[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
                  HACKING THE HOMELAND: INVESTIGATING
                  CYBERSECURITY VULNERABILITIES AT THE
                    DEPARTMENT OF HOMELAND SECURITY

=======================================================================

                                HEARING

                               before the

                        SUBCOMMITTEE ON EMERGING
                      THREATS, CYBERSECURITY, AND
                         SCIENCE AND TECHNOLOGY

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 20, 2007

                               __________

                           Serial No. 110-52

                               __________

       Printed for the use of the Committee on Homeland Security
                                     
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13

                                     

  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
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                     COMMITTEE ON HOMELAND SECURITY

               BENNIE G. THOMPSON, Mississippi, Chairman

LORETTA SANCHEZ, California,         PETER T. KING, New York
EDWARD J. MARKEY, Massachusetts      LAMAR SMITH, Texas
NORMAN D. DICKS, Washington          CHRISTOPHER SHAYS, Connecticut
JANE HARMAN, California              MARK E. SOUDER, Indiana
PETER A. DeFAZIO, Oregon             TOM DAVIS, Virginia
NITA M. LOWEY, New York              DANIEL E. LUNGREN, California
ELEANOR HOLMES NORTON, District of   MIKE ROGERS, Alabama
Columbia                             BOBBY JINDAL, Louisiana
ZOE LOFGREN, California              DAVID G. REICHERT, Washington
SHEILA JACKSON LEE, Texas            MICHAEL T. McCAUL, Texas
DONNA M. CHRISTENSEN, U.S. Virgin    CHARLES W. DENT, Pennsylvania
Islands                              GINNY BROWN-WAITE, Florida
BOB ETHERIDGE, North Carolina        MARSHA BLACKBURN, Tennessee
JAMES R. LANGEVIN, Rhode Island      GUS M. BILIRAKIS, Florida
HENRY CUELLAR, Texas                 DAVID DAVIS, Tennessee
CHRISTOPHER P. CARNEY, Pennsylvania
YVETTE D. CLARKE, New York
AL GREEN, Texas
ED PERLMUTTER, Colorado

        Jessica Herra-Flanigan, Staff Director & General Counsel

                     Rosaline Cohen, Chief Counsel

                     Michael Twinchek, Chief Clerk

                Robert O'Connor, Minority Staff Director

                                 ______

   SUBCOMMITTEE ON EMERGING THREATS, CYBERSECURITY, AND SCIENCE AND 
                               TECHNOLOGY

               JAMES R. LANGEVIN, Rhode Island, Chairman

ZOE LOFGREN, California              MICHAEL T. McCAUL, Texas
DONNA M. CHRISTENSEN, U.S. Virgin    DANIEL E. LUNGREN, California
Islands                              GINNY BROWN-WAITE, Florida
BOB ETHERIDGE, North Carolina        MARSHA BLACKBURN, Tennessee
AL GREEN, Texas                      PETER T. KING, New York (Ex 
VACANCY                              Officio)
BENNIE G. THOMPSON, Mississippi (Ex 
Officio)

                    Jacob Olcott, Director & Counsel

        Dr. Chris Beck, Senior Advisor for Science & Technology

                       Carla Zamudio-Dolan, Clerk

       Dr. Diane Berry, Minority Senior Professional Staff Member

                                  (II)


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               STATEMENTS

The Honorable James R. Langevin, a Representative in Congress 
  From the State of Rhode Island, and Chairman, Subcommittee on 
  Emerging Threats, Cybersecurity, and Science and Technology:
  Oral Statement.................................................     1
  Prepared Statement.............................................     3
The Honorable Michael T. McCaul, a Representative in Congress 
  From the State of Texas, and Ranking Member, Subcommittee on 
  Emerging Threats, Cybersecurity, and Science and Technology:
  Oral Statement.................................................     5
  Prepared Statement.............................................     6
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Chairman, Committee on 
  Homeland Security:
  Oral Statement.................................................     7
  Prepared Statement.............................................     8
The Honorable Bob Etheridge, a Representative in Congress From 
  the State of North Carolina....................................    28
The Honorable Zoe Lofgren, a Representative in Congress From the 
  State if California............................................    30

                               Witnesses

Mr. Scott Charbo, Chief Information Officer, U.S. Department of 
  Homeland Security:
  Oral Statement.................................................    10
  Prepared Statement.............................................    12
Mr. Greg Wilshusen, Director, Information Security Issues, 
  Government Accountability Officer:
  Oral Statement.................................................    15
  Prepared Statement.............................................    16

Accompanied by:
Mr. Keith A. Rhodes, Chief Technologist, Director, Center for 
  Technology and Engineering, Government Accountability Office...    24

                                Appendix

Additional Questions and Responses:
  Mr. Scott Charbo...............................................    39


 HACKING THE HOMELAND: INVESTIGATING CYBERSECURITY VULNERABILITIES AT 
                  THE DEPARTMENT OF HOMELAND SECURITY

                              ----------                              


                        Wednesday, June 20, 2007

             U.S. House of Representatives,
                    Committee on Homeland Security,
           Subcommittee on Emerging Threats, Cybersecurity,
                                and Science and Technology,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2:20 p.m., in 
Room 311, Cannon House Office Building, Hon. James R. Langevin 
[chairman of the subcommittee], presiding.
    Present: Representatives Langevin, Lofgren, Christensen, 
Etheridge, Thompson, ex officio, McCaul, and Brown-Waite.
    Mr. Langevin. The subcommittee will come to order. The 
subcommittee's meeting today is to receive testimony on Hacking 
the Homeland: Investigating Cybersecurity Vulnerabilities at 
the Department of Homeland Security.
    Ladies and gentlemen, good afternoon. I want to thank the 
witnesses for appearing before the subcommittee, and we look 
forward to your testimony today. The Internet has brought our 
friends close and our enemies closer. As each day passes, 
another incident reminds us that our information and our IT 
infrastructures are vulnerable.
    Cases in point: Estonia, a technically savvy country, was 
brought to its knees by hackers who took down government Web 
sites.
    The Pentagon recently asserted that China is developing 
viruses to attack computer systems to obtain electromagnetic 
dominance early in a conflict.
    The incident formerly classified as Titan Rain suggested 
that the Chinese have been coordinating attacks against the 
Department of Defense networks for years.
    This subcommittee has been holding a series of hearings on 
cybersecurity, and it has become very clear the infiltration of 
Federal Government networks and the possible theft or 
exploitation of our information is one of the most critical 
issues confronting our Nation today.
    In April, the subcommittee discussed a series of attacks 
penetrated by hackers--perpetrated by hackers operating through 
Chinese Internet servers against computer systems at the 
Departments of Commerce and State. Hackers were able to 
penetrate Federal systems and use ``rootkits,'' a form of 
software that allows attackers to mask their presence, to send 
information back out of our own systems. At the time, I was 
critical of the security efforts at both State and Commerce, 
but assured them that I would be posing the same kinds of 
questions about network security to DHS. Well, that is why we 
are here today.
    It was actually a shock and a disappointment to learn that 
the Department of Homeland Security, the agency charged with 
being the lead in our national cybersecurity, has suffered so 
many significant cybersecurity incidents in its own networks. 
It is equally disturbing that the Department is so slow to 
respond to fixing these problems.
    DHS reported to the committee that it experienced 844 
cybersecurity incidents in fiscal years 2005 and 2006. These 
incidents occurred on IT networks at DHS headquarters, ICE, 
CBP, FEMA and others. I would like to take a minute to share a 
few representative incidents of what I am talking about:
    A password dumping utility and other malicious files were 
found on two DHS systems.
    Computers contained suspicious beaconing activity and an 
IRC bot, which is a generic detection for a group of backdoor 
Trojan horses that allows a hacker to control the compromised 
computer.
    Workstations infected with multiple Trojans and viruses.
    The user ID and passwords for a local administrator were 
found in hard copy.
    A Department Web site has been compromised.
    Classified e-mails were sent over unclassified networks.
    A workstation was infected with a Trojan scanning for port 
137, an event that clearly demonstrated individuals attempting 
to scan DHS systems through the Internet.
    Unauthorized software was installed on an asset that could 
allow security settings circumvention.
    Unauthorized users had been attaching their personal 
computers to DHS networks.
    Unauthorized individuals gained access to DHS equipment and 
data.
    Firewalls had been misconfigured by a contractor to allow 
all ICMP traffic to and from the Internet.
    And there had been numerous classified data spillages, 
according to our reports.
    I am going to stop there. Each of these incidents that I 
have just mentioned represents a significant security breach. 
Some of these incidents are the result of blatant disregard by 
DHS IT policy, and I hope that those responsible have been 
properly disciplined. But others are reminiscent of classic 
attack patterns by formidable adversaries
    We saw these exact incidents on State Department and 
Commerce Department computers several months ago. These aren't 
just my conclusions. In spite of some of the significant 
vulnerabilities in its systems, the Department doesn't appear 
to be in any rush to fix them.
    Now, According to the September 2006 DHS IG report on DHS 
information systems, 69 percent of the 3,566 open 
vulnerabilities that existed on the Department's networks did 
not include the resources required for remediating those 
vulnerabilities. In fact, some of the agencies aren't even 
reporting incidents to the DHS Computer Security Incident 
Response Center, CSIRC, as required by law.
    These components apparently don't understand that 
vulnerabilities on their individual systems can affect the 
entire Homeland Security network. Furthermore, information 
provided by DHS suggests that the CIO is failing to engage in 
best defense practices that would limit penetrations into DHS 
networks. DHS does not conduct rogue tunnel audits, ingress/
egress filtering on DHS personal computers, widespread internal 
and external penetrations tests on its systems, audits on IT 
contractors. DHS hasn't mandated two factor authentication 
across the Department, which would demonstrate what types of 
critical vulnerabilities remain on DHS networks. How can DHS be 
the Nation's and the government's cybersecurity leader with 
this kind of a track record?
    The fact is, DHS is failing to dedicate adequate funding to 
network security. The finances show that Mr. Charbo and the 
Department's leadership continue to underinvest in IT security. 
Mr. Charbo cut funding for the chief information security 
officer and only slightly increased the IT security budget. 
Experts agree that agencies should allocate around 20 percent 
of their IT budgets to cybersecurity, and yet DHS is only 
spending 6.8 percent to secure their systems. All of this is 
happening while the Department's IT budget was increased by $1 
billion last year.
    Unfortunately, the failure to invest in defensive measures 
and mitigate vulnerabilities is jeopardizing the Department's 
mission. That is not just my conclusion; that is the conclusion 
that the GAO reached in an upcoming report about the IT systems 
supporting US-VISIT. GAO will report that these IT systems are 
riddled with significant information security control 
weaknesses that place sensitive and personally identifiable 
information at increased risk of unauthorized disclosure and 
modification, misuse, and destruction, possibly without 
detection, and place program operations at increased risk of 
disruption.
    What does all of this mean? It means that terrorists or 
nation-states could be hacking Department of Homeland Security 
databases, changing or altering their names to allow them 
access to this country, and we wouldn't even know that they 
were doing it. If we care about protecting our homeland from 
dangerous people, we have to care about the security of the 
information that we use to accomplish that mission.
    I wish that DHS exerted the same level of effort to protect 
its networks that our adversaries are exerting to penetrate 
them. But as long as this striking and dangerous imbalance 
persists, the success of the Department's mission remains in 
serious doubt.
    Again, I want to thank the witnesses for being here today. 
I look forward to probing these critical issues further.
    [The statement of Mr. Langevin follows:]

    Prepared Opening Statement of the Honorable James R. Langevin, 
Chairman, Subcommittee on Emerging Threats, Cybersecurity, and Science 
                             and Technology

     Ladies and gentlemen, good afternoon. I thank the 
witnesses for appearing before the Subcommittee, and we look forward to 
your testimony.
     The Internet has brought our friends close and our enemies 
closer.
     As each day passes, another incident reminds us that our 
information and our IT infrastructures are vulnerable to attacks.
         Estonia--a technologically savvy country--was brought 
        to its knees by hackers who took down government websites.
         The Pentagon recently asserted that China is 
        developing viruses to attack computer systems to obtain 
        ``electromagnetic dominance early in a conflict.''
         The incident formerly classified as Titan Rain 
        suggested that the Chinese have been coordinating attacks 
        against Department of Defense networks for years.
         This Subcommittee has been holding a series of 
        hearings on cybersecurity, and it has become clear to me that 
        the infiltration of federal government networks and the 
        exfiltration of our information is one of the most critical 
        issues confronting our nation.
     In April, the Subcommittee discussed a series of attacks 
perpetrated by hackers operating through Chinese Internet servers 
against computer systems at the Departments of Commerce and State.
     Hackers were able to penetrate Federal systems and use 
``rootkits''--a form of software that allows attackers to mask their 
presence--to send information back out of our systems.
     At the time, I was critical of the efforts by both State 
and Commerce, but assured them that I would be asking the same kinds of 
questions about network security to DHS.
     That's why we're here today.
     I am disappointed to learn that the Department of Homeland 
Security--the agency charged with being the lead in cybersecurity--has 
suffered so many significant security incidents on its networks. DHS 
reported to the Committee that it experienced 844 ``cybersecurity 
incidents'' in fiscal years 2005 and 2006. These incidents occurred on 
IT networks at DHS headquarters, ICE, CBP, FEMA, and others.
     I will share a few representative incidents:
         A password dumping utility and other malicious files 
        were found on two DHS systems.
         Computers contained suspicious beaconing activity, an 
        IRC bot, and other malware.
         Workstations infected with multiple Trojans and 
        viruses.
         The User id and passwords for a local administrator 
        account were found in hard copy.
         A Department website has been compromised.
         Classified emails were sent over unclassified 
        networks.
         A workstation was infected with a Trojan scanning for 
        port 137.
         Unauthorized software was installed on an asset that 
        could allow security setting circumvention.
         Unauthorized users have been attaching their personal 
        computers to the DHS network
         Unauthorized individuals gained access to DHS 
        equipment and data.
         Firewalls have been misconfigured by a contractor to 
        allow all ICMP traffic to and from the Internet.
         And there have been numerous ``Classified data 
        spillages''
     I'll stop there. Each of these incidents that I've just 
mentioned represents a significant security breach.
     Some of these incidents are the result of blatant 
disregard of DHS IT policy, and I hope that those individuals have been 
properly disciplined.
     But other incidents are reminiscent of classic attack 
patterns by formidable adversaries--we saw these exact incidents on 
State Department and Commerce Department computers several months ago.
     In spite of the significant vulnerabilities to its 
systems, the Department doesn't appear to be in any rush to fix them. 
According to the September 2006 DHS IG report on DHS information 
systems, 69% of the 3,566 open vulnerabilities that exist on the 
Department's networks did not include the resources required for 
remediating those vulnerabilities. In fact, some components aren't even 
reporting incidents to the DHS Computer Security Incident Response 
Center (CSIRC), as required by law.
     These components apparently don't understand that 
vulnerabilities on their systems can affect the entire Homeland 
Security network. Furthermore, information provided by DHS suggests 
that the CIO is failing to engage in defensive best practices that 
would limit penetrations into the DHS networks.
     DHS does not conduct rogue tunnel audits, ingress/egress 
filtering on DHS client personal computers, widespread internal and 
external penetration tests on his systems, audits on IT contractors. 
DHS hasn't mandated two factor authentication across the Department.
     How can DHS be the cybersecurity leader with this track 
record? DHS is failing to provide adequate funding to network security.
     The finances show that Mr. Charbo and the Department's 
leadership continue to under-invest in IT security. Mr. Charbo cut 
funding for the Chief Information Security Officer and only slightly 
increased the IT security budget. All of this is done while the 
Department's IT budget was increased by $1 b last year.
     Unfortunately, the failure to invest in defensive measures 
and mitigate vulnerabilities is jeopardizing the Department's mission.
     That's the conclusion that the GAO reached in a report 
that they're about to release about the IT systems supporting US-VISIT.
     GAO will report that these IT systems are ``riddled with 
significant information security control weaknesses that place 
sensitive and personally identifiable information at increased risk of 
unauthorized disclosure and modification, misuse, and destruction 
possibly without detection, and place program operations at increased 
risk of disruption.''
     What does this mean?
     It means that terrorists or nation states could be hacking 
Department of Homeland Security databases, changing or altering their 
names to allow them access to this country, and we wouldn't even know 
they were doing it. If we care about protecting our homeland from 
dangerous people, we have to care about the security of our information 
that we use to accomplish the mission.
     I wish DHS exerted the same level of effort to protect its 
networks that our adversaries are exerting to penetrate them.
     But as long as the effort level remains imbalanced, the 
success of the Department's mission remains in doubt.
     This concludes my opening statement.

    Mr. Langevin. And at this time, the Chair now recognizes 
the ranking member of the subcommittee, the gentleman from 
Texas, Mr. McCaul, for the purpose of an opening statement.
    Mr. McCaul. And I thank the chairman for holding this 
hearing on the state of information security at the Department 
of Homeland Security.
    This is an issue of national security, and it is an issue 
that I am glad that you brought to the forefront. As we learned 
last month, our Federal systems are under attack on a near-
constant basis. Viruses and spam are the least of our worries. 
There is evidence that organized, malicious hackers are 
targeting government systems, as well as those of government 
contractors. These attacks result in a truly frightening 
outflow of information from our departments and our Federal 
agencies, and the only way to counter these hackers is to 
improve our security posture and stay as vigilant and proactive 
as possible to counter them.
    Unfortunately, outside hackers are not the only threats to 
our sensitive information. Malicious insiders, untrained users, 
and basic carelessness are also threats to the integrity of our 
networks. Information systems have become so pervasive and so 
complex that users have become a weak link in the security 
chain. End users of our systems need to receive proper security 
training, and security policies need to be clear and 
responsive.
    The Department has had the challenge of putting together 22 
different agencies and components, each with its own security 
policies and culture. No doubt this is a very tough job. I look 
forward to the testimony of Mr. Scott Charbo, the Chief 
Information Officer, who will testify on the challenges of 
combining the legacy system into a single system, and how he 
has designed the security program to protect the Department's 
networks and systems. And I hope that the GAO will offer some 
constructive criticism and provide workable recommendations for 
the Department.
    Beyond the operational responsibilities of Mr. Charbo, 
there are aspects of the Department's other cybersecurity 
programs I would like this subcommittee to investigate. 
Specifically, I am concerned that the Department may not be 
coordinating their efforts enough with private sector experts, 
and am interested to see how the Department has worked with the 
private sector to protect the country as a whole.
    I would also like to see a report on what the Department 
has done and a road map for where it plans to go in the future.
    Most importantly, I would like to see, and this is long 
overdue, a strategic national vulnerability assessment to be 
done on United States cybersecurity. This has never been done. 
It is long overdue, and the Nation deserves it, and the Nation 
needs this to protect it. I have said it before: I believe an 
attack on our information infrastructure could be worse than 
the effects of a weapon of mass destruction, and I would hope 
the Department would take it just as seriously.
    Mr. Chairman, I hope the subcommittee can continue to 
assist the Department in its efforts to protect and secure this 
country's critical information infrastructure, and I yield back 
the balance of my time.
    [The statement of Mr. McCaul follows:]

Prepared Opening Statement of the Honorable Michael T. McCaul, Ranking 
 Member, Subcommittee on Emerging Threats, Cybersecurity, and Science 
                             and Technology

    Thank you, Mr. Chairman. I appreciate you holding this hearing on 
the state of information security at the Department of Homeland 
Security. As we learned last month our federal systems are under attack 
on a near constant basis. Viruses and spam are the least of our 
worries. There is evidence that organized malicious hackers are 
targeting government systems as well as those of government 
contractors. These attacks result in a flow of information out of our 
Departments and Agencies that is truly frightening. The only way to 
counter these hackers is to improve our security posture, staying as 
vigilant and proactive as possible in order to take effective action to 
counter the effects of these hackers.
    Unfortunately, outside hackers are not the only threats to our 
sensitive information, malicious insiders, untrained users and basic 
carelessness are also threats to the integrity of our networks. 
Information systems have become so pervasive and so complex that users 
have become a weak link in the security chain. End users of our systems 
should receive proper security training which includes basic awareness 
and operational techniques to secure the systems they use. Security 
polices need to be clear and responsive to the threat involved and 
users need to know why they are required to use these ``extra steps'' 
when they are just trying to get their job done.
    The Department has had the challenge of putting together 22 
different agencies and components, each with its own security policies 
and culture. This includes putting together various facilities that 
have been transferred to DHS oversight such as the Plum Island Animal 
Disease Center the Department took over from the USDA. No doubt, this 
is a tough job.
    I am happy to have the Department's Chief Information Officer, Mr. 
Scott Charbo, here to testify how he has faced the challenge of 
combining the legacy systems into a single system and how he has 
designed the security program to protect the Department's networks and 
systems. I imagine GAO will offer some constructive criticism and 
provide workable recommendations for the Department to work with in the 
future to better secure its systems.
    Beyond the operational responsibilities of Mr. Charbo, there are 
aspects of the Departments' other cybersecurity programs I would like 
this subcommittee to investigate. Specifically, I am concerned that the 
Department's efforts to secure the country's information infrastructure 
are lacking in organization and coordination with the private sector 
and experts in the field. While this is beyond the responsibilities of 
Mr. Charbo, I am interested to see how the Department has worked with 
the private sector to map vulnerabilities and implement mitigation 
efforts to protect the country as a whole. I have said it before, I 
believe an attack on our information infrastructure could be worse than 
the effects of a weapon of mass destruction and I would hope the 
Department takes it just as seriously. I am interested to hear about 
the coordination role the Department has taken regarding the 
vulnerabilities facing the Nation's information infrastructure, from 
secure software development to control system protection measures. I 
would like to see a report on what the Department has done and a road 
map for where it plans to go in the future, including what it hopes to 
accomplish with these future efforts.
    Mr. Chairman, I hope this subcommittee can continue to assist the 
Department in its efforts to protect and secure this Country's critical 
information infrastructure.

    Mr. Langevin. I thank the gentleman.
    The Chair now recognizes the Chairman of the full 
committee, Mr. Thompson of Mississippi, for the purposes of an 
opening statement.
    Mr. Thompson. Thank you very much, Mr. Chairman. And good 
afternoon to our witnesses. I appreciate you for holding this 
hearing and for your efforts on cybersecurity.
    Chairman Langevin touched on the national security 
implications of this issue, and I would like to associate 
myself with his remarks. But I would also like to focus my 
comments this afternoon on a quote by Ralph Waldo Emerson, the 
great American essayist and poet, who once said, ``What you do 
speaks so loud that I cannot hear what you say.''
    Two--months ago Assistant Secretary for Cybersecurity Greg 
Garcia spoke at the Computer Associates World Conference in Las 
Vegas. There, he told a captive audience several things.
    Though security incidents result from exploitation of 
defects in software design or code, they are also caused by 
users not fixing their configurations to their security 
requirements. He also went on to say that security incidents 
are also caused by insider problems stemming from poor employee 
training, inconsistent access control policy, and fragmented 
security implementation and patch management practices.
    The Assistant Secretary asked the audience, as he has been 
asking audiences all over the country, to perform risk 
assessments on their networks; establish security policies 
according to risk profiles; invest and upgrade technology 
solutions, systems, and training; and continue to test, audit, 
and fix systems.
    In light of the materials I have reviewed for this hearing, 
I think that Mr. Garcia probably should have given that speech 
to the folk here in Washington, D.C.
    Now, there are a lot of folks over in the CIO's office who 
need to hear that message. How can the Department of Homeland 
Security be a real advocate for sound cybersecurity practices 
without following some of its own advice? How can we expect 
improvements in private infrastructure cyberdefense when DHS 
bureaucrats aren't fixing their own configurations? How can we 
ask others to invest in upgraded security technologies when the 
chief information officer grows the Department's IT security 
budget at a snail's pace? How can we ask the private sector to 
better train employees and implement more consistent access 
controls when DHS allows employees to send classified e-mails 
over unclassified networks and contractors to attach unapproved 
laptops to those same networks?
    I am not suggesting that the Department discontinue its 
cybersecurity message to the public and private sectors. But 
what the Department is doing on its own networks speaks so loud 
that the message is not getting across to anyone else.
    It is not just the private sector that is getting 
doublespeak from DHS. It is the rest of the Federal Government 
too. Einstein is the National Cybersecurity Division's sensor 
system that analyzes suspicious network traffic. Over a dozen 
Federal agencies use this system. Yet the CIO does not deploy 
Einstein across the Department. I ask Mr. Charbo today, what 
kind of message does that send about the Einstein program? If 
it is good enough for other Federal agencies, why isn't it good 
enough for DHS?
    The ``do as I say, not as I do'' policy is a recipe for 
disaster, and if we are serious about the security risks facing 
our networks, then we need to start acting and stop posturing. 
I have spent some time reviewing Mr. Charbo's responses to our 
questions and reviewing the numerous IG and GAO audits of his 
work. I am not convinced that he is serious about fixing the 
vulnerabilities in our systems; and if he is not committed to 
securing our networks, I have to question his ability to lead 
the Department's IT efforts.
    I can't understand for the life of me why it takes outside 
auditors to tell the CIO and his contractors that these 
networks are insecure.
    The American people are tired of hearing that getting a 
``D'' is a security improvement. I am tired of hearing it.
    The American people are tired of hearing their government 
say one thing but do another.
    What happened to leadership? What happened to vision? What 
happened to accountability? What happened to excellence?
    Mr. Langevin, in light of the evidence in front of us 
today, I think the first thing that Mr. Charbo needs to explain 
is why he should be able to keep his job.
    I thank you for holding this hearing. I look forward to 
asking the questions of the witnesses, and I yield back the 
balance of my time.
    [The statement of Mr. Thompson follows:]

 Prepared Statement of of the Honorable Bennie G. Thompson, Chairman, 
                     Committee on Homeland Security

    I'd like to focus my comments this afternoon on a quote by Ralph 
Waldo Emerson, the great American essayist and poet who once said: 
``What you do speaks so loud that I cannot hear what you say.'
    Two months ago, assistant Secretary for Cybersecurity Greg Garcia 
spoke at the Computer Associates World Conference in Law Vegas. There, 
he told a captive audience several things:
    Though security incidents result from the exploitation of defects 
in software design or code, they are also caused by users not fixing 
their configurations to their security requirements. security incidents 
are also caused by insider problems stemming from poor employee 
training, inconsistent access control policy, and fragmented security 
implementation and patch management practices.
    The Assistant Secretary asked the audience--as he has been asking 
audiences across this country--to perform risk assessments on their 
networks; establish security policies according to risk profiles; 
invest in and upgrade technology solutions, systems, and training; and 
continue to test, audit, and fix systems.
    In light of the materials I've reviewed for this hearing, I think 
that Mr. Garcia probably should have given that speech to folks here in 
Washington, D.C.
    There are a lot of folks over in the CIO's office who need to hear 
that message. How can the Department of Homeland Security be a real 
advocate for sound cybersecurity practices without following some of 
its own advice? How can we expect improvements in private 
infrastructure cyberdefense when DHS bureaucrats aren't fixing their 
own configurations? How can we ask others to invest in upgraded 
security technologies when the Chief Information Officer grows the 
Department's IT security budget at a snail's pace? How can we ask the 
private sector to better train employees and implement more consistent 
access controls when DHS allows employees to send classified emails 
over unclassified networks and contractors to attach unapproved laptops 
to the network?
    I am not suggesting that the Department discontinue its 
cybersecurity message to the public and private sectors. But what the 
Department is doing on its own networks speaks so loud that the message 
is not getting across to anybody else.
    It's not just the private sector that's double-speak from DHS. It's 
the rest of the Federal government too. `Einstein' is the National 
Cybersecurity Division's sensor system that analyzes suspicious network 
traffic. Over a dozen Federal agencies use this system. yet the CIO 
does not deploy Einstein across the Department. I ask Mr. Charbo today, 
what kind of message does that send about the Einstein program? If it's 
good enough for the other Federal agencies, why isn't it good for DHS?
    ``Do as I say, not as I do' policy is a recipe for disaster, and if 
we are serious about the security risks facing our networks, then we 
need to start acting and stop posturing. I've spent some time reviewing 
Mr. Charbo's responses to our questions, and reviewing the numerous IG 
and GAO audits of his work. I am not convinced that he's serious about 
fixing the vulnerabilities in our systems.
    And if he's not committed to securing our networks, I have to 
question his ability to lead the Department's IT efforts. I can't 
understand for the life of me why it takes outside auditors to tell the 
CIO and his contractors that these networks are insecure.
    The American people are tired of hearing that getting a `D' is a 
security improvement. I'm tired of hearing it.
    The American people are tired of hearing there government say one 
thing but do another.
    What happened to leadership: What happened to vision? What happened 
to accountability? What happened to excellence? In light of all of the 
evidence in front of us, I think the first thing that Mr. Charbo needs 
to do is explain to us why he should keep his job.

    Mr. Langevin. I thank the chairman.
    All the members of the subcommittee are reminded, under the 
committee rules, opening statements may be submitted for the 
record.
    I now welcome our first panel of witnesses. Our first 
witness is Scott Charbo, the Chief Information Officer of the 
Department of Homeland Security. Mr. Charbo leads the resource 
efforts of the information technology assets supporting 180,000 
Federal employees at the 22 agencies now comprising DHS.
    Prior to joining DHS in June 2005, Mr. Charbo was the Chief 
Information Officer at the U.S. Department of Agriculture from 
August of 2002. Mr. Charbo holds a Bachelor of Science degree 
in biology from the University of Tampa, and a Master of 
Science degree in plant science from the University of Nevada-
Reno.
    Our second witness, Gregory Wilshusen, is Director for 
Information Security Issues at GAO, where he leads information 
security-related studies and audits of the Federal Government. 
He has over 26 years of auditing, financial management, and 
information systems experience. Mr. Wilshusen holds a B.S. 
degree in business administration, accounting, from the 
University of Missouri, and an M.S. in information management 
from George Washington University.
    Our third witness is Keith Rhodes, the Chief Technologist 
of the U.S. General Accounting Office, and Director of the 
Center for Technology and Engineering. Mr. Rhodes provides 
assistance throughout the legislative branch on computers and 
telecommunications issues and leads reviews requiring 
significant technical expertise. Mr. Rhodes holds degrees in 
computer engineering and engineering physics from Ohio State 
University and the University of California at Los Angeles, 
respectively. Mr. Rhodes will be supporting Mr. Wilshusen 
during the question-and-answer period. STATEMENTS OF

  STATEMENT OF SCOTT CHARBO, CHIEF INFORMATION OFFICER, U.S. 
                DEPARTMENT OF HOMELAND SECURITY

    Mr. Langevin. Without objection, the witnesses' full 
statements will be inserted into the record. And I now ask each 
witness to summarize their statement for 5 minutes, beginning 
with Mr. Charbo.
    Mr. Charbo. Thank you, Mr. Chairman, Ranking Member McCaul, 
Chairman Thompson, members of the subcommittee, for allowing me 
this opportunity to testify.
    The Department has implemented numerous changes to improve 
and address emerging information security risks and challenges, 
while at the same time enhancing information sharing. Key 
results include the following:
    In 2005, the Department baselined the systems inventory, 
which became the cornerstone for managing the risks and 
progress within the Department.
    In 2006, the plan improved overall security accreditation 
and certification compliance from 21 percent to 94 percent of 
the Department's systems.
    In 2006 and 2007, the Department has used the DHS inventory 
and improved security accreditation to help identify the risks 
to the Department information systems. We have implemented the 
DHS Security Operations Center and the concept of operations 
for the SOC. This improved incident handling and reporting 
process now provides U.S. better situational awareness of our 
information security posture and improved visibility into 
component security events.
    Since the start of 2007, we have closed 45 percent of the 
financial system notifications of findings and recommendations, 
findings on our financial systems within the DHS components.
    We have three key initiatives that are taking a more 
proactive approach to addressing emerging threats in 
cybersecurity:
    The legacy wide area networks, or WANs, are being collapsed 
into a single WAN called OneNet. OneNet has been designed to 
enhance security and fully implements the IPSec protocol, 
ensuring all traffic on the WAN is fully encrypted and 
authenticated.
    The Department is standardizing all electronic mail, e-mail 
and directory services into a single, secure, modern framework.
    The last initiative is to collapse the multiple legacy data 
centers into a common, shared and secured environment.
    This first phase of the consolidation is up and running, 
and the legacy systems are currently being migrated. As I 
briefed many of you, a more complete situational awareness 
picture of our information security posture now ensures that 
our NOC SOC has better enterprise visibility.
    Currently, our data from scans, the DHS SOC, and component 
reports do not support a position that our networks are 
compromised or that missions have been impacted. We will 
continue to diligently monitor and adjust to the changing 
landscape.
    Recently, the GAO completed a review of the information 
security controls that protect information and security systems 
used to support the CBP US-VISIT program. The audit lasted for 
over a year, and many of the findings are based on data from a 
year ago. The report identified 45 security weaknesses and 
generated 56 report recommendations. CBP replied to the GAO on 
June 18th of 2007, with a detailed report, which I will 
highlight.
    The GAO report did not consider compensating or mitigating 
controls, where legacy or technical barriers make a control 
impractical to implement. The GAO audit examined the CBP US-
VISIT systems without context of the overall CBP environment, 
including the significant upgrades made over the past year.
    For example, password protecting the system BIOS data is a 
significant technical and operational challenge that is 
effectively managed through physical security access 
restrictions and proper user training. Although one control may 
be deficient at the system level, additional controls exist at 
the network or facility level to compensate.
    Another example, that an Internet service provider had 
unrestricted direct access to the CBP network was not concurred 
because the service is staffed by CBP-cleared personnel, with 
full field background investigations and access limited via a 
dedicated internal connection for the purpose of network 
management.
    CBP has already taken significant steps towards mitigating 
many findings that have been verified by the GAO. This is 
missing from the draft report. The majority of network findings 
are a direct result of legacy systems still used when CBP did 
not have the capability of supporting or enforcing many of the 
newer security controls. They must be secured via compensating 
controls. These systems are in the process of being replaced.
    For example, CBP has completed 50 percent--56 percent of 
the Microsoft XP Active Directory and Microsoft Exchange 
upgrades. CBP has upgraded 75 percent of its Novell service 
from 50 to 6.5, a more secure platform.
    Mr. Chairman, my goal as the CIO is to continue the 
improvements in the Department's security posture by focusing 
on data, the results, and being proactive. For the remainder of 
fiscal year 2007, my office will take the following actions:
    We are establishing and implementing a configuration board, 
chaired by the deputy CIO, the highest career IT official in 
DHS.
    The board will review and approve all major configuration 
changes to the Department's infrastructure that can adversely 
impact the security posture, as well as review all significant 
DHS SOC notifications.
    We will complete the initial round of compliance reviews 
for all components that ensure that plans and actions and 
milestones, POAMs, are being completed, and weaknesses are 
being retired expeditiously.
    We will direct, identify, test, and approve for use 
standards for removable media devices, focusing on thumb drives 
that are compliant with FIPS 140-2.
    We will complete analysis regarding the mission impact for 
best methods for monitoring secure socket layer connections.
    While many challenges lie ahead, we are committed to bring 
the right processes, architecture, and resources together to 
bring a balanced IT security process to the Department.
    I thank you for this opportunity, and would be glad to 
address any questions.
    Mr. Langevin. Thank you for your testimony.
    [The statement of Mr. Charbo follows:]

                   Prepared Statement of Scott Charbo

    Thank you, Mr. Chairman, Ranking Member McCaul and Members of the 
Subcommittee, for allowing me this opportunity to testify before the 
subcommittee. My remarks will cover the current status of the 
Department's information security posture.
    You have no doubt heard reports of recent information security 
incidents at various federal agencies, including the Department of 
Homeland Security. Certainly, we need to increase our vigilance to 
ensure that such incidents do not happen again, and, in fact, the 
recent loss of an external hard drive at the Transportation Security 
Administration has prompted a comprehensive review of how the 
Department processes and stores privacy information. My office 
continues to work closely with the Department's Privacy Office and the 
Chief Human Capital Office to improve the effectiveness of our controls 
for privacy information.
    The Department takes these incidents very seriously, and will work 
diligently to ensure they do not recur. I'd like to describe for you 
some of the significant progress we have recently made in improving 
information security at the Department. The Department is presently 
working under a decentralized IT governance model. We have named CIOs 
and attendant IT support staff in each of the major components 
comprising the Department. To ensure that this model is effective, 
Secretary Chertoff recently instituted changes in the oversight 
functions of the Chief Information Officer for the Department. The 
revised Management Directive 0007.1 Information Technology Integration 
and Management has increased my authority to manage and direct the 
Department's information technology programs. Specifically:
        1. Components must provide their information technology (IT) 
        budgets annually to the DHS Chief Information Officer for 
        review; I will then make recommendations to the Secretary for 
        final budget submissions to the Office of Management and 
        Budget.
        2. Any proposed IT acquisition greater than $2.5 million must 
        be reviewed and approved by the DHS Chief Information Officer. 
        These IT acquisitions are defined as services for IT, software, 
        hardware, communications, and infrastructure.
        3. Before IT investment proposals greater than $2.5 million are 
        submitted to the DHS Chief Information Officer for approval, 
        the Department's Enterprise Architecture Board must approve the 
        investment and certify its alignment with the Department's 
        enterprise architecture.
        4. I approve the hiring of Component Chief Information 
        Officers, as well as set and approve their performance plans, 
        ratings, and annual award compensation in cooperation with 
        component directors.
    The result will be a more coherent and effective utilization of IT 
resources. IT programs and acquisitions are being reviewed at the 
Department-level to ensure that they are reconciled with the 
Department's strategic goals and that information security, enterprise 
architecture and infrastructure considerations are built into them.
    The Department's Information Security Program touches virtually 
every aspect of IT management, to include budget formulation and 
implementation, system and network design, enterprise and component 
specific IT operations, information security policy and architecture, 
and compliance with the Federal Information Security Management Act 
(FISMA). My authority over all of these areas directly affects our 
overall security posture. I would like to mention three key IT 
consolidation initiatives that we have started to not only better align 
our shared enterprise environment, but to enhance enterprise 
information security.
    First, we are collapsing multiple legacy wide-area networks (WANs) 
into a single enterprise WAN, called OneNet. OneNet is based on a 
comprehensive security architecture that uses the latest IT 
technologies. For example, the new consolidated WAN fully implements 
the IPSec protocol, an authentication and encryption protocol that 
ensures the confidentiality of all data transiting the WAN. And, as a 
key part of the transition to OneNet, we have also implemented a 
comprehensive Security Operations Center (SOC) Concept of Operations 
(CONOP). This CONOP details more efficient processes for the day-to-day 
management of security functions for OneNet, as well as for reporting 
incidents both internally to the SOC, and externally to the United 
States Computer Emergency Readiness Team (US-CERT) and other Law 
Enforcement and government agencies when required. To aid this effort, 
we've created the SOCONLINE Incident Reporting web tool for incident 
reporting, management and closure.
    Second, we are standardizing all email and directory services into 
a single, modern framework that is much more secure than the legacy 
environments we inherited. The department had 13 different email 
systems when it was formed. We have standardized the Target Enterprise 
Architecture for email, deployed a Global Address List and are on track 
to transition all components to the new email standards by December of 
2007. These improvements will eliminate several security 
vulnerabilities in our email posture and simplify its management.
    Third, we are collapsing multiple datacenters into a common shared 
environment. The first phase of our first datacenter is up and running 
in Stennis, Mississippi, and we are now in the process of migrating 
legacy systems into that center. Security has been designed into the 
Stennis facility from the start and as systems migrate to that facility 
our security posture will continue to improve.
    These initiatives will not only enhance our ability to store, 
process, and share information, they will also enhance our ability to 
ensure the confidentiality, integrity, and availability of that 
information.
    In addition to these three major consolidation activities, I have 
also begun another activity in conjunction with the Chief Financial 
Officer to enhance the security of our core financial systems. Each 
component CIO and CFO jointly presented a detailed remediation plan for 
improving the security of our core financial systems; this was done 
with the knowledge of both our Inspector General and independent 
auditors. These plans were personally approved by me, the Department 
CFO, and the Under Secretary for Management. In addition to ensuring 
the implementation of these plans, my office partners with the CFO and 
his team on other issues. One example of our continuing collaboration 
is a series of workshops that my office has sponsored to assist 
components in improving the security of these core financial systems. 
Due to the combined CIO/CFO efforts, we are now making significant 
progress in resolving prior financial audit findings.
    It is my responsibility to ensure that our IT systems comply with 
all federal and department policies. I now review each component's IT 
budget and expenditures as outlined in the Exhibit 53s and 300s and 
ensure their alignment in the following areas:
        1. The Secretary's goals and priorities;
        2. The Department's enterprise architecture;
        3. Needs definition and business case alignment;
        4. Privacy rules and regulations;
        5. Section 508 (Accessible Systems and Technology) compliance;
        6. Information security compliance; and,
        7. IT infrastructure compliance.
    In 2007, the Department will spend approximately $4.9 billion for 
information technology, and $332 Million of that is dedicated to IT 
security. We have requested $5.2 billion for IT in 2008, and we are 
planning to spend $342 Million on IT security. These numbers represent 
approximately 6.8 % of the total IT budgets for each of those years. 
Last week, I completed reviews for all component-level IT budgets for 
fiscal years 2009--2013. These detailed reviews provided me valuable 
insights into all areas of the Department's information technology 
programs, and it has given visibility into departmental activities in 
information technology from strategic mission, portfolio, and 
technology perspectives. These reviews will allow me to make informed 
recommendations to the Secretary concerning the Department's IT budget 
for these future years, while ensuring that all program elements, 
especially IT security, are adequately addressed.
    On the expenditure side, we are working to make sure our 
acquisitions are in line with our requirements for information 
security; so far, I have conducted 130 IT Acquisition reviews for 
security compliance (as well as enterprise architecture, infrastructure 
compatibility, business case maturity, etc.), and I have favorably 
adjudicated many issues to ensure that information security 
requirements are met in all IT acquisitions.
    As part of the process of reviewing and making recommendations for 
component IT budgets, I also take into account components' performance 
in mitigating their information security vulnerabilities. Included in 
this improved Management Directive is the authority to recommend budget 
changes in areas where a component's information security posture is 
weak. While I have not yet recommended that a component's budget be 
modified in response to a lack of success in mitigating 
vulnerabilities, I have provided guidance and direction, both 
informally and in some cases in writing, to the components that are not 
satisfactorily progressing in their remediation efforts, and with 
recommended changes.
    To ensure compliance with the Federal Information Security 
Management Act (FISMA), my Chief Information Security Officer (CISO) 
maintains a comprehensive systems inventory of all government-owned and 
contractor-managed systems. The Department's Office of Inspector 
General has reviewed the inventory methodology and continues to give it 
high marks for both completeness and accuracy. DHS's Information 
Security Program has made measurable progress, enough that unlike all 
previous years the Inspector General's annual FISMA assessment did not 
rate it as a significant deficiency in 2006.
    System owners, government and contractor alike, are held 
accountable for completing all elements of FISMA compliance for each 
system. The CISO produces a monthly scorecard, providing each component 
with an honest assessment of their status. Each component is provided a 
current assessment on status of certification and accreditation for 
every system in the inventory, annual controls testing, incident 
reporting, configuration management, information security training, and 
information security vulnerability management. The scorecards address 
the security of internal DHS systems as well as contractor operations. 
Additionally, the CISO has teams in place that conduct regular training 
and assist visits, with the current emphasis on vulnerability 
resolution and configuration management.
    I review this scorecard with all component CIOs in regular meetings 
set aside for this purpose and we discuss the scorecard at Management 
Council at least monthly. I also present this scorecard to the 
Secretary and Deputy Secretary periodically, and they in turn emphasize 
security with agency heads as appropriate. Most of our components have 
made exceptional progress in improving their overall FISMA posture. 
Since March 2007, I have written letters to the Directors of three 
components pointing out program deficiencies and suggesting ways to 
improve.
    While the monthly scorecard is the most visible product of the 
Department's Information Security Program, there is also a continuing 
emphasis on the basic tenets of effective information security with the 
understanding that progress in large federal agencies can only be 
achieved in increments. The Department's Information Security Program 
is in the third phase of its 5-year strategic plan.
    In the first phase, the Program focused on ``establishing a 
baseline.'' Basic information security policy and architecture were 
established and automated tools for enforcing the Department's policy 
were implemented. A thorough inventory of the Department's IT systems 
was conducted and system owners were identified to ensure 
accountability for system security.
    In the second phase, the Program focused on completing the 
accreditation of its IT systems. The significant goal of documenting 
and accepting system risk was accomplished. The implementation of the 
FY 2006 Certification and Accreditation (C&A) Remediation Plan 
generated a 68 percent increase in the number of systems accredited. 
The Department's C&A completion rate went from 26 percent in October 
2005 to 95 percent by the end of 2006.
    We now have a steady-state baseline from which to build. Our 
security policies and architecture are continually updated to respond 
to changing federal guidance, evolving missions, and new threats, and 
the certification and accreditation process is institutionalized across 
the Department. The current and future phases of the Information 
Security Program are aimed at incrementally ``raising the bar'', and 
our focus is not only on improving the documentation of controls and 
processes, but, more importantly on enhancing the operational security 
of every system.
    To this end, we are now evaluating and improving systems security 
profiles at the system level, and, review teams are providing 
assistance to Components in improving security plans and contingency 
plans, as well as providing assistance in other areas including 
configuration management and vulnerability remediation. We currently 
have over 4000 IT security related Plans of Action and Milestones 
(POAM) active, all targeting weaknesses identified through internal 
systems-level reviews, including certification and accreditation and 
annual assessments, as well as external audits including those 
conducted by our Inspector general and the Government Accountability 
Office. So far in 2007, we have completed remediation efforts for over 
7000 weaknesses, and all of the weaknesses identified in the recent GAO 
Audit of the US-VISIT Program now have active POAMs with scheduled 
completion dates by the end of 2007. We have also completed several 
tests starting with our most sensitive systems and our Network 
Perimeters.
    Although we still have a ways to go, we've made measurable 
improvements in the management of information security at the 
Department. We're not the only ones making this point. The Office of 
Management and Budget's (OMB) 2006 Report to Congress noted the 
significant progress we've made in certifying and accrediting the 
Department's IT systems. I am confident that the DHS Information 
Security Program is moving in the right direction and I look forward to 
working with you and your staff in the future.
    Thank you and I look forward to your questions.

    Mr. Langevin. The GAO submitted one testimony for the 
record, but we have two witnesses on the panel to answer 
questions from the subcommittee. And at this time, I now 
recognize Mr. Wilshusen to summarize his statement for 5 
minutes. Mr. Wilshusen.

  STATEMENT OF GREG WILSHUSEN, DIRECTOR, INFORMATION SECURITY 
                             ISSUES

    Mr. Wilshusen. Chairman Langevin, Ranking Member McCaul, 
Chairman Thompson, and members of the subcommittee, thank you 
for inviting me to participate in today's hearing on 
information security at the Department of Homeland Security, 
DHS. I am joined by Mr. Keith Rhodes, the GAO's chief 
technologist.
    Information security is a critical consideration for any 
organization that depends on information systems and computer 
networks to carry out its mission or business. It is especially 
important for government agencies such as DHS, where 
maintaining the public's trust is essential.
    The Homeland Security Act of 2002 created DHS by merging 
components of 22 Federal agencies and components. Each of these 
brought with it management challenges, distinct missions, 
unique IT resources and systems, and its own policies and 
procedures, thereby making implementation and integration of an 
effective department-wide information security program a 
significant challenge. Today, I will discuss the implementation 
of DHS's security program and the effectiveness of computer 
security controls for key information systems.
    Shortcomings of DHS security programs persist, although 
some progress has been made. In 2005, we reported that DHS had 
not fully implemented a comprehensive, department-wide program 
to properly protect the information systems that support its 
operations and assets. For example, the Department did not have 
a complete inventory of its systems, and component agencies did 
not fully or effectively perform key program activities, such 
as developing risk assessments, preparing security plans, 
testing and evaluating the effectiveness of security controls, 
completing remedial actions from known vulnerabilities, and 
developing and testing continuity of operations plans. We 
recommended that DHS take specific actions to address these 
problems.
    Since our 2005 report, DHS has taken steps to improve its 
security program. For example, it completed an inventory of its 
major systems for the first time in fiscal year 2006. DHS also 
implemented key program activities, such as contingency plan 
testing, security control testing, and system certification and 
accreditation on an increasing percentage of its systems. 
However, the quality and effectiveness of these activities was 
not assured, and program deficiencies continue to exist. These 
deficiencies contribute, Mr. Chairman, to serious computer 
security control weaknesses that threaten the confidentiality, 
integrity, and availability of key DHS systems.
    For example, DHS's independent auditors reported that 
security over its financial systems was a material weakness and 
internal control for fiscal year 2006.
    In addition, GAO determined that key systems operated by 
one of DHS's components, the U.S. Customs and Border 
Protection, were riddled with control weaknesses and did not 
effectively prevent, limit, and detect access to its computer 
networks systems and information.
    For example, it did not adequately identify and 
authenticate users, sufficiently limit access to information 
and information systems, properly protect external and internal 
boundaries of computer networks, effectively implement physical 
security at several locations, or provide adequate log-in or 
user accountability for key information technology resources. 
As a result, increased risk exists that unauthorized 
individuals, internal and external to the organization, could 
read, copy, delete, add, and modify sensitive and personally 
identifiable information and disrupt service on DHS systems.
    We are making recommendations to the Department to help it 
address these issues.
    In summary, DHS has made some progress in implementing its 
department-wide information security program. However, 
deficiencies in program activities continue to exist and 
contribute to serious control weaknesses. Until DHS and its 
components act to fully and effectively implement its security 
program and mitigate known weaknesses, they will have limited 
assurance that sensitive information and computer systems will 
be sufficiently safeguarded or that departmental missions and 
goals will be achieved.
    Mr. Chairman, this concludes my statement. Mr. Rhodes and I 
would be happy to answer questions.
    [The statement of Messrs. Wilshusen and Rhodes follows:]

               Prepared Statement of Gregory C. Wilshusen

    Mr. Chairman and Members of the Committee:
    Thank you for inviting us to participate in today's hearing on 
information security at the Department of Homeland Security (DHS). 
Information security is a critical consideration for any organization 
that depends on information systems and computer networks to carry out 
its mission or business. It is especially important for government 
agencies such as DHS, where the public's trust is essential. For many 
years, GAO has reported that poor information security is a widespread 
problem with potentially devastating consequences. In reports to the 
Congress since 1997,\1\ GAO identified information security as a 
governmentwide high-risk issue.
---------------------------------------------------------------------------
    \1\ GAO, High-Risk Series: An Update, GAO-07-310 (Washington, D.C.: 
January 2007).
---------------------------------------------------------------------------
    In this testimony, GAO discusses DHS' department-wide information 
Security program and computer security controls for key information 
systems. We based this testimony, in part, on our previously issued 
reports,\2\ and our draft report--that has been provided to DHS for 
review and comment--on computer security controls for certain 
information systems operated by the U.S. Customs and Border Protection 
(CBP). We also considered our analysis of the department's annual 
Federal Information Security Management Act (FISMA) \3\ reports for 
2005 and 2006 and the department's performance and accountability 
report for 2006. The work on which this testimony is based was 
performed in accordance with generally accepted government auditing 
standards.
---------------------------------------------------------------------------
    \2\ GAO, Information Security: Department of Homeland Security 
Needs to Fully Implement Its Security Program, GAO-05-700 (Washington, 
D.C.: June 2005) and Information Security: Department of Homeland 
Security Faces Challenges in Fulfilling Statutory Requirements, GAO-05-
567T (Washington, D.C.: April 2005).
    \3\ FISMA was enacted as title III, E-Government Act of 2002, Pub. 
L. No. 107-347 (Dec. 17, 2002) and requires agencies and their 
inspectors general or independent external auditors to report annually 
on the effectiveness of their security policies and compliance with the 
requirements of the Act. GAO, Informaion Security: Agencies Report 
Progress But Sensitive Data Remains at Risk, GAO-07-935T (Washington, 
D.C.: January 2007) describes the results of GAO's analysis of the 2006 
FISMA reports for 24 agencies including DHS.

Results in Brief
    Shortcomings in DHS information security program although progress 
has been made. In 2005, we reported that DHS had not fully implemented 
a comprehensive, department-wide information security program to 
protect the information and information systems that support its 
operations and assets. For example, the department did not have a 
complete inventory of its systems and component agencies did not fully 
or effectively perform key program activities such as developing risk 
assessments, preparing security plans, testing and evaluating the 
effectiveness of security controls, completing remedial action plans, 
and developing and testing continuity of operations plans. We 
recommended that DHS take specific actions to address these problems. 
Since our 2005 report, DHS has taken steps to improve its security 
program. For the first time, DHS completed a comprehensive inventory of 
its major applications and systems in fiscal year 2006. DHS has also 
implemented a department-wide tool that incorporates the guidance 
required to adequately complete a certification and accreditation for 
all systems and has implemented key program activities such as 
contingency plan testing, security control testing, and system 
certification and accreditation, on an increasing percentage of its 
systems. However, the quality or effectiveness of these activities was 
not assured and deficiencies continue to exist.
    These program deficiencies contribute to significant weaknesses in 
computer security controls that threaten the confidentiality, 
integrity, and availability of key DHS information and information 
systems. For example, DHS' independent auditors reported that security 
over its financial systems was a material weakness in internal control 
for fiscal year 2006. In addition, GAO determined that CBP did not 
implement controls to effectively prevent, limit, and detect access to 
certain computer networks, systems, and information since it did not 
(1) adequately identify and authenticate users; (2) sufficiently limit 
access to information and information systems; (3) ensure that controls 
adequately protected external and internal boundaries; (4) effectively 
implement physical security at several locations; (5) consistently 
encrypt sensitive data traversing the communication network; and (6) 
provide adequate logging or user accountability for the mainframe, 
workstations, or servers.
    CBP also did not always ensure that responsibilities for system 
development and system production were sufficiently segregated. As a 
result, increased risk exists that unauthorized individuals, internal 
and external to the organization, could read, copy, delete, add, and 
modify sensitive and personally identifiable information and disrupt 
service on DHS systems.
    Until DHS and its components act to fully and effectively implement 
its security program and mitigate known weaknesses, they will have 
limited assurance that sensitive information and computer systems will 
be sufficiently safeguarded or that departmental missions and goals 
will be achieved. Implementation of GAO's recommendations will assist 
DHS in mitigating the deficiencies described in this statement.

Background
    To address the challenge of responding to current and potential 
threats to homeland security--one of the federal government's most 
significant challenges--the Homeland Security Act of 2002 mandated the 
merging of 22 federal agencies and organizations to create the 
Department of Homeland Security (DHS). Not since the creation of the 
Department of Defense in 1947 has the federal government undertaken a 
transformation of this magnitude. Each of the 22 agencies and 
organizations brought with it management challenges, distinct missions, 
unique information technology infrastructures and systems, and its own 
policies and procedures, thereby making the implementation and 
integration of an effective department-wide information security 
program a significant challenge.
    DHS' mission, in part, is to prevent and deter terrorist attacks 
within the United States,\4\ reduce the vulnerability of the United 
States to terrorism, and to minimize the damage, and assist in the 
recovery, from terrorist attacks that do occur.\5\ One of the 
department's components, the United States Customs and Border 
Protection (CBP), is responsible for securing the nation's borders.
---------------------------------------------------------------------------
    \4\ 6 U.S.C. Sec. 113(a).
    \5\ 6 U.S.C. Sec. 111(b).
---------------------------------------------------------------------------
    Virtually all DHS and CBP operations are supported by automated 
systems and electronic data, and the agency would find it difficult, if 
not impossible, to carry out its mission and account for its resources 
without these information assets. Hence, the degree of risk caused by 
security weaknesses is high. For example, resources (such as payments 
and collections) could be lost or stolen, data could be modified or 
destroyed, and computer resources could be used for unauthorized 
purposes or to launch attacks on other computer systems. Sensitive 
information could be inappropriately disclosed, browsed, or copied for 
improper or criminal purposes. Critical operations could be disrupted, 
such as those supporting homeland security and emergency services. 
Finally, DHS' missions could be undermined by embarrassing incidents, 
resulting in diminished confidence in its ability to conduct operations 
and fulfill its fiduciary responsibilities.
    According to FISMA, the Secretary of DHS is responsible for 
providing information security protections commensurate with the risk 
and magnitude of harm resulting from unauthorized access, use, 
disclosure, disruption, modification, or destruction of information and 
information systems used by the agency or by a contractor on behalf of 
the agency. The Secretary has delegated to the DHS Chief Information 
Officer (CIO) responsibility for ensuring compliance with federal 
information security requirements and reporting annually to the 
Secretary on the effectiveness of the department's information security 
program. The CIO designated the Chief Information Security Officer 
(CISO) to
         develop and maintain a department-wide information 
        security program, as required by FISMA;
         develop departmental information security policies and 
        procedures to address the requirements of FISMA;
         provide the direction and guidance necessary to ensure 
        that information security throughout the department is 
        compliant with federal and departmental information security 
        requirements and policies; and
         advise the CIO on the status and issues involving 
        security aspects of the departmentwide information security 
        program.

Shortcomings in DHS Information Security Program Remain Although 
Progress Has Been Made
    In 2005, GAO reported \6\ that DHS had not fully or effectively 
implemented a comprehensive, department-wide information security 
program to protect the information and information systems that support 
its operations and assets. Although DHS had developed and documented 
policies and procedures that could provide a framework for implementing 
the department's program, certain departmental components had not yet 
fully implemented key program activities. For example, components' 
weaknesses in implementing these activities included (1) incomplete 
risk assessments for determining the required controls and the level of 
resources that should be expended on them; (2) missing required 
elements from information system security plans for providing a full 
understanding of the existing and planned information security 
requirements; (3) incomplete or nonexistent test and evaluation of 
security controls for determining the effectiveness of information 
security policies and procedures; (4) missing required elements from 
remedial action plans for identifying the resources needed to correct 
or mitigate identified information security weaknesses; and (5) 
incomplete, nonexistent, or untested continuity of operations plans for 
restoring critical systems in the case of unexpected events.
---------------------------------------------------------------------------
    \6\ GAO-05-700.
---------------------------------------------------------------------------
    The table below indicates with an ``x'' where GAO found weaknesses 
with key information security program activities for six systems and 
applications reviewed at four components.

    The table below indicates with an ``x'' where GAO found weaknesses 
with key information security program activities for six systems and 
applications reviewed at four components.

Table 1: Weaknesses in Information Security Program Activities for 
Selected Systems

----------------------------------------------------------------------------------------------------------------
   DHS                             Risk                         Security test   Remedial action   Continuity of
  SYSTEM    DHS  component      assessment     Security plan    and evaluation       plans          operations
----------------------------------------------------------------------------------------------------------------
Major      US-VISIT........  n/a............  X a............  n/a............  n/a............  n/a
 applicat
 ion
----------------------------------------------------------------------------------------------------------------
Major      ICE.............   ..............   ..............  X..............  X..............  X
 applicat
 ion
----------------------------------------------------------------------------------------------------------------
Major      TSA.............   ..............   ..............  X..............  X..............  X
 applicat
 ion
----------------------------------------------------------------------------------------------------------------
General    ICE.............  X..............   ..............  X..............    .............  X
 Support
system
----------------------------------------------------------------------------------------------------------------
General    TSA.............  X..............   ..............  X..............  X..............  X
 Support
system
----------------------------------------------------------------------------------------------------------------
General    EP&R............  X..............  X..............   ..............  X..............  X
 Support
system
----------------------------------------------------------------------------------------------------------------

Source: GAO analysis of information 
security documentation for United States 
Visitor and Immigrant Status Indicator 
Technology (US-VISIT), Immigration and Customs 
Enforcement (ICE), Transportation Security 
Administration (TSA), and Emergency 
Preparedness and Response (EP&R) systems.

a For each system, we obtained and 
reviewed all documentation contained in 
the certification and accreditation package--
with the exception of US-VISIT--in this 
case, we reviewed only the security 
plan.

    We also reported that DHS had not yet fully developed a 
complete and accurate systems inventory and used an enterprise 
management tool, known as Trusted Agent FISMA, that contained 
unreliable data for overseeing the components' reported performance 
data on their compliance with key information security activities. The 
DHS Inspector General reported that the data in the tool were not 
verified, there was no audit trail capability, material weaknesses were 
not consistently reported or linked to plans of action and milestones, 
and plans of action and milestones that had been identified and 
documented were not current.
    To assist DHS in addressing these issues, we recommended that it 
establish milestones for verifying the components' reported performance 
data in Trusted Agent FISMA and instruct its component agencies to
         develop complete risk assessments;
         document comprehensive security plans;
         fully perform testing and evaluation of security 
        controls;
         complete remedial action plans; and
         develop, document, and test continuity of operations 
        plans.

DHS Has Taken Steps to Improve Security Program, but Deficiencies 
Persist
    In response to our recommendations, the department has made several 
improvements in its information security program. For example, DHS 
officials stated that they had developed a plan to address all of the 
recommendations in our 2005 report. For the first time, DHS completed a 
comprehensive inventory of its major applications and general support 
systems, including contractor and national security systems, for all 
organizational components in FY 2006. DHS also implemented a 
departmentwide tool that incorporated the guidance required to complete 
a certification and accreditation \7\ for all systems. The completion 
of these two tasks eliminated two factors that had significantly 
impeded the department in achieving some success in establishing its 
security program over the previous two years. In addition, the CISO 
revised the baseline information technology security policies and 
procedures and mandated that the components ensure that their systems 
meet the requirements specified in the DHS baseline configuration 
guides.
---------------------------------------------------------------------------
    \7\ Certification is the comprehensive evaluation of the 
management, operational, and technical security controls in an 
information system to determine the effectiveness of these controls and 
identify existing vulnerabilities. Accreditation is the official 
management decision to authorize operation of an information system. 
This authorization explicitly accepts the risk remaining after the 
implementation of an agreed-upon set of security controls.
---------------------------------------------------------------------------
    With the exception of providing security awareness training to 
employees, the department has also implemented key program activities 
such as conducting specialized security training, testing and 
evaluating controls, testing contingency plans, and certifying and 
accrediting systems, for an increasing percentage of its systems or 
personnel in FY 2006 (see figure below). 


    However, the quality or effectiveness of certain information 
security program activities has not been assured. Although CBP has made 
important progress in implementing the department's information 
security program, it has not fully or effectively implemented key 
program activities. For example,
         Risk assessments performed for systems supporting a 
        key border protection program did not always fully characterize 
        risks to the systems;
         Interconnection security agreements listed in the 
        security plan for a key system were not current;
         Procedures for testing and evaluating the 
        effectiveness of security controls were not sufficient and did 
        not reveal problems with a mainframe computer that potentially 
        allowed unauthorized users to read, copy, change, delete, and 
        modify sensitive information;
         CBP did not always address significant deficiencies in 
        a remedial action plan thereby exposing sensitive information 
        to increased risk of unauthorized disclosure or modification;
         CBP did not adequately establish and implement tools 
        and processes to ensure timely detection and handling of 
        security incidents; and
         CBP had incomplete or out-of-date privacy documents 
        for systems supporting a key border protection program.

Significant Control Weaknesses Place Sensitive Information and 
Operations at Risk
    Significant weaknesses in computer security controls threaten the 
confidentiality, integrity, and availability of key DHS information and 
information systems.
    Independent external auditors identified over 130 information 
technology control weaknesses affecting the department's financial 
systems during the audit of its fiscal year 2006 financial statements. 
Weaknesses existed in all key general controls and application 
controls. For example, systems were not certified and accredited in 
accordance with departmental policy; policies and procedures for 
incident response were inadequate; background investigations were not 
properly conducted; and security awareness training did not always 
comply with departmental requirements. Additionally, users had weak 
passwords on key servers that process and house DHS financial data, and 
workstations, servers, and network devices were configured without 
necessary security patches. Further, changes to sensitive operating 
system settings were not always documented; individuals were able to 
perform incompatible duties such as changing, testing, and implementing 
software; and service continuity plans were not consistently or 
adequately tested. As a result, material errors in DHS' financial data 
may not be detected in a timely manner.
    Although CBP has made progress in addressing security 
vulnerabilities, significant problem areas still remain. Certain CBP 
systems supporting a key border protection program were riddled with 
control weaknesses that placed sensitive and personally identifiable 
information at increased risk of unauthorized disclosure and 
modification, misuse, and destruction possibly without detection, and 
placed program operations at increased risk of disruption. Weaknesses 
existed in all control areas and computing device types reviewed. 
Deficiencies in controls intended to prevent, limit, and detect access 
to information and information systems exposed CBP's mainframe 
computer, network infrastructure, servers, and workstations to insider 
and external threats, as the following examples demonstrate. CBP did 
not:
         Adequately identify and authenticate users in systems. 
        For example, passwords were transmitted over the network in 
        clear text and were stored using weak encryption.
         Sufficiently limit access to information and 
        information systems. For example, over one thousand users with 
        command line access could put a program designed to bypass 
        security rules into a special system library.
         Ensure that controls adequately protected external and 
        internal network boundaries. For example, internal network 
        traffic was not segregated. Moreover, workstations and many 
        servers did not have host based firewalls.
         Effectively implement physical security at several 
        locations. For example, CBP did not control access to its 
        restricted information technology spaces since its physical 
        access systems were controlled by local authorities.
         Consistently apply encryption to protect sensitive 
        data traversing the communication network. For example, network 
        routers, switches, and network management servers used 
        unencrypted network protocols so that files traversing the 
        network could be read.
         Adequately provide audit logging or user 
        accountability for the mainframe computer, workstations, or 
        servers. For example, monitoring lists for key operating system 
        libraries did not capture needed data for all sensitive 
        libraries in the desired locations.
         Always ensure that responsibilities for system 
        development and system operations or production were 
        sufficiently segregated. For example, mainframe system 
        programmers were allowed to access application production data 
        and developmental staff could access mainframe operating system 
        libraries. Moreover, developmental staff had update access to 
        the application production data.
         Consistently maintain secure configurations on the 
        mainframe, applications servers, and workstations we reviewed 
        at the data center and ports of entry. For example, production 
        servers and workstations were missing critical operating system 
        and software application security patches.
        As a result, increased risk exists that unauthorized 
        individuals, internal and external to the organization could 
        read, delete, add, and modify sensitive and personally 
        identifiable information and disrupt service on DHS systems.
    To assist enhance departmental security, GAO has previously made 
recommendations to DHS in implementing its information security program 
and is making additional recommendations in two draft reports currently 
being reviewed by the department. Implementation of these 
recommendations will facilitate improvements in the department's 
information security posture.
--------------------------------------------------------
    In summary, DHS has made progress in implementing its 
departmentwide information security program. However, the effectiveness 
of its program is not assured. Deficiencies in key program activities 
continue to exist and contribute to significant computer security 
control weaknesses that place (1) sensitive information and information 
systems at increased risk of unauthorized disclosure, use, 
modification, or destruction, possibly without detection, and (2) 
agency operations at risk of disruption.
    Ensuring that weaknesses are promptly mitigated and that controls 
are effective will require senior management support and leadership, 
disciplined processes, and effective coordination between DHS and its 
components. It also requires consistent oversight from the Secretary of 
DHS and the Congress. Until DHS and its components act to fully and 
effectively implement its information security program and mitigate 
known weaknesses, limited assurance will exist that sensitive 
information will be sufficiently safeguarded against unauthorized 
disclosure, modification, and destruction, or that DHS programs will 
achieve their goals.
    Mr. Chairman, this concludes our statement. We would be happy to 
answer your questions.

    Mr. Langevin. I thank you, Mr. Wilshusen, for your 
testimony. I thank the panel for their testimony.
    I remind each member that each member will have 5 minutes 
to question the panel, and I now recognize myself for 5 
minutes.
    Mr. Charbo, what we found in terms of staff investigative 
work, and also the GAO report, is very disturbing in terms of 
weaknesses in security at the Department of Homeland Security. 
I want to begin my questioning by asking this:
    Several months ago, hackers operating through Chinese 
Internet service launched an attack on the computer system at 
the Bureau of Industry and Security at the Department of 
Commerce. Hackers operating through Chinese Internet servers 
also accessed networks at several State Department locations, 
including its Washington headquarters and inside the Bureau of 
East Asian and Pacific Affairs.
    Now, we are familiar with public reports about the 
cyberattacks against the Department of Defense that were once 
code-named Titan Rain. As I mentioned in my opening statement, 
the infiltration of our data is a serious problem. And I want 
to know what the Department has done to stop it.
    Have you ever requested or received intelligence briefings 
about Chinese hackers penetrating Federal networks? And on a 
scale of zero to 10, how concerned are you about this threat?
    Mr. Charbo. Myself, I have not received an intel brief on 
those incidences. We have had an intel brief that was 
coordinated through the Federal CIO counsel with OMB through 
the support of DOD that did not report directly back to any 
evidence within DHS of any incidences from that data. It did 
identify other departments, but it did not point back to DHS.
    Do we experience scans from foreign countries? We believe 
so; we report those. Those are not penetrations. From a scale 
of one to 10, it is significant. It would be at a high scale in 
terms of a concern.
    I believe we do have a decent perimeter for the Department, 
where we are trapping things that come through, but none of 
those point back to being an orchestrated attack on the 
Department.
    Mr. Langevin. And the other day we had the chance to go 
over this in a meeting that we had, but for the record, have 
you ever requested a briefing on those issues?
    Mr. Charbo. Sir, I have not; on those specific issues I 
have not requested a briefing. We have asked the intel 
organizations to come in and do monitoring and reviews, using 
some of their skills, on our system. We have done numerous 
cases of those.
    Mr. Langevin. Mr. Charbo, DHS incident number 2006-09-30 
refers to suspicious beaconing activity, or botnets, on DHS 
computers. Now this is a common method of attack for 
sophisticated hackers to enter into networks and send out 
beacons in order to begin infiltrating data.
    Have DHS computers ever, quote-unquote, ``phoned home'' to 
Chinese servers?
    Mr. Charbo. I have not had any data that supports that. We 
have a filing within US-CERT. It is important to understand 
that the US-CERT incidences that we report, this 800 number, 
that is not a penetration. Those are events that we report up 
as a data-gathering tool for DHS, for the Federal Government, 
for the US-CERT to communicate out.
    Of those incidences, they are categorized. You place those 
into categories of significance based upon what you believe you 
are seeing at the time when you file that report. We had 844 of 
those in 2005 and 2006. It varies from ``I lost a laptop'' to 
``a phone I lost''; or it was ``something was stolen'' to ``we 
find malicious ware that is on a laptop.'' But we are capturing 
that as it scanned onto the network. It is very important to 
understand that.
    Of those events which are bots, we have--I have no 
evidence, I have no data that points back that it was actually 
phoning back to a Chinese network.
    Mr. Langevin. Mr. Charbo, I would also like to discuss DHS 
incident 2006-09-041, where a password dumping utility and 
other possibly malicious files were found on two DHS systems. 
This obviously looks like the work of experienced hackers.
    Once hackers are inside the system, they perform what is 
known in the industry as a ``rogue tunnel.'' This tunnel allows 
them to access the station through a beacon--through a back 
door, even when it appears that they have been removed from the 
system.
    Now, performing a rogue tunnel audit would allow you to 
determine whether the hackers are still within your systems. My 
question is, if you were concerned about bots on your 
computers, experts suggest conducting ingress and egress 
filtering on individual client PCs. Yet you report that DHS 
does not perform rogue tunnel audits nor does it apply ingress 
and egress filtering. Why not?
    Mr. Charbo. The question was, do we apply ingress and 
egress filters on client PCs. We do not do that.
    Mr. Langevin. Why?
    Mr. Charbo. We do monitor the edge routers.
    Mr. Langevin. Why don't you do that?
    Mr. Charbo. Because we monitor the traffic going outside of 
our Internet gateway, which is where traffic is leaving the 
Department. So we look at data as it revolves around that.
    If we do find evidence that there may be something 
suspicious happening, if we track something on the network or 
something comes in through a USB, which is common, or a laptop 
is remotely removed from the network, because they are mobile, 
we have people that are out in fields, they won't receive a 
patch upgrade.
    As it comes back into our environment, that configuration 
is now off; we will trap things. If it has collected a virus 
that has come in or patches have come into our configuration 
controls, that may need to be updated.
    So we will trap it at that point within our environment, 
and then we remove that. We report those up.
    Mr. Langevin. What about the rogue tunnel audits? I think 
these sound particularly dangerous, a rogue tunnel on your 
system. And obviously it is masked, it is very difficult to 
detect; why aren't you performing rogue tunnel audits?
    Mr. Charbo. What we do when we identify a password or some 
type of a malicious ware is, we do a forensic analysis of that. 
That is our mitigation of identifying whether or not there are 
further actions that need to be taken or reportings up through 
US-CERT or to our NOC SOC.
    Mr. Langevin. The Chair now recognizes the gentleman from 
Texas for 5 minutes.
    Mr. McCaul. I thank the chairman.
    Imagine agents of a foreign power breaking into the 
Pentagon or the Department of Homeland Security, going into 
file cabinets and taking out documents, and they were caught. 
That would be front page, Washington Post. Yet we know these 
intrusions are occurring in the Federal networks of Federal 
agencies.
    Some say that September the 11th was a failure of 
imagination. We had information that al-Qa'ida did want to fly 
airplanes into buildings and into national landmarks. We just 
didn't take it seriously. And yet here we are, with the status 
of cybersecurity the way it is, knowing what the threat 
potentially could be; and I would argue that this Nation is not 
taking it seriously.
    In order to prevent another devastating attack in the 
United States, we need to step up to the plate.
    You know, I see there are several routes of intrusions--one 
mischief, another one criminal, one espionage, worst case 
scenario a terrorist attack to shut down our power grids, to 
wreak havoc with our financial systems. There are many ways 
that the terrorists could really wreak havoc in this country. 
That is what this committee is all about.
    I think in order to really be able to evaluate a solution, 
we need to understand what the risk really is. And that is why 
I have called upon the Department of Homeland Security, and I 
hope to work with the chairman in introducing legislation that 
would call for a national strategic vulnerability assessment on 
U.S. cybersecurity so that we really know what the risk is and 
that we know how to deal with that risk.
    The private sector needs to be a key piece to that. We have 
our Federal networks and then we have our critical 
infrastructures in the private sector. Are they properly 
protected? Is our Federal Government properly protected?
    So my question is, to the panel, maybe more to the GAO, is 
this something that is necessary for the security of the United 
States, to conduct a national vulnerability assessment on our 
U.S. cybersecurity? And in doing so, how would you recommend 
that we do that?
    Mr. Rhodes. The risk assessment that you are talking about, 
risk is a function of threat, vulnerability, and impact. So all 
three pieces have to be done.
    Yes, there has to be a threat assessment, but there also 
has to be a realization of vulnerability, and there has to be 
an understanding of impact. No one, certainly not I, certainly 
not my colleague, Mr. Wilshusen, is going to say secure 
everything, lock everything down. That is impossible. It is 
also impossible to have perfect security, but you have to drive 
toward zero tolerance on key systems.
    What you are driving at, Mr. McCaul, is that you have to 
understand what ``key'' means. And the first point is, what is 
the threat against the systems you are trying to protect? And 
you are absolutely right, it is not just the Federal systems. 
It is that 97 percent of the critical infrastructure that is in 
private hands. The power grid is not owned by the Federal 
Government. The power grid is in private hands. Same with oil. 
Same with gas. Same with health care. Same with all of those 
systems.
    Well, they all fit under that hierarchy of ``critical 
infrastructure,'' and unless and until the government is able 
to translate to the private sector what the real threat is, the 
private sector is not going to be able to take it to the 
boardroom and justify it.
    So it is important that there is a threat assessment, but 
everyone also has to understand, that is one-third of the 
discussion. There is threat, there is vulnerability, and there 
is impact.
    Mr. McCaul. In your report you mentioned centralizing the 
Department's information security policy, which would go a long 
ways. I think there is a lot of confusion in the Federal 
Government as to who is in charge, not only within the Federal 
Government, but also in the private sector. Of course, we have 
the Department of Homeland Security, and then we have the NSA 
and the Department of Defense.
    Can you make recommendations on that issue?
    Mr. Wilshusen. Well, indeed, you know, with FISMA, which is 
the Federal Information Security Management Act of 2002, it 
establishes responsibilities for the specific agencies in terms 
of what their roles and responsibilities are in implementing 
sufficient safeguards within their agencies to protect this 
information and information assets.
    FISMA also requires that OMB and NIS establish government-
wide standards and policies for implementing security across 
the Federal Government. And so those two organizations have a 
role in determining what the policies and procedures are that 
other Federal agencies are required to follow insofar as it 
relates to non-national security systems.
    For national security systems, it is a combination of DOD 
and the Intelligence Community in coming up with those policies 
and procedures for government-wide use of those types of 
systems.
    Mr. McCaul. Mr. Charbo, do you have any comments on just 
lines of authority, clear lines of authority, and how we can 
resolve this? Because there is a lot of confusion, in my view.
    Mr. Charbo. Within the Department of Homeland Security, we 
have two groups that address cybersecurity. There is the 
Assistant Secretary for Cybersecurity and Communications, 
Telecommunications. They are focused on this issue with 
national policies around protecting cyberspace, critical 
infrastructure around the cyberthreats.
    My focus has been on the systems within the Department. I 
do not work on policy, but we work on trying to implement the 
policies that are there within our systems and manage towards 
more secure space. So if we just--as an example, if we take the 
recent FBI bot press release, they reported over a million, a 
million bots within the landscape that they had identified on 
IP addresses, potentially compromised within the Federal 
Government or within the U.S. Of that, there were about 181 
that were government, dot.gov's. The majority of these were 
edu's, dot.edu's, educational facilities, and dot.com's. The 
181, which included the House, the Senate, the Library of 
Congress, DHS; we had two IP addresses in that group.
    One of those, we had looked at. We believed it was a spoof, 
which means our IP address was being used as a return address 
from somebody. The other we aren't sure.
    As I said, the data--so we are waiting for that. So the 
operational roles of trying to implement against policies is 
where my office falls.
    The Assistant Secretary would look into the issues that you 
are addressing. There is a need.
    Mr. McCaul. I see my time is up. Thank you.
    Mr. Langevin. I thank the gentleman for his questions. The 
gentleman from Texas would also be glad to know that as a 
result of our first hearing on cybersecurity, the Chair is in 
the process of drafting legislation on a national threat 
assessment of cybersecurity; and I certainly look forward to 
working with you on that legislation.
    Before I recognize the gentleman from Mississippi, I also 
want to mention it is my intention to go for a second round of 
questions.
    The Chair now recognizes the chairman of the full 
committee, the gentleman from Mississippi, Mr. Thompson, for 
the purpose of asking questions for 5 minutes.
    Mr. Thompson. Thank you very much, Mr. Chairman.
    Mr. Charbo, are you aware of classified e-mails being sent 
over unclassified networks?
    Mr. Charbo. Yes, sir. It is termed ``spillage.''
    Mr. Thompson. Is that considered proper?
    Mr. Charbo. No, sir.
    Mr. Thompson. What have you done to correct it?
    Mr. Charbo. We have a procedure in place for those types of 
spillages. It is very closely aligned with our intelligence 
organization, our INA group, Intelligence and Analysis.
    As we go through our reports that we have gone through for 
the spillages, those that were considered significant--without 
exception, those were viewed as where somebody who had access 
to a secure system had typed an e-mail or made reference to a 
secured item, sent that item back to somebody else on e-mail on 
an unclassified system, and that person receiving said, I 
believe that is a secured breach. So we have a process where we 
notify that--we cleanse those systems.
    That is then a security issue, who they work with, the 
individual, on the breach. Many actions may happen there. It 
may be they are--their security clearance is removed. They may 
be removed from duty. But at that point it becomes a security 
issue with our security officers.
    Mr. Thompson. So do you consider these spillages 
significant?
    Mr. Charbo. They are a significant issue. It is a breach if 
not addressed. I believe what we are showing is that we are 
addressing those.
    This isn't unique to IT. This occurred even when we had no 
IT, but there were letters, papers, people wrote books. There 
are methods of handling and redacting spillages like this that 
go back quite many years.
    Mr. Thompson. Mr. Rhodes, do you care to comment on that?
    Mr. Rhodes. Any cross-authority communication, that is, any 
communication that breaches classification authority is 
significant, and it has to be handled. What has to be put in 
place is not just personnel. There has to be some control 
environment, so that people can't move from one network to 
another freely.
    It is not--obviously, there has to be a security function 
that takes place. It has to be a personnel issue. But having 
free access from one side to the other is not--is only going to 
foster the problem.
    Mr. Thompson. I guess my point is, knowing that you have--
these situations exist, could we not provide some controls to 
prevent it for the most part?
    Mr. Rhodes. Yes.
    Mr. Thompson. And I think that is the point I am trying to 
make.
    Mr. Charbo, in these spillage instances, can you provide 
the committee with how many people have been disciplined in 
this process?
    Mr. Charbo. I can't at this moment. We can get back.
    Our procedure is to refer those to our security office, 
because it may be a legal or a law enforcement issue at that 
point, so we have to refer those to our security office. And 
our intelligence office is involved in that as well.
    Mr. Thompson. Well, please provide us with what you have 
done on that.
    Are you aware of unapproved laptops being connected to our 
network?
    Mr. Charbo. Yes, sir.
    Mr. Thompson. Is that proper?
    Mr. Charbo. No, it is not.
    Mr. Thompson. What did you do or what have you done to 
prevent it?
    Mr. Charbo. So the process or the ones that are reported--
    Mr. Thompson. Go ahead.
    Mr. Charbo. The ones that are reported are where a 
contractor in our facilities happens to plug a laptop into a 
port. The alarm will go off.
    It is important to remember none of those contractors 
accessed our network. The alarm will go off. And in the cases 
that I am familiar with, we have escorted that individual off 
of the premises. Where we have contractors or it is a company 
that we have on contract, typically what we also do is follow 
up with security training recommendations around enforcing our 
policies.
    Mr. Thompson. I think part of the issue is whether or not 
we are providing enough training for the people. But I am a 
little concerned that a contractor could just walk in and plug 
up a laptop to a system under any protocol.
    Mr. Rhodes, you want to care to respond to that?
    Mr. Rhodes. I think one of the problems that you are 
describing, the root cause is that contractor staff are so 
pervasive.
    One of the root causes that we saw to a lot of the problems 
at the Department of Homeland Security when we were doing our 
testing is that systems are owned and operated by contract 
staff; therefore, they have free rein. Yes, an alarm goes off, 
but the contractor ultimately is running and operating the 
system at hand, and therefore, the contractor can come and go 
as the contractor pleases.
    Mr. Thompson. I beg the indulgence of the Chair.
    Mr. Charbo, were you aware of these security shortcomings 
before GAO brought them to your attention?
    Mr. Charbo. All of these issues that we are discussing 
specific to the Department of Homeland Security are ones that 
we report through our Security Operations Center. These are the 
ones that we provided to your letter as a request of events.
    I don't look at every one of those. I am not aware of every 
one of those. I certainly am aware of every one that impacts 
the mission. I mean, we have hundreds of these items. What we 
do--what I do is, we look across these categories, we review 
what incidences are of significance, we address those. We also 
take a look at these and determine, how do we need to modify 
our policies and change processes within the Department?
    Mr. Thompson. And my question is, why did it take GAO to 
find the weaknesses rather than your own internal operation?
    Mr. Charbo. Sir, GAO didn't point these incidences out to 
us.
    Mr. Thompson. Not incidents. CBP, the incidences dealing 
with CBP.
    Mr. Charbo. Oh, I am sorry. In terms of the GAO report, 
some of those were POAMs, or Plan of Actions and Milestones 
within our reporting processes. Others of these are events that 
were not picked up in audits by CBP.
    We use GAO and IG also. We don't disregard the comments 
that they make.
    I do believe that many of the findings in the GAO audit, 
since it was done, started over a year ago, many of those 
corrections have taken place.
    As in my statement it was said, there are also mitigating 
controls. In the cases where these employees are working inside 
a controlled space, we do background checks on those 
contractors. They do operate alongside our Federal employees. 
There is also a contracting officer, a program manager, someone 
who supervises those employees in that space. So it is 
important to know that those are secured employees.
    Mr. Thompson. I yield back.
    Thank you, Mr. Chairman. You have been very kind.
    Mr. Langevin. I thank the chairman.
    The Chair now recognizes the gentleman from North Carolina, 
Mr. Etheridge, for 5 minutes.
    Mr. Etheridge. Thank you, Mr. Chairman.
    Mr. Charbo, we have been talking about the importance of 
cybersecurity, and I want to know how important you think it is 
in the effective operations of DHS's IT resources and how 
important you think it is to our national security.
    We have talked about, the chairman, how many incidents we 
had in 2005 and 2006, and we know about the situations that 
happened at Defense and at the Department of State; yet 
cybersecurity spending has remained flat or has fallen at DHS, 
even as the budget of IT has risen by over 25 percent in recent 
years.
    The IT security budget was less than 10 percent of DHS's 
total IT spending in 2006, less than 7 percent in 2007, when 
cybersecurity experts recommended that spending be 
approximately 20 percent of the IT budget for security. So my 
question to you is this: How do you justify this level of 
investment in cybersecurity at DHS?
    Mr. Charbo. In terms of the budget for the chief 
information security officer, it did reduce in 2005 to 2006. 
That was a reflection of our security strategic plan. In 2004, 
there was a high incidence of what we call ``boarding 
parties.'' This was trying to determine what the inventory was.
    The budget presented back for outyears, which is now in 
terms of monitoring the progress for security and also on our 
Security Operations Center, reflects a flat line. It has been 
$15 million for the chief information security officer. That is 
for policy and for oversight; it is not for just the for what 
we have been putting into the Security Operations Center.
    Mr. Etheridge. Let me help you with that, because for 2005 
to 2007, 10 million. And it is truly flat. 2006 is 15, 2007 it 
is 15.
    Mr. Charbo. Correct.
    Mr. Etheridge. And yet we see the incidents going up. We 
just heard from GAO the problems we have, and yet we aren't 
investing in protecting the security--
    Mr. Charbo. From 2005 to 2006, it went down. It went up 
from 2004 to 2005. That represented our plan, our plan of 
identifying the inventory. The budget presented represented a 
reduced cost just for monitoring the program.
    As far as the Department goes, it has gone up between 2006, 
2007 and 2008, not as a percentage, but in dollars.
    When I look at a Gartner study--Gartner is a benchmark in 
the IT industry--their recommendations are 3 to 8 percent in 
terms of IT investment, depending upon your maturity as an 
organization. Typically--
    Mr. Etheridge. Well, let me interrupt you.
    Mr. Charbo. Yes.
    Mr. Etheridge. We are talking about maturity of the 
organization. We are talking about an organization that is just 
getting started, that we are putting investment of America's 
security in.
    Are you telling me that we are a mature organization?
    Mr. Charbo. No, sir.
    Mr. Etheridge. You were just quoting the statistics from an 
organization that said it was a mature organization.
    Mr. Charbo. No, sir, the quote I am using is 3 to 8 percent 
from Gartner based on your maturity, 8 if you are not a mature 
organization. This is what the study has presented.
    We invested in 2006 at about 8.2 percent. We are invested 
in 2007 at about 7 percent, 6.8; and we are about that amount 
in 2008 as well.
    As a total dollar amount, it has gone up. The request from 
2006 to 2007, our requests went up about $20 million. Again, in 
2008, it went up about $20 million, over a base of $350 million 
total in 2008.
    Mr. Etheridge. All right. I don't want to spend all my time 
on this. It is obvious we are not going to agree.
    It is not just the dollars we are spending; it is the 
results we are going to get, and I am very concerned about the 
results we are getting.
    You stated, when the chairman asked you a question earlier 
about--that you did not get the classified cyberthreat 
assessment briefing from the Intelligence Community, describing 
national and State activities.
    My question is, why did you not request these briefings?
    Mr. Charbo. You don't know what you don't know, sir. You 
know, I did not request the briefing because I was not aware of 
that event, that there were briefings going on that they were 
providing.
    Mr. Etheridge. Why?
    Mr. Charbo. I can't tell you that.
    Mr. Etheridge. It seems to me that is an important part of 
what we are trying to figure out.
    Mr. Charbo. It is. And as we have briefed the chairman, 
that is an effort that we would appreciate some help on.
    Mr. Etheridge. Isn't that part of leadership?
    Mr. Charbo. It is. That is why we are requesting some 
support in that area.
    The first intel briefing that we had on these issues came 
from a Federal CIO counsel with OMB. I think that most Federal 
CIOs are in need of that information, and that is an effort 
that I think the committee can help with. And we are anxious to 
support that.
    Mr. Etheridge. Mr. Chairman, your indulgence. I want to 
touch one other area, because I think we are into a serious 
area here.
    In view of the recent upticks in cyberattacks across the 
government systems that we have been talking about, have you 
requested that DHS conduct a risk assessment--we have talked 
about it already--to determine what your overall vulnerability 
is? And why haven't we done it, I guess is the big question.
    Mr. Charbo. At DHS every system goes through a 
vulnerability assessment as a part of our FISMA, a part of our 
certification accreditation.
    In terms of our major communication networks, our TS 
networks, our top secret networks, our security networks, our 
unclassified networks, we have had additional support come in 
from intelligence agencies to look for additional 
vulnerabilities in those. Some of those have been completed, 
some of those we will continue to do. We have some that are 
scheduled that will continue.
    Mr. Etheridge. Thank you Mr. Chairman. I yield back.
    Mr. Langevin. I thank the gentleman for his questions.
    The Chair now recognizes the gentlelady from California, 
Ms. Lofgren, for 5 minutes.
    Ms. Lofgren. Thank you, Mr. Chairman.
    Obviously, there are many, many issues that we will want to 
be consistently following up on with the Department from the 
GAO report. And I appreciate your holding this hearing today, 
and the participation of all the witnesses. I want to just 
spend a very brief time exploring the US-VISIT issue.
    Mr. Wilshusen or Mr. Rhodes, can you give us what you found 
in terms of US-VISIT in cybersecurity? Can you tell us some 
details of what you found there?
    Mr. Rhodes. Ms. Lofgren, let me--I want to be careful of 
the detail, because obviously I don't want to give the--
    Ms. Lofgren. Don't say anything that you shouldn't say in 
public.
    Mr. Rhodes. Right. Right. The security issues are 
pervasive.
    There are three parts to this discussion. One, the security 
issues are pervasive. As a matter of fact, I realize the 
statement continues to be made that our audit is a year old.
    It is not a year old. It started a year ago; the findings 
are not a year old. As a matter of fact, we curtailed our 
assessment of the systems because we just kept getting more and 
more findings. If we had continued to this day, I would argue 
that we would still be finding things in the environment.
    The problems were pervasive, the problems were systemic. It 
was not a matter of one system here, one system there, one 
problem here, one problem there. Problems were across the 
board.
    The second point I would make is that actually a lot of 
those problems can be fixed. They were functions of bad 
configuration or systems out of date, which is another reason 
that I say that the problems are systemic, in that, in a lot of 
ways, they are zero-cost fixes. They are a matter of 
reconfiguring the system to meet your requirements.
    The third point, I reiterate what I said earlier, the 
systems are run by contractors.
    Ms. Lofgren. No, I got that.
    Mr. Rhodes. All right. So those are the three--
    Ms. Lofgren. I wonder, could you, Mr. Charbo--we do have a 
contractor responsible for US-VISIT security, don't we? Could 
you get us a copy of that contract so we could take a look at 
that?
    Mr. Charbo. Yes.
    Ms. Lofgren. I appreciate that. On the--back on the US-
VISIT, I will ask this, because if it happened, the 
perpetrators already know that it happened.
    Was the database hacked, do you think, Mr. Rhodes?
    Mr. Rhodes. Was the database hacked? I did not see controls 
in place that would prevent it. And I did not see defensive 
perimeters, or I did not see detection systems in place that 
would let you know whether it had or had not.
    Ms. Lofgren. I will just close.
    This morning there was a hearing on US-VISIT and the exit 
portion, and I had another meeting to go to when our 
chairperson, Congresswoman Sanchez, asked Mr. Mocny and Mr. 
Jacksta about the GAO report and cybersecurity issues relative 
to US-VISIT. And I understand from staff who were--that they 
were surprised at the findings, and were unable to comment on 
them.
    So I would just ask that, as part of your exiting here, you 
make a special outreach to those two individuals on this. This 
is oriented not towards--I mean, we need to improve this 
situation, especially since much is riding on this. And perhaps 
we will get the details in a more appropriate setting from the 
GAO on the details of the exposure and risk, because this is 
obviously something that we will want to deal with in an 
expeditious basis.
    And I thank the chairman for recognizing me.
    Mr. Langevin. I thank the gentlelady for her questions. As 
I said, we are going to go for a second round of questions.
    Mr. Charbo, Chairman Thompson mentioned the Department's 
problem of saying one thing and doing another. He mentioned the 
Department's failure to implement Einstein, the National 
Cybersecurity Division's sensor system that analyzes suspicious 
network traffic, even though the US-CERT is trying to get other 
agencies to sign on.
    Now, another failure is auditing. DHS has contracts with 
two clouds to provide service to the Internet, that's Sprint 
and MCI. With so much traffic coming in and out, these clouds 
are keeping good traffic in and bad traffic out. Unfortunately, 
we see in one of your incident reports one of the carriers 
misconfigured the firewalls and allowed the firewalls to be 
bypassed.
    Now, despite this security breach, DHS has never audited 
the Sprint cloud. In fact, you told the committee that 
Assistant Secretary Garcia's shop, the National Cybersecurity 
Division, should be the one to audit the cloud. Yet, when the 
committee staff contacted NCSD, they said that not only have 
they never seen--never been asked to conduct such an audit, but 
that this should be handled by the CIO's office.
    So my question to you is, whose responsibility is it to 
audit these clouds and why has it never happened before?
    Mr. Charbo. Sir, the responsibilities to us go out to the H 
router. Those contractors that we have from that carrier, who 
were administering those, did misconfigure a router. We caught 
that. We identified that. We changed that. Those were the same 
cleared employees that--employees we have on staff.
    In terms of auditing the carrier clouds, you know, that is 
essentially auditing the Internet. I do believe that is a 
larger policy goal than just a Federal CIO's role at DHS or any 
Federal department. As we discussed, I do think that is an area 
that could be addressed or should be addressed on a broader 
scale than just every CIO in the Federal space trying to audit 
their carriers. There is a contractual issue in that.
    Mr. Langevin. You had a direct breach there. There should 
have been an audit conducted of the cloud. Isn't that--wouldn't 
that be your responsibility?
    And also, how long was that vulnerability open? Do you know 
how long that vulnerability existed?
    Mr. Charbo. I would have to get back to you on that.
    Mr. Langevin. That is disturbing. That is disturbing.
    Mr. Charbo, the DHS runs three local area networks, LANs A, 
B, and C. When was the last time you updated your network 
topology diagram with a focus on how the unclassified systems 
connect with the classified systems?
    Mr. Charbo. I would have to get back to you on that, sir, 
in order of--the exact date of the update of the topology. We 
have provided the committee with several diagrams of that 
topology. I would have to get back to you on any recent 
changes.
    Mr. Langevin. Mr. Wilshusen or Mr. Rhodes, if the network 
topology is incomplete, how can you be certain that your 
classified networks aren't touching your unclassified networks? 
And if hackers have infiltrated LAN A, can they have access to 
other networks within DHS?
    Mr. Wilshusen. I would say you probably can't be certain 
whether or not those two networks interconnect if you don't 
have a list or know all of the interconnections that affect 
those networks. So the possibility exists. And so certainly 
that is a key step.
    And, in fact, one of the first steps in developing an 
inventory of your systems and networks is to identify all the 
interconnections that exist on those networks. So that 
certainly is a key point of that.
    And I would just like to add one thing: Regarding the 
previous question, we have reviewed, as part of the request, 
the cloud, if you will, as part of our review of CMS's 
communication network. And this is what the Centers for 
Medicare and Medicaid Services, where we looked at the security 
over the communication network that was contractor-owned, 
contractor-operated, and identified a number of vulnerabilities 
that we were able to report on and make recommendations to CMS. 
And the benefit of that was that CMS took immediate, aggressive 
action to start implementing those recommendations.
    Mr. Langevin. So you would disagree with Mr. Charbo's 
statement that auditing that cloud would be like auditing the 
Internet? You are saying that it could be done and it should 
have been done?
    Mr. Wilshusen. I am saying there is some benefit to doing 
so. And we did that on the incidents with CMS.
    Mr. Langevin. Mr. Rhodes, do you have anything to add?
    Mr. Rhodes. Just to reiterate that we did audit the cloud. 
Now, we audited the portion of the cloud that was within the 
scope of the requirement from CMS, but we did audit it. So it 
can be done.
    Mr. Langevin. Thank you.
    The Chair now recognizes the gentleman from Texas, the 
ranking member of the subcommittee, for 5 minutes.
    Mr. McCaul. Thank you. And I want to follow up on your 
mention of a national strategic vulnerability assessment. I 
think in light of the testimony it is clear that we need to go 
forward with that.
    I want to follow up on something my colleague, Mr. 
Etheridge, brought up, and that is the Titan Rain. We had 
evidence that the Chinese were hacking into our networks at the 
Department of Defense, at the Commerce Department, State 
Department, extensive--hitting nonclassified networks, thank 
God. But that raises some serious concern in terms of the 
coordination across all Federal levels.
    If Mr. Charbo, who is in charge, as the Chief Information 
Officer, is not aware of that threat, it highlights the problem 
that we have that no one is really in charge across all Federal 
levels when you don't have one person in charge. And the 
coordination piece becomes very important.
    Mr. Charbo, I understand none of these intrusions actually 
hit the Department of Homeland Security, which is probably 
presumably why you were not briefed on this issue?
    Mr. Charbo. I believe so.
    Mr. McCaul. Okay.
    Mr. Charbo. I believe so.
    Mr. McCaul. Have you been briefed since then?
    Mr. Charbo. Briefed on Titan Rain?
    Mr. McCaul. Right.
    Mr. Charbo. I don't believe specifically. I believe it was 
a sanitized brief.
    Mr. McCaul. Were any of your superiors at higher levels 
briefed on this?
    Mr. Charbo. I couldn't comment on that.
    Mr. McCaul. Do you see that as a deficit? It seems to me if 
this is going on, that there needs to be some sort of 
coordination across particularly the national security-related 
agencies that this is happening and in order to better protect 
our Federal Government from these intrusions.
    Mr. Charbo. I agree. I think from my perspective more in-
depth intel briefs would be a benefit so that we can react to 
the situations. As I said, our data comes from what we report 
through to the US-CERT. We get information back from the US-
CERT. That would be our conduit for a lot of these intel 
briefs. We adjust our systems accordingly from those briefs.
    I am trying to establish a regular intel brief for the CIOs 
within components of the Department to specifically address 
that issue.
    Mr. McCaul. I appreciate the challenge you have in your 
position. It is an enormous one.
    Can the Government Accountability Office tell me, this 
obviously exposes, in my view, a huge vulnerability not only 
that a foreign government was hacking into major network 
systems at the Federal level, but also the lack of 
communication coordination briefings with the Department of 
Homeland Security in this case.
    Mr. Wilshusen. I would like to just add to that in terms of 
there is an organization called the US-CERT which is 
responsible for collecting and analyzing threat assessments and 
incidents that occur throughout the Federal Government, and, of 
course, the agencies are responsible for providing that 
information to US-CERT. In fact, GAO, we asked for and received 
a briefing from US-CERT on some of the incidents that you are 
referring to, particularly with Titan Rain. And so they had the 
information, and we were able to get some information about 
that, which helps us to better assess the threats that are out 
there when we definitely develop our audit programs.
    Mr. McCaul. Mr. Rhodes, any comment?
    Mr. Rhodes. I would just say that, yes, there is difficulty 
in cross-communication. That is why there is a large effort in 
information sharing, and that what I would convey is that it 
seems to me that basic curiosity should be driving everyone 
about their environments. All you have to do is pick up--it is 
an unclassified document, it is called Unrestricted War. That 
tells you who your opponent is and tells you how your opponent 
is coming after you.
    Currently there is information about attacks against Italy. 
Recently there were attacks against Estonia. Prior to that you 
can just--it doesn't necessarily need to be a decoder--ring--
level, supersecret brief in order to understand what is above 
the fold on the front page of the Washington Post.
    Mr. McCaul. Just one last point, Mr. Chairman, and that is 
to follow up on what you are saying, and in my first question 
talking about the threat posed by al Qaeda and airplanes and 
not being taken seriously, we clearly have a threat here with 
cybersecurity. Do you believe that we are not taking this issue 
as serious as we should?
    Mr. Rhodes. My concern is that I don't think people 
understand that the virtual and the physical world are 
intersecting every day and becoming more and more intertwined. 
If we cannot secure systems that are holding information 
because we do not understand the value of that information, if 
we can't do the risk assessment based on threat vulnerability 
and impact, then when the power grid is completely automated, 
when the oil and gas is completely automated, we will have a 
very, very serious problem on our hands, because we do have 
opponents, and they are dedicated.
    Mr. McCaul. Thank you, Mr. Rhodes.
    Mr. Langevin. The Chair recognizes the Chairman of the full 
committee Mr. Thompson.
    Mr. Thompson. Thank you very much, Mr. Chairman.
    Let me at the outset of my questions say that I am real 
troubled by a statement Mr. Rhodes said that they basically 
stopped looking at a program because every time they look, they 
kept finding weaknesses.
    Mr. Charbo, I hope you are as equally troubled, too, about 
that statement from a security standpoint, that basically you--
the GAO stopped looking because I would assume that every time 
they looked, they found a vulnerability. And the fact that we 
have a private contractor who we will get to contract who is 
supposed to, I would assume, prevent these things from 
happening; have you put this contract on notice that their 
performance is less than stellar in this particular arena?
    Mr. Charbo. Sir, we just received the draft. CBP just 
commented to the GAO 2 days ago. So there has not been any 
contractor placed on notice.
    Mr. Thompson. Well, then are you prepared to tell the 
committee that based on what GAO found as vulnerability and 
weaknesses, that you already knew about those vulnerabilities 
and weaknesses?
    Mr. Charbo. No, sir, I am not prepared to say I already 
knew about those vulnerabilities and weaknesses. We will sit 
down with CBP and go through these, as we typically do, go 
through these and address the contractor issues.
    Mr. Thompson. Mr. Wilshusen, is it standard operating 
procedure for a department to contract out its IT security; and 
if it is, what is the oversight back to that agency if it is 
contracted out?
    Mr. Wilshusen. I believe more and more agencies are indeed 
contracting out IT services, including IT security for certain 
aspects of that, to include network monitoring and actually 
administering systems. But it is incumbent upon the agency, and 
it is required under law that the agency take appropriate 
oversight measures to ensure that the contractor is applying 
the appropriate security safeguards and adhering to the 
agency's own information security policies and procedures.
    Under FISMA, the agency is responsible for assuring that 
the contractor is adequately securing the systems and 
information that it operates on behalf of the agency.
    Mr. Thompson. Mr. Charbo, have you certified FISMA 
compliance with respect to this contract?
    Mr. Charbo. I don't certify FISMA compliance. According to 
FISMA, the business owner of the system certifies that system.
    Mr. Thompson. To who?
    Mr. Charbo. Certifies it to the Department, essentially to 
me. We monitor that, go through and audit those.
    Mr. Thompson. Can you provide this committee with those 
certifications?
    Mr. Charbo. I can provide that.
    Mr. Thomas. Well, as whether or not you accepted the 
certifications?
    Mr. Charbo. Correct.
    Mr. Thompson. Yield back.
    Mr. Langevin. Thank the gentleman.
    The Chair now recognizes the gentleman from North Carolina 
Mr. Etheridge for 5 minutes.
    Mr. Etheridge. Thank you, Mr. Chairman.
    Mr. Charbo, earlier my colleague who had to leave, Ms. 
Lofgren, was asking GAO some questions as it related to 
Homeland Security's database, so let me give you a chance to 
comment, because the question dealt with US-VISIT and the 
Department's security database, whether or not terrorists or 
nation states could get into that and change or alter their 
names and allow them access to this country. And we wouldn't 
even know that they were doing it, rendering our watch list or 
our visa tracking protocol useless. When time ran out, you 
didn't have a response. Did you have a response to GAO's 
findings on that report?
    Mr. Charbo. The GAO report addresses a CBP system. As we 
stated in our testimony, there are other controls placed around 
that system, and there is no evidence that any of those 
incidents you stated have occurred on that system.
    Mr. Etheridge. So you are saying that the US-VISIT 
database, to your knowledge, has not been hacked by outsiders?
    Mr. Charbo. Correct.
    Mr. Etheridge. Let me return to my friend from GAO. Did any 
of your--Mr. Rhodes--any of the information from the GAO's 
study indicate any intrusion in the US-VISIT by any outsider?
    Mr. Rhodes. We did not have any direct evidence of 
intrusion; however, we did not see controls in place that could 
prevent it, and we did not see detection systems in place in 
key areas that would have detected it had there been 
intrusions.
    Mr. Etheridge. So let me reframe my question then. What you 
are saying is that if someone were smart enough to get in, they 
could conceivably get in, get out, and never know they had been 
in.
    Mr. Rhodes. They might have, sir.
    Mr. Etheridge. Let me ask you another question. You 
mentioned earlier that a low-cost fix to some of the security 
problems that you found in the US-VISIT system could be done.
    Mr. Rhodes. Yes, sir.
    Mr. Etheridge. How quickly could they be done, and how long 
would--how long would it take to get them done, and how 
complicated is it to do them?
    Mr. Rhodes. The complicated part is figuring out the value 
of the system and how much security has to be in place. That is 
a policy analysis. I can't give you that. Once that is 
established, however, some of these fixes could be done in an 
extremely short period of time, a matter of days. This is not 
weeks or months or years to try and fix things.
    When I talk about low cost and reconfiguring a system, I am 
talking about the time it takes for someone to come in and put 
a new computer on your desk in your office.
    Mr. Etheridge. Mr. Charbo, let me go back to my original 
question again, because it seems to me, if I am understanding 
what I am hearing--so if I am incorrect in what I am picking 
up, please correct me, because I don't know a great deal about 
it, but I do know this is a very vulnerable area potentially. 
Is there a reason why we haven't done this?
    Mr. Charbo. As an example of one of the controls that--in 
the U.S. GAO report on CBP and VISIT is that there is no 
encryption on the local area network. However, we encrypted the 
traffic going outside of that network, so there is an 
encryption control as a mitigating control, plus we do 
background checks on those employees and contractors that are 
in that area.
    And all of these cases in establishing risk, you look at 
mitigating controls. If there are some quick, easy 
configuration control fixes to put in place, we would like to 
sit down with GAO and understand what those are to implement 
those.
    Mr. Etheridge. Would you mind doing that before you leave 
today, start that process?
    Mr. Charbo. We have their findings; we have sat down with 
them.
    Mr. Etheridge. Have you already done that?
    Mr. Charbo. I have not. CBP has, US-VISIT has. Their 
security people have sat down and reviewed the findings, et 
cetera.
    Mr. Etheridge. I would encourage that, because it seems to 
me that that is a good starting point. Whoever is in charge 
ought to be knowing what is happening, if I might suggest that.
    Mr. Rhodes. Mr. Etheridge, may I just add one?
    Mr. Etheridge. Please.
    Mr. Rhodes. Some of these fixes have been made in the time 
since we made them.
    Mr. Etheridge. Thank you.
    Mr. Rhodes. Some were severe enough that we wanted them 
fixed right then. But some of them we are in the process of 
negotiation, because as Mr. Charbo says, he has had the report 
only a short time.
    Mr. Etheridge. In light of that, Mr. Chairman, could we ask 
that--because I think this is a very critical area, it is a 
highly vulnerable area--that, Mr. Charbo, if you would please 
let this committee know as this moves and when these are fixed?
    Mr. Charbo. Yes, sir.
    Mr. Langevin. I thank you.
    Mr. Etheridge. Mr. Chairman, I yield back.
    Mr. Langevin. I thank the gentlemen.
    We can clearly go on all afternoon with questions. I am 
going to ask one final one, and there are several that the 
committee will have for the panel in follow-up, and we would 
ask that you get back to us as quickly as possible in writing.
    Mr. Langevin. Mr. Charbo, one of your goals that you 
provide to the committee is 100 percent FISMA compliance, yet 
we have heard time and again that FISMA compliance doesn't 
equal security. Many IT security commentators have said that 
you can't correlate between the grade an agency receives and 
the true level of security within that agency.
    How important is getting an A to you on the FISMA scores, 
and why isn't your primary focus on securing your own networks 
and mitigating the vulnerabilities that exist within the 
networks?
    Mr. Charbo. Sir, FISMA is a law that we are obligated to 
follow. I mean, if you want to make it a paper process, 
certainly I believe an organization can make it just a paper 
process. That is not the case at DHS. FISMA does not require us 
to stand up a security operations center, as we have reported 
to the committee with all the actions that happen within the 
Department. That was an initiative that the Department took, 
that the CIO's office took, or Chief Information Security 
Officer took.
    So that is where we really believe we are trying to bridge 
and make FISMA operational. Certainly I do believe it can be 
just a paper process, but that is not the case at DHS. Our plan 
of action is in milestones and are very critical in terms of 
understanding the configuration controls. A lot of the 
questions have been directed today at how we are going to 
mitigate those and turn those into operations.
    Mr. Langevin. With respect to those POAMs that you have 
raised, there are a significant number of those POAMs that have 
not yet been completed and not been addressed. Why is that it. 
Why is the number so high in terms of POAMs that are 
unresolved?
    Mr. Charbo. There is a high number, but there have been a 
high number that have been resolved. The nature of those POAMs 
is to continuously review the risks, the security postures of 
your systems, and make a plan of action to mitigate that 
weakness. There will always be POAMs in the Department if we 
are doing this correctly and not making it just a paper trail.
    Mr. Langevin. Just to quantify, there are, according to the 
report, 69 percent of the 3,566 open vulnerabilities that exist 
on the Department's networks, and they did not include the 
resource to require for mitigating those vulnerabilities. That 
is a significant number that is still unaddressed, and I hope 
you are going to get to it.
    Mr. Charbo. In most of those cases, we address mitigating 
controls.
    Mr. Langevin. I want to thank the panel for their testimony 
today. Again, several times during the hearing you stated that 
you will get back to us with questions that we had. We will 
hold you to that. And we ask that you respond as expeditiously 
as possible in writing to further questions that the committee 
will have for you.
    I want to thank the panel for their testimony today. It has 
been very valuable. Thank the Members for their questions, and 
hearing no further business, this subcommittee now stands 
adjourned.
    [Whereupon, at 3:50 p.m., the subcommittee was adjourned.]


              APPENDIX: Additional Questions and Responses

                              ----------                              


                 Questions from Hon. Bennie G. Thompson

                      Responses from Scott Charbo

    It is my pleasure to provide the following responses to your 
committee's May 31, 2007 follow-on request for information concerning 
the Department of Homeland Security's (DHS) information technology 
security policies and procedures (Attachment 1).\1\*
    Question 1.: The network topology diagram provided to the Committee 
is Incomplete. Please provide the full network topology diagram.
    Response: Please find the attached Department of Homeland Security 
(DHS) OneNet topology diagram. The diagram represents the Department's 
current infrastructure and details OneNet, DCN, and the Component 
Connectivity (Attachment 2).\1\* A second diagram shows the 
Department's A LAN (Attachment 3).\1\* Additional topology diagrams 
will be provided to your office by Tuesday, June 19, 2007.

    Question 2.: Has the Department identified any security Concerns as 
it moves forward with the proposal, and, if so, what plans are in place 
to remedy any vulnerabilities prior to convergence of any networks.
    The OneNet project is currently managed by the DHS Infrastructure 
Transformation Program (ITP) within the Office of the Chief Information 
Officer (DHS CIO). Infrastructure Operations, also an office within the 
DHS CIO organization, is responsible for the ITP, and provides ongoing 
assurance that security controls are duly executed in with Chief 
Information Security Officer (CISO) policies acts as the OneNet 
Designated Accrediting Authority (DAA).
    The OneNet Certification and Accreditation was completed during the 
implementation stage and achieved anacceptable risk posture in January 
2007. An Authority to Operate (ATO) was subsequently issued and 
residual vulnerabilities, discovered during the accreditation security 
testing and evaluation (ST&E) process, were entered into the system's 
Plan of Actions and Milestones (POAM), provided as Attachment 4.\1\* 
POAM items are being addresesed in accordance with DHS 4300A Attachment 
H, Plans of Actions and Milestones process Guide, provided as 
Attachment 5.\1\*
    The following program issue is being addressed by the DHS CIO in 
partnership with the DHS service provider, U.S. Customs and Border 
Protection (CBP).
    During the accreditation security testing and evaluation process, 
we assessed that the security control for audit collection, retention, 
review, and management was not in place. Customs and Border Protection, 
responsible through the ITP Charter for One Service Delivery, is fully 
aware of the audit deficiencies and has a high level security project 
plan to correct them. The lack of audit management does not pose a risk 
to the Component Agencies, neither currently nor when they have 
complete network convergence. Nonetheless, successfully addressing this 
issue provide the Department with indicators as a security assurance 
measure that the network has the appropriate security and operational 
administrative control procedures in place.

    Questions 3.: Please provide a list of all mitigation actions 
tracked within the Department's Trusted Agent FISMA(TAF) tool, 
including the name of the component, date of assignment, scheduled 
completion date, mitigation action, and completion date.
    Response: A Department-wide is provided in Attachment 4.

    Question 4.: Please provide a list of all vulnerabilities that are 
recorded and tracked within the TAF Plan of Action and Milestone 
folder, including the name of the component, date of assignment, 
scheduled completion date, mitigation action, and completion date.
    Response: A Department-wide is provided in Attachment 4.

    Question 5.: During a meeting with the Committee staff, you stated 
that you are authorized to reduce funding to agency components that do 
not mitigate their vulnerabilities in a timely fashion. Please provide 
a list of funding reductions or recommendations for funding reductions 
that you made to Secretary Chertoff. Please also provide a narrative of 
Secretary response to your recommendations.
    Response: During the meeting with the Committee staff, the response 
to the question of the Chief Officer's authority and how he can 
influence a component's progress was answered in three parts by the 
Chief Information Officer. To clarify, the Chief Information Officer 
can make recommendations to the Secretary for budget reductions, but he 
cannot reduce budgets himself. This three part answer was based on the 
Secretary's changes to Management Directive 0007.1, Information 
Technology Integration and Management. Additional information follows:
    Secretary Chertoff recently instituted changes in the oversight of 
the Chief Information Officer for the Department of Homeland Security 
DHS published a revised Management Directive 0007.1 in March 2007, 
improving the ability of the Chief Information Officer to manage and 
influence the Department's information technology programs. Included in 
these changes were:
        1. Components must provide their information technology (IT) 
        budgets annually to the DHS Chief Information Officer for 
        review; I will then make recommendations to the Secretary for 
        final budget submissions to the Office of Management and 
        Budget.
        2. Any proposed IT acquisition greater than $2.5 million must 
        be reviewed and approved by the DHS Chief Information Officer. 
        IT acquisitions are defined as services for IT, software, 
        hardware, communications, and infrastructure.
        3. Before IT investment proposals greater than $2.5 million are 
        submitted to the DHS Chief Information Officer for approval, 
        the Department's Enterprise Architecture Board must approve the 
        investment and certify its alignment with the Department's 
        enterprise architecture.
        4. The DHS Chief Information Officer will approve the hiring of 
        Component Chief Information Officers, as well as set and 
        approve their performance plans, ratings, and annual award 
        compensation.
    As part of the process of reviewing and making recommendations for 
component IT budgets, I also take into account components' performance 
in mitigating their POAM vulnerabilities.
    Included in this improved Management Directive is the inherent 
ability to influence the budget in areas where a component's 
information security posture is weak. While I have never recommended 
that a component's budget be reduced due to a lack of success in a I 
POAM, I have been able to provide guidance and direction to the 
components that are not satisfactorily progressing in their POAMs. 
Since March 2007, when the Management Directive gave these additional 
powers to the Chief Information Officer, I have written letters to the 
directors of three components pointing out ways they could improve 
their FISMA scores (See these letters in Attachment 6).\1\*
    Indeed, it is not always the best policy to reduce an IT budget if 
a is not being satisfactorily met. My experience has shown that the 
components are in fact making efforts to resolve their problems and 
that the lack of financial means to mitigate vulnerabilities is their 
primary obstacle to success. We would want to provide encouragement and 
support to components so that they can obtain additional resources to 
ensure success.

    Question 6.: If you have not provided funding cut recommendations 
to the Secretary, please provide a list of any components that have not 
mitigated their POA&M vulnerabilities and a narrative explaining your 
decision not to recommend a funding reduction.
    Response: A Department-wide is provided in 4.
    Please see the answer to question 5.

    Question 7.: According to the Department's policy on Contractors 
and Outsourced Operations, ``components shall conduct reviews to ensure 
that the IT security requirements in the contract are implemented and 
enforced.'' When was the last Department-wide review of these 
contracts? Were these reviews conducted by component CIOs or by 
personnel within your of authority? What vulnerabilities were in the 
review and when were they remediated? Please provide the Committee with 
each component review of their outsourced operations, as well as the 
Departmental review of the components' work.
    Response: The Department has a of 717 systems in its inventory. 
This includes 501 government systems and 216 contractor systems. The 
Department mandates the testing of information systems security 
controls for all systems, government contractor alike, using the 
National Institute of Standards and Technology (NIST) Special 
Publication 800-53 (SP 800-53) methodology. Please refer to Attachment 
7,\1\* summary of NIST SP-800-53 assessment for a summary of these 
assessments. Contracting officers and their technical representatives 
(COTRs) also review contractor performance, including compliance with 
information security requirements.
    Additionally, the Department ensures that IT security requirements 
are included and enforced in all contracts. To that end, the DHS CIO 
implemented the IT Acquisition Review (ITAR) process that provides for 
the DHS CIIO's review of all IT acquisitions of $2.5M or more. Public 
Law 109-295 requires that ``no funds be made available for obligation 
for any information technology procurement of $2.5M or more without 
approval of the DHS CIO.''
    In support of this effort, the CISO developed review criteria and 
evaluates every Purchase Request (PR) to ensure that the appropriate 
personnel and information security requirements are included prior to 
CIO approval and release. The CISO staff has conducted conducted and 
adjudicated more than 130 PR reviews since October 1,2006. Please refer 
to Attachment 8,\1\* Summary of Information Technology Acquisition 
Reviews for a summary of these reviews.
    DHS Management Directive 0007.1 requires the DHS CIO to ``review 
and approve all Component IT budgets.'' The CISO staff completed 
secwity reviews for more than 375 investments (levels 1 through 4) in 
April 2007 and provided the security scores to the Capital Planning and 
Investment Control (CPIC) in support of this requirement. A summary of 
the results is presented in Attachment 9,\1\* Contractor Monitoring 
Summary.

    Question 8.: According to the Department's policy on Risk 
Management, ``components conduct risk assessments whenever significant 
changes to the system configuration or to the operational/threat 
environment have been made, or every three years, whichever comes 
first.'' Please provide these risk assessments, including the dates the 
assessments were conducted.
    A complete set of risk assessments is provided in Attachment 
10.\1\* Please be aware that this information is considered highly 
sensitive and should not be released.

    Question 9.: According to the Department's policy on IT Security 
Review and Assistance, ``the DHS CISO shall conduct IT security review 
and assistance visits throughout the Department to determine the extent 
to which the Component security programs comply with IT security 
policy, standards, and procedures.'' When were these security reviews 
completed? How many components passed or failed this review?
    The Department conducts security review and assist visits on an 
ongoing basis. The Office of Information Security (OIS) IT Security 
Compliance Team reviews and assesses Certification and Accreditation 
(C&A), including compliance with the Federal Information Systems 
Management Act (FISMA).
    Documents are reviewed on a pass/fail basis against criteria 
described in the FY07 Information Security Performance provided as 
Attachment 11,\1\* the Compliance Team provides Components with 
feedback on how to raise the quality of systems security, if required.
    Plans of Action and Milestones (POAMs) are reviewed monthly and 
assessed for compliance with OMB guidance and against criteria 
described in the FY07 Plan. All systems are graded on a pass/fail basis 
and the Compliance Team tracks Accounting Office (GAO), Office of the 
Inspector General (OIG) and financial audit findings to ensure that 
appropriate POAMs have been developed for each recommendation. It also 
monitors POAMs through completion.
    The overall FISMA compliance status for each Component and results 
of compliance reviews are compiled in a monthly scorecard and 
distributed to Department ISSMs and CIOs.
    Training and assistance provide tailored support designed to help 
individual Components address compliance issues. In most cases, this 
involves working directly with Component System Security Managers and 
Officers (ISSMs and ISSOs) in order to address weaknesses. Security 
training and assistance visits for FY07 have included:
        Training Activities
         C&A
         Risk Management System (RMS) and FISMA (TAF)
         POAM
         Security Awareness
         Role Based Training--Financial System Workshop
        Face-to-face and hands-on assistance to help Components 
        understand requirements and conduct activities to ensure 
        improved compliance in the following areas
         C&A
         TAF
         poam
         Financial Audit Remediation Activities
    Details for all the activities are provided in Attachment 12.\1\*

    Question 10.: The Department's policy on ''Wireless Systems'' 
requires ``annual security assessments shall be conducted on all 
approved wireless systems. Wireless security assessments shall 
enumerate vulnerabilities, risk statements, risk levels, and corrective 
actions.'' Please provide the Committee with those assessments.
    Assessments of the wireless or wired infrastructure are to be 
completed every three years per Section 3.8.b of DHS Sensitive Systems 
Policy 4300A version 5.1. The exception to this rule occurs when there 
is a major configuration change to a system, which requires an 
immediate re-assessment. Security assessment responsibility is a 
Component-level activity performed by the Component CIO organizations 
as part of the DHS security management program.
    The Department's Security Certification and Accreditation process, 
in accordance DHS and NIST security policies and standards, includes 
the wireless environment when necessitated by mission need in the 
System Security Life Cycle for each given General Support System. 
Security assessments for operational wireless systems have been 
included, as applicable, in the full Security Risk Assessments provided 
to the Committee in response to Question 8 of your Memorandum.
    The DHS Enterprise Architecture recognizes the pervasive need and 
use of Wireless Systems and has established a Wireless Security Board 
in collaboration with the DHS Chief Information Security Officer for 
promulgating wireless policy, standards and assessments for the 
wireless environment.

    Question 11.: When did the Department last audit the MCI MPLS Cloud 
or the Sprint MPLS Cloud? What were the results of the audit? Did the 
Department require MCI or Sprint to mitigate vulnerabilities?
    The Department has reviewed the security and network operational 
environments for the two OneNet provided carriers. In 2006, the 
Department reviewed the carrier services at Sprint during a visit with 
network steward. The review focused on management and operational 
issues. However, the review did not cover a technical assessment 
(security test and evaluation) because the General Services 
Administration (GSA) is responsible for technical assessments and 
security validation under both FTS-2001 and Networx. The security 
inherent in the Dynamic Multiple Virtual Private Network suite of 
protocols fully protects the confindentiality and integrity of all 
information transiting the OneNet. The Department has Service Level 
Agreements with each carrier, attesting that they have established and 
will maintain conformance with the applicable DHS security controls and 
availability metrics, which reduces my potential attack on network 
availability. GSA serves as the government-wide Contracting Officer for 
the FTS-2001 contract and the upcoming Networx contract is for 
technical assessments and security validation of the environment. GSA 
has agreed, during the Networx requirements gathering process, to 
assume the responsibility for ensuring that the carriers meet or exceed 
the applicable security requirements of the National Institute of 
Standards and Technology once the final contract is awarded.

    Question 12.: The Committee requested and received a list of FY 
2005 and FY 2006 incidents reported to the Department's Security 
Operations Center (DHS SOC).

        a. Please define a ``classified data spill.'' How is this 
        incident different from an incident where a Department employee 
        sends a classified through a non-classified system?
    A classified data spill, also referred to as a ``classified 
information or a ``collateral information spill,'' occurs whenever 
classified information is brought onto a network not approved for the 
level of classification commensurate with the sensitivity of the 
information. This can happen through a variety of vectors, including 
email, Compact Discs, removable media or manual data entry. The 
Department goes to great lengths to prevent direct electronic transfer 
between networks, however, when a classified spill occurs, it is 
usually the result of personnel not following proper classified data 
handling procedures. A Department employee sending classified 
information via through a non-classified system is a type of classified 
data spill.
    Under current policy, when a Component or Component Security 
Operations Center (SOC) becomes aware of a suspected or spillage, it is 
reported to the DHS SOC either in person or via telephone without 
delay. Other methods of reporting (Fax, email, DHS SOC Online) me not 
allowed for this type of incident because they provide additional 
electronic hails that must also be sanitized, thereby increasing the 
risk that the information will become accessible to unauthorized 
persons. Once notified, the DHS SOC coordinates the appropriate 
required actions.

        b. Please explain what disciplinary actions were taken against 
        the contractors in DHS Incident Incident #2006-08-031
    Incident 2006-08-031 was entered as a minor incident whereby 
unauthorized users had attached personal computers to the government 
network. No access was obtained, and the incident was closed with the 
following additional action: ``Laptops were removed, personnel were 
escorted off of the premises and training was issued to those who 
allowed them access to the area.
    The full incident report is provided in Attachment 13.\1\*

        c. Please provide a list of the FY 2007 incidents reported to 
        the DHS
    A list of incidents from October 1,2006 to June 4, 2007 is provided 
in Attachment 14.\1\*

           Questions from the Committee on Homeland Security

                      Responses from Scott Charbo

    Question 1.: What responsibility does the Chief Information Officer 
have over networks of the Department of Homeland Security? Please 
explain your relationship to the Chief Information Security Officer, as 
well as the Chief Information Officers and Chief Information Security 
Officers of the Department's component agencies.
    Response: The Department's Chief Information Officer exercises all 
statutory authorities and Federal mandates assigned to Federal Chief 
Information Officers, particularly those outlined in the Clinger-Cohen 
Act of 1996 and the Federal Information Security Management Act of 2002 
(FISMA). In accordance with FISMA, the Chief Information Security 
Officer (CISO) is a report to the Chief Information Officer.
    Department of Homeland Security Management Directive 007.1, 
Information Technology Integration and Management, included as 
Attachment 2, further strengthens the role of the DHS Chief Information 
Officer in three key areas:
         Review and approval authority over all information 
        technology (IT) purchase requests greater than $2.5 million
         Approval over all Component Chief Information Officer
         Input into Component-level Chief Information Officer 
        performance plans and evaluations.
    Component Security Programs are under the direction of Component-
level Information Systems Security Managers (ISSMs), who report 
directly to each of their respective Component Chief Information 
Officers. ISSMs are required to follow guidance the Department CISO. 
Additionally, ISSMs collectively comprise the Information Systems 
Security Board (ISSB), which is chaired by the Department CISO.

    Question 2.: Please provide the Department's information security 
policy and incident response plan.
    Response: DHS Sensitive Systems Policy Directive 4300A, Version 5.1 
and Attachment F--Incident Response and Reporting are included as 
Attachments 3 and 4. These documents represent the Department's current 
information technology security policy and incident response plan.

    Question 3.: Please provide a report on how many and what types of 
incidents have been reported to US-CERT by agencies within the 
department of homeland Security. Please categorize each incident using 
the ``Federal Agency Incident and Event Categories'' developed by the 
US-CERT. Please provide details of the attacks during 2004--2007 that 
were the most critical (classified ``CAT 1'' on the US-CERT reporting 
guidelines). Please include both those that were and were not reported 
to US-CERT, and indicate which were not reported to US-CERT within the 
US-CERT reporting timeframe.
    Individual DHS Components do not report incidents directly to the 
US-CERT. The Department has its own 24x7 Security Operations Center 
(DHS SOC) that oversees all IT security operations for the Department. 
The DHS SOC has direct operational oversight over of all aspects of the 
Department's common wide area network (OneNet), and also oversees the 
vulnerability management and incident reporting processes. Individual 
Components have security operations capabilities for their own local 
environments; however, all of these are operationally subordinate to 
the DHS SOC.
    The DHS SOC, and only the DHS SOC, reports incidents to the US-CERT 
in accordance with US-CERT categorizations and guidelines and in the 
same manner as the other civilian Federal agencies. Attachment 5 
contains a summary report for all incidents reported by the DHS SOC to 
the US-CERT from October 2004 to the present. The DHS SOC Security 
Operations Concept of Operations (CONOPS) is provided as Attachment 6.

    Question 4.: Has the Department taken an inventory of each access 
point to its network (i.e. every connected device, wireless device, 
remote device, etc.), both inside and outside of the firewall, in order 
to identify potential points of vulnerability? Does a complete network 
topology diagram exist? If so, please provide that diagram.
    Response: The network topology diagrams are provided as Attachments 
7a and 7b.

    Question 5.: Has the Department ever conducted both internal and 
external penetration tests on its systems? Have individual Components 
of the Department ever performed internal and external penetration 
tests on their systems? Please provide copies of all penetration 
testing reports and narratives describing the vulnerabilities that were 
revealed and how those vulnerabilities were mitigated.
    Response: Current DHS Policy requires all Components to conduct 
annual vulnerability assessments testing to identify security 
vulnerabilities on IT systems containing sensitive information. 
Assessments are also required whenever significant system changes are 
made. The DHS Computer Incident Response Center (CSIRC), an element of 
the DHS Security Operations Center (SOC), centrally manages the 
program, which is executed at the Component level. The CSIRC's role is 
fully outlined in the SOC CONOPS document (Attachment 5) and is 
supported within DHS Sensitive Systems Policy Directive 4300A \1\* 
(Attachment 2).
---------------------------------------------------------------------------
    \1\ Sections 5.4.2 Network Security Monitoring; 5.4.8 Testing and 
Vulnerability Management
---------------------------------------------------------------------------
    DHS Components have implemented internal and external penetration 
testing programs and currently test all FIPS 199 ``high'' category 
systems. General support systems or major applications created or built 
to meet unique mission needs, receive a full internal penetration test 
prior to obtaining ``Authority to Operate'' (ATO). In addition, the DHS 
Office of the Inspector General (OIG) conducts annual FISMA audits, 
which include internal penetration testing. Some systems receive 
periodic manual and automated internal penetration testing. Security 
Test and Evaluation (ST&E) results, Security Assessment Reports also 
reveal vulnerabilities. Mitigation actions are uploaded and tracked 
within the DHS Trusted Agent FISMA (TAF) tool.
    Vulnerabilities that can not be mitigated quickly are recorded and 
tracked within the TAF Plan of Action and Milestone (POA&M) folder. 
Each item is assigned a scheduled completion date, lists the 
vulnerability, and articulates how it will be corrected or mitigated.
    Attachment 8 provides a representative sample of the Department's 
penetration testing activities. The aggregate of additional information 
would reach a National Security classification level. Should you 
require additional information, please advise and the Department will 
arrange for courier delivery of information at the appropriate 
classification.

    Question 6.: When was the last time the Department used ingress and 
egress on client personal computers? When was the last time the 
Department replicated client-side attacks on those computers? Has the 
Department ever conducted a network-wide rogue tunnel audit of all 
client personal computers? Have you ever conducted audits on the 
aforementioned compromised personal computers from question 3?
    Response: DHS does not currently apply ingress and egress filtering 
on individual client personal computers, however all DHS content to and 
from the Internet is controlled through dedicated gateways and ingress 
and egress filtering is enforced at those control points.
    The DHS approach is similar to that employed by the Department of 
Defense (DoD) on its Non-classified Internet Protocol Router Network 
(NIPRNet) where most of the ingress/egress filtering is done at 
Internet/NIPRNet gateways. The DoD is conducting a pilot program 
whereby enterprise-wide client side ingress and egress filtering is 
currently being tested. DHS will review the results from the pilot and 
determine the best way forward.
    DHS has not replicated client-side attacks or rogue tunnel audits 
on client PCs, however it routinely conducts audits on compromised 
personal computers. A representative sample of incidents that have been 
audited and describes the actions taken as a result of compromised 
systems is provided in Attachment 9.

    Question 7.: Has the Department implemented a secure coding 
initiative? What portion of software deployed by the Department and its 
components have been tested using source code analysis tools? What 
portion of web applications have been tested using web application 
security tools? How many programmers working on Department 
applications, whether Department or contractor employees, have been 
trained in secure coding techniques and what skills testing was 
undertaken to ensure they had mastered secure coding techniques?
    The Department of Homeland Security relies heavily on Commercial 
Off-the-shelf (COTS) systems and applications. For this reason, 
Department policy requires that acquisition priority be given to 
products certified through any one of the three following certification 
programs:
         The National Security Agency/National Institute of 
        Standards and Technology, National Information Assurance 
        Partnership Evaluation and Validation Program
         International Common Criteria for Information Security 
        Technology Evaluation Mutual Recognition Agreement
         The National Institute of Standards and Technology 
        (NIST) Federal Information Processing Standards Validation 
        Program
    While there is currently no Department-wide secure coding 
initiative, this practice is addressed in a number of ways.
    The DHS Common Operating Environment primarily uses Microsoft 
software. In FY06/07 the Department supported the Service Oriented 
Architecture through the use of the Microsoft.NET environment. This 
coding environment provides a means to produce code to protect against 
buffer overflows and other threat vectors that could be used to gain 
privileged access to computing environments.
    The Federal Law Enforcement Training Center (FLETC) has limited 
legacy software applications and associated coding. Although the center 
has not used secure coding in the past, its latest Student 
Administration and Scheduling System (SASS), currently being developed 
under contract will be tested using source code analysis tools in the 
3rd Quarter of FY07.
    The Transportation Security Administration (TSA) is in phase one of 
implementing source code analysis tools, which it intends to employ on 
all applications, including web-enabled systems. Implementation will 
include appropriate training for TSA employees and contract language 
requiring training for contractor personnel.
    Other Components, such as the National Protection and Programs 
Directorate (NPPD) manually check secure coding against the Defense 
Information Systems Agency (DISA) Security Technical Implementation 
Guides (STIG) and with the .NET questionnaire. These checklists enable 
NPPD to ensure that coding is ``hardened'' in accordance with DHS IT 
Security Policy.\2\
---------------------------------------------------------------------------
    \2\ Hardening in this context means the use of security 
configuration checklists to greatly improve overall levels of security 
in organizational systems; however, no checklist can permit a system or 
a product to become 100 % secure.
---------------------------------------------------------------------------
    The United States Citizenship and Immigration Services (USCIS) 
tests selected enterprise applications as part of an independent 
validation and verification (IV&v) process. New application code is run 
through a security test and evaluation (ST&E) process as part of the 
normal IT lifecycle management methodology.
    Components who do not perform their own source code analysis are 
required to utilize applications and operating systems found in the DHS 
Technical Reference Model (TRM) database. The Customs and Border 
Protection (CBP) Technical Review Committee (TRC), reviews and approves 
software and hardware for insertion into the TRM. The TRC considers 
other test results, such as those conducted as part of the National 
Information Assurance Partnership (NIAP) testing program.

    Question 8.: Has the Department mandated two-factor authentication 
for all privileged personnel and system administrators? If not, why 
not?
    The Department currently employs a number of two-factor 
authentication technologies, including the Common Access Card (CAC) and 
RSA (Token-based). These technologies were implemented at the Component 
level and were selected to meet specific mission needs. There is 
currently no Department-wide solution in place, however two-factor 
authentication will be incorporated as part of the Department's 
implementation of Homeland Security Presidential Directive #12 (HSPD-
12). HSPD-12 is provided in Attachment 10.
    The Department's intent is to move to HSPD-12 compliant PIV cards 
as rapidly as possible. Cards will be required for all employees, as 
well as any other individual requiring access to Department's IT 
resources.

    Question 9.: What legal requirements are the Department's hosting 
companies, data warehouses, software developers, or application service 
providers contractually obligated to regarding security? Please provide 
a narrative of the duties, layers of security, notification of security 
breaches, and timeliness of responses that the Department requires of 
these contractors. Is the Department able to audit/penetration test 
these entities to ensure that that standard of security has been met? 
Has the Department ever done so?
    Response: The Department currently operates and maintains a total 
of 723 production systems:
    506 Agency Systems
    217 Contractor Systems
    --------------------------------------------
    723 Total Systems

    In addition to complying with all Federal Acquisition Regulations, 
the Department has published specific Homeland Security Acquisition 
Regulations (HSAR), in accordance with rule making authority granted 
when the Department was created. Contractor systems are tracked and 
maintained within the DHS tracking system and subject to the same rules 
and requirements as Government systems. The relevant sections and 
specific language associated with information security activities in 
the HSAR are included in Attachment 11.
    For example, the Inspector General (IG) routinely reviews a sub-set 
of contractor systems as part of the annual FISMA review. The review 
includes test results of system controls, conducted as part of the 
system's Certification and Accreditation or required annual test. In 
addition, the IG has conducted several audits where the information 
systems were owned by contractors (including other Federal agencies) 
and where system tests were performed to evaluate the effectiveness of 
system controls. In developing its FY08 annual performance plan, the IG 
has identified additional audits that will test and evaluate controls 
on systems owned and/or managed on behalf of the Department by outside 
contractors other Federal agencies.

    Question 10.: Please provide the annual budgets for the Chief 
Information Security Officer beginning in fiscal year 2003.
    2003 Department created (no budget existed for this year)
    2004 $12.5M
    2005 $17.5M
    2006 $15M
    2007 $15M

    Question 11.: How much money, in total, has the Department spent on 
meeting the requirements of the Federal Information Security Management 
Act (FISMA)? What percentage of the overall budget does that figure 
represent? Specifically, how did those reports lead to improved 
defenses against attacks? What specific changes were made? Are you 
confident those changes improved your defenses?
    Total spending in DHS for IT security is as follows (all dollar 
figures are in millions):


                                                    IT Security as % of
   Year           IT Security          IT Total            all IT

   2006                  $312.3         $3811.5                   8.2%
   2007                  $331.7         $4879.6                    6.8


    DHS has implemented the Federal Information Security Management Act 
(FISMA) through a comprehensive set of Department-specific policies 
that incorporate all federal guidance, including National Institute of 
Standards and Technology (NIST) standards and guidance, as well as 
Office of Management and Budget (OMB) memoranda. NIST Special 
Publication (SP) 800-53 is fully incorporated into Department policies 
and it provides the core set of controls implemented at the system 
level. Specifically, in 2006, the Department completed a year-long 
system accreditation project and the number of systems that are fully 
accredited rose 24% to 95%. As a result of this effort, systems now 
have documented plans in place for implementing the NIST recommended IT 
security controls, and the effectiveness of these controls has been 
verified for each system.

    Question 12.: When the Department purchases software, do 
procurement documents require that the purchased software operates 
effectively on the secure configurations? If not, what does the 
Department do when a purchased package requires security configurations 
to be weakened in order to run the purchased application?
    The Homeland Security Acquisition Regulations require vendors to 
comply with all Department IT security policies (specifically 4300A) 
including the Department's operating systems configuration guidance. 
(Note: The Department has published hardening guidance for all 
operating systems that are currently in use or that are planned for in 
future implementations.) Waivers to this policy expressly require risk 
acceptance and mitigation measures and a plan for bringing the system 
into compliance.

    Question 13. What are your top three initiatives for securing the 
Department for How do you measure those goals?
    The Department is currently pursing a number of initiatives to 
improve our overall Information Security posture. Among these, the top 
three are:
         100% FISMA compliance
         Consolidated networks and datacenters
         HSPD-12 implementation
    Full compliance with FISMA will allow the Department to fulfill the 
goals of the act, including implementing cost-effective, risk-based 
information security programs; providing improved, cost-effective 
application of IT security controls; allowing for more consistent, 
repeatable security control assessments; and providing more complete, 
reliable, and real-time information to the DHS leadership. This 
initiative is currently underway and being tracked through monthly 
FISMA Scorecards for each Component. The overall success will be 
realized by an increased Department-wide OMB FISMA score.
    Consolidation of DHS networks and datacenters is also a top 
priority. The Department currently operates a number of scattered 
networks and datacenters of varying capabilities, making it difficult 
to maintain consistent standards, increasing costs and forcing 
duplication of effort. Consolidation will allow for improved 
standardization, giving the Department a greater ability to apply more 
effective and consistent security policies, reducing operations and 
maintenance costs, and allowing DHS to better focus efforts and 
resources. Overall success will be realized through improved security, 
consistent capabilities, and decreased costs.
    HSPD-12 implementation is another priority. This initiative will 
give the Department an increased identity verification capability for 
its employees and contractors, allowing for tighter physical and 
logical access controls. Furthermore, HSPD-12 will give DHS the ability 
to implement two-factor authentication for all Government and 
Contractor personnel, as well as providing a secure, reliable 
interoperability capability with all other Federal agencies.
    [See committee file for all attachments.]