who went after email packages. In 

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many cases, those are encrypted such that it would be difficult to 

read them. But again, because, as you rightfully pointed out, the 

data left the network encrypted, it’s hard to say yes or no what it 

was. 

Mr. ROE. I understand that now. And let me ask, would any of 

this other information, since you-- do you cover the part of the VA 

involved in contracting? Is that data—not just personal information, but is contract data? In other words, if I’m bidding on a 

project out here, would a foreign competitor know what that contract was? Because we certainly have seen that in other areas. Is 

that possible? 

Mr. WARREN. Sir, I can’t refute the possible of any scenario in 

terms, again, there are no absolutes in information security. We 

strive to make sure there aren’t any— 

Mr. ROE. Let me stop you. I’ve heard that before. This August 

15th, there is an Office of Information Security, and you stated you 

heard—at least were known of one time that—I think that I understood this—that you had been hacked or pinged. March 10th and 

onward the DeepDive Analysis has been tracking activities of wellfunded cyber-espionage teams that regularly target VA. Over the 

past 31 months, the DDA—that’s the Direct Dive Analysis—has 

identified eight of these teams as part of our threat program. Each 

team is assigned a name—I won’t go through that. Assigning a 

common nomenclature has allowed them to contribute each of their 

campaigns and see which one of them is the most effective. And it 

goes through how they were doing it. I’m sure you’re aware of that. 

Mr. WARREN. Yes, sir. The key reporting and the fusion technology team—so the individual whose report you’re reading from— 

is an initiative that I started in terms of asking folks to go out and 

start pulling data and understand what was going on. What I think 

what you will see— 

Mr. ROE. Help clear me up because you said you only heard of 

one—you only knew of one incident, and yet you started this, which 

there are eight different teams that are looking. And it appears 

from this information we have—which it makes sense that they 

most like to hack us during holiday times, which makes sense, your 

defenses are down, Thanksgiving, Christmas, those times when we 

would be less—our defenses are up less. 

Mr. WARREN. I think what you’ll find, sir, if you read into that 

report, it’s targeting. So the report, again, it’s a very aggressive defensive policy in terms of through our network security folks is trying to identify where the threats are. Now, again, the August report we talked about, the specific instance where we saw the material leaving and some of the things that we did as a result of that, 

you will find there are reports like that that are published probably 

a couple times a month from the fusion team saying this is what 

we’re tracking, this is what we’re monitoring, this is what we’re 

doing about it. 

Mr. ROE. But you wouldn’t be tracking those if they weren’t active. 

Mr. WARREN. Sir, there are things known as honey pots, black 

holes, where the individual may try to come in. And what you do 

is you set up your perimeter so it looks like they’re actually getting 

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into data, but they’re not. You’re actually tracking and capturing 

them. 

The other piece, if I could, is there are actors you see inside, but 

you also set it up on the outside, where if they are trying to send 

data out, you basically put a trash can where the data goes versus 

leaving the Department. 

Mr. ROE. I have some more questions on that to see how many 

times that has happened. There is a note here I have that says 

over 400,000 systems in VA’s network do not even have a basic security baseline installed. Is that correct or incorrect? 

Mr. WARREN. Sir, I would need to basically validate where that 

report is coming from, and I will take that for the record. 

Mr. ROE. And lastly, just one quick question: Who are the statesponsored actors that we’re dealing with? You haven’t called any 

names, but who are they? 

Mr. WARREN. I would tell you, sir, that my preference is to do 

that in a closed session; otherwise I would put my clearance at 

risk, as well as the fines and penalties. 

Mr. ROE. That’s fine. That’s fine. I yield back. 

Mr. COFFMAN. Mr. Walz for 5 minutes, please. 

Mr. WALZ. Thank you, Chairman. 

Thank you, Mr. Warren. 

Your data is on those computers too, correct, as a veteran? 

Mr. WARREN. Yes, it is, sir. 

Mr. WALZ. Okay. And you were over at FTC and DOE? 

Mr. WARREN. Yes, sir. I was at the Federal Trade Commission, 

where I did the national Do Not Call Registry, something I’m very 

proud of, as well as annual credit monitoring that you can get, and 

then at the Department of Energy with the Weapons Clean Up 

Program. 

Mr. WALZ. How does your knowledge over there—does the current job you’re in correspond with you having a knowledge of those 

organizations and their ability to provide security over data? Because I’m assuming both of those have very sensitive data, especially DOE, in terms of state secrets and things like that. So is 

there a comparison there? Can you tell us how they function or 

how VA’s system is in terms of robustness compared to those? 

Mr. WARREN. I would tell you, sir, we are all facing the same 

threats. And we all put the protections in place and we work with 

each other. In fact, we have a very aggressive outreach program 

with the folks in the other organization. And there is also a larger 

effort through the Federal CIO Council to learn from each other 

and use our best practices because we are all facing that threat 

today. 

Mr. WALZ. I agree. And this is what I’m trying to get at. And I 

think the gentlewoman from Indiana brought up a good point. 

States are trying to tackle this as they go. And I’m looking 

through, there’s a Privacy Rights Organization Clearinghouse that, 

as we speak, in realtime is listing this: Health Information Trust 

of Frisco, Texas, 111 record compromised. A dentist in Rochester, 

New York, on June 3, theft of a laptop, 13,806 records. 

One, though, that comes in here—and I think it brings to the 

point of what we’re trying to get at—is Hampton Roads Health 

System, Newport News, Virginia, talked about employees accessing 

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information incorrectly. And it even notes in this that they were 

fired for that. And then of course there’s malicious content and all 

that. 

The point I’m trying to figure out here is, when you do this, is 

data security an all-or-nothing, zero-sum proposition? Is it an impenetrable firewall, or it’s open access, or are decisions made in the 

business community as well as you that risk assessment and what 

is acceptable risk is in that? 

I’m assuming in the private sector now—and listening to Ms. 

Walorski brought up a very good point—is there is a huge market 

in identity theft insurance, data breach insurance on that. Those 

insurance underwriters must be drawing some guidelines on what 

is acceptable risk and what is not. Does that pertain to what you’re 

doing? Is the VA doing that very same risk analysis based on best 

practices of those underwriters? 

Mr. WARREN. Yes, sir. We apply those same rules. It is baked 

into the standards that we follow. The National Institute of Standards and Trust applies those to us. 

And to your question about, is there an all or nothing? I think 

our partners at DoD found out with WikiLeaks, in a secure system, 

you still could not guarantee the material would not— 

Mr. WALZ. Well, what I guess I’m asking for is, is it worth—and 

I’m going to come to this question is: What’s the cost, have you figured, to implement OIG’s recommendations? Is there a cost factor 

that takes into this? Say, for example, depending on where I’m at, 

versus a high crime versus a low crime neighborhood, I might not 

invest in the most robust security system, taking and thinking 

into—there hasn’t been a crime in my neighborhood in 75 years. 

Those are things that we work in. Now, if I always want to be absolutely sure, I could go to the top of the line every time and implement that security. How do you view that at VA when you make 

those decisions? 

Mr. WARREN. Sir, great question. Thank you for that question. 

We look at what the risk is. Is it something at the perimeter or is 

it something inside? Is the data inside something that has the 

highest level of need or something that is just transactional data? 

And the amount of resources we apply and the controls we put in 

place are actually tailored to the information that’s in the system 

and the potential risk. 

Mr. WALZ. Does OIG take that into consideration when they put 

out their recommendations, that you are doing—what you’re telling 

me is, you are doing a risk analysis, a cost-benefit analysis. Is OIG 

asking or saying this is the ultimate perfect world, what it looks 

like in security? Are they factoring that in? 

Mr. WARREN. I believe my partners in the Inspector General Office are taking that into consideration. But I will tell you they’ve 

done a fair appraisal, in terms of the FISMA audit, of areas where 

we need to continue our attention and focus. And I will tell you the 

one thing that tells me that we’re on the right path is we did this 

massive program last year called CRISP, which was more than just 

IT, it was the leadership of the organization—the VHAs, the VBAs, 

the NCAs. So they got engaged from the senior levels of what do 

we need to secure the enterprise. And we are seeing the critical 

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things dealing with personal attitude by non-IT folks as well as IT 

folks is changing to where it needs to be. 

Mr. WALZ. Well, if I heard that right, OIG did say they didn’t 

give an assessment based on it hasn’t run its whole course yet. So 

what your assessment is, is at the end of this, when you go back 

and look at what CRISP did, we’re going to see a change across the 

spectrum, culturally and robustness of security. 

Mr. WARREN. Yes, sir. We are seeing that change. And I will tell 

you the change will need to continue from here on out because we 

know that threat evolves with our change. 

Mr. WALZ. I’m going to use my last 25 seconds here. You’re not 

going to get the opportunity to do this, but following you, Mr. Davis 

is going to speak and there’s going to be some questions of how 

things came out or why they came out. Is there anything you’d like 

to address? I’m out of time here. You know the situation, the 

memorandum and how things are going to play out, and I think it’s 

only fair that you be able to respond. 

Mr. WARREN. I would tell you, sir, I was perplexed by what happened and how it went down. I was troubled by the fact that there 

are two memos in circulation, a memo dated 29 January that I and 

leadership received, and the one that we received from the Committee that was signed on the 28th of January that we were not 

aware of the existence of it until Friday, when the Committee staff 

gave it to us. And the memos are almost identical except for one 

paragraph, and that paragraph says: ‘‘Clear and present danger.’’ 

I will tell you, if anyone tells me there’s a clear and present danger, I pick them up and I walk them over to the IG and say, tell 

them what it is that I am missing here. I actually did that on the 

29th with the memo received. That memo I took to the IG. 

On Friday, when I learned of the existence of a second memo different than the one the Department received, I took both of those 

memos and I reached to the IG and said, I need you to help me 

figure this out because I cannot figure out why the Department 

would get one memo with four paragraphs and the Committee 

would get a different memo with five paragraphs and the difference 

is ‘‘clear and present danger.’’ That was not communicated in the 

memo we received. And I’ll tell you, I am still perplexed on why 

that would exist. 

Mr. WALZ. Mr. Chairman, I thank you for indulging the extra 

time. 

Mr. COFFMAN. Ms. Walorski for 5 minutes. 

Mrs. WALORSKI. Thank you, Mr. Chairman. 

Mr. Warren, can you guarantee that the veterans in my district, 

in Indiana’s Second District, have not suffered a security breach? 

Mr. WARREN. Ma’am, I’d be lying to you if I made that guarantee. Again, it is all about what the risks are. And we try our 

darnedest—in fact, we do more than try our darnedest. 

Mrs. WALORSKI. But you can’t guarantee that. 

Mr. WARREN. I can’t—and in fact, nobody—if someone sat here 

and guaranteed, you should haul them out of here— 

Mrs. WALORSKI. All right. Do you personally, sir, do you personally feel responsible for the fact that we have a Nation of veterans 

that are vulnerable? 

Mr. WARREN. I care deeply that we are not further— 

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Mrs. WALORSKI. Do you feel personally responsible, when you 

leave and check out at night and go home, do you feel responsible 

for the fact that there are various security breaches and our whole 

Nation’s veterans are at risk? 

Mr. WARREN. Ma’am, I go home tired every night for all the 

things that I do. 

Mrs. WALORSKI. Do you feel responsible for all the things that we 

talked about here today? 

Mr. WARREN. Ma’am, I’m personally responsible for the organization as the Acting CIO. 

Mrs. WALORSKI. Thank you. 

I yield back my time to Dr. Roe. 

Mr. ROE. Just a couple of questions, and maybe I got to this before. But are the state actors, is that classified information? Because I’ve seen published reports. I mean, we’ve just had the Chinese in every headline in the world here saying, oh, it’s not a big 

deal, it’s not a big. We know it’s a big deal. So who are the state 

actors? 

Mr. WARREN. Sir, as a young lieutenant, one of the first briefings 

I got when I came onboard was that just because something is published in the press, if you receive a briefing that says it’s classified, 

until the classifying authority says it’s clear, it’s classified no matter what you read. 

Mr. ROE. The briefings you’ve had, I mean, what you’ve got done 

right here, when you determine with what you’re doing that somebody is trying to breach your firewalls and get into data that’s in 

the VA system, that’s classified information, you can’t come here to 

this Committee and say, this is what happened? 

Mr. WARREN. Sir, actually, you had asked me a different question, which was the naming of the actors. We work with Homeland 

Security on our boundary, so they are in constant communication 

with us. They are telling us when they see stuff. We are telling 

them when we see stuff. 

Mr. ROE. We want you to tell us when you see stuff. What’s the 

problem with that? I thought that we all work for the American 

people. 

Mr. WARREN. As do I, sir. 

Mr. ROE. Well, I include you. I said we all. You, me, everybody 

in this room who’s here who’s a public servant works for the American people. They have a right to know who’s trying to get into 

their personal information. I would like to know who’s trying to get 

into the veterans that I serve, the 70-something thousand of them 

that live in northeast Tennessee. 

Mr. WARREN. Congressman Roe, we would be glad to come up 

and give you that private briefing with all of the material you 

would like. 

Mr. ROE. I guess my question is—second question is—why is that 

classified? Why wouldn’t that be public? When people are trying to 

steal from you, we ought to let the people in our country know 

who’s trying to steal our own veterans’ information, I think. I think 

that’s very important to be public. Why are we hiding that? And 

that’s above where you are, I understand that. But that’s a philosophical question. 

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The next question is, is that, when we come back a year from 

now—I’ve been here now 4-1/2 years, and I see problems that linger on and on and on. Are we going to come back 1 year from now 

and have the same conversation? And I totally agree with you, Mr. 

Warren, when you were saying you couldn’t absolutely guarantee. 

I’ve had people come to me when I’m taking them to the operating 

room and say, will you guarantee that I’m going to live through the 

surgery? Well, I can’t guarantee that. I got that. I understand that. 

But with as good a system, can we say a year from now that the 

IG, in fact, who gave a very good report, you will have met those 

metrics that you agree with, and then you all work out if you don’t 

agree with them? 

Mr. WARREN. Sir, I would like to take the 12 to 18 months the 

IG identified. But the intent is to clear as many of those as we can 

in the 12 months with the schedule we’ve given them, and to keep 

moving through those until we’ve cleared them all. 

Mr. ROE. I yield back. 

Mr. COFFMAN. Thank you, Mr. Chairman. 

Mr. Huelskamp. 

Mr. HUELSKAMP. Thank you, Mr. Chairman. 

Mr. Warren, the IG’s testimony outlined some pretty serious deficiencies in the Office of Information and Technology. And according 

to the evidence, VA’s network has been accessed by foreign state 

actors since March 2010. And in that fiscal year, and since then, 

you’ve received a grand total of more than $87,000 in bonuses. Can 

you explain how you merit such a large amount in bonuses? 

Mr. WARREN. Sir, as you’re aware, the way the compensation system works in the Federal Government is a performance plan is laid 

on an employee, as in myself. A supervisor sits down and lays out 

what I expect from you in the year. And based upon how you do, 

there is an appraisal given. 

Mr. HUELSKAMP. So how you did was worthy of $87,000 in bonuses? Is that your understanding? 

Mr. WARREN. I believe, as a result of me exceeding the performance expectations that my leadership have laid on me, I was recognized with performance awards of that amount. 

Ms. HALLIDAY. Okay. I’d like to ask a question as well, that you 

did state there were no absolutes in your mind in security. But we 

do have a letter here, a very absolute statement from your boss, 

the Secretary, that says, quote, ‘‘To be clear, VA’s security posture 

was never at risk.’’ 

Is that a true or false statement? 

Mr. WARREN. I would tell you, sir, as the person who ghost wrote 

that memo, in terms of doing the staff work for the Secretary, I 

was not clear in my language and I take ownership of that. 

Mr. HUELSKAMP. Is it true or false? 

Mr. WARREN. It is true with respect to the ATO process, which 

this memo was trying to answer. With respect to the broader question, as we’ve already talked about today, there always is some 

risk. And so again— 

Mr. HUELSKAMP. Is this a false statement then? 

Mr. WARREN. I would not say it was a false statement, sir. 

Mr. HUELSKAMP. It’s an inadequate statement? A mistake? 

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Mr. Lowe, let me ask you a question: Have you ever brought to 

Mr. Warren’s attention that there are significant security issues 

that need to be addressed? 

Mr. LOWE. Congressman, thank you. 

Have I ever brought attention to Mr. Warren that there are significant security issues that need to be addressed? No, sir, I have 

not. 

Mr. HUELSKAMP. You have not? 

Mr. LOWE. I have not. 

Mr. HUELSKAMP. Usually, I try to anticipate an answer. And to 

anticipate an answer that in your job you have never identified a 

single security risk really strains credibility. Your own testimony. 

So you’ve never sent an email, never made a statement to Mr. 

Warren or his superiors that there are any security risks in the IT 

system at the VA? 

Mr. LOWE. I brief Mr. Warren and the Secretary frequently on 

security risks for the organization. 

Mr. HUELSKAMP. Do you know how many foreign state actors 

have been identified as perhaps intruding upon the system? 

Mr. LOWE. I know that there are foreign state actors that are— 

Mr. HUELSKAMP. Do you know how many have you identified? Is 

there one or more? 

Mr. LOWE. Individual state actors? 

Mr. HUELSKAMP. The Individual states. It’s a pretty clear question. 

Mr. LOWE. Yes, sir. 

Mr. HUELSKAMP. Have you identified more than one? 

Mr. LOWE. Yes, sir. 

Mr. HUELSKAMP. How many more? Mr. Warren said there was 

only one, in his earlier testimony. How many more were identified? 

Mr. LOWE. How many more state actors that are actively trying 

to penetrate the network or actors that have penetrated— 

Mr. HUELSKAMP. I’m guessing there will be a second round of 

questions, so it probably doesn’t help to try to stall. Would you answer the question? How many more? 

Mr. LOWE. Sir, I have been in this position for approximately 90 

days. I’m still trying to ascertain the state of the organization. 

Mr. HUELSKAMP. Have you seen any memos that would identify 

more than one? 

Mr. LOWE. More than one— 

Mr. HUELSKAMP. State actor. You believe there’s more than one. 

Mr. Warren stated there was only one. You believe there’s more 

than one. I am asking how many more? 

Mr. LOWE. I don’t know the answer off the top of my head, sir. 

If I could get back to you on the record, I would appreciate it. 

Mr. HUELSKAMP. Well, I will note for the Committee I’ve had a 

grand total of, I believe 23 questions. I’ve been waiting for 264 days 

for your agency to respond. As Dr. Roe mentioned, we’re supposed 

to be working for the American people. And when your agency, 

your bosses refuse to answer questions, it looks like you’re covering 

things up. When you say there’s one state actor, he says there’s 

more, he’s only been here for 90 days, we’ve got a report from the 

people that work for you, Mr. Warren—you know this report. You 

know there’s eight actors identified on here. And you claimed 

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there’s only one in your earlier testimony. I think that’s embarrassing. It’s not only embarrassing, you’re sworn under oath. So I’m 

going to ask you one more time, how many state actors have you 

identified or believe are out there that have accessed the system 

for 20 million veterans and their dependents? 

Mr. WARREN. Congressman Huelskamp, I believe that question is 

directed to myself? 

Mr. HUELSKAMP. Is your name Mr. Warren? Answer the question, please. Let’s get on with it. We’re doing the business of answering questions. Please answer them. I come from Kansas. We 

don’t go through all this trying to act like we don’t know what the 

question is. I asked your name. Answer the question. 

Mr. WARREN. I would tell you that the Department, through the 

NSOC, is aware of multiple state actors who are trying to take action against the Department. 

And I will tell you it is more than just state actors. It is very 

known in the community that it is more than countries. There are 

syndicates who have this as a money-making activity. And I believe 

that’s also in the open press in terms of it’s not just countries, it’s 

individuals, it’s groups of individuals. And it is not just veteran 

data they’re going after, they go after your home, your home computer, Web sites you go to. And there is a very aggressive effort, 

and I know that Congress is engaged in terms of what’s notification, what you should notify, how we share, and how do we do all 

those things. 

Mr. HUELSKAMP. But you’re comfortable with the current security risk? 

Mr. WARREN. I am not comfortable with the current security risk, 

sir. And again, I will tell you the safest computer is the one you 

don’t hook up to the Internet. 

Mr. COFFMAN. Mr. Huelskamp, we’ll do a second round. 

Mr. HUELSKAMP. Thank you, Mr. Chairman. 

Mr. COFFMAN. Mr. Warren, so we know that we’ve been hacked 

by a foreign actor, we know that, the VA system. We know that 

they encrypted their way out, exiting. So we don’t know what they 

took. We know that the system contains the personal identification 

information for about 20 million veterans. So isn’t it possible that 

they could have taken all of that—that there is an entity, having 

hacked our system, that has all the personal identifying information for all our 20 million veterans? Isn’t that correct? 

Mr. WARREN. Sir, I am very concerned about stringing all those 

facts together and stating a causality. In other words, this, this, 

this, this means. 

Mr. COFFMAN. Well, okay, let’s walk through it then. 

Number one, our system has been hacked, correct? 

Mr. WARREN. We are aware of incidents— 

Mr. COFFMAN. That’s right. Number two, that they encrypted— 

that they penetrated the system, and they encrypted on their way 

out, so we don’t know what files they took. Is that correct? 

Mr. WARREN. In the incident referred to, there was data removed 

that was encrypted, yes, sir. 

Mr. COFFMAN. So we don’t know what files they took, correct? 

Mr. WARREN. We do not know what files they took out of the VA. 

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Mr. COFFMAN. Had access to information pertaining to our 20 

million veterans, did they not? 

Mr. WARREN. I would tell you, sir, that is the point where I diverge, because it’s not clear where they had access, right. So you’re 

assuming the VA is a small place with one computer. 

Mr. COFFMAN. You’re right, we don’t know. That’s the problem. 

We don’t know. That’s right. And so the fact is that they had access 

to the 20 million veterans. Aren’t you concerned about that? 

Mr. WARREN. Sir, I am concerned any time veterans’ data is put 

at risk. 

Mr. COFFMAN. Don’t you feel that the veterans of this country— 

I being one of them, and there are some other veterans on this 

Committee—ought to be warned of that fact? 

Mr. WARREN. I believe you are accomplishing that through this 

hearing, sir. 

Mr. COFFMAN. Should you have accomplished that? 

Mr. WARREN. To what end, sir? To drive veterans away from the 

health care they need, the mental health care they need? 

Mr. COFFMAN. To inform them that they need to watch out, the 

fact their—that the system had been compromised, just as any private entity that had been compromised would notify the consumers 

that they serve. You, in fact, had an obligation to notify the consumers that you serve. That’s the men and women that served this 

Nation in uniform. 

Mr. WARREN. Yes, sir, as I did. And any time there is the potential where we believe there is the potential of a breach, we offer 

credit monitoring— 

Mr. COFFMAN. There was a breach. 

Mr. WARREN. We offer credit monitoring for a year. We have a 

hotline to provide those services to individuals. In the past, we 

have received emails from Homeland Security— 

Mr. COFFMAN. Ranking Member Kirkpatrick. 

Mrs. KIRKPATRICK. I yield back. 

Mr. COFFMAN. Mr. Lamborn. 

Mr. LAMBORN. Thank you, Mr. Chairman, and once again, thank 

you for your leadership on this issue. 

Mr. Warren, it was testified under oath by the previous panel 

that when you own the domain controls you own the network and 

that that is what happened at the VA. Would you agree with that 

statement? 

Mr. WARREN. I would tell you, sir, that when you have the domain controllers you can go where you would like. That is not necessarily the same as owning the network. Owning the network 

means you control what anybody does or anybody can do and 

where all the traffic goes. That is not the case. 

Mr. LAMBORN. But if you are looking for information and you can 

go wherever you want to go, that is a pretty bad situation. 

Mr. WARREN. As I believe I have—yes, sir. 

Mr. LAMBORN. Can you tell me about the APO process, the certification process? I hope I am using the right terminology. 

Mr. WARREN. Yes, sir. The authority to operate process is something that was established I think approximately in 2002 by the EGov Act. It was a paper process that was used, very routine eyes, 

very checklist focused, very document oriented, to if you are bringVACREP180 with DISTILLER

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ing a system online, are you putting it in a box and controlling all 

of the boundaries on the box in such a way that it was worth the 

risk to the organization for the system to run. 

Mr. LAMBORN. Okay, thank you. So if you go to a vendor or if 

you go to someone in the VA and say I want you to certify that everything is working properly and is secure, how long would it normally take them to do that? 

Mr. WARREN. So that the ATO process is actually an ongoing 

process. Multiple documents are on different schedules on when 

they are generated and when they are updated. As an example, 

COOP/COG, which deals with what do you do if a system breaks, 

that gets checked and exercised on an annual basis, and in fact 

every year the IG comes in and looks at have you done that? That 

is a part of that. There is a system security plan which is the description of it. There is the security controls in terms of what you 

are doing. There are the management controls in terms of what you 

put in place because technology can’t do it. And there is a whole 

list of documents that you run through. Each of those are on a different schedule. So when you talk certifying, there are multiple 

steps in the process. 

Mr. LAMBORN. Okay. What would be a normal range of high-end 

and low end of how long that certification would take? 

Mr. WARREN. Sir, if you are referring to the last two steps, which 

I take it you are, which is the individual looking at all of the material that exists and asking is it relevant and correct and then recommending authorization, I believe you can do that in 2 weeks to 

30 days if you have a well-run organization. 

Mr. LAMBORN. Two weeks to 30 days. 

Mr. WARREN. For the last two steps of the process. As I said, all 

of the other ones are ongoing. Those last two steps are validating 

that the individuals below, the information security officer, the system owner, the facility, have actually done all the things and certified, attested that all of the information is correct, that it is current. So that certification process is not a go do a lot of work. It 

is make sure all the folks below you, all the processes you are responsible for, have happened. 

Mr. LAMBORN. So if you accepted certifications like that in that 

2 weeks to 30 days or 2 months process, then you would also be 

trusting that everything before those last two steps had been accomplished on an ongoing and regular basis? 

Mr. WARREN. Yes, sir. You count on the signature of the individual and the attestation they have done their job. And I will tell 

you, when we did that first cycle, of the 268 documents that were 

signed, I rejected over 40 percent because when I looked at the underlying documentation, which is how I do things, it did not meet 

the standard and I sent them back to be redone. So the certifier 

said yep, it is ready, but when I did that first set, 44 percent did 

not meet it. 

Mr. LAMBORN. So you would not accept an ATO without all of the 

previous steps having been done on an ongoing basis up to the last 

two steps and then reviewing it once again for those last two steps? 

Mr. WARREN. Yes, sir. 

Mr. LAMBORN. And you would not rush something through just 

to look good or something like that? 

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Mr. WARREN. Sir, my signature means a heck of a lot to me, so 

when I sign something saying that I am accepting the risk, I am 

accepting that risk. So I believe I laid out a responsible time period 

for something to be done and I had an expectation that the individual would have done all the things necessary such that when it 

got to me that it needed to be done. And in fact the action was 

given in November in a meeting where the individual accepted the 

responsibility to do the job by February. It had been talked about 

prior to that in multiple meetings about the need to fix that process. I was expecting at the end of the process that all of the things 

they were responsible for had happened. And even though they 

were, I still checked and rejected the ones that did not meet the 

standard. 

Mr. LAMBORN. All right. Thank you. 

Mr. COFFMAN. Mr. Warren, a quick question. Did you mislead 

the Secretary of Veterans Affairs when you had inserted the language in the letter that was sent to me on May 14th, ‘‘To be clear, 

VA security posture was never at risk.’’ Did you mislead the Secretary? 

Mr. WARREN. Mr. Chairman, I did not intend to mislead the Secretary. 

Mr. COFFMAN. But you did? 

Mr. WARREN. I don’t believe I did. 

Mr. COFFMAN. You did? 

Mr. WARREN. I believe my answer was within the context of the 

question which was dealing with the ATO process. 

Mr. COFFMAN. Dr. Roe. 

Mr. ROE. Just very briefly. Mr. Warren, one of the things that 

is most important I think at the VA or with anyone in health care 

is trust. You have to trust not only the person that is seeing you, 

providing the care, but you have to trust that that information will 

be protected. Because many times it could be very embarrassing if 

something had occurred to you years ago that maybe current family members, other people don’t know about, right now the relationships you have had, issues that come along, mental health care 

issues. That is why it is so—not just money, but that is why that 

is important. 

And I guess a question that I have, and the VA has not done an 

exemplary job, in 2006 with the laptop it took forever to notify people. Secondly, when the issue came along with the colonoscopies, 

that wasn’t handled very well by the VA. And I don’t think that 

veterans right now understand, as a matter of fact I guarantee you 

they won’t until they see this hearing today and the word gets out 

among the veteran community that all of their personal information potentially is at risk. 

I guess the question I have for you is, are you concerned at all 

about your data in the VA, if you go to the VA, about your own 

personal information, you? 

Mr. WARREN. Sir, I have no reservation about using VA benefits 

or services, placing the data, my data in the veterans’ hands, into 

my staff’s hands, into the rest of the VA. I believe we would be 

doing a disservice to our veterans by telling them, hey, there is a 

disproportionate risk and therefore you should not be coming to the 

VA for those services or benefits. 

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We know health care, and as you have already talked about in 

other settings about mental health care and making sure our veterans get that, I would hate that this, the potential to drive folks 

away from the services and the benefits not only that they have 

earned but they need. 

Mr. ROE. But equally just as bad is to have that information once 

she have shared it with somebody, shared with the world, I think 

Mr. Lamborn said in a WikiLeak drop. I think the most compelling 

thing you said, and I have to agree with you the more I hear in 

these hearings I go to, is don’t hook up a computer to the Internet 

if you don’t want somebody to know about it. Apparently if you 

can’t protect it, I mean that is what you said just a minute ago, 

whether you said that just out of exasperation or fact, but I think 

when you hook it up, you may be now, you may be an open book. 

Mr. WARREN. I would tell you, sir, and it is a great area where 

we focus and it is the training of our workforce, our greatest asset 

and our greatest risk is our employee base, because if you do something without thinking, if you do not think about where you go— 

in other words, if you go out to the Internet and you say ‘‘free car,’’ 

and you go to that Web site to get that free car, you are actually 

downloading probably malicious software. 

Within the VA, we protect against that. But when you are at 

home, if you go to the wrong place or your child goes to the wrong 

place or a visiting sibling or niece, you are putting that computer 

at risk, right? And one of the programs that we have at the VA is, 

we don’t allow you to hook your personal commuter up to the VA. 

We actually allow you to come into the VA through a virtual environment so you don’t bring any of the things you have on your 

home computer. 

In fact, at the Federal Trade Commission before the virtual technology had really matured, we paid for anti-virus protection for individuals’ personal computer because we knew if they had to use 

it to get into the VA through remote or into the Federal Trade 

Commission. 

At the VA we don’t have to do that because we protect by doing 

virtual. But the behaviors that we build at the VA we want them 

to take home, because if you are at home dealing with identity 

theft because you did a bad thing unintentionally, you really can’t 

do your job at the VA as a result of it. 

Active aggressive education. Posters. Some of the things that we 

have been exploring with, and we did it at the Federal Trade Commission, is you do spooks, right? You send individuals email at 

work intentionally, bad stuff, right, and you want them to basically 

do it. And you pop up and say don’t do this for real, because this, 

if this had been a real one, you would have just compromised your 

system. 

Mr. COFFMAN. Mr. Walz. 

Mr. WALZ. I yield back my time, Mr. Chairman. 

Mr. COFFMAN. Mr. Huelskamp. 

Mr. HUELSKAMP. Thank you, Mr. Chairman. I apologize for my 

emotion earlier. I have a 95-year-old veteran uncle, a Purple Heart 

recipient who is facing some medical problems and the thought 

that his records might be at risk is particularly worrisome to me. 

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But I have a few more follow-up questions for Mr. Warren and his 

assistant on some budget issues. If I understand correctly, the VA intends to transfer almost $69 

million to various IT efforts. Is any of that money destined for IT 

security? 

Mr. WARREN. Sir, so I can make sure I am answering the question appropriately, is that referring to a reprogramming action that 

was sent up to the Hill, or is this something else? 

Mr. HUELSKAMP. That would be a reprogramming. 

Mr. WARREN. This would be the reprogramming. I need to go 

back and confirm which accounts were being moved. I do not believe—in fact, I am pretty sure that that transfer would not be degrading any of the efforts we are doing in information security; 

that the work that we need to do to continue CRISP and to support 

the work on the material weakness that the IG has identified— 

Mr. HUELSKAMP. Is it enhancing your IT security efforts? 

Mr. WARREN. I would tell you every day we are working on enhancing our— 

Mr. HUELSKAMP. With this transfer, are you moving money to 

enhance the IT security? 

Mr. WARREN. The primary purpose of those dollars, sir, that 

transfer, is to move accounts, move dollars out of different accounts— 

Mr. HUELSKAMP. Are you using it for enhancing IT security? Yes 

or no. 

Mr. WARREN. I will need to go back and confirm if we are moving 

funds into the information security accounts. I can’t tell you that 

directly here, but I will get back to you, sir. 

Mr. HUELSKAMP. The second budget question would be, it is my understanding under your direction, the VA spent $14 million for 

a conference room, approximately $14 million for a conference room 

in Martinsburg, Virginia. Is that accurate? 

Mr. WARREN. Sir, I would need to take that one for the record. 

The number I believe is high, but I need to go back and pull the 

records up to confirm. 

Mr. HUELSKAMP. When you say high, is that in the ballpark? 

Roughly? I appreciate getting the actual figures, but your best 

guess is how much was spent on this conference room? 

Mr. WARREN. Sir, the reason I would like to take the question 

for the record is Martinsburg is a facility that has multiple conference facilities in it. It is a place where we have the NSOC in 

terms of our security group. So I don’t know if it is facilities we 

built for them. There is a location for the Secretary and the leadership team. I don’t know if it refers to that. We also have a command post for the IT organization in case we deploy there. So I 

don’t know which one you are speaking to, so that is why I would 

like to take it for the record. 

Mr. HUELSKAMP. There is one here. It would be the one room 

that has a plaque on the wall with your name on it. And I don’t 

know if we have a copy of that. That would be the plaque that is 

on the wall. So if you are going to look for the room—is it customary in the VA to put your name on a plaque on a wall? 

Mr. WARREN. Sir, that is actually the plaque to the building, and 

I was the responsible official that worked with the Congress to get 

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the funding for that location. And I believe if you look in any new 

building that has been built, the names of the individuals responsible normally appear on the plaque. 

Mr. HUELSKAMP. I would say actually say put about 300 million 

taxpayers on there as the ones responsible for the building. 

The last thing I want to ask you about, you mentioned credit 

monitoring services. 

Mr. WARREN. Yes, sir. 

Mr. HUELSKAMP. Who do you provide those to? 

Mr. WARREN. We provide those in any case where we believe 

there is the potential for the release of veterans data. 

Mr. HUELSKAMP. So you do that on an individual— 

Mr. WARREN. On an individual basis. A letter is sent out to each 

of the veterans where— 

Mr. HUELSKAMP. Do you know how many you have provided this 

for? 

Mr. WARREN. I will take that for the record and get it back to 

you, sir. 

Mr. HUELSKAMP. Okay. So you actually have identified individuals you believe their data is at risk and provided them credit monitoring services if they so choose? 

Mr. WARREN. Any time we believe there is the potential of the 

information being released, we offer the credit monitoring protection to those veterans. 

Mr. HUELSKAMP. Okay. And I understand you don’t believe anything is actual, you don’t have actually any loss of data. It is all 

potential. 

Mr. WARREN. I will tell you, sir, we go the extra distance by offering that. We actually have a lower threshold for offering than 

anybody else because we want to be sure— 

Mr. HUELSKAMP. You know that how? 

Mr. WARREN. Based upon our communication with the industry 

and conversations with folks who offer credit monitoring. I am not 

sure you will find other government agencies who offer credit monitoring if there is the potential of a risk. I think the VA is unique 

in that regard. 

Mr. HUELSKAMP. I look forward to that information, the exact 

numbers of folks you have identified potentially at risk. 

Mr. WARREN. Yes, sir. 

Mr. HUELSKAMP. Thank you, Mr. Chairman. I yield back. 

Mr. COFFMAN. Potentially, I think that number is about 20 million. Mr. Warren, thank you so much for your testimony today. Mr. 

Lowe, you are excused, both of you. Thank you. Stay around. I 

think if we have time we will do that classified setting after Mr. 

Davis gives testimony. 

On the last panel today is Mr. Jerry Davis, former Deputy Assistant Secretary for Information Security for the Office of Information and Technology at the Department of Veterans Affairs. 

Before I recognize you, Mr. Davis, I ask that you please rise and 

raise your right hand. 

[Witness sworn.] 

Mr. COFFMAN. Please take your seat and you will be recognized 

for 5 minutes, Mr. Davis. 

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STATEMENT OF JERRY L. DAVIS, FORMER DEPUTY ASSISTANT 

SECRETARY FOR INFORMATION SECURITY, OFFICE OF INFORMATION AND TECHNOLOGY, U.S. DEPARTMENT OF VETERANS AFFAIRS 

Mr. DAVIS. Chairman Coffman, Ranking Member Kirkpatrick, 

and Members of the Subcommittee, thank you for the opportunity 

to convey my concerns to you regarding the protection of information systems and information, which includes sensitive veteran 

data at the Department of Veterans Affairs. 

From August 2010 until February 2013 I have served as the Deputy Assistant Secretary Information Security and Chief Information Security Officer at the VA. As the DAS IS, I served as the 

most senior civil servant staff member within VA with responsibility for oversight and accountability and the protection of VA information, VA privacy, records management, and the Freedom of 

Information, FOIA, Act process. 

At that time, the time of my departure from VA in early February 2013, I was one, if not the longest serving chief information 

security officer in the Federal Government, with nearly a decade of 

service in that role spread across multiple Federal agencies. I am 

also a Marine veteran, having served in combat with distinction 

during the first Gulf War, so the appointment to the position as the 

VA CISO had special meaning. It was a position that I did not take 

lightly and I was and I still am extremely proud to have had an 

opportunity to serve our country, and equally proud to have had an 

opportunity to serve the veteran community. 

My time at VA was largely filled with a great sense of pride because of the purpose and mission of VA and because of my role, 

which had a direct and positive impact on the veteran community. 

However, there came a time at the end of my tenure where my 

pride turned to serious consternation, and that consternation remains to this day. 

In nearly 20 years of building and managing security programs 

across government and private industry, I have never seen an organization with as many unintended security vulnerabilities. Upon 

my arrival in late August 2010, I inherited results of more than 15 

continuous years of an unintended and documented material weakness in IT security controls. This material weakness included more 

than 13,000 uncompleted IT security corrective actions. These 

13,000 corrective actions will require more than 100,000 sub-actions to fully remediate and manage IT security vulnerabilities and 

improve the VA security posture. In early September 2010, I was 

also advised that nearly 600 VA systems’ Authority to Operate had 

expired and there was no plan in place to bring these systems into 

compliance. 

Despite the voluminous number of uncompleted corrective actions and expired ATOs, the most concerning issue was a conversation I had with the VA Principle Deputy Assistant Secretary Steph 

Warren, who told me shortly after my arrival that we have 

uninvited visitors in the network. Further discussion with the VA 

network security operations team indicated that VA became aware 

of a serious network compromise in March 2010 and these 

uninvited visitors were nation-state sponsored attackers. 

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Over the course of time while working with the VA NSOC and 

external agencies I learned that these attackers were a nation-state 

sponsored cyber espionage unit and that no less than eight different nation-state sponsored organizations had successfully compromised VA networks and data or were actively attacking VA networks, attacks that continue at VA to this very day. 

These group of attackers were taking advantage of weak technical controls within the VA network. Lack of controls such as 

encryption on VA data bases holding millions of sensitive records, 

web applications containing common exploitable vulnerabilities, 

and weak authentication to sensitive systems contributed to successful unchallenged and unfettered access and exploitation of VA 

systems and information by this specific group of attackers. 

During my tenure, I consistently ensured that each instance of 

attack or compromise by these group of attackers was documented 

and communicated to the VA OIT leadership through specialized 

reporting called Key Investigative Reporting performed by the 

NSOC Deep Dive analysis team and biweekly security meetings 

with the VA Principle Deputy Assistant Secretary, Mr. Steph Warren. 

From late August 2010 until my departure in early February 

2013, I planned for and executed with support from various sub offices within OIT a series of initiatives and activities needed to improve network and system security with the particular focus on defending the network against sophisticated and targeted attacks levied by nation-state sponsored organizations. Some of these initiatives included a web application security program, the VA software 

assurance program, continuous monitoring and diagnostics of VA 

information systems, mandating encryption of all VA databases, 

and supported the reduction of the total number of VA databases 

hosting sensitive veteran information. 

During my tenure as CISO, with the support of VA as a whole, 

we were able to close more than 10,000 of the 13,000 security corrective actions. In all, VA personnel executed more than 100,000 

sub actions. While these actions did improve security from a compliance perspective, there still existed a problem of fully implementing adequate technical security controls needed to defend network systems and system information from nation-state sponsored 

attackers. 

The heart of selecting the proper technical controls meant fully 

understanding the threat actors, their tactics, techniques and procedures, and along with systems and network vulnerabilities in implementing a program that could continuously report on and remediate identified vulnerabilities in a near realtime fashion. 

Over time, the Office of Information Security worked to enhance 

a comprehensive program called Continuous Monitoring and 

Diagnostics that would provide adequate security of VA systems 

and networks by continually evaluating certain technical controls 

in a near realtime fashion. There is proof that a good CMD program monitoring the correct controls can significantly improve information security and is consistent with the direction that the 

Federal Government is taking in securing Federal systems. It is 

also significantly superior to even a good paper-based ATO process. 

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It is my testimony that at the time of my departure from VA that 

the process required for the DAS IS to make an attestation that 

VA systems were adequately secure was completely faulty and improper and implementation of the process veteran systems and VA 

information to further risk of compromise. It was confirmed to me 

by the VA information security staff charged with executing the 

process that it was flawed, provided no value, and that providing 

a positive attestation to the adequacy of security controls would seriously compromise the integrity of the VA security program. I subsequently conveyed this message to the Assistant Secretary and the 

PDAS by formal memorandum and in conversation to the PDAS between January 15, 2013, and January 23, 2013. 

VA Handbook 6500.3 states that the DAS is responsible for reviewing all C&A packages and making a decision recommendation 

to the authorizing official to issue an IATO, ATO or Denial of Authorization to operate; and providing an IATO extension in the 

event local management can demonstrate continuous monitoring 

and security due diligence are being provided. 

In accordance with VA information security policy and following 

VA information security procedures as a DAS IS, I elected to recommend a denial of Authority to Operate and also elected to recommend movement of VA systems over the course of eight months 

into an enhanced continuous monitoring program where systems 

technical controls can be centrally managed and evaluated in a 

near realtime fashion. I based my decision on the guidance provided by the information security team on the fact that the paperbased process would not keep highly sophisticated nation-state 

sponsored attackers from further compromising VA data. 

Furthermore, as each VA system was transitioned into the continuous monitoring program, additional specific critical controls 

would be evaluated for adequacy before being fully granted a full 

ATO. These additional critical controls are proven to slow and repeal sophisticated nation-state sponsored attackers from compromising information systems and data. This was an agreed upon 

process with the VA information security team and a process that 

had been briefed by me to the Director of IT Audits and Security 

within the VA Office of the Inspector General several weeks before 

the process implementation. 

Despite the authority granted to the DAS IS, to make the recommendation to deny authorization, the VA OIT PDAS made a 

concerted effort to circumvent my authority and influence my decision to make a recommendation to the accrediting official that 545 

VA systems be given an interim authority to operate. Furthermore, 

VA handbook and policy 6500.3 and VA policy 6500 provides no 

role or authority for the PDAS, OIT with regard to the program or 

processes governing authority to operate. 

To this end, I would recommend to this Subcommittee some recommendations. Review all key investigation reports and Deep Dive 

analysis reports and Web Application Security Program reports to 

assess the damage and depth of exposure, extent of compromise to 

VA systems and compromise to Veteran information, and regularly 

report to the House Committee on Veterans Affairs on progress 

made with respect to mitigating access to VA systems and veteran 

information by nation-state sponsored organizations. 

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Assess previously identified web application exposures and assess for potential compromise of veteran data, both PII and PHI. 

Include web application exposures as part of the Data Breach 

Core Team evaluation process. 

Assess the potential compromise to non-VA networks sharing an 

interconnection with VA’s networks. 

Designate the VA network as a compromised environment and 

establish controls that are effective and support the reclamation of 

control back to VA from nation-state sponsored organizations. 

Move the VA systems into a full continuous monitoring and 

diagnostics program with near realtime situation awareness of a 

security posture with a focus on the 20 critical controls. 

Increase VA funding for VA security programs and number of information security officers supporting VA field offices and facilities. 

Move reporting lines for the DAS Information Security directly to 

the Assistant Secretary OIT or to the Office of the Secretary, VA. 

Assess the past and present practices of the OIT leadership with 

regard to decisions made in the protection of VA systems and information. 

I would like to thank the Members of the Subcommittee for your 

time today and I look forward to any questions you may have. 

[THE PREPARED STATEMENT OF JERRY L. DAVIS APPEARS IN THE

APPENDIX]

Mr. COFFMAN. Thank you, Mr. Davis. Mr. Davis, in your experience, what would be the intended use for their access once these 

actors gained access into the network? 

Mr. DAVIS. The actors, once they get inside a network, depending 

on what their goals and objectives are, could be a number of things. 

So initially, once they get inside a network they establish a foothold and that foothold is actually meant and designed to allow 

them access into the network at another given time. So basically 

what they do is, they install backdoors into the network. Once they 

are inside the network and they have established those backdoors, 

they then attempt to move laterally throughout the network by 

compromising passwords, user names and things of that nature, 

and elevating their privileges so they can further move throughout 

the network and start looking at systems to potentially compromise. 

Their long-term objective is to maintain a presence inside the 

network for whatever they need to do. So by maintaining the presence means that they will attack multiple systems, they will continue to steal passwords, user names, things of that nature, so they 

can maintain their presence, and then essentially take whatever 

data that they deem may be important for them. 

Mr. COFFMAN. Mr. Davis, can you elaborate on these nation-state 

attackers? 

Mr. DAVIS. So within VA I saw—we dealt with approximately 

eight different types of attackers or groups or organizations. In 

looking at reporting that was put out by industry experts, particularly a report in February of 2013, Mandiant, they identified 

attackers coming from the People’s Republic of China, the People’s 

Liberation Army, and in information that I had at the time and 

looking back when we did the analysis on those individuals, we 

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identified that it was also the same groups. One the groups we 

called were the Comment Crew, and they are known to be sponsored by the People’s Liberation Army. 

Mr. COFFMAN. Mr. Davis, how does an organization defend 

against these sophisticated attackers once they are in the network? 

Mr. DAVIS. Once they are in the network, once you understand 

that they are in the network, you have to do something which I call 

is, you are in a compromised environment. So there is a number 

of things that you need to do to understand how do you reclaim 

that environment. 

The first thing you need to do is identify which systems were 

compromised, do a forensics evaluation if you can on what was actually taken, remove users from resources around the network and 

then do things such as look at what we call indications of compromise. 

So this is basically digital fingerprints that we would have of different groups who have compromised other environments and we 

now have their fingerprints. You will look for these indications of 

compromise and then basically go back and remediate all of those 

areas where you believe the compromise took place or where you 

know the compromise took place. 

So if you know that the compromise was a missing patch, you 

have to start patching past the systems. The problem is, is that 

once you realize that the individuals are in the network, on average, they have already compromised the environment for generally 

up to a year by the time you figured out they have been in the network. So you may go back and patch a particular system, but they 

have already established backdoors elsewhere in the network. So it 

becomes sometimes chasing your tail around and around in circles 

in trying to identify where they are. So you may patch, but they 

will pop up again somewhere else. So it takes over time a number 

of years, months to years, to go through the organization systematically and plug these holes. 

DoD puts out a very good document, it is not classified, it is sensitive but it is the not classified, that is called Operating in a Compromised Environment, and it teaches organizations, it is instructions on how you actually operate in a compromised environment 

and reclaim that environment. 

Mr. COFFMAN. Mr. Walz. 

Mr. WALZ. Thank you, Chairman. Mr. Davis, thank you. Thank 

you for your service both in uniform and after. 

I am going to try and go back at this issue because I think the 

issue of security and veterans security is paramount. The accusations that have been laid out, I am going to get at this and try and 

figure it out. Can you tell me, was this issue over you pointing out 

that there were problems, did that lead to your departure from VA? 

Mr. DAVIS. The problems at VA didn’t lead to my departure. Like 

I said earlier, we had worked through a tremendous number of corrective actions. You know, as I said earlier, I worked through 

about—of the 13,000, we had gotten through about 10,000 of them. 

At that time I felt that the work that I was doing at VA, some 

other opportunities came up. I had an opportunity to move back to 

the West Coast where I am from originally and be closer to my 

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family out there, was part of the reason why I elected to move 

back. 

Mr. WALZ. Because you signed off, if I am right here, in August 

31 of 2011 you did the extensions on the ATOs. 

Mr. DAVIS. That is correct. 

Mr. WALZ. And then again you met with Mr. Warren on November 29th about the expiring ATOs, and then on December 21st you 

informed him of your resignation. It is just personal timing on all 

this, is why this hit like this? 

Mr. DAVIS. Yes, it was the timing. I had actually notified the previous Assistant Secretary Mr. Baker before November that I would 

be departing. I had just had a one-on-one with him and said that 

I have an opportunity to go back to the West Coast. I don’t have 

anything in writing but there has been a formal offer. When I get 

a formal offer— 

Mr. WALZ. This was all prior to December 31st on the expiring 

ATOs. 

Mr. DAVIS. That is correct. 

Mr. WALZ. Why would they have asked you when they knew you 

were leaving, you had already signed on to these, do you think it 

was appropriate at that time? Now, you say, the thing that I am 

going at is under duress. What did they do or ask you to do that 

violated your conscience on this to sign these things? 

Mr. DAVIS. The process to do the Authority to Operate, it is a 

sign-off that says—that gives my attestation that the systems are 

adequately secure. The process is pretty involved and very extensive. So the problem that I had was that the process was asked to 

be short-circuited. In other words, an email had come out from the 

OIT front office indicating that Mr. Warren wanted all the authorities who operate to be signed by the time I left, and that was 2 

weeks. This is January 11th. So my team forwarded that to me— 

Mr. WALZ. Why didn’t you just say no and walk away? Because 

what you are asking here is signing off on a system that is going 

to possibly lead to the breach of this. You knew it wasn’t working. 

You knew that there were violations made. But by putting your 

name on it, it gave the authorization to move it forward. You were 

already leaving your job and had notified them, and then a month 

later a memo is sent, and I am going to get to that in a minute, 

two different ones, and I find out about it here for this hearing. I 

am still trying to get at this. 

Mr. DAVIS. Yes, sir. At that point, I did say no in writing, in 

memorandum form to Mr. Baker, and that would have been on or 

about January 15th, immediately after I became aware that I was 

needed to sign these before I had departed. In the memorandum 

that I sent to Mr. Baker, I said that this is improper because all 

of the activities that are needed to make a decision on authorities 

to operate can’t be done in 2 weeks. I said there is going to be errors and omissions and that it was improper, we would jeopardize 

the integrity of security. 

Mr. WALZ. Did someone threaten you? 

Mr. DAVIS. I wouldn’t say—no one threatened me, but basically 

I was told that I would not be getting—be given a transfer date, 

a transfer date would not be given to the agency that picked me 

up until I signed off on the documentation. 

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Mr. WALZ. Who told you that about the transfer? 

Mr. DAVIS. Mr. Warren. 

Mr. WALZ. Mr. Warren said you would not be given a transfer 

date if you wouldn’t sign on a document that your conscience told 

you was wrong? 

Mr. DAVIS. That is correct. And that was—I contacted the senior 

executive HR because the new organization was contacting me and 

asking me when was I going to be coming on board, because I had 

told them back in December that I would give VA 30 days to work 

through whatever I had left to do and I would be coming on board. 

At this point they are contacting VA. They are asking when am I 

going to get a release date. I contacted HRHCS and I was told that 

Mr. Warren said that you would not be given a release date because you still had a project to finish. 

Mr. WALZ. Did he miss this last paragraph in the memo you gave 

him? The one I have here says I attest that there is a clear and 

present danger and risk of exposure and compromise of the sensitive data. 

He testified under oath that he never got that, that this was 

added to the letter that was sent to Congress on January 28th, and 

on January 29th he got the letter without that there. 

Mr. DAVIS. He did indeed, sir, get a different copy. 

Mr. WALZ. Why a different copy? 

Mr. DAVIS. Let me explain what happened. I originally—that was 

the original letter that I had written, and that letter was on an internal—a letter that was going to VA internally and it had concurrently copied all the Members of Congress. My business office came 

back to me, because we were putting it through the official VA system, my business office came back to me and said we don’t concurrent copy Members of Congress on letters of this type. They get an 

individual memorandum. So I said okay. 

So they went ahead and drafted the individual memorandum in 

the background. Meanwhile, what I did was, I had someone look 

at the letter and they said they didn’t like the language. They said 

I don’t like the language. They said you probably should change 

this language at the bottom. It sounds a little bit dramatic and 

that sort of thing. 

Mr. WALZ. Well, when I read this letter, the most important 

paragraph is the last one. 

Mr. DAVIS. Yes. It was—someone told me that I asked to—the 

person I asked to look at it thought it was overly dramatic. I said, 

you know, this is a dramatic thing, but maybe it is. So I did change 

the letter. But what had happened was I sent that inside, but then 

later on before I left, I had gotten copies of the original letters that 

came up here to the Members of Congress and those had went out. 

Mr. WALZ. Okay, I will yield back. We will wait if there is a second round of questions. 

Mr. COFFMAN. Mr. Lamborn. 

Mr. LAMBORN. Thank you, Mr. Chairman. 

Continuing on these ATOs, Mr. Warren testified that in a well 

run organization you can finish up the last two steps prior to signing off on an ATO in as little as 2 weeks. Now, you did not feel 

that that was appropriate though, and why not? 

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Mr. DAVIS. Because the team that was putting together, which 

was the security team that worked under me that runs the what 

we call assessment and authorization process, they looked at the 

process—they put together the process, looked at it, brought it to 

me and said, sir, do not sign these, the process is not good. But I 

already knew that just by looking at what was coming up to me 

for me to sign that it wasn’t a good process. 

Mr. LAMBORN. So in an ideal situation, if it was a well run organization you could do that. So you are saying it wasn’t a well run 

organization? 

Mr. DAVIS. The ATO process that was taking place at the very 

end was not the general ATO process that we had done in the 2- 

1/2 years that I had been there. It was cut short, very abbreviated, 

to make this 2-week timeframe. And I said there is no way you can 

certify and accredit 600 systems in a 2-week timeframe by going 

through all the controls. 

The bigger problem that I had was there is a checklist, and some 

individuals have already testified to this. That on that checklist we 

were asking people out in the field to validate that the controls had 

not changed. My team that came back to me in reaching out to the 

field, one of the reasons they told me not to sign the document is 

because the individuals who were supposed to sign off on the 

checklist delegated the authority down, down, down into the organization to hurry up and meet the timeframe. 

So you had individuals that had no concept about the security 

posture of the system checking off on this checklist and then sending them up to me for signature, and I just refused to sign them. 

Mr. LAMBORN. Thank you. That is very illuminating, and I am 

sorry that we are even in this posture today. I am sorry that we 

have to have this hearing. 

You mentioned encryption and others have talked about that. 

Was it a negligent practice or a deficient practice not to have veterans’ personal information encrypted so that one of these, up to 

eight state actors or state sponsored or outside actors, had they 

accessed it, it would have been not usable to them? 

Mr. DAVIS. That is correct. Encryption of any sensitive data is a 

general policy. When I got to VA and we started looking, the VA 

policy, which is Directive 6500, encryption on databases was basically optional. So in 2012, I said absolutely not. I am mandating 

that all databases be encrypted because of the issues of individuals 

being in the network who could quite—pretty simply, once you got 

into the database you had everything that you needed. 

Mr. LAMBORN. Now, those of us, some of us anyway on this panel 

have been concerned about what would have been able to be 

accessed. Am I correct in assuming that this would include, of the 

20 million veterans on the system, Social Security numbers and 

names, ages and possibly Social Security numbers of dependents 

and sometimes personal health information? 

Mr. DAVIS. Sure. Some of the systems that were compromised, if 

they had that information in them obviously they would take that. 

In some of the studies that my organization did when we were 

looking at web applications, and web applications that have a database connected to the back end it has veterans’ information, my 

team will run security software tools and it will tell them if that 

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application is vulnerable to attack and how easily it is vulnerable 

and exploitable. 

My team at that time found a number of applications that had 

veteran information, 30 million instances of veteran information 

that was exploitable, and they exploited the system to show that 

it was exploitable inside those systems; Social Security numbers, 

date of birth, so on and so forth. 

Mr. LAMBORN. And what about, and I don’t know if there is going 

to be a second round or not, I may have to pursue this later, but 

what about access to other networks? Like, I know DoD and VA 

interact a lot, at least in the health care issue. What possible access could this allow if someone was controlling VA or at least had 

domain control to get into other networks? 

Mr. DAVIS. As we talked about earlier, the team did these key 

investigative reports, so specifically looking at the nation-state 

sponsored attackers. And one of the compromises that they picked 

up on, this report was right as I was leaving, this came out on January 9th, 2013, there was an incident that took place where the 

team, and I will just kind of read it, it says the teams in turn simply gains initial access to an enterprise via spear pfishing by moving laterally previously through compromised trusted networks. 

I will jump forward in this report, and what they have said is 

that—has targeted and compromised one or more systems within 

the Silver Spring office site code, many of which are virtual private 

network users. Based on information collected from open source intelligence and interviews of targeted users, the Deep Dive analysis 

team considers the Bidirectional Health Information Exchange Program to be a high value target for this team. The BHIE program 

is a joint information technology data exchange initiative between 

the Department of Defense, DoD, and VA. The team may be interested in the data residing in the system and the network interconnections between the VA and DoD allowing this program to 

function or both. 

Mr. LAMBORN. Thank you. 

Mr. COFFMAN. Dr. Roe. 

Mr. ROE. Thank you. A couple of things I want to just go over 

very quickly and then yield my time. In March 2010, these 

uninvited visitors were nation-state sponsored attackers. Over the 

course of time, while working with the VA, the NSOC team and external agents learned that these attackers were a nation-state 

sponsored cyber espionage unit and that no less than eight different nation-state sponsored organizations had successfully compromised VA networks or data or were actively attacking, not necessarily compromised but attacking VA networks, and attacks continue to VA to this day. Is that a correct statement? 

Mr. DAVIS. That is correct. 

Mr. ROE. So to this date, to date perhaps these attacks are taking place. The other question I have is, that I think you just stated, 

and you said the PLA without any hesitation. I guess I would have 

to ask Mr. Warren, why couldn’t he say the PLA? He didn’t mention that. It is not any big secret to anybody. 

Mr. DAVIS. It is in the public domain. 

Mr. ROE. Yes, it is. 

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Mr. DAVIS. And that is what I am going off. I am going off the 

report that came out in the public domain that listed these groups 

of individuals, organizations, and based on that information that is 

in this public domain report, we could accurately say that those are 

the same individuals. Even the nomenclature is the same. 

Mr. ROE. And I am not a technical person so stop me if I am off 

base, but you mentioned that once that system has been compromised, that piece of malware is in the system, there are ways 

you can operate around it. 

Mr. DAVIS. Yes. 

Mr. ROE. But would encryption work once you have been compromised? Once that malware—do you follow me? 

Mr. DAVIS. Right. So it depends on what exactly the malware is 

that they put on the system. Your encryption would be of little 

value to you if—once the malware is on the system, the malware 

can then go out and call down other tools into the environment. 

And some of the tools that they do remotely is they pulled down 

keystroke logging. So if they have those types of tools, a keystroke 

logger on that system, when you go to log in to decrypt, they have 

the decryption password for that system. 

Mr. ROE. So they get your password that way. 

Mr. DAVIS. That is correct. 

Mr. ROE. And do you know that that has happened? When you 

have got the system up now, let’s say you are back there, would 

you know that has happened to you, that they swiped the password? 

Mr. DAVIS. We know that the way these individuals work that 

it is a typical tactic for them to, if they compromise something such 

as a domain controller as was said earlier, or particularly the domain controllers, the domain controller has a file on it called the 

SAM file and that file is the securities accounts manager. In that 

file are all the password accounts for the users in the network. So 

if they have got the domain controller, they will grab the SAM file. 

When they encrypt the information, generally, if it is going out and 

it is encrypted, I know they hit a domain controller. I guarantee 

they probably took the SAM file. They are going to go back, crack 

it later and are going to take every password that was on that system. 

Mr. ROE. So you better change your password pretty often? 

Mr. DAVIS. Yes, you would have to change all the—but the problem is, if you have compromised the domain controller, you have 

to change the password to the domain controller as well because 

they are on a controller. If you are just changing passwords without changing the domain controller, they are just grabbing that as 

it goes along. 

Mr. ROE. Well, I want to thank all of the people here today, Ms. 

Halliday, certainly your team and every one of you. I have learned 

a lot today, and I think we will continue. 

Mr. Chairman, thanks for holding this hearing. 

Mr. COFFMAN. Mr. Huelskamp. 

Mr. HUELSKAMP. Thank you, Mr. Chairman. I just want to follow 

up on a statement that Dr. Roe mentioned in which he stated that 

you learned about these attackers were a nation-state sponsored 

cyber espionage unit with no less than eight different nation-state 

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sponsored organizations. Who told you this, how did you determine 

that, and was that common knowledge in the IT network? 

Mr. DAVIS. It was put together through information that the VA 

Information Security Team, they are called the Enterprise Network 

Defense Team, they put that information together because they 

track, as Mr. Warren stated earlier, they track all these issues 

across the network. They produce these reports. They would send 

them to me and Mr. Warren and a couple other folks and I would 

read through them and work out a plan of action or strategy to 

work through this. 

Mr. HUELSKAMP. So the report you mentioned, which I believe we 

have a copy of, both reports, did Mr. Warren receive these reports 

as well? 

Mr. DAVIS. Yes, he was on that email distribution list. I think it 

was only Mr. Warren, myself and maybe one other person. There 

is like three people. 

Mr. HUELSKAMP. Did you discuss this issue of nation-state sponsored organizations with Mr. Warren? 

Mr. DAVIS. We did from time to time initially when I first came 

on board at VA. He told me that we have uninvited visitors in the 

network. I pretty much knew what that meant. I had dealt with 

it before. And then going on in subsequent talks, from time to time 

I had a biweekly security meeting with Mr. Warren. It would come 

up about these attackers in the network. If we had an incident it 

might be the topic of the day that we had an incident and we are 

trying to work through it. So, yes, we definitely talked about it. 

Mr. HUELSKAMP. And above Mr. Warren, did you discuss with 

any of his superiors about that or did you just leave it in his 

hands? 

Mr. DAVIS. I generally—my reporting line was to Mr. Warren, so 

generally, I didn’t have a great opportunity to talk to folks above 

Mr. Warren. 

Mr. HUELSKAMP. Did you ever email them with the information 

or include them on an email distribution about this issue? 

Mr. DAVIS. No. I just worked directly with Mr. Warren on those 

things. 

Mr. HUELSKAMP. Okay. I think you were here earlier, but a 

statement from Mr. Shinseki indicates that, again to be clear, VA 

security posture was never at risk. Your opinion on that, Mr. 

Davis. Is that an accurate statement? 

Mr. DAVIS. I would say that is not an accurate statement. 

Mr. HUELSKAMP. Okay. Did Mr. Warren ever tell you that was 

an inaccurate statement? Did you ever discuss something along 

those lines? 

Mr. DAVIS. At the time when we were doing the ATOs in the 

memorandum and at the time when he visited my office, I believe 

it was January 22nd, I said that, you know, that the process was 

just bad and basically, as I wrote in the memo, I repeated the 

words that it jeopardized the integrity of the security program. 

Mr. HUELSKAMP. Lastly, I didn’t get a chance to ask questions 

on this issue, but recently it has come up that numerous other Secretary and high level individuals in Washington have at times used 

private apparently non-secure email systems to communicate and 

to conduct business. Do you know if that was occurring at the VA? 

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Mr. DAVIS. I couldn’t say definitely. I would suspect that people 

do do that, but I have no direct knowledge that anybody was doing 

it. I was not asked to investigate or anything like that. 

Mr. HUELSKAMP. Okay. Were there any VA policies about doing 

that? 

Mr. DAVIS. I believe there is a VA policy. I believe it would be 

more on the—possibly on the HR side of the house, but it may also 

be in the security policy, that official business you have to conduct 

using VA provided email systems and things of that nature. But I 

don’t know the exact policy that that would be. But I am pretty 

sure that it is in policy. 

Mr. HUELSKAMP. And then lastly and I will yield back, Mr. 

Chairman, I wasn’t trying to figure out what you were doing on 

personal time, but the testimony you have given sometimes has not 

matched up with earlier testimony as I understood that. Do you 

have any printed out emails or anything in your possession that 

would help establish the veracity of some of the discussions today, 

or is that all retained entirely by the Department? 

Mr. DAVIS. Anything that I have with me, it is free to go to the 

Committee. It is a lot—some of this is off the public Internet and 

some of them are internal VA documentation and email systems information, things like that, that—some of them I would be concerned that where there are system compromise—or system issues, 

exposures of data, that it identifies the particular vulnerability in 

the system. So I would ask that the system piece of it be stripped 

out. 

Mr. HUELSKAMP. I understand. Last, Mr. Chairman, Mr. Davis, 

as I understand it, you have 20 years of experience in the private 

and public sector dealing with system security and it still is your 

recommendation that the VA network should be designated as a 

compromised environment. Is that still your— 

Mr. DAVIS. That is correct. 

Mr. HUELSKAMP. Thank you, Mr. Chairman. I yield back. 

Mr. COFFMAN. Thank you, Mr. Huelskamp. Does anybody have 

any questions they would like to ask? 

Very well. Our thanks. Mr. Davis, thank you very much for your 

testimony today. You are now excused. 

It is obvious from what we have heard here today that VA needs 

to take action to improve its IT security. The Subcommittee looks 

forward to working with VA to address these serious deficiencies 

and ensure that all steps are being taken to safeguard the information of our veterans. In that vein, I ask that in 30 days VA provide 

this Subcommittee a specific plan to address all of its IT 

vulnerabilities. 

I ask unanimous consent that all Members have 5 legislative 

days to revise and extend their remarks and include extraneous 

material. Without objection, so ordered. 

Mr. Weaver, the Committee will be in touch with you to establish 

a date and time for a separate meeting for a classified brief— 

Mr. WARREN. Warren. 

Mr. COFFMAN. Mr. Warren, I am sorry. I was looking at you. Mr. 

Warren, okay. 

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I would like to once again thank all of our witnesses and audience members for joining us today in conversation. This hearing is 

now adjourned. 

[Whereupon, at 5:40 p.m., the Subcommittee was adjourned.] 

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A P P E N D I X 

Prepared Statement of Hon. Mike Coffman, Chairman 

Good afternoon. I would like to welcome everyone to today’s hearing titled ‘‘How 

Secure is Veterans’ Private Information?’’ 

Reports from VA’s Office of Inspector General, private sector consultants brought 

on by VA, and this Subcommittee’s own investigation have revealed tremendous 

problems within VA’s Office of Information and Technology. 

Some of these issues have been made public in Inspector General reports which 

outlined mismanagement of human resources and the lack of much needed technical 

expertise. Other issues have been less publicized, such as those captured in the 

Deloitte (‘‘deep dive’’ that identified gaps in OI&T’s organizational structure and a 

poorly executed business model. 

The latter report recognized the growth of VA by thirty-three percent since 2006; 

growth that is mirrored by the expansion of VA’s computer network. Unfortunately, 

there has not been a comparable growth in the technical personnel needed to manage security of VA’s sprawling network. 

These failures have created problems for both the Department and for veterans. 

The Inspector General substantiated that VA was transmitting sensitive data, including personally identifiable information and internal network routing information, over an unencrypted telecommunications carrier network—both violations of 

Federal regulation and basic IT security. The IG also noted that VA has not implemented technical configuration controls to ensure encryption of sensitive data despite VA and Federal information security requirements. 

Similarly, it is evident that software patches are not up to date across the network, too many users have Administrator access, security software is not up to date 

on older computers, and computer ports are not properly secured. There is little to 

no security of file transfer protocol, and web pages are vulnerable allowing unauthorized access to veterans’ unprotected personal information within the system. 

While these issues alone give cause for grave concern, this Subcommittee’s investigation has identified even greater problems. The entire veteran database in VA, 

containing personally identifiable information on roughly 20 million veterans, is not 

encrypted, and evidence suggests that it has repeatedly been compromised since 

2010 by foreign actors, including in China and possibly in Russia. 

Recently, the Subcommittee discussed VA’s Authorization to Operate, a formal 

declaration that authorizes operation of a product on VA’s network which explicitly 

accepts the risk to agency operations, and was told that ‘‘VA’s security posture was 

never at risk.’’ 

In fact, VA’s security posture has been an unacceptable risk for at least three 

years as sophisticated actors use weaknesses in VA’s security posture to exploit the 

system and remove veterans’ information and system passwords. While VA knew 

foreign intruders had been in the network, the Department was never sure what 

exactly these foreign actors took, because the outgoing data was encrypted by the 

trespassers. 

These actors have had constant access to VA systems and data, information which 

included unencrypted databases containing hundreds of thousands to millions of instances of Veteran information such as veterans’ and dependents’ names, social security numbers, dates of birth, and protected health information. 

Notwithstanding these problems, VA has waived or arbitrarily extended accreditation of its security systems on its network. It is evident that VA’s waivers or extensions of accreditation only ‘‘appear’’ to resolve material weaknesses without actually 

resolving those weaknesses. 

VA’s IT management knowingly accepted the security risks by waiving the security requirements even though such waivers are not appropriate. This lapse in computer security and the subsequent attempts by VA officials to conceal this problem 

are intolerable and I look forward to a candid discussion about these issues. 

I now yield to Ranking Member Kirkpatrick for her opening statement. 

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1 Veteran population estimates, as of September 30, 2012, are produced by the VA Office of 

the Actuary (VetPop 2011). http://www.va.gov/vetdata/Veteran—Population.asp. 

f 

Prepared Statement of Hon. Ann Kirkpatrick 

Thank you, Mr. Chairman. 

As the Department of Veterans Affairs works hard to serve the needs of today’s 

veterans they must work equally hard to protect their personal information. 

Today’s hearing is an attempt to determine whether a veterans’ private information is secure. Mr. Chairman, veterans need to know that when they ask VA for 

the services and benefits they have earned, the information they submit in order 

to get those benefits will not be compromised under any circumstances. 

I hope that the VA came prepared today to provide assurances to Congress and 

veterans that that all their information technology systems are secure. We expect 

VA to also answer our questions directly and honestly. As we get questions from 

veterans in our districts we want to provide complete and honest answers to them. 

Congress received a letter from Mr. Jerry L. Davis, now a former employee at VA, 

who states that ‘‘there is a clear and present danger and risk of exposure and compromise of the sensitive data.’’ I share the Chairman’s concern on whether VA is 

following the required government practices and policies regarding the monitoring 

and remediation of system risk. 

In addition, two OIG reports from 2012 and 2013 raise additional concerns. The 

2012 report questions whether the agency has the proper Strategic Human Capital 

Management program to meet mission-critical system capabilities as VA moves in 

the 21st century. The second 2013 OIG report faults VA for failing to ensure private 

information by not encrypting health data transmitted to outpatient clinics and external business partners. The VA must address the concerns raised and assure veterans who come to VA for assistance that their personal information is secure. 

I want to thank everyone for being here today. I would also like to thank the witnesses for their testimony and for answering our questions about the security of veterans’ private information at the Department of Veterans’ Affairs. 

Thank you Mr. Chairman. I yield back. 

f 

Prepared Statement of Hon. Jackie Walorski 

Mr. Chairman and Ranking Member, it’s an honor to serve on this Committee. 

I thank you for holding this hearing on such an important issue affecting our veterans and their sensitive personal information. 

There are over 22 million veterans who have proudly served this country and who 

we are indebted to for their selfless call to protect the freedoms which we cherish. 1

The fact that the personal information of many of these veterans may have been 

compromised is completely unacceptable. 

The VA’s Office of Information and Technology has proven inept at securing the 

Department’s information systems and has consequentially exposed veteran information. 

Our veterans are comprised of an exceptional group of men and women, including 

their families, who should not live in fear of their private information getting into 

the wrong hands. 

I look forward to working my colleagues and our panelists to establish an immediate plan of action that will address this serious problem. 

Thank you. 

f 

Prepared Statement of Linda A. Halliday 

Mr. Chairman and Members of the Subcommittee, thank you for the opportunity 

to discuss the Office of Inspector General’s (OIG) work regarding the securing of veterans’ private information by VA. I am accompanied by Ms. Sondra McCauley, Deputy Assistant Inspector General for Audits and Evaluations, and Mr. Michael Bowman, Director, OIG’s Information Technology and Security Audits Division. 

BACKGROUND 

Secure systems and networks are integral to supporting the range of VA missioncritical programs and operations. Information technology (IT) safeguards are essenVACREP180 with DISTILLER

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tial due to the wide availability of hacking tools on the internet and the advances 

in the effectiveness of attack technology. Lacking proper safeguards, IT systems are 

vulnerable to intrusions by groups seeking to obtain sensitive information, commit 

fraud, disrupt operations, or launch attacks against other systems. VA has at times 

been the victim of such malicious intent. In the past, VA has reported security incidents in which sensitive information has been lost or stolen, including personally 

identifiable information (PII), potentially exposing millions of Americans to the loss 

of privacy, identity theft, and other financial crimes. The need for an improved approach to information security is apparent, and one that senior VA leaders well recognize. 

In response to the need to improve security controls, VA has made progress defining policies and procedures supporting its Department-wide information security 

program. However, VA continues to face significant challenges implementing effective access controls, configuration management controls, and contingency planning 

to protect mission-critical systems from unauthorized access, alteration, or destruction. VA has taken positive steps to safeguard personal and proprietary information 

used by VA employees and contractors. Key actions have included: 

• Mandating cyber security and privacy awareness training to ensure that VA 

and contract employees are familiar with applicable laws, regulations, and policies. • Reviewing the accuracy of position sensitivity level designations for VA and contract employees. 

• Strengthening its policies and procedures for identifying and reporting incidents 

involving information management and security violations to ensure that the 

incidents are promptly and thoroughly investigated. 

• Establishing a clear chain of command and accountability structure for information security. 

These were good first steps toward improving information security; however, more 

needs to be done. Over recent years, the OIG has conducted a series of reviews to 

help VA overcome its information security challenges by identifying the underlying 

causes for VA’s security vulnerabilities and deficiencies. These include our statutory 

work, reviews of complaints to the OIG Hotline, and proactive reviews of internal 

controls. Our report findings have disclosed a pattern of ineffective information security controls that expose VA’s mission-critical systems and sensitive data to unnecessary risk. We believe our corresponding audit recommendations provide a roadmap for VA to improve the effectiveness of its information security program and 

safeguard the sensitive data needed to support delivery of benefits and services to 

our Nation’s veterans. 

STATUTORILY–REQUIRED REVIEWS 

For more than 10 consecutive years, independent public accounting firms under 

contracts with the OIG identified information technology security controls as a material weakness as a result of their annual audits of VA’s Consolidated Financial 

Statements. Work on these audits supports our annual Federal Information Security 

Management Act (FISMA) assessments. FISMA requires agencies to develop, document, and implement agency-wide information security risk management programs 

and prepare annual reports. FISMA also requires that each year, the OIG assess 

the extent to which VA complies with FISMA’s information security requirements, 

information security standards developed by the National Institute of Standards 

and Technology, and the annual reporting requirements from the Office of Management and Budget. 

In the middle of FY 2012, while our annual FISMA assessment was ongoing, VA 

instituted the Continuous Readiness in Information Security Program (CRISP) to 

ensure continuous monitoring year-round and establish a team responsible for resolving the IT material weakness. As our FISMA work progressed, we noted more 

focused VA efforts to implement standardized information security controls across 

the enterprise. We also saw improvements in role-based and security awareness 

training, contingency plan testing, reducing the number of outstanding Plans of Action and Milestones (POA&Ms), developing initial baseline configurations, reducing 

the number of IT individuals with outdated background investigations, and improving data center web application security. However, the CRISP initiative was not 

launched until March 2012 and the improved processes had not been implemented 

for an entire fiscal year with the opportunity to demonstrate sustained improvements in information security. 

For FY 2012, we provided a draft report to VA for review and comments and we 

expect to issue our report in June 2013. The report will discuss control deficiencies 

in four key areas: 

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Configuration Management Controls are designed to ensure critical systems have 

appropriate security baseline controls and up-to-date vulnerability patches implemented. However, we found: 

• Systems including key databases supporting various applications were not timely patched or securely configured to mitigate known and unknown information 

security vulnerabilities. • Baseline configurations, including implementation of the Federal Desktop Core 

Configuration, were not consistently implemented to mitigate significant system 

security risks and vulnerabilities across the facilities. • Change control policy and procedures for authorizing, testing, and approval of 

system changes were not consistently implemented for the networks and mission critical system hardware and software changes. 

Access Controls are designed to ensure that password standards are consistently 

implemented across the enterprise and that user accounts are monitored to enforce 

minimal access privileges necessary for legitimate purposes and to eliminate conflicting roles. Our FISMA assessment revealed that: 

• Password standards were not consistently implemented and enforced across 

multiple VA systems, including the network domain, databases, and mission 

critical applications. In addition, multi-factor authentication for remote access 

had not been implemented across the agency. • Inconsistent reviews of networks and application user access resulted in numerous generic, system, and inactive user accounts that were not removed and/or 

deactivated from the system, and users with access rights that were not appropriate. • Proper completion of user access requests was not consistently performed to 

eliminate conflicting roles and enforce principles of least system privilege. • Lack of monitoring of access in the production environment for individuals with 

elevated application privileges for a major application. 

Security Management is designed to ensure that system security controls are effectively monitored on an ongoing basis and system security risks are effectively remediated through corrective action plans or compensating controls. We will report 

that: 

• Security management documentation, including the risk assessments and System Security Plans, were outdated and did not accurately reflect the current 

system environment or Federal standards. • Background reinvestigations were not performed timely or tracked effectively. 

In addition, personnel were not receiving the proper level of investigation for 

the sensitivity levels of their positions. • Scheduled completion dates for POA&Ms were updated without written justification and supporting documentation was not adequate to justify POA&M 

closures. 

Contingency Planning Controls ensure that mission-critical systems and business 

processes can be restored in the event of a disaster or emergency. However, we determined that: 

• Contingency plan documentation had not been updated to reflect lessons 

learned from the contingency and disaster recovery tests, and detailed recovery 

procedures for all system priority components had not been documented and/or 

did not reflect current operating conditions. 

• Backup tapes were not encrypted prior to being sent to offsite storage at selected facilities and data centers. 

More importantly, we continue to identify significant technical weaknesses in 

databases, servers, and network devices that support transmitting sensitive information among VA’s Medical Centers, Data Centers, and VA Central Office. Many 

of these weaknesses are due to inconsistent enforcement of an agency-wide information security program across the enterprise and ineffective communication between 

VA management and the individual field offices. Therefore, VA needs to improve its 

monitoring process to ensure controls are operating as intended at all facilities and 

communicate security deficiencies to the appropriate personnel to implement corrective actions. 

We have identified and reported deficiencies where control activities were not appropriately designed or operating effectively. The dispersed locations, the continued 

reorganization of VA business units, and the diversity in applications adversely affected facilities and management’s ability to consistently remediate IT security deficiencies agency-wide. For example, VA’s complex and dispersed financial system arVACREP180 with DISTILLER

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chitecture had resulted in a lack of common system security controls and inconsistent maintenance of IT mission-critical systems. Consequently, VA continues to 

be challenged by a lack of consistent and proactive enforcement of established policies and procedures throughout its geographically dispersed portfolio of legacy applications and newly implemented systems. In addition, VA lacks an effective and consistent corrective action process for identifying, coordinating, correcting, and monitoring known internal security vulnerabilities on databases, web applications, and 

networks infrastructures. 

Our FY 2012 FISMA report will include 27 current recommendations to the Acting Assistant Secretary for Information and Technology for improving VA’s information security program. The report also highlights five unresolved recommendations 

from prior years’ assessments for a total of 32 outstanding recommendations. Overall, we are recommending that VA focus its efforts in the following areas: 

• Addressing security-related issues that contributed to the IT material weakness 

reported in the FY 2012 audit of the Department’s consolidated financial statements. 

• Remediating high-risk system security issues in its Plans of Action and Milestones. 

• Establishing effective processes for evaluating information security controls via 

continuous monitoring and vulnerability assessments. 

We continue to evaluate VA’s progress during our ongoing FY 2013 FISMA audit 

and acknowledge increased VA efforts to improve information security, but we are 

still identifying repeat deficiencies, albeit to a lesser extent. This fall, upon completion of our FY 2013 FISMA testing and related work, we will make a determination 

as to whether VA’s improvement efforts are successful in overcoming the IT material weakness. 

OTHER REPORTS RELATED TO INFORMATION SECURITY 

Over the past 2 years, we have issued a series of audits and reviews that have 

identified VA’s information security controls deficiencies. Our reports disclosed a 

number of issues, including ineffective management of systems interconnections and 

sensitive data exchanges, delayed contractor background investigations, and inadequate access controls that placed sensitive veterans’ data at unnecessary risk. 

Review of Alleged Transmission of Sensitive VA Data Over Internet Connections 

In March 2013, we substantiated an allegation made through the OIG Hotline 

that VA was transmitting sensitive data, including PII and internal network routing 

information, over an unencrypted telecommunications carrier network. VA Office of 

Information Technology (OIT) personnel disclosed that VA typically transferred 

unencrypted sensitive data, such as electronic health records and internal internet 

protocol addresses, among certain VA Medical Centers and Community Based Outpatient Clinics using an unencrypted telecommunications carrier network. OIT management acknowledged this practice and formally accepted the security risk of potentially losing or misusing the sensitive information exchanged. 

VA has not implemented technical configuration controls to ensure encryption of 

sensitive data despite VA and Federal information security requirements. Without 

controls to encrypt the sensitive VA data transmitted, veterans’ information may be 

vulnerable to interception and misuse by malicious users as it traverses 

unencrypted telecommunications carrier networks. Further, malicious users could 

obtain VA router information to identify and disrupt mission-critical systems essential to providing health care services to veterans. 

VA acknowledged transmitting PII over privately segmented networks to support 

service to veterans. VA concurred with our recommendations to improve the protection of sensitive data transmitted over the unencrypted carrier networks and implement configuration controls to ensure encryption of such data. VA clarified that it 

employs an industry telecommunications carrier network to provide a segmented 

network for transmitting PII, but noted that these network links are not currently 

employing encryption controls to protect sensitive data. 

VA did not agree with the assertion that PII and internal network routing information were being transmitted over unsecured internet connections. However, based 

on interviews with OIT personnel at VA Medical Centers as well as information provided by the OIG Hotline complainant, we maintain that PII and router information 

were being transmitted unencrypted through a telecommunications carrier that also 

provided internet services to customers outside of VA. Nonetheless, we commend 

OIT for performing a review of the locations associated with the Hotline complaint 

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works from internet connections. We recognize that industry telecommunications 

carriers can segment data traffic from unsecured Web connections. However, we believe the risk remains that sensitive VA data and router information can be compromised when it is transmitted across unencrypted telecommunications carrier networks outside of VA’s span of technical control. More specifically, the network alone 

does not provide encryption, integrity, or authentication protections for the transmission of sensitive data and such services may be vulnerable to denial of service 

or sniffing attacks by malicious users. The Assistant Secretary for Information and 

Technology acknowledged these information security risks by stating OIT will review technical network communications practices across the enterprise and take corrective actions without hesitation. 

Audit of VA System Interconnections With Research and University Affiliates 

In October 2012, we reported on the effectiveness of VA’s management of network 

interconnections and sensitive data exchanges with its research and university affiliates. Our audit disclosed that VA has not consistently managed its systems interconnections and data exchanges with its external research and university affiliates. 

Despite Federal requirements, VA could not readily account for the various systems 

linkages and sharing arrangements. VA also could not provide an accurate inventory of the research data exchanged, where data was hosted, or the sensitivity levels. In numerous instances, we identified unsecured electronic and hardcopy research data at VA Medical Centers and co-located research facilities. 

We determined that VA’s data governance approach has been ineffective to ensure 

that research data exchanged is adequately controlled and protected throughout the 

data life cycle. VA and its research partners have not consistently instituted formal 

agreements requiring that hosting facilities implement controls commensurate with 

VA standards for protecting the sensitive data. The responsible Veterans Health Administration program office’s decentralized approach to research data collection and 

oversight at a local level has not been effective to safeguard sensitive VA information. Because of these issues, VA data exchanged with its research partners was 

considered to be at risk of unauthorized access, loss, or disclosure. 

VA has the opportunity to further serve veterans by supplying the patient and 

medical data needed to achieve advancements in medical research and health care 

services. However, providing such sensitive data through electronic or hard copy 

means without effective information security controls and oversight has left the data 

susceptible to unauthorized access, loss, or disclosure. Leaving hosting facilities responsible for data governance at the local level without coordinated involvement of 

all stakeholders has proven ineffective and improvements are needed. 

Establishing formal information security agreements is one method of documenting data sharing agreements and ensuring that hosting facilities institute information security controls commensurate with VA standards. Further, a centralized 

data governance and storage approach would ensure researchers effectively control 

and securely manage sensitive VA research information over the data life cycle. 

Such measures are key to protect veterans’ PII and personal health information and 

promote continued advancements in medical research now and for the future. VA 

generally concurred with our report recommendations. VA is taking corrective actions, however, all recommendations remain open as full implementation has not occurred. 

Review of Alleged Incomplete Installation of Encryption Software Licenses 

In October 2012, we substantiated a Hotline allegation that OIT had not installed 

and activated an additional 100,000 licenses purchased in 2011. As of July 2012, 

OIT officials stated they had installed and activated only a small portion, about 

65,000 (16 percent), of the total 400,000 licenses procured. OIT did not install and 

activate all of the licenses due to inadequate planning and management of the 

project. Specifically, OIT did not allow time to test the software to ensure compatibility with VA computers, ensure sufficient human resources were available to install the encryption software on VA computers, and adequately monitor the project 

to ensure encryption of all VA laptop and desktop computers. 

As such, 335,000 (84 percent) of the total 400,000 licenses procured, totaling about 

$5.1 million in questioned costs, remained unused as of 2012. Given changes in VA 

technology since 2006, VA lacked assurance the remaining software licenses were 

compatible to meet encryption needs in the current computer environment. Further, 

because OIT did not install all 400,000 encryption software licenses on VA laptop 

and desktop computers, veterans’ PII remained at risk of inadvertent or fraudulent 

access or use. 

We recommended the Assistant Secretary for Information and Technology complete an assessment of the encryption software project to determine whether the 

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software was compatible with VA’s operating systems and still met VA needs. Based 

on the assessment, we recommended that VA terminate the project or develop a 

plan, including adequate human resources and project monitoring, to ensure installation and activation of the remaining encryption software licenses. The Assistant 

Secretary for Information and Technology concurred with our finding and recommendations and is taking steps to move forward with the software implementation. 

Review of Alleged Delays in VA Contractor Background Investigations 

In September 2012, we reported on the merits of a complaint regarding ineffective 

VA management of its contractor background investigations. We substantiated that 

VA could improve management of its contractor background investigations. Specifically, VA had a backlog of 3,000 contractor background investigations as of April 

2012, despite process improvements and a reduction in pending cases in recent 

months. VA also inappropriately prohibited contractors from working on awarded 

contracts although VA policy only requires initiating, not fully completing, investigations before contractors could start work. 

According to VA officials, delays occurred due to ineffective management within 

VA’s program office which is responsible for initiating and adjudicating background 

investigations; staff misunderstanding VA’s personnel security requirements and investigative processes; and no effective centralized system to monitor progress in addressing the backlog. In the absence of a system linking contractors needing background investigations with underlying contracts, we could not determine whether 

VA unnecessarily paid for contractors not yet authorized to work on awarded contracts. Nonetheless, VA officials said the backlog adversely affected their ability to 

fully staff major IT initiatives. 

Our report provided several recommendations for improving procedures to reduce 

the backlog of contractor background investigations and implementing a central case 

management system to monitor contractor status and associated costs during the 

background investigation process. VA generally concurred with our findings and recommendations and has reported corrective actions to address them. 

Review of Alleged Mismanagement of the Systems To Drive Performance 

Project 

In February 2012, we reported that VA’s Office of Management did not effectively 

manage the Systems to Drive Performance (STDP) project. We substantiated that 

VA did not adequately protect sensitive VA information from unauthorized access 

and disclosure. Specifically, we determined that more than 20 system users had inappropriate access to sensitive STDP information. On a specific note, VA’s National 

Data Systems Group did not consistently approve requests for user access. Furthermore, project managers did not report unauthorized access as a security event, as 

required by VA policy. Security deficiencies occurred because STDP project managers were not fully aware of VA’s security requirements for system development 

and had not formalized user account management procedures. Inadequate Information Security Officer oversight also contributed to weaknesses in user account management and the failure to report the granting of excessive user rights as security 

violations. As a result, VA lacked assurance of adequate control and protection of 

sensitive STDP data. 

VA concurred with our findings and recommendation to ensure that employees assigned to the STDP project receive the role-based security training needed to address the issues highlighted in the report. Additionally, VA agreed to assign an Information Security Officer to the project to ensure VA’s information security requirements are met. Corrective actions have been taken and these recommendations are 

now closed. 

Review of Alleged Unauthorized Access to VA Systems 

In July 2011, we reported on the merits of an OIG Hotline allegation that certain 

contractors without proper security clearances gained unauthorized access to VA 

networks and Veterans Health Information System and Technology Architecture 

(VistA) systems at multiple VA medical facilities. Our review substantiated the allegation and found that contractors improperly used other employees’ Virtual Private 

Network user accounts to gain unauthorized access to VA systems and networks. 

The review also substantiated that contractor personnel did not obtain appropriate 

background security clearances before gaining access to VA systems and networks. 

Contractors admitted to sharing two of their employees’ user accounts to access VA 

networks on a number of occasions for maintenance and monitoring of contractor 

systems. Further, contractors could not provide evidence that it readily initiated actions to terminate user accounts after the employee’s separation date. 

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VA policy specifically prohibits the sharing of user accounts and requires the closing of user accounts as part of proper user account management. Further, VA policy 

requires VA personnel to regularly review user account access for inappropriate or 

unusual activity and take necessary actions. Contractors stated they did not fully 

understand VA’s information security requirements regarding user account access 

and did not believe additional user accounts were needed. Additionally, VA did not 

actively monitor user account activity or readily communicate with contractors the 

need periodically to identify and terminate unnecessary user accounts. Without effective controls to prevent unauthorized access by contractors, VA information systems and sensitive veterans’ data are vulnerable to increased risks of compromised 

availability, integrity, and confidentiality. The lack of individual accountability over 

user accounts provides ample opportunities to conceal malicious activity such as 

theft or misuse of veterans’ data. VA concurred with our findings and recommendations. However, the report remains open because a key recommendation regarding 

contractor security controls and practices has not been implemented almost 2 years 

after we issued the report. 

CONCLUSION 

Well-publicized information security incidents at VA demonstrate that weaknesses 

in information security policies and practices expose mission-critical systems and 

data to unauthorized access and disclosure. Through its CRISP initiative, VA has 

strengthened its efforts to define policies and procedures supporting its agency-wide 

information security program. However, its highly decentralized and complex system infrastructure poses significant challenges to implementing effective access controls, system interconnection controls, configuration management controls, and contingency planning practices that adequately protect mission-critical systems from 

unauthorized access, alteration, or destruction. Until VA fully implements key elements of its information security program and addresses our outstanding audit recommendations, VA’s mission-critical systems and sensitive veterans’ data remain at 

increased and unnecessary risk of attack or compromise. 

Mr. Chairman, this concludes my statement. We would be happy to answer any 

questions you or other Members of the Subcommittee may have. 

f 

Prepared Statement of Stephen W. Warren 

Introduction 

Chairman Coffman, Ranking Member Kirkpatrick, Members of the Subcommittee: 

thank you for inviting me to testify regarding the Department of Veterans Affairs’ 

(VA) Information Technology (IT) security strategy. I appreciate the opportunity to 

discuss VA’s plans, actions, and accomplishments in IT security. 

Protecting the data that VA holds on Veterans is as important as the Veterans 

themselves. As the committee knows, the Department received a wakeup call from 

the incident in 2006 involving a stolen laptop which contained unencrypted information on over 19 million Veterans. As a result of this incident, VA consolidated its 

disparate IT functions into a single, unified IT organization. This consolidation has 

benefited VA in many ways, especially in terms of strengthening its information security posture. VA’s consolidated IT organization is responsible for protecting Veteran information at 153 hospitals, 853 community-based outpatient clinics, 57 benefits processing offices, and 131 cemeteries and 33 soldier’s lots and monument sites. 

Our network supports over 400,000 users, and over 750,000 devices. 

We remain committed to protecting the information we hold on millions of Veterans and their beneficiaries and more than 300,000 VA employees by providing 

round-the-clock security of VA’s enterprise and infrastructure. The Department fully 

supports the White House’s information security initiatives such as two-factor authentication using HSPD–12 compliant PIV cards, which the VA is in the process 

of implementing. The Department continues to improve the security posture of the 

VA network through our Visibility into Everything initiative, which allows VA to 

see and manage all of its devices and network components in real time. The continuous monitoring program is responsible for checking IT systems and monitoring 

every desktop and laptop computer attached to the VA network. 

To reinforce our commitment to information security, we are fostering a culture 

change to ensure that all users on our system follow all necessary and required IT 

and privacy protection rules. VA launched the Continuous Readiness in Information 

Security Program (CRISP) in 2012 to proactively address process and policy deficiencies and architecture and configuration issues. As part of the CRISP effort, VA 

conducts rigorous vulnerability scanning, continuous monitoring of patching and 

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software inventory, implementing port security, anti-virus services, and encryption 

of non-medical IT laptops. 

Through Web Application Security Assessments, VA is able to identify critical 

vulnerabilities and potential exploits in VA applications that store millions of 

records of sensitive data. The network infrastructure is protected through identification of all network assets and critical database stores, identification of all connections, and providing the Trusted Internet Connection Gateways services for mail, 

content filtering, name resolution and firewall protection. 

In the past year, VA improved its security posture. The Department has ensured 

that over 98 percent of VA staff have received the mandatory information security 

training they need to protect the information of Veterans and their families. We 

have also completed a number of business impact assessments for contingency planning. 

After the 2006 laptop incident, VA worked to ensure its laptop computers were 

encrypted to provide another layer of protection. Currently, over 98 percent of VA’s 

non-medical IT laptops are encrypted. VA has around 2,500 unencrypted laptops remaining and, with the exception of laptops with specific waivers (specific medical 

uses, research laptops using software where encryption would disable the device, 

service/maintenance laptops that do not connect to VA’s network or store sensitive 

information, and laptops purchased by VA and given to Veterans as part of a A rehabilitation program) the Department expects to complete encryption of all laptops 

by June 30, 2013. 

Data Breaches 

The Department has worked hard to regain the trust of Veterans after the stolen 

laptop incident in 2006. VA now has a robust data breach notification process, using 

a Data Breach Core Team (DBCT), which provides advance planning, guidance, 

analysis, and direction regarding the potential loss of Protected Health Information 

(PHI), Personally Identifiable Information (PII), or both. The DBCT serves as the 

decision making body between the functional area(s) affected, VA organizations, and 

external stakeholders. 

The DBCT is made up of representatives from across nearly every part of the VA 

enterprise. When the DBCT determines that a breach is reportable, notification is 

made to the affected individuals and credit monitoring is extended. VA also posts 

a monthly report of data breach notifications on its Web site and holds a press call 

with reporters to discuss the contents of the report. The report is also provided to 

Congress, in addition to a quarterly data breach report. 

VA has become one of the very best large organizations at providing notification 

when a breach occurs. For example, while the HITECH Breach Notification Rule requires covered entities to provide notification within 60 calendar days after discovery of the breach, and the strictest state laws require notice within 45 days after 

discovery of a breach, VA policy requires notification within 30 days. A review of 

VA’s incident tracking system over the current fiscal year indicates that VA takes, 

on average, 25 days to provide notice. VA’s standards and practices exceed even the 

strictest Federal and state laws and policies. 

Conclusion 

Mr. Chairman, VA places the highest priority in safeguarding Veterans’ and employees’ personal information. We are committed to information security, and although work remains, VA has made significant improvements made in the last few 

years and strives to meet the highest standards in protecting sensitive information. 

Thank you for your continued support of Veterans, their families, and of our efforts 

to protect Veterans and their private information. I am prepared to answer any 

questions you and other Members of the Subcommittee may have. 

f 

Prepared Statement of Jerry L. Davis 

INTRODUCTION 

Chairman Coffman, Ranking Member Kirkpatrick and members of the Subcommittee, thank you for the opportunity to convey my concerns to you regarding 

the protection of information systems and information, which includes sensitive Veteran data at the Department of Veterans Affairs (VA). 

From August 2010 until February 2013, I served as the Deputy Assistant Secretary, Information Security (DAS IS) and Chief Information Security Officer (CISO) 

at the VA. As the DAS IS, I served as the most senior civil service staff member 

within VA with responsibility for oversight and accountability in the protection of 

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VA information, VA privacy, records management and the Freedom of Information 

Act (FOIA) process. At the time of my departure from VA in early February 2013, 

I was one, if not the longest serving Chief Information Security Officer (CISO) in 

the federal government with nearly a decade of service in that role spread across 

multiple federal agencies. I am also a Marine Veteran having served in combat with 

distinction during the First Gulf War, so the appointment to the position as the VA 

CISO had special meaning. It was a position that I did not take lightly and I was 

and I still am extremely proud to have had an opportunity to serve our country and 

equally proud to have had a great opportunity to serve the Veteran community. 

My time at VA was largely filled with a great sense pride because of the purpose 

and mission of VA and because of my role, which had a direct and positive impact 

on the Veteran community. However there came a time at the end of my tenure 

where my pride turned to serious consternation and that consternation remains this 

very day. 

SECURITY POSTURE IN 2010: VA’s COPROMISED ENVIRONMENT 

In nearly 20 years of building and managing security programs across government 

and private industry, I had never seen an organization with as many unattended 

IT security vulnerabilities. Upon my arrival in late August 2010 I inherited the results of more than 15 continuous years of an unattended and documented material 

weakness in IT security controls. This material weakness included more than 13,000 

uncompleted IT security corrective actions. These 13,000 security corrective actions 

would require more than 100,000 sub actions to fully remediate and manage IT security vulnerabilities and improve the VA security posture. In early September 

2010, I also was advised that nearly 600 VA systems’ Authority to Operate (ATO) 

had expired and there was no plan in place to bring these systems into compliance. 

Despite the voluminous number of uncompleted corrective actions and expired 

ATOs, the most concerning issue was the conversation I had with the VA Principle 

Deputy Assistant Secretary (PDAS), Stephen Warren, who told me shortly after my 

arrival that ‘‘We have uninvited visitors in the network’’. Further discussion with 

the VA Network Security Operations (NSOC) team indicated that VA became aware 

of a serious network compromise in March 2010 and these ‘‘uninvited visitors’’ were 

nation-state sponsored attackers. Over the course of time while working with the 

VA NSOC team and external agencies, I learned that these attackers were a nationstate sponsored cyber espionage unit and that no less than eight (8) different nation-state sponsored organizations had successfully compromised VA networks and 

data or were actively attacking VA networks; attacks that continue at VA to this 

very day. These groups of attackers were taking advantage of weak technical controls within the VA network. Lack of controls such as encryption on VA databases 

holding millions of sensitive records, web applications containing common exploitable vulnerabilities and weak authentication to sensitive systems contributed to the 

successful unchallenged and unfettered access and exploitation of VA systems and 

information by this specific group of attackers. 

During my tenure, I consistently insured that each instance of attack or compromise by these group of attackers was documented and communicated to the VA 

OIT leadership through specialized reporting called Key Investigative Reporting 

(KIR) performed by the NSOC Deep Dive Analysis (DDA) team and biweekly security meetings with the VA Principle Deputy Assistant Secretary (PDAS), Mr. 

Stephan Warren. 

MITIGATION ACTIVITIES 2010–2013 

From late August 2010 until my departure in early February 2013, I planned for 

and executed with support from various sub offices within OIT a series of initiatives 

and activities needed to improve network and systems security with a particular 

focus on defending the network against sophisticated and targeted attacks levied by 

nation-state sponsor organizations. Some of these initiatives included the Web Applications Security Program (WASP), the VA Software Assurance Program, Continuous Monitoring and Diagnostics (CMD) of VA information systems, and mandating 

encryption of VA databases, and supported the reduction of the total number of VA 

databases hosting sensitive Veteran information. 

During my tenure as CISO, with the support of VA as a whole, we were able to 

close more than 10,000 of the 13,000 security corrective actions. In all, VA personnel 

executed more than 100,000 sub actions. While these actions did improve security 

from a compliance perspective, there still existed a problem of fully implementing 

adequate technical security controls needed to defend networks, systems and sensitive information from nation-state sponsored attackers. The heart of selecting the 

proper technical controls meant fully understanding the threat actors, their tactics, 

techniques and procedures (TTPs) and along with system and network 

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vulnerabilities and implementing a program that could continuously report on and 

remediate identified vulnerabilities in a near real time fashion. 

Over time, the Office of Information Security (OIS) worked to enhance a comprehensive program called Continuous Monitoring and Diagnostics (CMD) that 

would provide adequate security of VA systems and networks by continually evaluating certain technical controls in a near real time fashion. There is proof that a 

good CMD program monitoring the correct controls can significantly improve information security and is consistent with the direction that the federal government has 

taken in securing federal systems. It is also significantly superior to even a good 

paper based ATO process. 

OIT LEADERSHIP DEVIATES FROM ATO PROCESS 

It is my testimony that at the time of my departure from VA that the processes 

required for the DAS, IS to make an attestation that VA systems were adequately 

secure was completely faulty and improper and the implementation of the process 

exposed Veteran systems and VA information to further risk of compromise. It was 

confirmed to me by the VA information security staff charged with executing the 

process that it was flawed, provided no value and that a providing a positive attestation to the adequately of security controls would seriously compromised the integrity of the VA security program. I subsequently conveyed this message to the Assistant Secretary and the PDAS by formal memorandum and in conversation to the 

PDAS between January 15, 2013 and January 23, 2013. 

VA Handbook 6500.3 states that the DAS, IPRM (now called DAS,IS) is responsible for: 

(3) Reviewing all C&A packages and making a decision recommendation to the AO 

to issue an IATO, ATO or Denial of Authorization [emphasis added] to operate; and 

(4) Providing an IATO extension in the event local management can demonstrate 

continuous monitoring and security due diligence are being provided . . . . 

In accordance with VA information security policy and following VA information 

security procedures, As the DAS, IS, I elected to recommend a denial of an authority 

to operate and also elected to recommend movement of VA systems over the course 

of eight (8) months into an enhanced continuous monitoring program, where systems technical controls could be centrally managed and evaluated in a near real 

time fashion. I based my decision on the guidance provided by the information security team and on the fact that the paper based process would not keep highly sophisticated nation-state sponsored attackers from further compromising VA data. 

Furthermore, as each VA system was transitioned into the continuous monitoring 

program, additional specific critical controls would be evaluated for adequacy before 

being granted a full ATO. These additional critical controls are proven to slow and 

repel sophisticated, nation-state sponsored attackers from compromising information 

systems and data. This was an agreed upon process with the VA information security team and a process that had been briefed by me to the Director of IT Audits 

and Security within the VA Office of the Inspector General (OIG) several weeks before the process implementation. 

Despite the authority granted to the DAS, IS to make a recommendation to deny 

authorization, the VA OIT PDAS made a concerted effort to circumvent my authority and influence my decision to make a recommendation to the Accrediting Official 

(AO) that 545 VA systems be given an IATO. Furthermore, VA handbook 6500.3 

and VA policy 6500, provides for no role or authority for the PDAS, OIT with regard 

the program or processes governing Authority to Operate. 

RECOMMENDATIONS 

To this end, I would recommend that this subcommittee: 

1. Review all VA Key Investigative Reports (KIRs) and Deep Dive Analysis (DDA) 

reports and Web Application Security Program reports (WASP) to assess the damage and depth of exposure, extent of compromise to VA systems and compromise of 

Veteran information; and 

2. Regularly report to the House Committee on Veteran Affairs on progress made 

with respect to mitigating access to VA systems and Veteran information by nationstate sponsored organizations; 

3. Assess previously identified web application exposures and assess for potential 

compromise of Veteran data, both PII and PHI; 

4. Include web application exposures as part of the Data Breach Core Team 

(DBCT) evaluation process; 

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5. Assess the potential compromise to non VA networks sharing an interconnection with VA’s network; 

6. Designate the VA network as a ‘‘compromised environment’’ and establish controls that are effective and support the reclamation of control back to VA from nation-state sponsored organizations; 

7. Move the VA systems into a full continuous monitoring and diagnostics program with near real time situational awareness of its security posture with a focus 

on the 20 critical controls; 

8. Increase VA funding for information security programs; and number of Information Security Officers (ISOs) supporting VA field offices and facilities 

9. Move reporting lines for the DAS, IS directly to the AS, OIT or to the Office 

of the Secretary, VA 

10. Assess the past and present practices of the OIT leadership with regard to 

decisions made in the protection of VA systems and information. 

I would like to thank the members of the subcommittee for your time today and 

I look forward to any questions you may have. 

Executive Summary 

At the Department of Veterans Affairs (VA), the Deputy Assistant Secretary for 

Information Security (DAS, IS) is responsible for information security and privacy 

strategy, management, policy, procedures, oversight and reporting. VA handbook 

6500.3, Certification and Accreditation (C&A) of VA Information Systems, Holds the 

DAS, IS responsible for; 

Reviewing all final C&A packages and making a decision recommendation to the AO to issue an IATO [Interim Authority to Operate], ATO [Authority to Operate], or Denial of Authorization to operate . . . ‘‘ and ‘‘Providing an IATO extension in the event local management can demonstrate 

continuous monitoring and security due diligence are being provided . . . ’’ 

Beginning in early 2010 and continuing through late 2012, VA systems had been 

under repeated attacks and data compromised by no less than eight (8) groups of 

well organized and sophisticated nation-state sponsored actors who appear to have 

had unfettered and at times, unchallenged access to VA networks, systems and information. Internal reporting by the Office of Information Security (OIS) to the Principle Deputy Assistant Secretary (PDAS), Office of Information and Technology 

(OIT) kept the PDAS informed of the condition regarding exposures of Veteran 

dated in information systems. This reporting further confirmed to the PDAS by his 

own admission in late 2010 that ‘‘uninvited visitors were in the [VA] network’’ and 

thus continued to be a persistent threat and risk to VA systems and sensitive information and other interconnected non-VA networks. 

Security enhancements and programs put into place by the DAS, IS beginning in 

late 2010 through early 2013, revealed over time that significant amounts of Veteran data was exposed to potential compromise by any attacker from both the Internet and from within the VA network infrastructure. 

Because of unfettered access to VA systems and information by sophisticated 

attackers and lack of adequate controls to ensure protection of Veteran information, 

in January 2013, the DAS, IS operating under the authority of VA policy and 

FISMA, determined that the newly derived C&A process was not proper and inadequate for securing VA systems holding sensitive information. Despite the recommendation from the DAS, IS to the Assistant Secretary, OIT to reconsider an 

IATO using the inadequate process, the PDAS used his official position to influence 

the DAS, IS to sign an attestation that systems were adequately secure for more 

than 250 ATOs, and essentially exposing VA systems and sensitive data to further 

risk of compromise and exposure. 

f 

Questions For The Record 

Letter From: Hon. Mike Coffman, Chairman, Subcommittee on Oversight & 

Investigations, To: VA 

October 22, 2013 

The Honorable Eric K. Shinseki 

Secretary 

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U.S. Department of Veterans Affairs 

810 Vermont Avenue, NW 

Washington, DC 20420 

Dear Mr. Secretary: 

Please provide written responses to the attached questions for record for the Oversight and Investigations Subcommittee hearing entitled ‘‘How Secure is Veterans’ 

Private Information’’ that took place on June 4, 2013. 

In responding to these questions for the record, please answer each question in 

order using single space formatting. Please also restate each question in its entirety 

before each answer. Your submission is expected by the close of business on July 

25, 2013, and should be sent to Ms. Bernadine Dotson at 

Bernadine.dotson@mail.house.gov. 

If you have any questions, please call Mr. Eric Hannel, Majority Staff Director 

of the Oversight & Investigations Subcommittee, at 202–225–3527. 

Sincerely, 

Mike Coffman 

Chairman 

Subcommittee on Oversight & Investigations 

MC/hr 

f 

Questions for the Record from Subcommittee Chairman Mike Coffman 

1. The OIG indicates that IT security has been a material weakness at VA for 

more than 10 years. Why did VA OI&T wait until 2012 to institute a proactive initiative like the Continuous Readiness in Information Security Program (CRISP) to 

try to address this issue? 

2. The OIG’s more recent Semiannual Report states that OI&T has 11 reports 

open containing 60 recommendations with 14 open for more than year. Can you explain why you concur with OIG recommendations but can’t seem to complete the 

actions necessary to close the recommendations? 

• For example, one report will be open for 2 years come July and yet the most 

significant recommendation remains open – which deals with reviewing contractor security controls and practices to ensure compliance with VA’s information security requirements. 

3. What steps is VA taking to eliminate the IT Material weakness in FY 13? 

4. Why does VA have so many repeat findings and recommendations from the 

OIG’s FISMA work? Why has VA not made any significant progress towards eliminating these long standing recommendations? 

5. What actions is VA taking to eliminate the use of clear text protocols used to 

transmit medical information between the VAMCs and the CBOCs over external 

service provider networks? 

6. Based on the information provided in the Deloitte’s deep dive report detailing 

inefficiencies in OI&T operations, what steps will the CIO take to improve delivery 

of IT services? 

7. How will the issuance of the PIV badge affect the ability of the Department 

to respond to Congressional requests, litigation demands, and other similar requests 

to search, decrypt, and release bulk volumes of VA emails? Does the planned rollout of the PIV badge tied to automatic encryption hinder timely responses to such 

requests in any way? 

8. Why is it that the PMAS processes only focuses on meeting milestones and 

schedule but there are no metrics around quality, functionality and customer satisfaction? 

9. The VA regulations on Information Security Matters at 38 CFR Part 75 appear 

to authorize an accelerated response with notice to the subjects of a data breach 

and/or an offer of credit protection services. How many times has credit protection 

service been offered to veterans for FY 2008–2012 and for each such instance, to 

how many veterans were such services offered? Please provide the annual cost for 

credit services for each year between FY 2008–2012. 

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10. Under the regulations at 38 CFR Part 75, if the Secretary determines that 

individual notice is not warranted for a data breach, then an independent risk analysis is required to be performed. How many risk analyses have been performed in 

accordance with these provisions for FY 2008 to present? Please describe each occurrence of such analysis including the findings and conclusions. Please also indicate 

each date and instance in which a data breach was reported to OMB and/or to Congress within FY 2008 to present. 

11. By letter to the committee dated May 14, 2013, you stated: ‘‘To be clear, VA’s 

security posture was never at risk.’’ Please explain how this statement is true given 

the admissions uncovered in the hearing that systems and networks had been 

breached by foreign state actors and the testimony of OIG that, at one point, there 

were 4000 open vulnerabilities. If the statement was untrue when made (as it certainly appears), please describe what disciplinary action is being taken for the subordinates responsible. 

12. Reports indicate that VA became aware in January, 2013, of an incident 

where attackers used a spearphishing attack to gain access to a joint VA–DoD network dealing with health data. How many instances have hackers tried to use VA 

networks to gain access to Defense Department computer systems? Please describe 

each instance and what corrective actions were taken in response. 

f 

Questions for the Record from Congressman Tim Huelskamp 

1. I reiterated in my questioning during your testimony, if you could please communicate with the appropriate individual my request for answers to the letters I 

sent to the Department of Veteran Affairs on September 23, 2012 and October 3, 

2012? If you need a copy of those questions, my office would be happy to provide 

those to you. 

2. Your explanation for receiving $87,000 in bonuses was that you met the performance expectations laid out for you by your leadership—could you please provide 

further explanation of those expectations to my office? 

3. Can you please provide information on how data security at the Department 

of Veteran Affairs compares with industry standards outside the federal government? Specifically, please describe the current data encryption process used by the 

Department of Veteran Affairs. 

4. It was stated during the hearing that outside foreign agents have had access 

to information in the Veterans Affairs database. Could you please provide to me detailed information on who has accessed the data, the date(s) it was accessed, and 

what the Department of Veteran Affairs has done to prevent future compromises 

to the system? 

f 

Questions and Responses From: U.S. Department of Veterans Affairs 

Questions for the Record from Subcommittee Chairman Mike Coffman 

1. The OIG indicates that IT security has been a material weakness at VA 

for more than 10 years. Why did VA OI&T wait until 2012 to institute a 

proactive initiative like the Continuous Readiness in Information Security 

Program (CRISP) to try to address this issue? 

VA Response: VA has been taking proactive steps to strengthen IT security for 

many years. Prior to 2006, information technology (IT) at the Department of Veterans Affairs (VA) was decentralized. Among other implications, this decentralization made securing the vast VA enterprise information systems, and thus ending the 

material weakness, virtually impossible. The lack of an ability to address the material weakness in IT was one of the primary reasons the Department, with the help 

of Congress, began to consolidate IT functions into the Office of Information and 

Technology (OIT) in 2006. As a result of IT consolidation, all governance, funding, 

and implementation of IT programs and security controls are managed out of VA 

Central Office (VACO). VA’s consolidation of OIT was not completed until 2009. 

After consolidation, VA managed its information security posture as an IT concern. Prior to 2012, information security was seen by some as only an IT issue. 

Today, VA recognizes information security is a Department-wide concern and responsibility of every single VA employee. In order to bring leadership and field-level 

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focus on the goal of ending the material weakness, the Continuous Readiness in Information Security Program (CRISP) was formed in 2012 under a new innovative 

management methodology. The CRISP effort consolidates all of the disparate material-weakness related initiatives under the leadership of one focused team across 

VA. Moreover, CRISP is more than just a program, but rather is a culture change 

to be embedded throughout the agency. CRISP is steered by VA executive leadership 

and executed by two OIT co-managers. This collaborative approach with senior leader oversight allowed for more consistent communication, implementation, and consolidation of tasks downstream, more accurate reporting and oversight upstream, 

and meant a more agile governance of the program. 

2. The OIG’s more recent Semiannual Report states that OI&T has 11 reports open containing 60 recommendations but can’t seem to complete the 

actions necessary to close the recommendations? 

• For example, one report will be open for 2 years come July and yet the 

most significant recommendation remains open – which deals with reviewing contractor security controls and practices to ensure compliance with VA’s information security requirements. 

VA Response: VA appreciates the work conducted by the Office of Inspector General (OIG) to ensure that the Department is following the correct path in working 

to serve Veterans. VA takes OIG’s recommendations seriously, and where we concur 

with the recommendations, we work to implement the recommendations to OIG’s 

satisfaction as quickly as possible. 

VA’s OIT acknowledges that it has several outstanding recommendations over a 

year old. Many of these recommendations have either been submitted to OIG for closure, or are in the process of being implemented. VA will continue to work with its 

OIG partners to implement and close all outstanding recommendations. 

VA has furnished OIG with what it believes to be responses sufficient to close the 

open recommendation for its oldest reports. 

3. What steps is VA taking to eliminate the IT Material weakness in FY 

13? 

VA Response: VA’s OIT has made strides to improve its information security 

program. While many of the changes in fiscal year (FY)2012 were recognized by OIG 

during the FY 2012 audits, those changes were not in place long enough to assure 

auditors a permanent process had been firmly established. In FY 2013, VA focused 

on the four major areas of repeat material weakness findings which are: Configuration Management, Access Controls, Security Documentation, and Contingency Planning. The CRISP team and VA leadership are optimistic that the progress made 

from FY 2012 have been sustained, and when coupled with the early audit results 

this year, will show positive improvements during the remainder of FY 2013 audit 

results. FY 2013 also includes the introduction of a new office which focuses on 

patch management and baseline configuration management. While this program is 

new to FY 2013, it is demonstrating promise in its effectiveness. 

FY 2014 continues to bring other significant changes in working towards security 

improvement. Some examples of major initiatives include the Department-wide implementation of a Governance, Risk, and Compliance (GRC) tool (begun in 

FY 2013) which will aid in the assessments of the overall security posture within 

VA as well as the funding approval for a Security Information and Event Management (SIEM) tool to provide an audit log and event management oversight capability. 

All of these efforts are in conjunction with VA’s 18-month plan in response to 

OIG’s Federal Information Security Management Act (FISMA) Audit. The plan, provided to OIG and part of their FISMA report, addresses each and every OIG recommendation with a plan to remediate the recommendation at various intervals, 

but no later than 18 months. This plan includes work to complete implementation 

of a risk governance structure, completion of a process for better documenting Plans 

of Actions and Milestones, update system security plans, finish implementing strong 

password requirements on all computers, continue reviewing user accounts for correct level of user access, implement a mechanism for ensuring antivirus definitions 

are installed and up to date, and others. 

4. Why does VA have so many repeat findings and recommendations from 

the OIG’s FISMA work? Why has VA not made any significant progress towards eliminating these long standing recommendations? 

VA Response: As stated above, VA takes OIG’s recommendations seriously and 

is working to implement the recommendations with which VA concurs as quickly as 

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possible, including several targeted efforts as outlined in the 18-month plan to address recommendations in OIG’s FISMA report. Many of the recommendations are 

technical in nature and require extensive research, and detailed implementation 

plans spanning more than a year in order to request closure of the recommendation 

by OIG. All findings have remediation plans either currently in development or execution which will position VA to address OIG’s FISMA recommendations. 

5. What actions is VA taking to eliminate the use of clear text protocols 

used to transmit medical information between the VAMCs and the CBOCs 

over external service provider networks? 

VA Response: OIT does not agree with the conclusion reached by OIG in its recent report regarding data transmission. In its final report, OIG acknowledges that 

VA does not send unencrypted sensitive information over the public Internet. However, VA does not agree with OIG’s assertion in its final report that the manner 

with which VA transmits data over its network necessarily exposes sensitive data 

to non-VA personnel. 

Although OIT does not agree with OIG’s findings in the OIG final report, we concurred with the recommendation to immediately conduct a comprehensive review. 

The information contained in the OIG report is incorrect for the specific network 

links cited in Veterans Integrated Service Network 23, and is inaccurate of the network as a whole. 

VA takes a defense-in-depth approach to the protection of data in flight. 

Encryption is being deployed at the network layer as well as means to encrypt data 

in flight at the application layer. The Department is already approximately two 

thirds done with deployment of a Transmission Control Protocol/Internet Protocol 

(TCP/IP) Layer 3 bulk encryption solution for wide area network (WAN) links to its 

major facilities including medical centers, regional offices, and data centers. This 

would eliminate the passing of ‘‘clear text’’ across those VA WAN links regardless 

of the use of private external service provider networks as an underlying transport. 

Encryption for the links to major facilities is scheduled to be completed by the end 

of the calendar year and the same solution is being extended to the Department’s 

Community-Based Outpatient Clinics. 

In addition to the bulk WAN encryption, there is encryption at the application 

layer in some instances related to the transmission of medical and other sensitive 

data. For terminal emulation sessions to its hospital information systems (VistA), 

for instance, VA uses secure shell which encrypts all traffic transmitted between the 

end user client and the VistA system. For the bulk transmission of VistA data, the 

VistA systems end user clients and other VA servers have the capability to use secure file transmission protocol which encrypts the data in flight. For other types of 

sensitive transmissions, VA staff and systems have standard public key infrastructure (PKI) capabilities to digitally sign and encrypt any transmissions and, for document encryption and user-based controls, VA has Rights Management Services 

(RMS). RMS encrypts documents regardless of where and how they are transmitted 

and controls how the recipient is permitted to handle the document (e.g., whether 

they are permitted to forward it, print it, store it, etc.). VA also uses secure socket 

layer and transport layer security, which encrypts sensitive http transmissions. All 

of these methods are in place and encrypt data transmissions independent of whether or not the underlying network is, itself, encrypted. 

6. Based on the information provided in the Deloitte’s deep dive report 

detailing inefficiencies in OI&T operations, what steps will the CIO take to 

improve delivery of IT services? 

VA Response: VA is working hard to position its IT organization as a product 

and service delivery organization focused on providing quality customer service. VA 

asked for the Deloitte survey to be conducted specifically to help address any existing issues in order to meet the goal of improving customer service. As part of our 

culture of constant measurement and evaluation against goals and objectives, leadership asked for a tough and thorough analysis to evaluate the effectiveness of the 

Service Delivery organization. 

Since the delivery of the Deloitte deep dive report, we have worked on expediting 

initiatives already in place designed to improve service delivery and have begun two 

related efforts to address customer service and communications issues. We are currently exploring ways of accelerating the implementation of the National Service 

Desk, which we believe will streamline and improve our efficiency in capturing 

issues facing our customers so they can be addressed and resolved more quickly and 

analyzed more comprehensively so as to enable proactive efforts to do IT preventive 

maintenance interventions, where necessary. 

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In terms of new efforts, we established a Customer Advisory Tiger Team in April 

2013, comprised of members of field-based employees from the Veterans Health Administration (VHA) and OIT as recommended by the Assistant Deputy Undersecretary for Health and the Acting Assistant Secretary for Information and Technology. 

This tiger team is tasked to explore the impact of OIT organizational initiatives, 

such as the establishment of regional service lines. Recommendations resulting from 

the work of this committee were presented to the Acting Assistant Secretary for OIT 

in August 2013. In addition, we have begun an effort toward enhancing field communications and dialogue between VACO and the field through direct meetings, 

mostly via teleconferencing, with field leadership in the Veterans Benefits Administration (VBA) regional offices, VA medical centers, and National Cemetery Administration offices, working to identify and solve issues identified through focus group 

dialogues and intervention by our customer service improvement council. Using the 

October 2013 VA-wide customer satisfaction survey as a launching point, this program of structured interviews will identify six issues to address nationwide on a 

quarterly basis. The first of several quarterly reports is due at the end of this 

month, and the six initial issues we seek to address were identified in August 2013. 

The investigation process will continue with additional interviews in the next two 

quarters. 

OIT leadership is actively working with field staff to keep communication lines 

open as changes to the organization are developed and implemented. The Acting Assistant Secretary for OIT conducts weekly calls with IT field leadership to keep 

them informed and involved in this significant initiative to transform service delivery at VA. VA will keep the committee informed after recommendations are selected 

for adoption and the initial set of six customer concern issues are selected for resolution. 

7. How will the issuance of the PIV badge affect the ability of the Department to respond to Congressional requests, litigation demands, and other 

similar requests to search, decrypt and release bulk volumes of VA emails? 

Does the planned roll-out of the PIV badge tied to automatic encryption 

hinder timely responses to such requests in any way? 

VA Response: The issuance and use of Personal Identity Verification (PIV) cards 

will improve the security posture of VA by ensuring only authorized employees have 

access to general information systems by requiring a higher level of assurance 

through using multi-factor authentication. Multi-factor authentication and hard PKI 

certificates associated with the PIV card will improve network access and help secure VA and Veteran’s information. The use of PIV cards with hard PKI certificates 

to encrypt/decrypt email complicates the response to e-Discovery request. We have 

several efforts underway to improve our response times when dealing with emails 

encrypted with a hard PKI certificate, as VA understands the importance of complying with such requests. 

8. Why is it that the PMAS processes only focuses on meeting milestones 

and schedule but there are no metrics around quality, functionality and 

customer satisfaction? 

VA Response: The Project Management Accountability System (PMAS) is an 

evolving IT project development methodology and management oversight system. 

From the very inception of PMAS, VA leadership planned to systematically expand 

the scope and function of PMAS over time. PMAS was initially implemented to ensure on-time delivery of IT capabilities. PMAS’ initial focus on schedule was the 

most impactful to reviving the IT delivery rate at VA. However, PMAS continues 

to evolve and now also includes quality, functionality and customer satisfaction elements. 

PMAS Guide 4.0, dated November 7, 2012, establishes current PMAS policy. 

PMAS mandates that IT customers be engaged in the process of identifying the 

functionalities and capabilities that new IT projects are to deliver. Before development of a new IT project begins, as well as during the development process, the customer is intricately involved and their satisfaction is a critical element in the ability 

of that project to continue development. In addition, PMAS requires direct and continual participation by the customer across the entire life cycle of project development via the Integrated Project Team. Specifically, PMAS policy mandates that the 

Project Manager and the customer agree not only on the IT capability to be delivered, but also on the schedule by which the new IT capability is to be developed. 

At the conclusion of each development period, called increments, the customer 

must approve of the capabilities which were delivered. Without this measure of customer satisfaction being achieved, the project cannot continue development. To deliver on time, the capability must be delivered to a production environment by the 

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scheduled increment delivery date, and the customer must agree that the capability 

meets desired functionality and schedule goals. 

Recently, measuring functionality (scope) has also been added to PMAS by capturing function points delivered in an IT project’s increment. Function points measure an amount of business functionality delivered by the IT system to its users. By 

capturing these metrics, analysis can be conducted to also measure the effectiveness 

and efficiency of functionality delivered to the VA enterprise. 

In addition to measuring functionality, PMAS is now able to capture costs per increment by integrating data from the Budget Tracking Tool and PMAS data to 

achieve a cost per increment. 

The PMAS program will continue to mature; the near-future will focus on: ???(1) 

increasing customer satisfaction by assisting the customer in determining and measuring the business value the increment delivers; (2) recognizing and verifying the 

progress toward achieving the customers’ strategic goals and objectives; and (3) determining the quality of the code delivered to production. 

9. The VA regulations on Information Security Matters at 38 CFR Part 75 

appear to authorize an accelerated response with notice to the subjects of 

a data breach and/or an offer of credit protection services. How many times 

has credit protection service been offered to veterans for FY 2008–2012 and 

for each such instance, to how many veterans were such services offered? 

Please provide the annual cost for credit services for each year between FY 

2008–2012. 

VA Response: The following table demonstrates the number of credit monitoring 

offers extended by VA, and the cost to the agency. 

FY Issued Cost 

FY 2009 20,287 97,519 

FY 2010 28,369 148,367 

FY 2011 26,980 74,908 

FY 2012 16,160 39,498 

FY 2013* 11,485 25,156 

*so far through July 

VA has reached out to Veterans Service Organizations to help encourage Veterans 

who are offered credit monitoring to accept the service. 

10. Under the regulations at 38 CFR Part 75, if the Secretary determines 

that individual notice is not warranted for a data breach, then an independent risk analysis is required to be performed. How many risk analyses 

have been performed in accordance with these provisions for FY 2008 to 

present? Please describe each occurrence of such analysis including the 

findings and conclusions. Please also indicate each date and instance in 

which a data breach was reported to OMB and/or to Congress within FY 

2008 to present. 

VA Response: The results of several contracted Independent Risks Analysis’ 

(IRA) VA has conducted are below. The costs for each IRA are at least $29,000 and 

as much as $67,000. In 2012 alone, there were 4,724 incidents. Conducting an IRA 

for each incident would have cost the Government over $136 million. The costs are 

not justified by the results from the IRAs. Of note, VA’s OIG has declined to conduct 

IRA’s as authorized by 38 U.S.C. § 5724(a). 

In order to protect our Nation’s Veterans, VA uses a very low threshold for offering credit protection services when a Veteran’s sensitive personal information is the 

subject of a data breach. All reported incidents are triaged by VA’s Incident Response Team and forwarded to the Department-wide Data Breach Core Team 

(DBCT) to determine when credit monitoring or notification letters are required. 

The DBCT team performs the same function as the IRA at a much lower cost. 

Additionally, the Department routinely performs other monitoring activities to ensure information is protected and has not been compromised, including conducting 

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quarterly generalized data breach analysis on the 20 million Veterans names in the 

Beneficiary Identification Record Locator Subsystem to determine if any anomalies 

indicating identity theft warrant intervention on behalf of the Veteran. If such 

anomalies are detected, individual Veterans are notified by mail. This proactive 

data breach analysis identifies both potential identity theft that may be the result 

of undetected VA data breaches and identity theft unrelated to VA experienced by 

the Veteran population. 

1. April 2008 – An Independent Risk Analysis (IRA) was completed on an incident 

that involved unaccounted for IT Equipment Inventory losses across VA. A reasonable risk of harm was not found. Approximately $53,000. 

2. June 2008 – An IRA was completed on an incident that involved lost CD’s at 

VBA regional offices. A reasonable risk of harm was not found. Approximately 

$29,000. 

3. October 2009 – An IRA was completed on an incident that involved contracted 

transcription services done for various facilities within VHA. A reasonable risk of 

harm was not found. Approximately $67,000. 

4. April 2011 – An IRA was contracted regarding an OIT employee in Fayetteville, 

North Carolina, who was stealing identities. The contract was cancelled in September 2011, after the employee was convicted and the OIG determined the investigation was complete. Credit protection services were provided due to reasonable 

risk of harm. 

11. By letter to the committee dated May 14, 2013, you stated: ‘‘To be 

clear, VA’s security posture was never at risk.’’ Please explain how this 

statement is true given the admissions uncovered in the hearing that systems and networks had been breached by foreign state actors and the testimony of OIG that, at one point, there were 4000 open vulnerabilities. If the 

statement was untrue when made (as it certainly appears), please describe 

what disciplinary actions is being taken for the subordinates responsible. 

VA Response: As has been previously explained to the committee on July 12, 

2013, this statement came in the context of a response to an inquiry on a particular 

topic. On April 25, 2013, VA received a letter from Congressman Coffman asking 

how VA will renew its ‘‘Authorizations to Operate’’ (ATO) various IT systems ‘‘without compromising system security.’’ The Secretary responded to this question in a 

letter on May 14, 2013, outlining the ATO process and stating that through this 

process, ‘‘VA’s security posture was never at risk.’’ As the Acting Assistant Secretary 

for OIT, Mr. Stephen Warren indicated in the testimony at the June 4, 2013, Subcommittee hearing, that specific phrase in the letter was and is clearly referring to 

the context of the letter: The process to approve ‘‘Authorizations to Operate’’ did not 

‘‘compromise system security.’’ The line did not – and was not meant to—imply that 

normal operation of VA systems were never at risk based on other factors. Further, 

as you know, Mr. Warren indicated in the hearing that his office drafted that letter 

for the Secretary’s signature and that in retrospect Mr. Warren believes he could 

have been more clear. Regardless, the sentence is within the context of the ATO situation and responds to Congressman Coffman’s request for assurance that the process of renewing ATOs would not put VA systems at risk. 

12. Reports indicate that VA became aware in January, 2013, of an incident where attackers used a spearphishing attack to gain access to a joint 

VA–DoD network dealing with health data. How many instances have hackers tried to use VA networks to gain access to Defense Department computer systems? Please describe each instance and what corrective actions 

were taken in response. 

VA Response: A response to this question was provided in a briefing to Committee staff on July 12, 2013. VA is bound by agreements with outside agencies to 

not reveal information they report to the department in public documents or settings. This has been explained to committee staff several times. 

Questions for the Record from Congressman Tim Huelskamp 

1. I reiterated in my questioning during your testimony, if you could 

please communicate with the appropriate individual my request for answers to the letters I sent to the Department of Veteran Affairs on September 23, 2012 and October 3, 2012? If you need a copy of those questions, 

my office would be happy to provide those to you. 

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VA Response: VA provided a response to Congressman Huelskamp’s October 3, 

2012, letter on January 24, 2013. A response to Congressman Huelskamp’s September 23, 2012, letter will be provided as soon as it is available. 

2. Your explanation for receiving $87,000 in bonuses was that you met the 

performance expectations laid out for you by you leadership—could you 

please provide further explanation of those expectations to my office? 

VA Response: Mr. Warren met and exceeded the performance expectations set 

by his supervisors. As a Senior Executive, Mr. Warren was responsible for meeting 

the executive core requirements of leading change, leading people, being resultsdriven, exercising business acumen, and building coalitions. Mr. Warren has excelled in these areas as reflected in the performance appraisals. 

3. Can you please provide information on how data security at the Department of Veteran Affairs compares with industry standards outside the 

federal government? Specifically, please describe the current data 

encryption process used by the Department of Veteran Affairs. 

VA Response: Effectively comparing data security at VA to industry standards 

largely depends on what sector of industry is being used for comparison. VA is on 

par with health care providers in terms of data security based on publicly available 

data regarding Health Insurance Portability and Accountability Act reports to the 

Department of Health and Human Services. VA has made great strides in 

encrypting laptops and desktops, having completed approximately 99.6 percent 

encryption of laptops and 70 percent encryption of desktops, with the remainder of 

desktop encryption to be completed by the end of the calendar year. 

4. It was stated during the hearing that outside foreign agents have had 

access to information in the Veterans Affairs database. Could you please 

provide to me detailed information on who has accessed the data, the 

date(s) it was accessed, and what the Department of Veteran Affairs has 

done to prevent future compromises to the system? 

VA Response: A response to this question was provided in a briefing to Committee staff on July 12, 2013. VA is bound by agreements with outside agencies to 

not reveal information they report to the department in public documents or settings. This has been explained to committee staff several times. 

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