Critical Infrastructure Protection: Establishing Effective Information Sharing with Infrastructure Sectors
Published: 2004-04-21T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Critical infrastructure protection (CIP) activities that are called for in federal policy and law are intended to enhance the security of the cyber and physical public and private infrastructures that are essential to our nation's security, economic security, and public health and safety. As our reliance on these infrastructures increases, so do the potential threats and attacks that could disrupt critical systems and operations. Effective information-sharing partnerships between industry sectors and government can contribute to CIP efforts. Federal policy has encouraged the voluntary creation of Information Sharing and Analysis Centers (ISACs) to facilitate the private sector's participation in CIP by serving as mechanisms for gathering and analyzing information and sharing it among the infrastructure sectors and between the private sector and government. This testimony discusses the management and operational structures used by ISACs, federal efforts to interact with and support the ISACs, and challenges to and successful practices for ISACs' establishment, operation, and partnerships with the federal government.
section_title: What GAO Found
paragraphs: Federal awareness of the importance of securing the nation's critical infrastructures--and the federal government's strategy to encourage cooperative efforts among state and local governments and the private sector to protect these infrastructures--have been evolving since the mid- 1990s. Federal policy continues to emphasize the importance of the ISACs and their information-sharing functions. In addition, federal policy established specific responsibilities for the Department of Homeland Security (DHS) and other federal agencies involved with the private sector in CIP. The ISACs themselves, although they have similar missions, were developed to serve the unique needs of the sectors they represent, and they operate under different business models and funding mechanisms. According to ISAC representatives and a council that represents many of them, a number of challenges to their successful establishment, operation, and partnership with DHS and other federal agencies remain. These challenges include increasing the percentage of entities within each sector that are members of its ISAC; building trusted relationships and processes to facilitate information sharing; overcoming barriers to information sharing, clarifying the roles and responsibilities of the various government and private sector entities that are involved in protecting critical infrastructures; and funding ISAC operations and activities. According to a DHS official, these issues are being considered, and the department is developing a plan that will document the current information-sharing relationships among DHS, the ISACs, and other agencies; goals for improving those information-sharing relationships; and methods for measuring progress toward these goals.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the status of private-sector  information sharing and analysis centers (ISACs) and their efforts to help  protect our nation’s critical infrastructures. Critical infrastructure  protection (CIP) activities called for in federal policy and law are intended  to enhance the security of cyber and physical, public and private  infrastructures that are essential to national security, national economic  security, or national public health and safety. Beginning with Presidential  Decision Directive 63 (PDD 63), issued in May 1998, federal policy has  encouraged the voluntary creation of ISACs to facilitate private-sector  participation and serve as mechanisms for gathering, analyzing, and  appropriately sanitizing and disseminating information to and from  infrastructure sectors and the federal government. Subsequent federal CIP  policy, including several national strategies, has continued to emphasize  the importance of the ISACs and their information-sharing functions.  Further, CIP policy has established specific responsibilities for the  Department of Homeland Security (DHS) and other federal agencies with  respect to public/private collaboration to help protect private  infrastructure sectors.
In my testimony today, I will discuss the management and operational  structures used by the ISACs, including their estimated sector  participation, business and funding models, and information sharing and  analysis mechanisms. I will then discuss activities by DHS and other  federal agencies with responsibilities for specific infrastructure sectors to  interact and support the ISACs. Lastly, I will discuss some of the ISAC- identified challenges to and successful practices for their establishment,  operation, and partnership with the federal government.
As agreed, this testimony includes initial results of our ongoing analysis of  private-sector ISACs, which was requested by your subcommittees. In  conducting this work, we contacted officials from the 15 different ISAC  organizations that had been established at the time of our review:  Chemical, Electricity, Energy, Emergency Management and Response,  Financial Services, Food, Information Technology, Multi-State, Public  Transit, Real Estate, Research and Education Networking, Surface  Transportation, Telecommunications, Highway, and Water. Through  structured interviews with these officials, we obtained and analyzed  information to describe the ISACs’ current organization and operational  models, funding mechanisms, sector representation and membership  criteria, as well as their challenges and successful practices in establishing  effective information-sharing relationships within their sectors and with  the federal government. We also contacted officials of the Healthcare  Sector Coordinating Council to discuss their efforts to establish an ISAC  for the healthcare sector. Further, we contacted officials of the ISAC  Council, which was created by 11 ISACs to address common issues, and  we obtained and analyzed its series of white papers on a range of ISAC- related issues and challenges. Within the federal government, we obtained  and analyzed information on efforts to work with the private sector by  DHS and other agencies assigned responsibilities for specific industry  sectors, including the Departments of Agriculture, Energy, Health and  Human Services, and the Treasury and the Environmental Protection  Agency. We did not validate the accuracy of the data provided by the  ISACs, DHS, or other agencies. We performed our work from November  2003 to April 2004, in accordance with generally accepted government  auditing standards.
subsections: section_title: Background
paragraphs: As reliance on our nation’s critical infrastructures grows, so do the  potential threats and attacks that could disrupt critical systems and  operations. In response to the potential consequences, federal awareness  of the importance of securing our nation’s critical infrastructures, which  underpin our society, economy, and national security, has been evolving  since the mid-1990s. For example, Presidential Decision Directive 63 (PDD  63), issued in 1998, described the federal government’s strategy for  cooperative efforts with state and local governments and the private  sector to protect the systems that are essential to the minimum operations  of the economy and the government from physical and cyber attack. In  2002, the Homeland Security Act created the Department of Homeland  Security, which was given responsibility for developing a national plan;  recommending measures to protect the critical infrastructure; and  collecting, analyzing, and disseminating information to government and  private-sector entities to deter, prevent and respond to terrorist attacks.  More recently, HSPD-7, issued in December 2003, defined federal  responsibilities for critical infrastructure protection, superseding PDD 63.
subsections: section_title: CIP Policy Has Continued to Evolve
paragraphs: Federal awareness of the importance of securing our nation’s critical  infrastructures has continued to evolve since the mid-1990s. Over the  years, a variety of working groups has been formed, special reports  written, federal policies issued, and organizations created to address the  issues that have been raised. Key documents that have shaped the  development of the federal government’s CIP policy include:    Presidential Decision Directive 63 (PDD 63),    The Homeland Security Act of 2002,    The National Strategies for Homeland Security, to Secure Cyberspace  and for the Physical Protection of Critical Infrastructures and Key  Assets, and   Homeland Security Presidential Directives 7 (HSPD-7) and 9 (HSPD-9).
Presidential Decision Directive 63 Established an Initial CIP Strategy  In 1998, the President issued PDD 63, which described a strategy for  cooperative efforts by government and the private sector to protect the  physical and cyber-based systems essential to the minimum operations of  the economy and the government. PDD 63 called for a range of actions  that were intended to improve federal agency security programs, improve  the nation’s ability to detect and respond to serious computer-based and  physical attacks, and establish a partnership between the government and  the private sector. Although it was superseded in December 2003 by  HSPD-7, PDD 63 provided the foundation for the development of the  current sector-based CIP approach.
To accomplish its goals, PDD 63 established and designated organizations  to provide central coordination and support, including the National  Infrastructure Protection Center (NIPC), an organization within the FBI,  which was expanded to address national-level threat assessment, warning,  vulnerability, and law enforcement investigation and response.
To ensure the coverage of critical sectors, PDD 63 identified eight  infrastructures and five functions. For each of the infrastructures and  functions, the directive designated lead federal agencies, referred to as  sector liaisons, to work with their counterparts in the private sector,  referred to as sector coordinators. Among other responsibilities, PDD 63  stated that sector liaisons should identify and access economic incentives  to encourage sector information sharing and other desired behavior.
To facilitate private-sector participation, PDD 63 also encouraged the  voluntary creation of information sharing and analysis centers (ISACs) to  serve as mechanisms for gathering, analyzing, and appropriately sanitizing  and disseminating information to and from infrastructure sectors and the  federal government through NIPC. PDD 63 also suggested several key  ISAC activities to effectively gather, analyze, and disseminate  information—activities that could improve the security postures of the  individual sectors and provide an improved level of communication within  and across sectors and all levels of government. These activities are:  establishing baseline statistics and patterns on the various infrastructures;  serving as a clearinghouse for information within and among the various  sectors; providing a library of historical data for use by the private sector  and government, and reporting private-sector incidents to NIPC.
section_title: The Homeland Security Act of 2002 Established the Department’s CIP Responsibilities
paragraphs: The Homeland Security Act of 2002, signed by the President on November  25, 2002, established DHS. To help accomplish its mission, the act  established five undersecretaries, among other entities, with responsibility  over directorates for management, science and technology, information  analysis and infrastructure protection, border and transportation security,  and emergency preparedness and response.
The act made the Information Analysis and Infrastructure Protection  (IAIP) Directorate within the department responsible for CIP functions  and transferred to it the functions, personnel, assets, and liabilities of  several existing organizations with CIP responsibilities, including NIPC  (other than the Computer Investigations and Operations Section).
IAIP is responsible for accessing, receiving, and analyzing law  enforcement information, intelligence information, and other threat and  incident information from respective agencies of federal, state, and local  governments and the private sector, and for combining and analyzing such  information to identify and assess the nature and scope of terrorist threats.  IAIP is also tasked with coordinating with other federal agencies to  administer the Homeland Security Advisory System to provide specific  warning information along with advice on appropriate protective  measures and countermeasures. Further, IAIP is responsible for  disseminating, as appropriate, information analyzed by DHS, within the  department, to other federal agencies, state and local government  agencies, and private-sector entities.
Moreover, as stated in the Homeland Security Act of 2002, IAIP is  responsible for (1) developing a comprehensive national plan for securing  the key resources and critical infrastructure of the United States and  (2) recommending measures to protect the key resources and critical  infrastructure of the United States in coordination with other federal  agencies and in cooperation with state and local government agencies and  authorities, the private sector, and other entities.
section_title: National Strategies Establish Information- Sharing Initiatives
paragraphs: The National Strategy for Homeland Security identifies information  sharing and systems as one foundation for evaluating homeland security  investments across the federal government. It also identifies initiatives to  enable critical infrastructure information sharing and to integrate sharing  across state and local government, private industry, and citizens.  Consistent with the original intent of PDD 63, the National Strategy for  Homeland Security states that, in many cases, sufficient incentives exist  in the private market for addressing the problems of CIP. However, the  strategy also discusses the need to use all available policy tools to protect  the health, safety, or well-being of the American people. It mentions  federal grant programs to assist state and local efforts, legislation to create  incentives for the private sector, and, in some cases, regulation.
The National Strategy to Secure Cyberspace provides an initial framework  for both organizing and prioritizing efforts to protect our nation’s  cyberspace. It also provides direction to federal departments and agencies  that have roles in cyberspace security and identifies steps that state and  local governments, private companies and organizations, and individual  Americans can take to improve our collective cybersecurity. The strategy  warns that the nation’s private-sector networks are increasingly targeted  and will likely be the first organizations to detect attacks with potential  national significance. According to the cyberspace strategy, ISACs, which  possess unique operational insight into their industries’ core functions and  will help provide the necessary analysis to support national efforts, are  expected to play an increasingly important role in the National Cyberspace  Security Response System and the overall missions of homeland security.  In addition, the cyberspace strategy identifies DHS as the central  coordinator for cyberspace efforts and requires it to work closely with the  ISACs to ensure that they receive timely and threat and vulnerability data  that can be acted on and to coordinate voluntary contingency planning  efforts. The strategy reemphasizes that the federal government encourages  the private sector to continue to establish ISACs and, further, to enhance  the analytical capabilities of existing ISACs. Moreover, the strategy  stresses the need to improve and enhance public/private information  sharing about cyber attacks, threats, and vulnerabilities and to encourage  broader information sharing on cybersecurity among nongovernmental  organizations with significant computing resources. The National Strategy  to Secure Cyberspace also states that the market is to provide the major  impetus to improve cybersecurity and that regulation will not become a  primary means of securing cyberspace.
The National Strategy for the Physical Protection of Critical  Infrastructures and Key Assets provides a statement of national policy to  remain committed to protecting critical infrastructures and key assets  from physical attacks. It outlines three key objectives to focus the national  protection effort: (1) identifying and assuring the protection of the most  critical assets, systems, and functions; (2) assuring the protection of  infrastructures that face an imminent threat; and (3) pursuing  collaborative measures and initiatives to assure the protection of other  potential targets. The National Strategy for the Physical Protection of  Critical Infrastructures and Key Assets also states that further  government leadership and intense collaboration between public- and  private-sector stakeholders is needed to create a more effective and  efficient information-sharing process to enable our core protective  missions. Some of the specific initiatives include    defining protection-related information requirements and establishing  effective, efficient information-sharing processes;   promoting the development and operation of critical sector ISACs,  including developing advanced analytical capabilities; improving processes for domestic threat data collection, analysis, and  dissemination to state and local governments and private industry; and   completing implementation of the Homeland Security Advisory System.
The National Strategy for the Protection of Critical Infrastructures and  Key Assets reiterates that additional regulatory directives and mandates  should be necessary only in instances where the market forces are  insufficient to prompt the necessary investments to protect critical  infrastructures and key assets.
section_title: Current Federal Agency CIP Responsibilities
paragraphs: In December 2003, the President issued HSPD-7, which established a  national policy for federal departments and agencies to identify and  prioritize critical infrastructure and key resources and to protect them  from terrorist attack. It superseded PDD 63. HSPD-7 defines  responsibilities for DHS, sector-specific agencies (formerly referred to as  lead agencies) that are responsible for addressing specific critical  infrastructure sectors, and other departments and agencies. It instructs  federal departments and agencies to identify, prioritize, and coordinate the  protection of critical infrastructure to prevent, deter, and mitigate the  effects of attacks.
The Secretary of Homeland Security is assigned several responsibilities,  including    coordinating the national effort to enhance critical infrastructure  identifying, prioritizing, and coordinating the protection of critical  infrastructure, emphasizing protection against catastrophic health effects  or mass casualties;   establishing uniform policies, approaches, guidelines, and methodologies  for integrating federal infrastructure protection and risk management  activities within and across sectors; and   serving as the focal point for cyberspace security activities, including  analysis, warning, information sharing, vulnerability reduction, mitigation,  and recovery efforts for critical infrastructure information systems.
To ensure the coverage of critical sectors, HSPD-7 designated sector- specific agencies for the critical infrastructure sectors identified in the  National Strategy for Homeland Security (see table 1). These agencies  are responsible for infrastructure protection activities in their assigned  sectors, which include    coordinating and collaborating with relevant federal agencies, state and  local governments, and the private sector to carry out their  responsibilities;   conducting or facilitating vulnerability assessments of the sector;    encouraging the use of risk management strategies to protect against and  mitigate the effects of attacks against the critical infrastructure; identifying, prioritizing, and coordinating the protection of critical  infrastructure; facilitating the sharing of information about physical and cyber threats,  vulnerabilities, incidents, potential protective measures, and best  practices; and reporting to DHS on an annual basis on their activities to meet these  responsibilities.
Further, the sector-specific agencies are to continue to encourage the  development of information-sharing and analysis mechanisms and to  support sector-coordinating mechanisms. HSPD-7 does not suggest any  specific ISAC activities.
In January, the President issued HSPD-9, which established a national  policy to defend the agriculture and food system against terrorist attacks,  major disasters, and other emergencies. HSPD-9 defines responsibilities  for DHS, lead federal agencies, or sector-specific agencies, responsible for  addressing specific critical infrastructure sectors, and other departments  and agencies. It instructs federal departments and agencies to protect the  agriculture and food system from terrorist attacks, major disasters, and  other emergencies by  identifying and prioritizing sector-critical infrastructure and key resources  for establishing protection requirements,   developing awareness and early warning capabilities to recognize threats,    mitigating vulnerabilities at critical production and processing nodes,    enhancing screening procedures for domestic and imported products, and    enhancing response and recovery procedures.
In addition, the Secretary of Homeland Security, in coordination with the  Secretaries of Agriculture, Health and Human Services, and other  appropriate federal department and agencies, are assigned responsibilities  including    expanding and continuing vulnerability assessments of the agriculture and    working with appropriate private-sector entities to establish an effective  information-sharing and analysis mechanism for agriculture and food.
section_title: Prior GAO Recommendations
paragraphs: We have made numerous recommendations over the last several years  related to information-sharing functions that have been transferred to  DHS. One significant area of our work concerns the federal government’s  CIP efforts, which is focused on sharing information on incidents, threats,  and vulnerabilities and providing warnings related to critical  infrastructures both within the federal government and between the  federal government and state and local governments and the private  sector. Although improvements have been made in protecting our nation’s  critical infrastructures and continuing efforts are in progress, further  efforts are needed to address the following critical CIP challenges that we  have identified:    developing a comprehensive and coordinated national plan to facilitate  CIP information sharing that clearly delineates the roles and  responsibilities of federal and nonfederal CIP entities, defines interim  objectives and milestones, sets timeframes for achieving objectives, and  establishes performance measures;   developing fully productive information-sharing relationships within the  federal government and among the federal government and state and local  governments and the private sector; improving the federal government’s capabilities to analyze incident, threat,  and vulnerability information obtained from numerous sources and share  appropriate timely, useful warnings and other information concerning  both cyber and physical threats to federal entities, state and local  governments, and the private sector; and   providing appropriate incentives for nonfederal entities to increase  information sharing with the federal government.
section_title: ISAC Structures and Operations Reflect Sector Needs and Evolving Goals
paragraphs: PDD 63 encouraged the voluntary creation of ISACs and suggested some  possible activities, as discussed earlier; however, their actual design and  functions were left to the private sector, along with their relationships  with the federal government. HSPD-7 continues to encourage the  development of information-sharing mechanisms and does not suggest  specific ISAC activities. As a result, the ISACs have been designed to  perform their missions based on the unique characteristics and needs of  their individual sectors and, although their overall missions are similar,  they have different characteristics. They were created to provide an  information sharing and analysis capability for members of their  respective infrastructure sectors in order to support efforts to mitigate risk  and provide effective response to adverse events, including cyber,  physical, and natural events. In addition, the ISACs have taken several  steps to improve their capabilities and the services they provide to their  respective sectors.
subsections: section_title: Management and Operational Structures Vary, but Provide Similar Basic Capabilities
paragraphs: The ISACs have developed diverse management structures and operations  to meet the requirements of their respective critical infrastructure sectors.  To fulfill their missions, they have been established using various business  models, diverse funding mechanisms, and multiple communication  methods.
Business model—ISACs use different business models to accomplish  their missions. Most are managed or operated as private entities, including  the Financial Services, Chemical, Electricity Sector, Food, Information  Technology, Public Transit, Real Estate, Surface Transportation, Highway,  and Water ISACs. Many are established as part of an association that  represents a segment of or an entire critical infrastructure sector. For  example, the Association of Metropolitan Water Authorities manages the  contract for the Water ISAC and the American Chemistry Council manages  and operates the Chemical ISAC through its CHEMTRAC. In addition, the  North American Electric Reliability Council (NERC),  a nonprofit  corporation that promotes electric system reliability and security, operates  the Electricity Sector ISAC using internal expertise.
The legal structure of the ISACs continues to evolve. The Financial  Services ISAC has evolved from a limited liability corporation in 1999 to a  501(c)6 non-stock corporation and is managed by a board of directors that  is comprised of representatives from the Financial Services ISAC’s  members. According to the Financial Services ISAC Board, the change to  be a 501(c)6 non-stock corporation, as mentioned above, was made to  simplify the membership agreement and to make the process for obtaining  public funding easier. The Energy ISAC also changed from a limited  liability corporation to a 501(c)3 nonprofit charitable organization to  eliminate membership barriers.
Also, government agencies have partnered with the private sector to  operate certain ISACs. For example, DHS’s National Communications  Systems/ National Coordinating Center (NCC) for Telecommunications  sponsors the Telecommunications ISAC, which is a government/industry  operational and collaborative body. DHS provides for the  Telecommunications ISAC facilities, tools and systems, the NCC manager,  and the 24x7 watch operations staff. The private sector provides  representatives who have access to key corporate personnel and other  resources. In addition, DHS’s United States Fire Administration operates  the Emergency Management and Response ISAC. New York State, through  its Office of Cyber Security and Critical Infrastructure Coordination, is  coordinating efforts of the Multi-state ISAC. The New York State Office of  Cyber Security and Critical Infrastructure Coordination is currently  studying best practices and lessons learned to assist in developing a  structure that will include representation by member states.
Six of the ISACs included in our study use contractors to perform their  day-to-day operations. According to an Association of Metropolitan Water  Agencies (AMWA) official, they chose a contractor to operate the Water  ISAC because the contractor had the appropriate expertise. In addition,  the contractor’s personnel had government clearances and the ability to  operate a secure communication system and facility. In addition, ISACs  use contractors to supplement their operations. For example, a formal  contract provides for the daily staffing and performance of the Emergency  Management and Response ISAC’s tasks. It chose this model because of  federal requirements and the shortage of positions for federal full-time  employees at the United States Fire Administration. The  Telecommunications ISAC contracted for analysts to operate its 24 x 7  watch operations under the management of a government official.
ISACs also differ in the nature of the hazards that they consider: cyber,  physical, or all hazards (including natural events such as hurricanes). For  example, during events of the power outage in August 2003 and Hurricane  Isabel in September 2003, the Financial Services ISAC was contacted by  DHS to determine the Banking and Finance sector’s preparedness and the  impact of those events. However, the Multi-state ISAC will remain focused  on cyber threats because other state organizations are in place to address  physical and natural disaster events.
Funding—ISACs fund their activities using a variety of methods—fees- for-service, association sponsorship, federal grants, and voluntary, or in- kind operations by existing participants. For example, the Financial  Services, Information Technology, and Water ISACs use a tiered fee-for- service model for members. This model establishes different tiers of  membership based on the level of service provided. These tiers typically  include some basic level of service that is provided at minimal or no cost  to the member and additional tiers that provide—for a fee—more  personalized service and access to additional resources. To help ensure  that cost is not a deterrent to membership and that the ISAC’s coverage of  its sector is extensive, the Financial Services ISAC recently, as part of its  next-generation ISAC effort, shifted to a tiered fee-for-service approach. It  offers five levels of service that vary in cost—Basic (no charge), Core  ($750 per year), Premier ($10,000 per year), Gold ($25,000 per year), and  Platinum ($50,000)—for ascending levels of information and analytical  capabilities. In addition, there is a partner-level license agreement for  select industry associations ($10,000) for distribution to eligible  association members of Urgent and Crisis Alerts. For example, the  Information Technology ISAC recently started to work on a tiered basis  with fees set annually at $40,000; $25,000; $5,000; $1,000; and free. The  Water ISAC also uses a tiered approach, with membership fees ranging  from $7,500 to $750 annually. The Surface Transportation ISAC assesses  an annual fee from its Class I railroad members of approximately $7,500.
Some industry associations that operate ISACs fund them from budgets.  For example, the North American Electric Reliability Council (NERC)  funds the Electricity Sector ISAC, and the American Trucking Association  funds the Highway ISAC from their budgets. The American Chemistry  Council fully funds the Chemical ISAC through the previously existing  Chemical Transportation Emergency Center, known as CHEMTRAC. The  ten trade associations that are members of it fund the Real Estate ISAC.
In addition, some ISACs receive funding from the federal government for  such purposes as helping to start operations, funding memberships, and  providing expanded capabilities. Examples include the following:    The Public Transit ISAC initially received a $1.2 million grant from the  Federal Transit Administration (FTA) to begin operations. Members pay  no an annual fee and there are no membership requirements from the  association that started the ISAC—the American Public Transportation  Association.
For FY 2004, the Water ISAC received a $2 million grant from EPA to cover  annual operating costs, including the expansion of memberships to  smaller utilities.
The Financial Services ISAC received $2 million dollars from the  Department of the Treasury to enhance its capabilities, including  technology to broaden membership service.
The Highway ISAC received initial funding from DHS’s Transportation  Security Administration (TSA) to start the ISAC.
The Energy ISAC received federal grants to assist entities within its  separate sectors to be members.
DHS provides funding for the operation of the Telecommunications ISAC  that is combined with in-kind services provided by the corporate  participants. DHS also fully operates the Emergency Management and  Response ISAC.
States also provide funding for ISACs. For example, the Multi-state ISAC is  funded by and functions as part of the New York State Cyber Security  Analysis Center. In addition, the Research and Education Networking  ISAC is supported by Indiana University.
Sharing mechanisms—ISACs use various methods to share information  with their members, other ISACs, and the federal government. For  example, they generally provide their members access to electronic  information via e-mail and Web sites. For example, the Chemical ISAC  members receive e-mail alerts and warnings in addition to the information  that is posted to the ISAC’s Web site. The Highway ISAC provides  members on its Web site with links to IT resources.
Some ISACs also provide secure members-only access to information on  their Web sites. For example, the Financial Services ISAC’s Web site offers  multiple capabilities for members at the premier level and above,  including, among other things, access to news, white papers, best  practices, and contacts. The Energy ISAC offers its members access to a  secure Web site.
In addition, some ISACs hold conference calls for their members. For  example, the Chemical ISAC holds biweekly conference calls with DHS.  The Financial Services ISAC also conducts threat intelligence conference  calls every two weeks for premier members and above with input from  Science Applications International Corporation (SAIC) and DHS. These  calls discuss physical and cyber threats, vulnerabilities and incidents that  have occurred during the previous two weeks, and they provide  suggestions on what may be coming. The Financial Services ISAC is  capable of organizing crisis conference calls within an hour of the  notification of a Crisis Alert, and it hosts regular biweekly threat  conference calls for remediation of vulnerabilities (viruses, patches).
ISACs also use other methods to communicate. For example, they may use  pagers, phone calls, and faxes to disseminate information. In addition, the  Telecommunications ISAC uses the Critical Infrastructure Warning  Information Network (CWIN). The Financial Services ISAC also sponsors  twice yearly members’ only conferences to learn and share information.
section_title: ISAC Coverage and Participation Varies
paragraphs: According to the ISAC Council, its membership possesses an outreach and  connectivity capability to approximately 65 percent of the U.S. private  critical infrastructure. However, the ISACs use various matrices to define  their respective sectors’ participation in their activities. For example, the  Banking and Finance sector has estimated that there are more than 25,000  financial services firms in the United States. Of those, according to the  Financial Services ISAC Board, roughly 33 percent receive Urgent and  Crisis Alerts through license agreements with sector associations; these  firms account for the vast majority of total commercial bank assets, the  majority of assets under management, and the majority of securities/  investment bank transactions that are handled by the sector, but less than  half the sector’s insurance assets. According to an American Public  Transportation Association official, the Public Transit ISAC covers a little  less than 5 percent of the public transit agencies; however, those agencies  handle about 60 to 70 percent of the total public transit ridership. Further,  according to NERC officials, virtually all members of NERC are members  of the Electricity Sector ISAC. As for the Energy ISAC, officials stated that  its 80-plus members represent approximately 85 percent of the energy  industry. Membership in the Information Technology ISAC also represents  85 to 90 percent of the industry, including assets of Internet equipment  hardware, software, and security providers. For other ISACs, such as  Chemical and Real Estate, officials stated that it is difficult to determine  the percentage of the sector that is included.
Table 2 provides a summary of the characteristics of the ISACs that we  included in our review. In addition to these ISACs, the Healthcare sector is  continuing to organize, including efforts to establish an ISAC. According to   DHS officials, the Emergency Law Enforcement ISAC that was formally  operated by the NIPC and transferred to IAIP is not currently staffed and  will be considered in current efforts to organize the Emergency Services  sector.
section_title: Sector Coordinator Roles Differ
paragraphs: As discussed earlier, federal CIP policy establishes the position of sector  coordinator for identified critical infrastructure sectors to initiate and  build cooperative relationships across an entire infrastructure sector. In  most cases, sector coordinators have played an important role in the  development of their respective infrastructure sectors’ ISACs. In many  cases the sector coordinator also manages or operates the ISAC.
The North American Electric Reliability Council, as sector coordinator for  the electricity segment of the energy sector, operates the Electricity Sector  ISAC.
The Association of American Railroads, as a sector coordinator for the  transportation sector, manages the Surface Transportation ISAC.
The Association of Metropolitan Water Agencies, as the sector coordinator  for the water and wastewater sector, manages the Water ISAC.
In addition, regarding the telecommunications ISAC, sector coordinators  participate as members of the ISAC. For example, the Cellular  Telecommunications and Internet Association, the United States Telecom  Association, and the Telecommunications Industry Association are all  members of the NCC, which operates the telecommunications ISAC. In the  case of the Financial Services ISAC, no formal relationship exists between  the Banking and Finance Sector Coordinator, the Financial Services  Sector Coordinating Council, and the ISAC; however, according to  Financial Services ISAC officials, there is a good relationship between  them.
Other ISACs were created and are operated without a formal sector  coordinator in place, including the Chemical, Emergency Management and  Response, and Food ISACs.
section_title: Council Established to Improve ISACs’ Efficiency and Effectiveness
paragraphs: Eleven ISACs created an ISAC Council to work on various operational,  process, and other common issues to effectively analyze and disseminate  information and, where possible, to leverage the work of the entire ISAC  community. The ISACs initiated this effort without federal sponsorship.  Currently, the participating ISACs include Chemical, Electricity, Energy,  Financial Services, Information Technology, Public Transit, Surface  Transportation, Telecommunications, Highway, and Water. In addition, the  Multi-state and Research and Education Networking ISACs are  participants.
In February 2004, the council issued eight white papers to reflect the  collective analysis of its members and to cover a broad set of issues and  challenges, including    Government/Private-Sector Relations. Explains the need for DHS to  clarify its expectations and to develop roles and responsibilities for the  ISACs.
HSPD-7 Issues and Metrics. Describes specific issues related to the  private sector that DHS should address when responding to HSPD-7.
Information Sharing and Analysis. Identifies future goals that the  ISACs may want to work on achieving, including developing an  implementation plan.
Integration of ISACs into Exercises. Discusses the importance of the  ISACs and the private infrastructure sectors being involved in government  exercises that demonstrate responses to possible incidents.
ISAC Analytical Efforts. Describes the various levels of capabilities that  individual ISACs may want to consider supporting, including cyber and  physical analysis.
Policy and Framework for the ISAC Community. Identifies common  policy areas that need to be addressed to provide effective, efficient, and  scalable information sharing among ISACs and between ISACs and the  federal government.
Reach of Major ISACs. Describes and identifies the degree of outreach  that the ISACs have achieved into the U.S. economy. As of September  2003, the ISAC Council estimated that the ISACs had reached  approximately 65 percent of the critical infrastructures they represent.
Vetting and Trust. Discusses the processes for sharing information and  the need to develop trust relationships among individual ISAC members  and among the various ISACs.
section_title: Federal Efforts to Establish Cooperation and Interaction with the ISACs Continue
paragraphs: As outlined in HSPD-7 and presented in table 1, DHS and other federal  agencies are designated as sector-specific agencies for the critical  infrastructure sectors identified. In addition, DHS is responsible for  coordinating the overall national effort to enhance the protection of the  critical infrastructure and key resources of the United States and has  established organizational structures to address its CIP and information- sharing responsibilities. DHS and the sector-specific agencies have  undertaken a number of efforts to address the public/private partnership  that is called for by federal CIP policy, and they continue to work on their  cooperation and interaction with the ISACs and with each other.
subsections: section_title: DHS Actions to Improve Information-Sharing Relationships
paragraphs: The functions DHS provides to each ISAC differ, and its coordination and  levels of participation vary for each sector-specific agency. However, the  department has undertaken a number of efforts with the ISACs and sector- specific agencies to implement the public/private partnership called for by  federal CIP policy.
DHS has established functions within the department to support the ISACs  and other CIP efforts. IAIP, as the DHS component directly responsible for  CIP activities, carries out many of these functions. The Infrastructure  Coordination Division within IAIP plays a key role in coordinating with the  ISACs concerning information sharing. Nonetheless, ISACs may interact  with multiple components of the department. For example, the ISACs may  discuss cyber issues with the National Cyber Security Division. According  to a DHS official, the department does not intend to establish a single  point of contact for ISACs within the department. Rather, the department  plans to develop policies and procedures to ensure effective coordination  and sharing of ISAC contact information among the appropriate DHS  components. In addition, the Infrastructure Coordination Division is in the  process of staffing analysts who are responsible for working with each  critical infrastructure sector. The analysts would serve as the primary  point of contact for the sectors and would address information sharing,  coordination, information protection, and other issues raised by the  sectors.
Further, according to DHS officials, TSA, within the department’s Border  and Transportation Security Directorate, is working with organizations in  the private sector to establish information-sharing relationships. For  example, Surface Transportation ISAC analysts stated that they have a  good working relationship with TSA, and TSA’s Operations Center has  office space designated for them.
In addition, other DHS actions include the following:    Last summer, DHS, the Department of Agriculture (USDA), and the  Department of Health and Human Services’ (HHS) Food and Drug  Administration (FDA) initiated efforts to organize the agriculture and food  critical infrastructure sectors to raise awareness and improve security  efforts. An introductory conference was held with about 100 leading sector  corporations and associations to make the business case for participating  in CIP efforts, including the importance of enhancing security and sharing  information within the sectors.
In December, DHS hosted a 2-day CIP retreat with ISAC representatives,  sector coordinators, and high-level DHS and White House Homeland  Security Council officials. Participants discussed the needs, roles, and  responsibilities of public- and private-sector entities related to information  sharing and analysis, incident coordination and response activities, critical  infrastructure information requests, and level of DHS funding. During this  retreat, DHS participated in the first meeting of the Operational Clarity and  Improvement Task Group, which was formed by the ISAC Council and  sector coordinators to address the need for a common conceptual  framework and to clarify current and future efforts to protect the nation’s  critical infrastructure.
In January, DHS’s IAIP Directorate held a 2-day conference to describe the  information it is analyzing and the use of that information in the  partnership with the private sector to discuss information sharing between  the federal government and the private sector.
In February, the department established the Protected Critical  Infrastructure Information (PCII) Program, which enables the private  sector to voluntarily submit infrastructure information to the government.  DHS’s IAIP Directorate is responsible for receiving submissions,  determining if the information qualifies for protection and, if it is  validated, sharing it with authorized entities for use as specified in the  Critical Infrastructure Information Act of 2002.
In addition to the efforts listed above, DHS officials stated that they  provide funding to some of the ISACs. For example, DHS has agreed to  fund tabletop exercises for the Financial Services, Telecommunications,  and Electricity Sector ISACs. DHS anticipates that the tabletop exercises  will be completed by August 2004. Also, DHS expects to fund a cross- sector tabletop exercise. According to the Financial Services ISAC,  funding for their tabletop exercise is $250,000.
Another effort that DHS has undertaken is to maintain regular contact  with the ISACs. For example, a DHS analyst specializing in the chemical  sector stated that the Chemical ISAC is in daily contact with DHS and that  it participates in DHS-sponsored biweekly threat meetings. The  department also conducts weekly conference calls with several ISACs,  other DHS components, and private-sector organizations to discuss threats  and viruses.
section_title: Sector-Specific Agencies Have Taken Action to Assist the ISACs
paragraphs: HSPD-7 designates federal departments and agencies to be sector-specific  agencies. These federal agencies, among other things, are to collaborate  with the private sector and continue to encourage the development of  information-sharing and analysis mechanisms. In addition, sector-specific  agencies are to facilitate the sharing of information about physical and  cyber threats, vulnerabilities, incidents, potential protective measures, and  best practices. Another directive, HSPD-9, establishes a national policy to  defend the agriculture and food system against terrorist attacks, major  disasters, and other emergencies. Some sector-specific agencies have  taken steps to help the ISACs to increase their memberships and breadth  of impact within their respective sectors and to improve their analytical  and communications capabilities.
Environmental Protection Agency (EPA). As noted earlier, EPA is  the sector-specific agency for the water sector. According to EPA  officials, its Office of Water (Water Security Division), which has been  designated as the lead for drinking water and wastewater CIP efforts,  is currently revising EPA’s Office of Homeland Security’s Strategic  Plan. In addition, the division is working on a General Strategic Plan,  to identify measurable goals and objectives and determine how the  division will accomplish that work. Further, these officials stated that  for fiscal year 2004, EPA issued a $2 million grant to the Water ISAC to  enhance its capabilities, for example, to fund 24x7 operations and to  increase and support ISAC membership. They also stated that EPA  issued $50 million in grants to assist the largest drinking water utilities  in conducting vulnerability assessments. There are also state grants to  build communications networks for disseminating information,  particularly to smaller utility companies. EPA’s Water Security  Division also makes publicly available various resources related to  water security including, among other things, emergency response  guidelines, risk assessment and vulnerability assessment  methodologies, and a security product guide. The division has also  developed a “Vulnerability Assessment Factsheet” that gives utility  companies additional guidance on vulnerability assessments.  Moreover, the Water Security Division holds biweekly conference calls  with water associations to promote communications between EPA and  the private sector, and it provides EPA publications and other  information to the Water ISAC through e-mail distribution lists. In  addition, the division has 10 regional offices that work with the states.
Department of the Treasury (Treasury). As the sector-specific  agency for the Banking and Finance sector, Treasury’s Office of CIP  and Compliance Policy is responsible for CIP-related efforts. It has  developed policy for its role as a sector-specific agency. The policy  includes steps to identify vulnerabilities with the assistance of the  institutions, identify actions for remediation, and evaluate progress in  reducing vulnerabilities. A major effort by Treasury was having  consultants work with the Financial Services ISAC’s board of directors  to evaluate ways to improve the overall reach and operations of the  ISAC. According to Treasury officials, this effort, in part, led to a  $2 million grant from Treasury to the ISAC for developing the “next  generation” Financial Services ISAC. The one-time grant was  earmarked for enhancing the ISAC’s capabilities. Regarding interaction  with the Financial Services ISAC, Treasury informally shares high-level  threat and incident information with the sector through the ISAC. The  department also chairs the Financial and Banking Information  Infrastructure Committee (FBIIC), a group of regulators who  coordinate regulatory efforts to improve the reliability and security of  financial systems. This group has done a number of things to raise  awareness and improve the reliability of the institutions. For example,  under the sponsorship of the Federal Deposit Insurance Corporation,  there are regional outreach briefings that address why the private  sector needs to partner with the federal government to improve its  security. Moreover, FBIIC has sponsored the 3,600 priority  telecommunications circuits for financial institutions under the  National Communications System’s Telecommunications Service  Priority and Government Emergency Telecommunications Service  programs.
Department of Energy (DOE). As the sector-specific agency for the  Energy and Electricity sectors, DOE’s Office of Energy Assurance is  responsible for fulfilling the roles of critical infrastructure  identification, prioritization, and protection for the energy sector,  which includes the production, refining, and distribution of oil and gas,  and electric power—except for commercial nuclear power facilities.  However, DOE does not address situational threats such as natural  disasters or power outages with its ISACs because, in part, the ISACs  are determining whether it is their role to address these types of  threats. Information sharing with the ISACs is an informal process, and  no written policy exists. For example, DOE is collecting threat  information related to hackers and computer security, but the  department is not disseminating it to the ISACs or to private industry.  The Office of Energy Assurance hopes to clarify and expand on this  subject in its International Program Plan, which is currently in draft  form.
Department of Health and Human Services (HHS). As mentioned  earlier, HHS is the sector-specific agency for the public health and  healthcare sector, and it shares that role with USDA for the food  sector. Currently, there is no ISAC for the healthcare sector. Efforts to  organize the healthcare sector have been ongoing. In July 2002, HHS  officials and other government and industry participants were invited  to the White House conference center to discuss how they wanted to  organize the sector. A Healthcare Sector Coordinating Council (HSCC)  was formed, and HHS requested that MITRE, its contractor, lend  technical support to the new group as it continues to organize the  sector and establish an ISAC. In addition, HHS officials stated that the  department provided $500,000 for ISAC efforts in fiscal year 2003 and  budgeted $1 million for fiscal year 2004. HHS officials stated that the  department would likely be agreeable to continuing to provide funding  for an ISAC. They also stated that an ISAC could be operational within  the next year. In the meantime, HHS is sharing information with the  industry through an e-Community group that MITRE has set up on a  secure Web site.
Agriculture and Food were only recently designated as critical  infrastructure sectors and, as with the healthcare sector, efforts to  organize the sectors are in the beginning stages. HHS has worked with  the Food Marketing Institute-operated Food ISAC since it was  established, but the department has focused more of its efforts on  organizing the agriculture and food sectors. As we mentioned earlier,  HHS helped initiate efforts to organize the sector by holding an  introductory conference last summer for about 100 leading sector  corporations and associations to make the business case for  participating in CIP efforts. Recently, the department cohosted a  meeting with DHS and USDA in which industry participants were  asked how they wished to organize into an infrastructure sector,  including addressing the existence and expansion of the current Food  ISAC. As a result of this meeting, participants agreed to establish a  council of about 10-15 private-sector food and agriculture  organizations to represent the sector. A federal government council  will be created to interact with the private sector and with state and  local governments. The government council will initially include  several federal government agencies and state and local entities.  According to HHS officials, the timeframe for organizing the sector and  setting up an expanded Food ISAC has not been determined, but  officials anticipated this occurring by fall of 2004.
Department of Agriculture (USDA). As mentioned above, USDA  shares with HHS the sector-specific agency designation for the food  sector. USDA participated in a conference held last summer and a  recent meeting with the industry. In addition to those events, USDA’s  Homeland Security Council Working Group is involved in enhancing  the agriculture sector’s information-sharing and analysis efforts, which  may include replacing or improving the current Food ISAC. Another  USDA effort uses training to reach out to the industry and raise  awareness. For example, USDA is providing training to private-sector  veterinarians and animal hospitals on recognizing possible signs of  bioterrorism activity.
Although no longer a sector-specific agency for the transportation sector,  DOT, through its Federal Transit Administration, has provided a grant to  the Public Transportation ISAC to provide for memberships at no cost.
section_title: Challenges to ISAC Establishment and Partnership with the Federal Government
paragraphs: Our discussions with the ISACs and the series of ISAC Council white  papers confirmed that a number of challenges remain to the successful  establishment and operation of ISACs and their partnership with DHS and  other federal agencies. Highlighted below are some of the more significant  challenges identified, along with any successful ISAC practices and related  actions that have been taken or planned by DHS or others.
subsections: section_title: Increasing Sector Participation and Reach
paragraphs: Many of the ISACs report that they represent significant percentages of  their industry sectors; at least one—the Electricity ISAC—reports  participation approaching 100 percent. The ISAC Council estimates that  the overall ISAC community possess an outreach and connectivity  capability to reach approximately 65 percent of the private critical  infrastructure. The Council also recognizes the challenge of increasing  sector participation, particularly to reach smaller entities that need  security support, but have insufficient resources to actively contribute and  pay for such support. Officials in DHS’s IAIP acknowledge the importance  of reaching out to critical infrastructure entities, and are considering  alternatives to address this issue.
The Financial Services ISAC provides a notable example of efforts to  respond to this challenge. Specifically, officials for this organization  reported that, as of March 2003, its members represented a large portion of  the sector’s assets, but only 0.2 percent of the number of entities with  small financial services firms and insurance companies, in particular, were  underrepresented. To increase its industry membership, this organization  established its next generation ISAC, which provides different levels of  service—ranging from a free level of basic service to fees for value-added  services—to help ensure that no entity is excluded because of cost.  Further, it has set goals of delivering urgent and crisis alerts to 80 percent  of the Banking and Finance sector by the end of 2004 and to 99 percent of  the sector by the end of 2005. To help achieve these goals, the Financial  Services ISAC has several other initiatives under way, including obtaining  the commitment of the Financial Services Sector Coordinating Council  (FSSCC—the sector coordinator and primary marketing arm for this ISAC)  to drive the marketing campaign to sign up its members for the  appropriate tier of service; encourage membership through outreach  programs sponsored by the Federal Deposit Insurance Corporation and  the FSSCC in 24 cities; and to work with individual sector regulators to  include in their audit checklists whether a firm is a member of the ISAC.  The Financial Services ISAC believes that its goals are attainable and  points to its industry coverage, which it says had already increased to 30  percent in March 2004—only three months after its new membership  approach began in December 2003.
Other issues identified that were related to increasing sector participation  and reach included the following,    Officials at two of the ISACs we contacted considered it important that  the federal government voice its support for the ISACs as the principal  tool for communicating threats.
The ISAC Council has suggested that a General Business ISAC may need  to be established to provide baseline security information to those general  businesses that are not currently supported by an ISAC.
Many of the industries that comprise our nation’s critical infrastructures  are international in scope. Events that happen to a private infrastructure  or public sector organization in another country can have a direct effect in  the United States, just as events here could have effects in other countries.  Therefore, an ISAC may need to increase its reach to include the reporting  and trust of international companies and organizations.
section_title: Building Trusted Relationships
paragraphs: A key element in both establishing an ISAC and developing an effective  public/private partnership for CIP is to build trusted relationships and  processes. From the ISAC perspective, sharing information requires a  trusted relationship between the ISAC and its membership, such that  companies and organizations know their sensitive data is protected from  others, including competitors and regulatory agencies. According to the  ISAC Council, the ISACs believe that they provide a trusted information- sharing and analysis mechanism for private industry in that they manage,  scrutinize, establish, and authenticate the identity and ensure the security  of their membership, as well as ensuring the security of their own data and  processes. Other steps taken by ISACs to safeguard private companies’  information, which may help to foster trusted relationships, included  sharing information with other entities only when given permission to do  so by the reporting entity and providing other protections, such as  distributing sensitive information to subscribers through encrypted e-mail  and a secure Web portal.
Building trusted relationships between government agencies and the  ISACs is also important to facilitating information sharing. In some cases,  establishing such relationships may be difficult because sector-specific  agencies may also have a regulatory role; for example, the Environmental  Protection Agency has such a role for the Water sector and HHS’ Food and  Drug Administration has it for portions of the Food and Agriculture  sectors.
section_title: Information Sharing Between the Private Sector and Government
paragraphs: Sharing information between the federal government and the private  sector on incidents, threats, and vulnerabilities continues to be a  challenge. As we reported last year, much of the reluctance by ISACs to  share information has focused on concerns over potential government  release of that information under the Freedom of Information Act,  antitrust issues resulting from information sharing within an industry, and  liability for the entity that discloses the information. However, our recent  discussions with the ISACs—as well as the consensus of the ISAC  Council—identified additional factors that may affect information sharing  by both the ISACs and the government.
The ISACs we contacted all described efforts to work with their sector- specific agencies, as well as with other federal agencies, ISACs, and  organizations. For example, the Public Transit ISAC said that it provides a  critical link between the transit industry, DOT, TSA, DHS, and other ISACs  for critical infrastructures and that it collects, analyzes, and distributes  cyber and physical threat information from a variety of sources, including  law enforcement, government operations centers, the intelligence  community, the U.S. military, academia, IT vendors, the International  Computer Emergency Response Community, and others. Most ISACs  reported that they believed they were providing appropriate information to  the government but, while noting improvements, still had concerns with  the information being provided to them by DHS and/or their sector- specific agencies. These concerns included the limited quantity of  information and the need for more specific, timely, and actionable  information. In particular, one ISAC noted that it receives information  from DHS simultaneously with or even after news reports, and that  sometimes the news reports provide more details.
In its recent white papers, the ISAC Council also has identified a number  of barriers to information sharing between the private sector and  government. These included the sensitivity of the information (such as law  enforcement information), legal limits on disclosure (such as Privacy Act  limitations on disclosure of personally identifiable information), and  contractual and business limits on how and when information is disclosed  (e.g., the Financial Services ISAC does not allow any governmental or law  enforcement access to its database). But the Council also emphasized that  perhaps the greatest barriers to information sharing stem from practical  and business considerations in that, although important, the benefits of  sharing information are often difficult to discern, while the risks and costs  of sharing are direct and foreseeable. Thus, to make information sharing  real, it is essential to lower the practical risks of sharing information  through both technical means and policies, and to develop internal  systems that are capable of supporting operational requirements without  interfering with core business. Consequently, the technical means used  must be simple, inexpensive, secure, and easily built into business  processes.
According to the Council, the policy framework must reduce perceived  risks and build trust among participants. Further, the Council identified  three general areas that must be addressed in policy for the information- sharing network to assure network participants that there is good reason  to participate and that their information will be dealt with appropriately.  These areas concern policies related to what information is shared within  ISACs, across ISACs, and to and from government; actions to be  performed at each node in the information-sharing network, including the  kinds of analysis to be performed; and the protection of shared  information and analysis in terms of both limitations on disclosure and use  and information security controls.
The white papers also described the processes that are believed to be  needed to ensure that critical infrastructure and/or security information is  made available to the appropriate people with reasonable assurance that it  cannot be used for malicious purposes or indiscriminately redistributed so  as to become essentially public information. These processes and other  information-sharing considerations and tasks identified by the Council  included the following:    The ISAC information-sharing process needs to recognize two types of  information categories—classified and sensitive but unclassified.  However, the majority of information sharing must focus on the  unclassified “actionable element” that points the recipient to a problem  and to remediation action.
Each ISAC is responsible for initially validating the trust relationship with  its member organizations and for periodically reassessing that trust  relationship. The security structure must understand and continually be in  dialogue with its vetted members and must manage this trusted  relationship.
Each individual who receives shared information must have a background  check completed by and at a level of comprehensiveness specified by the  sponsoring organization.
Consequences and remediation must be developed and understood to  address situations in which information is disclosed improperly—either  intentionally or unintentionally.
The government’s data and information requirements for the sectors and  the sectors’ requirements for the government need to be defined.
The government should establish a standing and formal trusted  information-sharing and analysis process with the ISACs and sector  coordinators as the trusted nodes for this dissemination. This body should  be brought in at the beginning of any effort, and DHS products should be  released to this group for primary and priority dissemination to their  respective sectors.
Building this trusted information-sharing and analysis process is also  dependent on the protections the government provides for the sensitive  data shared by ISACs and private companies. As discussed earlier, DHS  recently issued the interim rule for submitting protected critical  infrastructure information, which provides restrictions on the use of this  information and exempts it from release under the Freedom of  Information Act. However, it remains to be seen whether these protections  will encourage greater private-sector trust and information sharing with  the federal government.
section_title: Identifying Roles and Responsibilities
paragraphs: Federal CIP law and policies, including the Homeland Security Act of 2002,  the National Strategy to Secure Cyberspace, and HSPD-7, establish CIP  responsibilities for federal agencies, including DHS and others identified  as sector-specific agencies for the critical infrastructure sectors. However,  the ISACs believe that the roles of the various government and private- sector entities involved in protecting critical infrastructures must continue  to be identified and defined. In particular, officials for several ISACs  wanted a better definition of the role of DHS with respect to them.  Further, officials for two ISACs thought other agencies might more  appropriately be their sector-specific agencies. Specifically, the Energy  ISAC would like its sector-specific agency to be DHS and not the  Department of Energy, which is also the regulatory agency for this sector.  On the other hand, the Highway ISAC thought its sector-specific agency  should be the Department of Transportation—the regulatory agency for its  sector—and not DHS.
The ISAC Council also identified the need for DHS to establish the goals of  its directorates and the relationships of these directorates with the private  sector. The Council also wants clarification of the roles of other federal  agencies, state agencies, and other entities—such as the National  Infrastructure Advisory Council.
section_title: Obtaining Government Funding
paragraphs: Ten of the ISACs we contacted, plus the Healthcare sector, emphasized  the importance of government funding for purposes including creating the  ISAC, supporting operations, increasing membership, developing metrics,  and providing for additional capabilities. According to ISAC officials, some  have already received federal funding: the Public Transit ISAC initially  received a $1.2 million grant from the Federal Transit Administration to  begin operations, and the Water ISAC received a $2 million grant from  EPA for fiscal year 2004 to cover annual operating costs and expand  memberships to smaller utilities. In addition, the Financial Services ISAC  received $2 million from the Department of the Treasury to help establish  its next-generation ISAC and its new capabilities, including adding  information about physical threats to the cyber threat information it  disseminates.
Despite such instances, funding continues to be an issue, even for those  that have already received government funds. For example, the Healthcare  Sector Coordinating Council, which is the sector coordinator for the  healthcare industry, is currently looking to the federal government to help  fund the creation of a Healthcare ISAC. Also, officials at the Public Transit  ISAC noted that funding is an ongoing issue that is being pursued with  DHS. Officials at the Financial Services ISAC, who notes that the ISAC’s  goal is to become totally self-funded through membership fees by 2005, are  also seeking additional government funding for other projects.
The ISAC Council has also suggested that baseline funding is needed to  support core ISAC functionalities and analytical efforts within each sector.  The Council’s suggestions include that the government should procure a  bulk license for the ISACs to receive data directly from some vulnerability  and threat sources and access to analytical or modeling tools and that the  funding for an ISAC analyst to work at DHS to support analysis of sector- specific information or intelligence requirements.
According to the Financial Services ISAC, DHS has agreed to fund tabletop  exercises for some ISACs. For example, according to DHS officials,  exercises are occurring this week involving the Banking and Finance  sector and exercises for other sectors are currently being explored. In  addition, energy sector-related exercises were held earlier in the year.  DHS officials also stated that funding considerations for the critical  infrastructure sectors and the ISACs would be based on their needs.
section_title: Utilizing Sector Expertise
paragraphs: In our discussions with ISAC officials, several, such as officials from the  Surface Transportation and the Telecommunications ISACs, highlighted  their analysis capabilities and, in particular, their analysts’ sector-specific  knowledge and expertise and ability to work with DHS and other federal  agencies. The ISAC Council also emphasized that analysis by sector- specific, subject matter experts is a critical capability for the ISACs,  intended to help identify and categorize threats and vulnerabilities and  then identify emerging trends before they can affect critical  infrastructures. Sector-specific analysis can add critical value to the  information being disseminated, with products such as 24/7 immediate,  sector-specific, physical, cyber, all threat and incident report warning;  sector-specific information and intelligence requirements; forecasts of and  mitigation strategies for emerging threats; and cross-sector  interdependencies, vulnerabilities, and threats.
The Council also emphasized that although government analytical efforts  are critical, private-sector analytical efforts should not be overlooked and  must be integrated into the federal processes for a more complete  understanding. The private sector understands its processes, assets, and  operations best and can be relied upon to provide the required private- sector subject matter expertise.
In a few cases, the integration of private-sector analytical capabilities with  DHS does occur. For example, the Telecommunications ISAC, as part of  DHS’s National Communication System, has watch standers that are part  of the DHS operations center and share information, when the information  owner allows it and when it is appropriate and relevant, with the other  analysts. In addition, a Surface Transportation ISAC analyst also  participates in the DHS operations center on a part-time basis to offer  expertise and connection to experts in the field in order to clarify the  impact of possible threats.
section_title: Participation in National Homeland Security Exercises
paragraphs: The ISAC Council highlighted the need for ISAC participation in the  national-level homeland security exercises that are conducted by the  federal government, such as DHS’s May 2003 national terrorism exercise  (TOPOFF 2), which was designed to identify vulnerabilities in the nation’s  domestic incident management capability. However, according to the  Council, there has been little or no integration of active private industry  and infrastructure into such exercises. For example, private industry  participation in TOPOFF 2 was simulated. The Council believes that with  such participation, both national and private-sector goals could be  established during the creation of the exercise and then addressed during  the exercise.
The Council did identify examples where the private sector is being  included in exercises, such as efforts by the Electronics Crime Unit of the  U.S. Secret Service to reach out to the private sector and support tabletop  exercises to address the security of private infrastructures. Further,  according to a DHS official, the department has agreed to fund tabletop  exercises for members of several ISACs, including Financial Services,  Chemical, and Electricity, as well as a cross-sector tabletop exercise.
section_title: Additional Challenges
paragraphs: Additional challenges identified by our work and/or emphasized by the  ISAC Council included the following.
Obtaining Security Clearances to Share Classified Information. As  we reported last year, several ISACs identified obtaining security  clearances as a challenge to government information sharing with the  ISACs. Seven of the 15 ISACs with which we discussed this issue indicated  either that some of their security clearances were pending or that  additional clearances would be needed.
Identifying Sector Interdependencies. Federal CIP policy has  emphasized the need to identify and understand interdependencies  between infrastructure sectors. The ISAC Council also highlighted the  importance of identifying interdependencies and emphasized that they  require partnerships between the sectors and the government and could  only be modeled, simulated, or “practiced” once the individual sectors’  dynamics are understood sufficiently. The current short-term focus for the  ISACs is to review the work done by the government and the sectors  regarding interdependencies. Similarly, a DHS official acknowledged the  importance of identifying interdependencies, but that it is a longer-term  issue.
Establishing Communications Networks. Another issue raised through  the ISAC Council’s white papers was the need for a government-provided  communications network for secure information sharing and analysis.  Specifically, the Council suggested that although functionality would be  needed to satisfy the ISAC s’ requirements, DHS’s Critical Infrastructure  Warning Information Network (CWIN) could be used as an interim, first- phase communications capability. According to the Council, some of the  ISACs are conducting routine communications checks at the analytical  level in anticipation of expanded use of CWIN. In discussing this issue  with a DHS official, he said that ISAC access to a secure communications  network would be provided as part of the planned Homeland Security  Data Network (HSDN). DHS recently announced a contract to initiate the  implementation of HSDN, which is be a private, certified, and accredited  network that provides DHS officials with a modern IT infrastructure for  securely communicating classified information. According to DHS, this  network will be designed to be scalable in order to respond to increasing  demands for the secure transmission of classified information among  government, industry, and academia to help defend against terrorist  attacks.
section_title: DHS Information-Sharing Plan
paragraphs: At the time of our study, the relationship and interaction among DHS, the  ISACs, sector coordinators, and other sector-specific agencies was still  evolving, and DHS had not yet developed any documented policies or  procedures. As we discussed earlier, HSPD-7 requires the Secretary of  Homeland Security to establish uniform policies for integrating federal  infrastructure protection and risk management activities within and across  sectors. According to a DHS official, the department is developing a plan  (referred to as a “roadmap”) that documents the current information- sharing relationships among DHS, the ISACs, and other agencies; goals for  improving that information-sharing relationship; and methods for  measuring the progress in the improvement. According to this official, the  plan is to define the roles and responsibilities of DHS, the ISACs, and other  entities, including a potential overlap of ISAC-related responsibilities  between IAIP and the Transportation Security Administration. Further, the  official indicated that, in developing the plan, DHS would consider issues  raised by the ISAC Council.
In summary, since first encouraged by federal CIP policy almost 6 years  ago, private-sector ISACs have developed and evolved into an important  facet of our nation’s efforts to protect its critical infrastructures. They face  challenges in increasing their sector representation and, for some,  ensuring their long-term viability. But they have developed important trust  relationships with and between their sectors—trust relationships that the  federal government could take advantage of to help establish a strong  public/private partnership. Federal agencies have provided assistance to  help establish the ISACs, and more may be needed. However, at this time,  the ISACs and other stakeholders, including sector-specific agencies and  sector coordinators, would benefit from an overall strategy, as well as  specific guidance, that clearly described their roles, responsibilities,  relationships, and expectations. DHS is beginning to develop a strategy,  and in doing so, it will be important to consider input from all  stakeholders to help ensure that a comprehensive and trusted information- sharing process is established.
Messrs. Chairmen, this concludes my statement. I would be happy to  answer any questions that you or members of the subcommittees may  have at this time.
If you should have any questions about this testimony, please contact me  at (202) 512-3317 or Ben Ritt, Assistant Director, at (202) 512-6443. We can  also be reached by e-mail at daceyr@gao.gov and rittw@gao.gov,  respectively.
Other individuals making key contributions to this testimony included  William Cook, Joanne Fiorino, Michael Gilmore, Barbarol James, Lori  Martinez, and Kevin Secrest.
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