[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]

                        OPM DATA BREACH: PART II



                               BEFORE THE

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM
                        HOUSE OF REPRESENTATIVES


                             FIRST SESSION


                             JUNE 24, 2015


                           Serial No. 114-81


Printed for the use of the Committee on Oversight and Government Reform


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                     JASON CHAFFETZ, Utah, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, Jr., Tennessee       CAROLYN B. MALONEY, New York
JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of 
TIM WALBERG, Michigan                    Columbia
JUSTIN AMASH, Michigan               WM. LACY CLAY, Missouri
PAUL A. GOSAR, Arizona               STEPHEN F. LYNCH, Massachusetts
SCOTT DesJARLAIS, Tennessee          JIM COOPER, Tennessee
TREY GOWDY, South Carolina           GERALD E. CONNOLLY, Virginia
BLAKE FARENTHOLD, Texas              MATT CARTWRIGHT, Pennsylvania
CYNTHIA M. LUMMIS, Wyoming           TAMMY DUCKWORTH, Illinois
THOMAS MASSIE, Kentucky              ROBIN L. KELLY, Illinois
MARK MEADOWS, North Carolina         BRENDA L. LAWRENCE, Michigan
RON DeSANTIS, Florida                TED LIEU, California
MICK MULVANEY, South Carolina        BONNIE WATSON COLEMAN, New Jersey
KEN BUCK, Colorado                   STACEY E. PLASKETT, Virgin Islands
MARK WALKER, North Carolina          MARK DeSAULNIER, California
ROD BLUM, Iowa                       BRENDAN F. BOYLE, Pennsylvania
JODY B. HICE, Georgia                PETER WELCH, Vermont
STEVE RUSSELL, Oklahoma              MICHELLE LUJAN GRISHAM, New Mexico

                    Sean McLaughlin, Staff Director
                 David Rapallo, Minority Staff Director
             Troy D. Stock, IT Subcommittee Staff Director
 Jennifer Hemingway, Government Operations Subcommittee Staff Director
                    Sharon Casey, Deputy Chief Clerk
                            C O N T E N T S

Hearing held on June 24, 2015....................................     1


The Hon. Katherine Archuleta, Director, U.S. Office of Personnel 
    Oral Statement...............................................     6
    Written Statement............................................    10
The Hon. Patrick E. McFarland, Inspector General, U.S. Office of 
  Personnel Management
    Oral Statement...............................................    15
    Written Statement............................................    17
Ms. Ann Barron-Dicamillo, Director, U.S. Computer Emergency 
  Readiness Team, U.S. Department of Homeland Security
    Oral Statement...............................................    23
Mr. Eric A. Hess, Chief Executive Officer, Keypoint Government 
    Oral Statement...............................................    25
    Written Statement............................................    28
Mr. Rob Giannetta, Chief Information Officer, US Investigations 
  Services, LLC
    Oral Statement...............................................    31
    Written Statement............................................    32


2015-06-16 FLEOA to Chaffetz-GR & Johnson-HSGAC-OPMData Breach...    98
2015-05-13 WP Defense Firm That Employed Drunk High Contractors 
  in Afghanistan.................................................   100
1963-04-22 WSJ New Lingo Spells Out Common Orders for Different 
  Computers......................................................   102
2015-06-24 Director Archuleta-OPM Letter to Chairman Chaffetz....   103
2014-07-09 NYT Chinese Hackers Pursue Key Data on US Workers.....   105
2015-06-17 OPM Flash Audit Alert.................................   109
2015-06-22 Response to OPM Flash Audit Alert.....................   115
2015-04-24 WSJ Altegrity Executives Got Payouts Before Security 
  Screener Filed for Bankruptcy..................................   119
2015-03-27 BI Hedge Fund Manager Said Sorry For Losing 99.7% of 
  Clients Money..................................................   120
Questions for the Record.........................................   122

                        OPM DATA BREACH: PART II


                        Wednesday, June 24, 2015

                  House of Representatives,
      Committee on Oversight and Government Reform,
                                           Washington, D.C.
    The committee met, pursuant to call, at 10:03 a.m., in Room 
2154, Rayburn House Office Building, Hon. Jason Chaffetz 
[chairman of the committee] presiding.
    Present: Representatives Chaffetz, Mica, Turner, Duncan, 
Jordan, Walberg, Amash, Gosar, DesJarlais, Gowdy, Farenthold, 
Massie, Meadows, DeSantis, Mulvaney, Walker, Blum, Hice, 
Carter, Grothman, Hurd, Palmer, Cummings, Maloney, Norton, 
Clay, Lynch, Connolly, Cartwright, Duckworth, Kelly, Lawrence, 
Lieu, Watson Coleman, Plaskett, DeSaulnier, Welch, and Lujan 
    Also Present: Representative Comstock.
    Chairman Chaffetz. Good morning. The Oversight Committee is 
coming to order. Our hearing today is about the OPM data 
breaches. This is part 2.
    $529 billion: $529 billion is how much the Federal 
Government has spent on IT since 2008. Roughly $577 million has 
been spent at the Office of Personnel Management. Roughly 80 
percent of that money has been spent on legacy systems, and 
we're in a situation here where the hurricane has come and 
gone, and just now OPM is wanting to board up the windows. 
That's what it feels like.
    This is a major, major security breach, one of the 
biggest--if not the biggest--we have ever seen. This demands 
all of our attention and great concern about what happened, how 
we're going to prevent it from happening in the future, and 
what are we going to do with the information now? Because there 
is no simple, easy solution, but I can tell you, oftentimes it 
feels like one good trip to Best Buy, and we could help solve 
this problem and be a whole lot better than where we are today.
    There are a lot of questions that remain about what 
happened last month, and the uncertainty is very disconcerting 
to a host of people. And it's unacceptable to this committee 
and to the Congress. The most recent public reports indicate 
that many more Americans were affected by the breach than 
originally disclosed. Federal workers and their families 
deserve answers, answers on both the scope of the breach and 
the types of personnel information compromised.
    Because of these many outstanding questions, we still don't 
understand the extent to which the breach threatens our 
national security. However, according to the intelligence 
community, the risk is significant. Only the imagination limits 
what a foreign adversary can do with detailed information about 
a Federal employee's education, career, health, family, 
friends, neighbors, and personal habits.
    I'd ask unanimous consent to enter into the record a letter 
we received on June 16 from the Federal Law Enforcement 
Officers Association.
    I want to read part of it: Here are the concerns about the 
Office of Personnel Management data breaches, our demands of 
the government, and a list of questions that remain unanswered.
    They represent some 28,000 current and retired Federal law 
enforcement officers and special agents from over 65 different 
    This is what they wrote: OPM turned its back on Federal law 
enforcement officers when they failed to protect sensitive 
information from an inexcusable breach. And OPM's delay and 
aloof response is a pathetic and irresponsible miscarriage of 
its obligations to affected Americans. The very lives of 
Federal law enforcement officers are now in danger, and their 
safety and security of innocent people, including their 
families, are now in jeopardy because of OPM's abysmal failure 
and its continued ignorance in the severity of the breach. The 
information lost includes personal, financial, and location 
information of these officers and their families, leaving them 
vulnerable to attack and retaliation for criminals and 
terrorists currently or formally investigated by the United 
States of America.
    Without objection, I will enter this into the record.
    Chairman Chaffetz. OPM is currently attempting to overhaul 
its technical infrastructure but without a full understanding 
of the scope or the cost of the project. In fact, the agency 
kept the project from the inspector general for more than a 
year. The IG determined OPM's chief information officer, 
``initiated this project without a complete understanding of 
the scope of OPM's existing technical infrastructure or the 
scale and cost of the effort required to mitigate it to the new 
environment.'' Because of these concerns, the project is, 
quote, ``possibly making OPM environment less secure and 
increasing cost to taxpayers.''
    The IG also raised questions about why OPM awarded a sole-
source contract for this project without going through the 
process for full and complete competition.
    In fact, I would like to enter into the record without 
objection, this is an article from the Washington Post. This is 
May 13, ``Defense Firm that Employed Drunk, High Contractors in 
Afghanistan May Have Wasted $135 Million in Taxpayer Dollars.''
    Chairman Chaffetz. These are the recipients of a sole-
source contract to try to help clean up this mess. They were 
formally known as Jorge Scientific Corporation. They're now 
known as Imperatis Corporation. They have a good list of very 
impressive military personnel who are involved and engaged. 
Maybe this is the right decision. But when it is a sole-source 
contract, it does beg a lot of questions. No doubt we need to 
move fast. But this organization has had a lot of problems in 
the past, and it begs a lot of questions.
    In addition to data security problem, we have a data 
management problem. It is unclear why so much background 
information related to security clearances was readily 
available on the OPM system to be hacked. It is unclear to me 
why there is a need for SF-86 background information--the SF-86 
is the Standard Form 86. It's what the employees or prospective 
employees fill out. Why was this background information on the 
network if the applicant isn't currently being investigated?
    Part of the reason we're in this mess and we have such a 
big mess in our hands is a lot of information and background 
checks that we're not even engaging in was still on the system. 
If information isn't accessible on the network, it can't be 
hacked. So if a security clearance isn't under investigation 
wall off the data. It's a best practice that others use and 
probably should have been used in this situation as well.
    We have to do a better job of anticipating our adversaries 
and protecting information from unnecessary exposure. One of 
the concerns is this legacy system that we're using is a COBOL. 
The language used is COBOL. I'd ask unanimous consent to enter 
into the record a Wall Street Journal article from April 22, 
1963, ``COBOL Can Help Users Cut Costs When Changing Models; 
Government Spurs Progress.'' 1963. I wasn't even born yet. And 
that's the system that we're operating on in this day and age 
when technology is changing moment by moment, minute by minute.
    Without objection, I will enter that into the record.
    Chairman Chaffetz. Yesterday, Ms. Archuleta stated that no 
one is personally responsible for the OPM data breach and 
instead blamed the hackers. Hackers certainly have a lot of 
culpability on their hands. There's no doubt that there are 
nefarious actors that are going to be attacking the United 
States on a moment-by-moment basis. We literally take millions 
of hits on a daily basis. That's not new news. But I disagree 
that nobody is to be held personally responsible. Personal 
accountability is paramount. People have roles and 
responsibilities. They are charged with the fiduciary 
responsibility of carrying out those.
    As the head of the agency, Ms. Archuleta is, in fact, 
statutorily responsible for the security of the OPM network and 
managing any risks. And while she may have inherited a lot of 
problems, she was called on by the President and confirmed by 
the Senate to protect the information maintained by OPM. During 
her confirmation in 2013, she stated that IT modernization 
would be one of her main priorities, yet it took a security 
breach in March of 2014, 5 months after the confirmation, to 
begin the process of developing a plan to fix the problem. That 
was just the beginning of the start to think about how to fix 
the problem. And yet the shift in blame is just inexcusable.
    I really hope we hear solid answers. It's not going to be 
good enough to say: Oh, well, we'll get you that information. 
It's under investigation. There was a security--no. We're going 
to answer questions. Federal workforce, the people affected, 
they need to hear that. We're different. We're unique in this 
world because we are self-critical, and we do have hearings 
like this.
    I would also ask unanimous consent to enter two letters 
into the record. One was the flash audit that was done, it was 
June 17 of this year, from Patrick McFarland, the inspector 
general. It's a flash audit, U.S. Office of Personnel 
Management Information Improvement Project.
    Without objection, I will enter that into the record.
    Chairman Chaffetz. I will also ask unanimous consent to 
enter into the record the June 22 response by the Director of 
the Office of Personnel Management, Ms. Archuleta.
    And I ask unanimous consent that enter into the record as 
    Without objection, so ordered.
    Chairman Chaffetz. We also have some contractors here, and 
we appreciate their participation. They have answers--or we 
have questions that need to be answered as well. We need their 
cooperation to figure this out. A lot of what was done by OPM 
was contracted out. And there are very legitimate questions in 
particular that Mr. Cummings and others have asked that--and 
that's why I'm pleased to have them invited and participating 
as well. So it will be a full and robust committee hearing. And 
we appreciate all the participation.
    As I conclude, I would also say, without objection, the 
chair is authorized to declare a recess at any time. I should 
have said that--without objection, so ordered. I should have 
said that at the beginning.
    Now, I'd like to recognize the distinguished ranking 
member, Mr. Cummings, for his opening statement.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    And this is a very important hearing. We're here today 
because foreign cyber spies are targeting millions of our 
Federal workers. OPM has made it clear that every month, there 
are 10 million efforts to pierce our cyberspace. These folks 
are hacking into our data system to get information about our 
employees, private information about them, their families, 
their friends, and all of their acquaintances. And they may try 
to use that information in their espionage efforts against 
United States' personnel and technologies.
    Mr. Chairman, I want to start by thanking you. Last week, 
we held a hearing on cyber attacks against OPM. And this week, 
we have an opportunity to hear from OPM's two contractors that 
also suffered major data breaches, USIS and KeyPoint. Some 
people in your shoes might have merely criticized the agency 
without looking at the whole picture, but you agreed to my 
request to bring in the contractors. And you deserve credit for 
that, and I thank you.
    On Monday night, I received a letter from USIS' 
representatives finally providing answers to questions I asked 
more than 7 months ago, Mr. Giannetta. Seven months ago. Seven 
months ago. Their letter disclosed that the breach at USIS 
affected not only DHS employees but our immigration agencies, 
our intelligence community, and even our police officers here 
on Capitol Hill.
    But it took them 7 months, the night before the hearing, to 
give me that information but not only to give me the 
information but Members of Congress that information. My 
immediate concern was for the employees at these agencies. And 
I hope that they were all alerted promptly. But there's no 
doubt in my mind that USIS officials never would have provided 
that information unless they were called here to testify today.
    So I thank you again, Mr. Chairman.
    I have some difficult questions for USIS. I want to know 
why this company paid millions of dollars in bonuses to its top 
executives after the Justice Department brought suit against 
the company for allegedly--allegedly--defrauding the American 
taxpayers of hundreds of millions of dollars. I can hardly wait 
for the answer. I want to know why USIS used these funds for 
bonuses instead of investing in adequate cybersecurity 
protections for highly sensitive information our Nation 
entrusted to it.
    Mr. Giannetta, I want to know if you as the chief 
information officer of USIS received one of those bonuses, and 
I'd love to know how much it was and what the justification for 
it was. I understand that you just returned from Italy. Welcome 
back. So this is probably the last place you want to be. I also 
understand you are leaving the company in a matter of weeks. 
But I want to know why USIS has refused for more than a year to 
provide answers to our questions about the board of directors 
of its parent company, Altegrity.
    Mr. Hess, I also have difficult questions for you, for 
KeyPoint. At last week's hearing, I said one of our most 
important questions was whether these cyber attackers were able 
to penetrate OPM's networks using information they obtained 
from one of its contractors. As I asked last week, did they get 
the keys to OPM's networks from its contractor?
    Yesterday, Director Archuleta answered that question. 
Appearing before the Senate Appropriations Committee, she 
testified, ``The adversary leveraged a compromised KeyPoint 
user credential to gain access to OPM's network.'' So the weak 
link in this case was KeyPoint.
    Mr. Hess, I want to know how this happened. I appreciate 
that OPM continues to have confidence in your company, but I 
also want to know why KeyPoint apparently did not have adequate 
logging capabilities to monitor the extent of data that was 
stolen. Why didn't you invest in these safe guards?
    Mr. Chairman, to your credit, one of the first hearings you 
called after becoming chairman was on the risk of third-party 
contractors to our Nation's cybersecurity. At that hearing, on 
April 20, multiple experts explained that Federal agencies are 
only as strong as their weakest link. If contractors have 
inadequate safeguards, they place our government systems and 
our government workers at risk.
    I understand that we have several individuals here sitting 
on the bench behind our panel of witnesses who may be called to 
answer questions if necessary: Mr. Job, who is the CIO of 
KeyPoint; and Mr. Ozment from the Department of Homeland 
    Thank you, Mr. Chairman, for allowing them to be here.
    As we move forward, it is critical that we work together. 
We need to share information, recognize when outdated legacy 
systems need to be updated, and acknowledge positive steps when 
they do occur. Above all, we must recognize that our real 
enemies are outside of these walls. They are the foreign 
nation-states and other actors that are behind these 
devastating attacks.
    And, with that, I yield back.
    Chairman Chaffetz. Thank the gentleman.
    I'll hold the record open for 5 legislative days for any 
members who would like to submit a written statement.
    We're also pleased to have Representative Barbara Comstock, 
who is able to join us this morning.
    And I ask unanimous consent that our colleague from 
Virginia be allowed to fully participate in today's hearing.
    No objection. So ordered.
    We now recognize the panel of witnesses. I'm pleased to 
welcome the Honorable Katherine Archuleta, Director of the 
Office of Personnel Management. We also have the Honorable 
Patrick McFarland, inspector general, the Office of Personnel 
Management; Ms. Donna Seymour, Chief Information Officer of the 
Office of Personnel Management; Ms. Ann Barron-DiCamillo--help 
me there, DiCamillo, just the way it's spelled--Director for 
the U.S. Computer Emergency Readiness Team at the United States 
Department of Homeland Security.
    Appreciate you being here.
    Mr. Eric Hess is the chief executive officer of KeyPoint 
Government Solutions. And Mr. Rob Giannetta is the chief 
information officer at USIS.
    Pursuant to committee rules, all witnesses are to be sworn 
before they testify. So if you will please all rise and raise 
your right hands.
    Do you solemnly swear or affirm that the testimony you're 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    Thank you. Let the record reflect that all witnesses 
answered in the affirmative.
    In order to allow time for discussion, please limit your 
verbal testimony to 5 minutes. And, obviously, your entire 
written record or written statement will be made part of the 
    We will start first with the Director of the Office of 
Personnel Management, Ms. Archuleta, first. You're now 
recognized for 5 minutes.

                       WITNESS STATEMENTS


    Ms. Archuleta. Chairman Chaffetz, Ranking Member Cummings, 
and members of the committee, thank you for the opportunity to 
testify before you again today.
    I understand and I share the concerns and the frustration 
of Federal employees and those affected by the intrusions into 
OPM's IT systems. Although OPM has taken significant steps to 
meet our responsibility to secure personnel data of those we 
serve, it is clear that OPM needs to dramatically accelerate 
those efforts.
    As I testified last week, I am committed to a full and 
complete investigation of these incidents. And we continue to 
move urgently to take action to mitigate the longstanding 
vulnerabilities of the agency's systems.
    In March of 2014, we released our strategic IT plan to 
modernize and secure OPM's aging legacy system. We began 
implementing the plan immediately. And in fiscal years 2014 and 
2015, we directed nearly $70 million toward the implementation 
of new security controls to better protect our systems. OPM is 
also in the process of developing a new network infrastructure 
environment to improve the security of OPM infrastructure and 
IT systems.
    Once completed, OPM IT systems will be migrated into this 
new environment from its current legacy networks. Many of the 
improvements have been to address critical immediate needs, 
such as security vulnerabilities in our network. These upgrades 
include the installation of additional firewalls, restriction 
of remote access without two-factor authentication, continuous 
monitoring of all connections to ensure that only legitimate 
connections have access, and deploying antimalware software 
across the environment to protect and prevent the deployment or 
execution of cybercrime tools that could compromise our 
    These improvements led us to the discovery of the malicious 
activity that had occurred. And we were immediately able to 
share the information so that other agencies could protect 
their networks.
    I also want to discuss data encryption. OPM does currently 
utilize encryption when possible. I have been advised by 
security experts that encryption in this instance would not 
have prevented the theft of this data because the malicious 
actors were able to steal privileged user accounts and 
credentials and could decrypt the data. Our IT security team is 
actively building new systems with technology that will allow 
OPM not only to better identify intrusions but to encrypt even 
more of our data.
    In addition to new policies that were already implemented 
to centralize IT security duties under the CIO and to improve 
oversight of new major systems development, the IT plan 
recognized that further progress was needed. And the OIG's 2014 
report credited OPM for progress in bolstering our security 
policies and our procedures and for committing critical 
resources to the effort.
    With regard to information security governance, the OIG 
noted that OPM had implemented significant positive changes and 
removed its designation as a material weakness. This was 
encouraging, as IT governance is a pillar of the strategic IT 
plan. Regarding the weaknesses found with authorization, the 
OIG has recommended that I consider shutting down 11 out of the 
47 OPM IT systems because they did not have current and valid 
    Shutting down systems would mean that retirees could not 
get paid and that new security clearances could not be issued. 
Of the systems raised in the 2014 audit, eleven of those 
systems were expired. Of those, one, a contractor system, is 
presently expired. All other systems raised in the 2014 audit 
have either been extended or provided a limited authorization.
    OPM is offering credit monitoring services and identity 
theft information with CSID for the approximately 4.2 million 
current and former Federal civilian employees. Our team is 
continuing to work with CSID to make the online signup 
experience quicker and to reduce call center wait times. They 
are expanding staffing and call center hours and increasing 
server capacity.
    I have taken steps to ensure that greater IT restrictions 
are in place, even for privileged users. That includes removing 
remote access for privileged users and requiring two-factor 
authentication. We're looking into further protections, such as 
tools that mask and redact data that would not be necessary for 
a privileged user to see.
    I want to share with this committee some new steps that I 
am taking. First, I will be hiring a new cybersecurity adviser 
that will report directly to me. This cybersecurity adviser 
will work with OPM CIO to manage ongoing response to the recent 
incidents, complete development of OPM's plan to mitigate 
future incidents, and assess whether long-term changes to OPM's 
IT architecture are needed to ensure that its assets are 
secure. This individual is expected to be serving by August 1.
    Second, to ensure that the agency is leveraging private 
sector best practices and expertise, I am reaching out to chief 
information security officers at leading private sector 
companies that experienced their own significant cybersecurity 
challenges. And I will host a meeting with these experts in the 
coming weeks to help identify further steps the agency can 
take. As you know, public and private sectors both face these 
challenges, and we should face them together.
    I would like to address now the confusion regarding the 
number of people affected by two recent related cyber incidents 
at OPM. First, it is my responsibility to provide as accurate 
information as I can to Congress, the public, and, more 
importantly, the affected individuals. Second, because this 
information and its potential misuse concerns their lives, it 
is essential to identify the affected individuals as quickly as 
possible. Third, we face challenges in analyzing the data due 
to the form of the records and the way they are stored. As 
such, I have deployed a dedicated team to undertake this time-
consuming analysis and instructed them to work--make sure their 
work is accurate and completed as quickly as possible.
    As much as I want to have all the answers today, I do not 
want to be in a position of providing you or the affected 
individuals with potentially inaccurate data. With these 
considerations in mind, I want to clarify some of the reports 
that have appeared in the press. Some press accounts have 
suggested that the number of affected individuals has expanded 
from 4 million individuals to 18 million individuals. Other 
press accounts have asserted that 4 million individuals have 
been affected in the personnel file incident, and 18 million 
individuals have been affected in the background investigation 
incident. Therefore, I am providing the status as we know it 
today and reaffirming my commitment to providing more 
information as soon as we know it.
    First, the two kinds of data that I'm addressing, personnel 
records and background investigations, were affected in two 
different systems in the two recent incidents. Second, the 
number of individuals with data compromised from the personnel 
records incident is approximately 4.2 million as reported on 
June 4. This number has not changed. And we have notified those 
individuals. Third, as I have noted, we continue to analyze the 
background investigation data as rapidly as possible to best 
understand what was compromised. And we are not at a point 
where we are able to provide a more definitive report on this 
    That said, I want to address the figure of 18 million 
individuals that has been cited in the press. It is my 
understanding that the 18 million refers to a preliminary, 
unverified, and approximate number of unique Social Security 
numbers in the background investigations data. It is a number 
that I am not comfortable with at this time because it does not 
represent the total number of affected individuals.
    The Social Security number portion of the analysis is still 
under active review, and we do not have a more definitive 
number. Also, there may be an overlap between the individuals 
affected in the background incident and the personnel file 
incident. Additionally, we are working deliberately to 
determine if individuals who have not had their Social Security 
numbers compromised but may have other information exposed 
should be considered individuals affected by this incident.
    For these reasons, I cannot yet provide a more definitive 
response on the number of individuals affected on the 
background investigation's data intrusion, and it may well 
increase from these initial reports. My team is conducting this 
further analysis with all due speed and care. And, again, I 
look forward to providing an accurate and complete response as 
soon as possible.
    Thank you, Mr. Chairman, for this opportunity to testify 
today, and I'm happy to be here along with my CIO to address 
any questions you may have.
    [Prepared statement of Ms. Archuleta follows:]
    Chairman Chaffetz. Thank you.
    Mr. McFarland, you are now recognized for 5 minutes.


    Mr. McFarland. Chairman Chaffetz, Ranking Member Cummings, 
and members of the committee, good morning. My name is Patrick 
McFarland, and I am the inspector general of the U.S. Office of 
Personnel Management. Thank you for inviting me to testify at 
today's hearing.
    I would like to note that my colleague, Lewis Parker, the 
deputy assistant inspector general, is here with me. With your 
permission, he may assist in answering technical questions.
    In 2014, OPM began a massive project to overhaul the 
agency's IT environment by building an entirely new 
infrastructure called the shell and migrating all of its 
systems to the shell from the existing infrastructure.
    Before I discuss the OIG's recent examination of this 
project, I would like to make one point. There have been 
multiple statements made to the effect that this complete 
overhaul is necessary to address immediate security concerns 
because OPM's current legacy technology cannot be properly 
secured. This is not the case. There are many steps that can be 
taken or, indeed, which OPM has already taken to secure the 
agency's current IT environment. I just wanted to emphasize 
that while we agree that this overhaul is necessary, the 
urgency is not so great that the project cannot be managed in a 
controlled manner.
    Last week, my office issued a flash audit alert discussing 
two significant issues related to this project. Because my 
written testimony describes these issues in detail, I will give 
only a summary for you this morning.
    First, we have serious concerns with how the project is 
being implemented. OPM is not following proper IT project 
management procedures and does not know the true scope and cost 
of this project. The agency has not prepared a project charter, 
conducted a feasibility study, or identified all of the 
applications that will have to be moved from the existing IT 
infrastructure to the new shell environment.
    Further, the agency has not prepared the mandatory OMB 
Major IT Business Case, formally known as Exhibit 300. This 
document is an important step in the planning of any large-
scale IT project as it is the proper vehicle for seeking 
approval and funding from OMB. It is also a necessary process 
for enforcing proper project management techniques.
    Because OPM has not conducted these very basic planning 
steps, it does not know the true cost of the project and cannot 
provide an accurate timeframe for completion. OPM has estimated 
that this project will cost $93 million. However, the amount 
only includes strengthening the agency's current IT security 
posture and the creation of a new shell environment. It does 
not include the cost of migrating all of OPM's almost 50 major 
IT systems and numerous subsystems to the shell.
    This migration will be the most costly and complex phase of 
this project. Even if the $93 million figure was an accurate 
estimate, the agency does not have a dedicated funding stream 
for the project. Therefore, it is entirely possible that OPM 
could run out of funds before completion, leaving the agency's 
IT environment more vulnerable than it is now.
    OPM also has set what I believe to be an unrealistic 
timeframe for completion. The agency believes it will take 
approximately 18 to 24 months to migrate all of its systems to 
the shell. It is difficult to imagine how OPM will meet the 
goal when it does not have a comprehensive list of all the 
systems that need to be migrated. Further, this process is 
inherently difficult, and there are likely to be significant 
challenges ahead.
    The second major point discussed in the alert relates to 
the use of sole-source contract. OPM is contracted with a 
single vendor to complete all four phases of this project. 
Unless there is a specific exception, Federal contracts must be 
subject to full and open competition. However, there's an 
exception for compelling and urgent situations.
    The first phase of this project, which involves securing 
OPM's IT environment, was indeed such a compelling and urgent 
situation. That phase addressed a crisis, namely the breaches 
that occurred last year. However, the later phases, such as 
migrating the application to the new shell environment, are not 
as urgent. Instead, they involve work that is essentially a 
long-term capital investment.
    It may sound counterintuitive, but OPM should step back, 
complete its assessment of its current IT architecture and 
develop an OMB major IT business case proposal. When OMB 
approval and funding have been secured, OPM should move forward 
with the project in a controlled manner using sound project 
management techniques. OPM cannot afford to have this project 
    I fully support OPM's effort to modernize its IT 
environment and the Director's long-term goals. However, if it 
is not done correctly, the agency will be in a worse situation 
than it is today and millions of taxpayer dollars will have 
been wasted.
    I'm happy to answer any questions you may have.
    [Prepared statement of Mr. McFarland follows:]
    Chairman Chaffetz. Thank you.
    Ms. Seymour, was your statement with Ms. Archuleta, or do 
you have one yourself?
    Ms. Seymour. It was with the Director. Thank you, sir.
    Chairman Chaffetz. Okay. Very good.
    I would ask unanimous consent to enter into the record a 
letter that was given us this morning from the Office of 
Personnel Management. It's dated today, signed by Ms. 
Archuleta, dealing with the number of records.
    Without objection, so ordered. We'll enter that into the 
    Chairman Chaffetz. We'll now recognize Ms. Barron-DiCamillo 
for 5 minutes.


    Ms. Barron-DiCamillo. Thank you. Chairman Chaffetz, Ranking 
Member Cummings, and members of the committee, good morning. My 
name is Ann Barron-DiCamillo. I appear here today to talk about 
the role that my organization, the United States Computer 
Emergency and Readiness Team, known as US-CERT, played in the 
recent breaches involving OPM.
    As stated by Ranking Member Cummings, Assistant Secretary 
Dr. Andy Ozment, is also here with me to answer any questions.
    Like many Americans, I, too, am victim of these incidents 
and concerned about the continued cyber incidents at numerous 
government and private sector entities. I am a career civil 
servant who has worked to improve the security of critical 
government and private sector networks for the past 13 years. I 
understand both the scope and the problem we face and the 
challenges in securing critical networks.
    Cybersecurity is a true team sport. There are many 
different agencies responsible for aspects of cybersecurity, 
including members of the intelligence community, law 
enforcement, the Department of Homeland Security, as well as 
individual system owners, and individual end users as well. My 
organization within DHS, the US-CERT, is part of the National 
CyberSecurity and Communications Integration Center, also known 
as an NCCIC.
    US-CERT focuses on analyzing the evolving cyber risks, 
sharing information about threats and vulnerabilities, and 
responding to significant cyber incidents. We work with trusted 
partners around the world and focus on threats and incidents 
facing the government and critical private sector networks. In 
both cases, our role is largely voluntary. We build and rely 
upon trusted relationships to both share information and 
respond to incidents.
    When an entity believes that they have been a victim of a 
significant cyber incident, they often invite us to help them 
assess the scope of any intrusion as well as provide 
recommendations on how they can mitigate the incident and 
improve their security posture going forward. US-CERT's current 
involvement with OPM began in March of 2014, when we first 
learned that there was a potential compromise within the OPM 
    From March through May of 2014, US-CERT was part of an 
interagency response team that first assessed the scope of the 
malicious activity and then remediated that intrusion. 
Throughout that time, US-CERT shared information that we had 
learned about the intrusion with our governmental partners as 
well as private sector partners, so that they too could better 
protect themselves.
    We also created signatures so that our EINSTEIN systems 
could look for malicious activity at other Federal agencies. On 
May 28, 2014, the interagency response team concluded that the 
malicious actor in question from that event had been removed 
from the network. US-CERT also provided OPM with 
recommendations about what steps they could take to increase 
their own security.
    It is important to note that there is no silver bullet or 
magic solution to secure networks from a sophisticated actor. 
Most government agencies and their private sector counterparts 
are making up for years of underspending on security as part of 
the information technology development. As many experts have 
noted, the Internet was designed with ease of use rather than 
security in mind.
    The status of OPM networks in May of 2014 was not unlike 
other similarly situated agencies. OPM did some things well and 
was weak in other areas. I understand that OPM had at the time 
under its new leadership just started an effort to improve its 
cybersecurity. The US-CERT incident report for OPM included 
several specific mitigation recommendations, some of which 
could be implemented fairly quickly and others of which would 
take longer.
    From what I observed, OPM made a concerted effort to adopt 
the US-CERT recommendations beginning last summer. Indeed, it 
was OPM who, in April of 2015, discovered the current intrusion 
on its own networks using one of the tools recommended by US-
CERT. Based on the OPM discovery, US-CERT created new EINSTEIN 
signatures to look for similar intrusions at other agencies. 
This is how the malicious access to OPM data at the Department 
of Interior data center was discovered. This newly discovered 
threat information was also quickly shared by US-CERT with out 
private sector partners and other trusted partners around our 
    US-CERT and the interagency response team have been working 
with OPM since April of 2015 to assess the nature and scope of 
the incident. While the investigation is ongoing, there are a 
few things that I can share. We were able to use the EINSTEIN 
capabilities to detect the presence of malicious activity on 
the Department of the Interior data center, which houses the 
OPM personal records.
    Further onsite investigation revealed that some OPM 
personal data was compromised and see that at least some of 
that data had been exfiltrated by the Department of the 
Interior data center. This is the 4.2 million number that 
Director Archuleta has referenced today. As a result of what we 
learned from the April 2015 investigation, OPM continued to 
conduct forensic investigations into its own environment.
    In that process, OPM discovered evidence of an additional 
compromise on its own network. US-CERT then led another 
interagency response team to assess OPM's networks and, in 
early June, found that background investigation data had been 
exposed and possibly exfiltrated. Again, that's currently under 
    We also learned at the time that OPM's ongoing efforts to 
implement two-factor authentication had precluded continued 
access by the intruder into the OPM network. This protected 
measure, like others instituted by OPM, may have mitigated any 
continued effects of the intrusion. The work of the interagency 
response team is ongoing, and we continue to assess the scope 
of the potential compromise.
    Although I am appearing today ready to provide information 
to this committee, I do so with some concern. As I had 
mentioned, US-CERT relies on voluntary cooperation from 
agencies and private entities who believe that they may be 
victims of malicious activity. I worry that US-CERT appearing 
before this committee will have a chilling effect on their 
willingness to notify us, the whole of government, of future 
incidents. We especially need private companies to continue to 
work with government and to share information about cyber 
threats and incidents so that, through greater shared 
awareness, we can all be more secure from those who seek to do 
us harm.
    Thank you, and I look forward to your questions.
    Chairman Chaffetz. Thank you.
    Mr. Hess, you are now recognized for 5 minutes.

                   STATEMENT OF ERIC A. HESS

    Mr. Hess. Thank you, Chairman Chaffetz, Ranking Member 
Cummings, and members of the committee. My name is Eric Hess. I 
am president and chief executive officer of KeyPoint Government 
    Since 2004, KeyPoint has provided fieldwork services for 
the background investigations to a number of Federal agencies, 
including the Office of Personnel Management. KeyPoint, which 
employs investigators in every State, is proud to be part of 
OPM's team helping to ensure that security clearance 
investigations it conducts are thorough, detailed, and 
    KeyPoint takes issues of cybersecurity very seriously. And 
as a contractor providing critical services across the Federal 
Government, we stand in partnership with the Federal Government 
in trying to combat ever-present and ever-changing cyber 
threats. KeyPoint is committed to ensuring the highest levels 
of protection for sensitive information in which we are 
    The recently announced breach at OPM is the focus of this 
hearing. With that in mind, I would like to make clear that we 
see no evidence suggesting KeyPoint was in any way responsible 
for the OPM breach. There have been some recent media reports 
suggesting that the incursion into OPM's systems last year is 
what facilitated the recent announced OPM breach. There is 
absolutely no evidence that KeyPoint was responsible for that 
    The press have also reported the hackers stole OPM 
credentials assigned to a KeyPoint employee and leveraging to 
access OPM systems. As Director Archuleta noted at the Senate 
hearing yesterday, there was no evidence suggesting that 
KeyPoint is responsible for or directly involved with the 
incursion. To be clear, the employee was working on an OPM 
system, not a KeyPoint system.
    Now, I know that, during this hearing, the incursion of 
KeyPoint system that was discovered last September will also be 
discussed. Before going into more detail, I would like to note 
that KeyPoint has continuously maintained its authority to 
operate ATO from OPM and DHS. This means that we met the 
stringent information and security requirements imposed under 
our Federal contracts.
    KeyPoint only maintains personal information that is 
required under our contractual obligations. However, we, like 
government agencies, face aggressive, well-funded, and ever-
evolving threats that require us to exceed the current FISMA 
requirements in order to protect the sensitive information in 
our charge.
    Let me say a few words about the earlier incursion of 
KeyPoint. In December of 2014, the Washington Post reported 
that OPM had announced it would notify over 48,000 Federal 
workers that their personal information may have been exposed 
as a result of incursion to KeyPoint systems. I emphasize the 
word ``may'' because in the report, after the extensive 
analysis of the incursion, we find no evidence of exfiltration 
of sensitive personal data.
    Last August, following public reports of a data security 
breach at another Federal contractor providing background 
checks, OPM Chief Information Officer Donna Seymour asked 
KeyPoint to invite the United States Computer Emergency 
Readiness Team, or US-CERT, to test KeyPoint's network and 
KeyPoint agreed. The team from the Department of Homeland 
Security National Cybersecurity Assessment and Technical 
Services conducted risk vulnerability assessment. The NCATS 
team conducted full network and application vulnerability tests 
of KeyPoint systems, including network mapping, internal and 
external penetration testing.
    The NCATS team provided a number of findings at the end of 
the engagement, which were resolved while the team was on site, 
as well as recommendations for the future. Ultimately, while 
the NCATS team found issues, they were resolved, and the team 
found no malware or KeyPoint system.
    However, then in September, the US-CERT Hunt team informed 
KeyPoint that it had found indications of the sophisticated 
malware undetectable by commercial antivirus on two computers. 
The US-CERT team provided KeyPoint with mitigation 
recommendations to remove the malware from our environment and 
other recommendations for hardening its network to prevent and 
defeat future compromises.
    KeyPoint acted quickly and immediately began implementing 
the recommendations. KeyPoint conducted an internal 
investigation of the data security issues identified by US-CERT 
and concluded that the malware in question was not functioning 
correctly, potentially caused by errors made during its 
installation on KeyPoint system. Again, neither US-CERT's 
investigation nor ours found any evidence of exfiltration of 
personally identifiable information.
    I recently attended a classified briefing at OPM where I 
learned more about the OPM breach. In this open setting, I 
cannot go into details that were presented in that briefing. 
However, I can reiterate that we have seen no evidence of 
connection between the incursion at KeyPoint and the OPM breach 
that's the subject of this hearing. That said, we are always 
striving to ensure KeyPoint cyber defenses are as strong as 
possible, and we welcome US-CERT's recommendation for 
strengthening the security of our system.
    We've also been working closely with OPM and CBP to improve 
our information security posture in light of the new advanced 
persistent threats. OPM presented us with a 90-day network 
hardening plan. We completed it. We have been working 
diligently to make our systems more resilient and stronger by 
implementing the US-CERT recommendations. And a number of the 
most significant improvements we put into place are full 
deployment of multifactor authentication; Security Information 
Events Management; enhanced intrusion detection systems; 
NetFlow and packet capture network information; improved 
network segmentation; and many more.
    Additionally, we've been working with all of our customers 
to update our ATOs. This process includes an audit from a 
third-party independent 3PAO assessor.
    In closing, cybersecurity is vital to KeyPoint's mission, 
and we will continue to fortify protections of our systems. Our 
adversaries are constantly working to create new methods of 
attack against our systems, and we must constantly work to meet 
and deter those attacks. While it may be impossible to ever 
truly eliminate the threat of cyber attack, we will continue to 
evaluate our protections and ensure that they reflect the most 
current best practices.
    I want to thank the committee for drawing attention to this 
critical issue and for allowing KeyPoint to share its 
perspective with the committee today. I look forward to your 
    [Prepared statement of Mr. Hess follows:]
    Chairman Chaffetz. Thank you for your testimony.
    Mr. Giannetta, we will now recognize you for 5 minutes.


    Mr. Giannetta. Thank you. Good morning, Mr. Chairman, 
Ranking Member Cummings, and members of the committee. My name 
is Robert Giannetta, and I'm currently the chief information 
officer at US Investigations Services, LLC, which is often 
referred to as USIS or USIS. I joined USIS as the CIO in August 
2013. Before then, I was with BAE Systems, Nextel, and Verizon. 
I also served in the United States Navy.
    Until August 2014, USIS performed background investigation 
work for the United States Office of Personnel Management. When 
I started working at USIS, the information technology systems 
it used to perform OPM background investigation work were 
operating under two security certifications, known as 
authorities to operate, which issued from OPM in 2012. Those 
authorities to operate required annual review of USIS systems. 
OPM's 2014 review included approval of USIS system security 
plans and a site visit in May of 2014.
    In June 2014, USIS self-detected a cyber attack on its 
information technology systems. USIS immediately notified OPM 
and initiated a comprehensive response plan pursuant to USIS' 
written OPM-approved incident response plan. USIS' response 
included retaining the highly regarded independent forensics 
investigations firm Stroz Friedberg to lead the investigation 
and remediation efforts.
    USIS instructed Stroz Friedberg to leave no stone unturned 
in their investigation. USIS invested thousands of person hours 
and millions of dollars to investigate and remediate against 
the attack. By early June 2014, those efforts succeeded in 
blocking and containing the attacker.
    The Stroz investigation was also able to develop 
significant technical details about how the attack occurred, 
what the attacker did within the USIS systems, and which 
systems and data were potentially compromised. All of this 
information was openly shared with OPM as well as other 
government agencies.
    In addition, USIS invited US-CERT and other government 
investigators into its facilities in late July 2014 and gave 
them full access to USIS systems. In August 2014, OPM issued a 
stop-work order to USIS and subsequently terminated its 
longstanding contractual relationship with the company. This 
led USIS to exit the background investigation business and 
ultimately to bankruptcy.
    Just yesterday, I was invited to appear to testify before 
the committee. I'll do my best to answer any questions you may 
have. Thank you.
    [Prepared statement of Mr. Giannetta follows:]
    Chairman Chaffetz. Thank you.
    I now recognize myself. Ms. Archuleta, you have personal 
identifiable information for how many Federal employees and 
    Ms. Archuleta. We have----
    Chairman Chaffetz. Move your microphone closer, please.
    Ms. Archuleta. We have 2.7 individuals who were full-time 
employees and 2.4 who are----
    Chairman Chaffetz. No, I asked you how many--you have 
personally identifiable information for how many Federal 
employees and retirees?
    Ms. Archuleta. The number I just gave you includes the 
number of employees and retirees. And personally identifiable 
information within those files depends on whether they've had a 
background investigation or whether their personnel file----
    Chairman Chaffetz. How many records do you have? This is 
what I'm trying to get at.
    Ms. Archuleta. I'll ask Ms. Seymour.
    Chairman Chaffetz. No, I want you. Come on, you're the head 
of this agency. I'm asking you, how many records are at play 
    Ms. Archuleta. I'll get back to you with that number, sir.
    Chairman Chaffetz. No, no. Let me read to you what you 
wrote on February 2 of this year. This is to the Appropriations 
chairmen, both in the House and the Senate. You wrote: As a 
proprietor of sensitive data, including personally identifiable 
information for 32 million Federal employees and retirees, OPM 
has an obligation to maintain contemporary and robust 
cybersecurity controls.
    You wrote that in February. Are you here to tell me that 
that information is all safe, or is it potentially 32 million 
records that are at play here?
    Ms. Archuleta. As I mentioned to you earlier in my 
testimony, Mr. Chairman, we're reviewing the number and the 
scope of the breach and the impact to all of the records.
    Chairman Chaffetz. So it could be as high as 32 million. Is 
that right?
    Ms. Archuleta. As I mentioned to you, I will not give a 
number that is not completely accurate. And as I mentioned in 
my testimony today, I will get back to you as soon as----
    Chairman Chaffetz. I'm asking you for a range. I don't need 
a specific number. We know it's a minimum of 4.2 million, but 
it could be as high as 32 million?
    Ms. Archuleta. I'm not going to give you a number that I am 
not sure of.
    Chairman Chaffetz. And when they fill out the SF-86, that 
would include other people that are identified within those 
forms, correct?
    Ms. Archuleta. That's correct, sir.
    Chairman Chaffetz. Do we know, on average, how many people 
are identified--if you fill out an SF-86, what's the average 
number of people that are identified within those records?
    Ms. Archuleta. I don't believe anyone has calculated an 
    Chairman Chaffetz. Are you working on that?
    Ms. Archuleta. As I mentioned in my testimony, each--my 
    Chairman Chaffetz. I'm asking you if you will take a 
sampling of records and understand how many other people are 
identified in those records. If you have 32 million employees 
and former employees in your database and they are also 
identifying other individuals, I would like to know, on 
average, how many people that is? Is that fair?
    Ms. Archuleta. We're not calculating on average. We're 
calculating on a very distinct and accurate number. We're not 
going to make estimates.
    Chairman Chaffetz. A distinct and accurate number. When you 
asked for $32 million more in your budget request, it was 
because you had 32 million Federal employees identified and 
former employees. Correct?
    Ms. Archuleta. That--the number of employees that we have, 
yes. We're asking for support. We're asking for support for our 
    Chairman Chaffetz. Ms. Seymour, do you have a complete 
inventory of servers, database, network, devices, and people 
that have access to that information? Do you have the complete 
inventory of that?
    Ms. Seymour. We have as complete an inventory as we can 
have, sir. That changes on a daily basis. We have run scans on 
our network----
    Chairman Chaffetz. Changes on a daily basis. You either 
have it or you don't. You don't have it, do you?
    Ms. Seymour. We have an inventory of all of our----
    Chairman Chaffetz. Is it 100 percent complete?
    Ms. Seymour. We believe that it is complete today.
    Chairman Chaffetz. But the IG says that it's not complete. 
Mr. McFarland says that it's not complete.
    Ms. Seymour. His IG report was done in 2014. We've made 
significant progress in our IT program since then. We have 
tools on our network that scan our network for databases, so we 
know where those are, and we know the PII in them.
    Chairman Chaffetz. To the members of the committee here, we 
have to move quickly, but I think just having an inventory of 
what's at play here is key. And the inspector general does not 
believe you when you say that.
    Ms. Archuleta, in March of 2014, OPM became aware of an 
attack on its computer networks. I would highlight and I'll ask 
unanimous consent to enter into the record--without objection, 
so ordered--``Chinese Hackers Pursue Key Data on U.S. 
Workers.'' This is dated July 9 of 2014.
    Chairman Chaffetz. As it relates to this attack, Ms. 
Archuleta, did it result in a breach of security?
    Ms. Archuleta. The March 24----
    Chairman Chaffetz. Your microphone.
    Ms. Archuleta. On the March 2014 OPM network, the adversary 
activity that dated to that number was no PII was lost.
    Chairman Chaffetz. I asked if there was a breach in 
    Ms. Archuleta. On March 24, there was adversarial activity 
that dated back to November of 2013. And with the forensics of 
that information, we found that no PII was lost.
    Chairman Chaffetz. I am asking you a broader question. So 
did they have access to the PII, the personal identification 
information? Did they have access to it?
    Ms. Archuleta. You would have to ask forensic teams. I am 
not a forensic expert. But we have the forensic team right here 
with us on this panel.
    Chairman Chaffetz. In your perception, from your 
understanding, did they have access to the personal 
    Ms. Archuleta. We know that there is adversarial activity 
that dated back to November 2013. I also know that no PII was 
    Chairman Chaffetz. No. That's a different question. The 
question I asked is, did they have access? Whether they 
exfiltrated it is a different question. I am asking if they had 
access. And I believe the answer is yes, isn't it?
    Ms. Archuleta. That's what I've said to you, sir, that 
there was adversarial activity.
    Chairman Chaffetz. So they had access to that information.
    Ms. Archuleta. There was adversarial access, activity.
    Chairman Chaffetz. Yes. Did it result in a breach of 
security, in your opinion? Is that a breach of security?
    Ms. Archuleta. That's a breach of our systems, yes.
    Chairman Chaffetz. Is that a breach of your security?
    Ms. Archuleta. With the security systems, yes.
    Chairman Chaffetz. So, yes, it was a breach of security, 
    Ms. Archuleta. They were able to enter our systems. The 
security tools that we had in place at that time were not 
sufficient to fight back, and we have since instituted more. 
And that is why, in April of this year, we were able to----
    Chairman Chaffetz. Okay. But at the time--at the time--it 
was a breach of security, right?
    Ms. Archuleta. Yes, there was a breach into our system.
    Chairman Chaffetz. Was there any information lost?
    Ms. Archuleta. As I have just said to you, there was no PII 
    Chairman Chaffetz. That's not what I asked you. I asked, 
did you lose any information?
    Ms. Archuleta. You would have to ask the forensic team.
    Chairman Chaffetz. I am asking you if any information was 
    Ms. Archuleta. I will get back to you with that answer, 
    Chairman Chaffetz. I believe you know the answer to this 
    Ms. Archuleta. You believe I know the answer to this 
    Chairman Chaffetz. Yes. Did they take any information when 
they hacked into the computers?
    Ms. Archuleta. I have been advised by my CIO and our 
forensic team that no PII was lost.
    Chairman Chaffetz. That's not what I asked you. We will 
take as long as you want here. I did not ask if they just 
exfiltrated PII. I am asking you, did they take any other 
    Ms. Archuleta. I will get back to you.
    Chairman Chaffetz. I know you know the answer to this 
    Ms. Seymour, did they take any other information?
    Ms. Seymour. In the March 2014 incident, the adversaries 
did not have access to data on our network. They did have 
access to some documents, and they did take some documents from 
the network.
    Chairman Chaffetz. What were those documents?
    Ms. Seymour. Those documents were some outdated security 
documents about our systems and some manuals about our systems.
    Chairman Chaffetz. What kind of manuals?
    Ms. Seymour. Manuals about the servers and the environment.
    Chairman Chaffetz. Is it fair to say--is that like a 
blueprint for the system?
    Ms. Seymour. It would be fair to say that that would give 
you enough information that you could learn about the platform, 
the infrastructure of our system, yes.
    Chairman Chaffetz. Did they take any personnel manuals?
    Ms. Seymour. No, sir, they did not take----
    Chairman Chaffetz. But they----
    Ms. Seymour. They took some manuals about the way that we 
do business. They didn't take personnel manuals. I am not--we 
may be not defining that the same way.
    Chairman Chaffetz. But they did take information.
    Ms. Seymour. Yes, sir, they did.
    Chairman Chaffetz. Do you believe it was a breach of 
    Ms. Seymour. Yes, sir, I do.
    Chairman Chaffetz. So, Ms. Archuleta, when we rewind the 
tape and look at the WJLA-TV interview that you did on July 21, 
you said: Again, we did not have a breach in security. There 
was no information that was lost. That was false, wasn't it?
    Ms. Archuleta. I was referring to PII.
    Chairman Chaffetz. No, you weren't. That wasn't the 
question. That was not the question. You said, ``There was no 
information that was lost.'' Is that accurate or inaccurate?
    Ms. Archuleta. The understanding that I had of that 
question at that time referred to PII.
    Chairman Chaffetz. It was misleading. It was a lie, and it 
wasn't true. And when this plays out, we are going to find that 
this was the step that allowed them to come back and why we are 
in this mess today. It was not dealt with. You were misleading 
when you went on television and told all the employees, all 
these Federal employees watching local television: Don't worry, 
there is no information lost.
    Did they have access to personnel information, Ms. Seymour?
    Ms. Seymour. No, sir, at that time, they did not have 
access to personnel information.
    Chairman Chaffetz. They may not have exfiltrated it, but 
did they have access to it? Could they look at it?
    Ms. Seymour. No, sir, at that time, they did not have 
access to personnel information.
    Chairman Chaffetz. We will explore that more. Thank the 
indulgence of the committee.
    Now recognize Mr. Cummings.
    Mr. Cummings. Mr. Giannetta, I will get to you in a minute.
    But I want to talk to you, Mr. McFarland. And I want you to 
hear me very carefully, listen to me carefully. There have 
been, after our last hearing on this subject, members on both 
sides have wanted to ask for Ms. Archuleta's resignation. And I 
asked that we not do that, but we have this hearing so we could 
clear up some things and because I wanted to make sure we were 
all hearing right, and we are being fair.
    This is my question. You have one opinion, and Ms. 
Archuleta, Director Archuleta, and Ms. Seymour have another 
opinion. You seem to say they need to do certain things in a 
certain order. They say they think the order that they are 
doing them in is fine. They say they can do certain things in a 
short time. You say it's going to take longer. You also say 
that they don't have the necessary stream of funding that they 
may need.
    This is what I want to know. Is this a difference of 
opinion with regard to experts? You understand what I am 
saying? You have your set of experts; they have their set. Is 
it a difference? Do you deem it a difference of opinion? The 
reason why I mention from the very beginning about the desire 
of certain members of our committee to ask for Ms. Archuleta's 
dismissal is because I want you to understand how significant 
that answer is because there are some members who believe that 
you have made recommendations and that those recommendations 
have been simply disregarded.
    And so can you help us with that, Mr. McFarland? Do you 
understand my question? You look confused. Don't be confused.
    Mr. McFarland. I always look that way.
    Mr. Cummings. Oh, good. You always look that way. Okay. Go 
    Mr. McFarland. I am not confused, no, but it is a difficult 
    Mr. Cummings. But it's a very important question.
    Mr. McFarland. Yes, absolutely. Well, of course, it's a 
difference of opinion.
    But the opinion that I have comes from auditors who are 
trained to look for the things that they reported on. And they 
did, in my estimation, as normal and usual, an excellent job. 
And they stand behind their findings. And I stand behind their 
    Mr. Cummings. But is this a difference of opinion?
    Mr. McFarland. Well, it's obviously a difference of 
opinion. But I think, without question, from my perspective, 
ours is based on auditing and questioning and understanding of 
the situation. And that's where we come up with our answer.
    Mr. Cummings. Let me ask you this. You heard Ms. Archuleta 
give a whole list of things that she is doing or about to do, I 
think naming a new cyber officer and whatever. Does that 
satisfy you as far as your concerns are involved?
    Mr. McFarland. Well, no, it doesn't satisfy me as far as 
our concerns. We have a whole suitcase of concerns that we have 
identified in our reports. I think that the best way to explain 
or answer that question is that we are, I guess, very 
frustrated that we ask answers of OPM, and it takes a long time 
to get the answers. We ask definitive questions, and we don't 
necessarily get definitive answers. We know for a fact that the 
things that we have reported are factual. We don't take a back 
seat to that at all. Our people have done this for a long time. 
They know what they are doing.
    But, yes, it comes out to a difference of opinion, but ours 
is based on fact. I can't speak for the other side.
    Mr. Cummings. All right.
    Mr. Giannetta, your company, USIS, and its parent company, 
Altegrity, have a lot to answer. According to the Justice 
Department, USIS perpetrated a multimillion dollar fraud, 
orchestrated at the highest levels of the company. USIS failed 
to protect sensitive information of tens of thousands of 
Federal employees, including people in the intelligence 
community and even the Capitol Police. And Altegrity doled out 
millions of dollars of bonuses to top executives during the 
fraud and after the data breach.
    I want to question you about USIS and Altegrity's pattern 
of refusing to cooperate with this committee and our requests 
for information. Last week, the committee invited Altegrity's 
chairman to testify. Do you know what he said?
    Mr. Giannetta. I do not.
    Mr. Cummings. I will tell you. He said no. He refused.
    In 2014, a team from the Department of Homeland Security 
asked Altegrity if they could scan the networks of Altegrity's 
other subsidiaries because the cyber spies were able to move 
from USIS to those other subsidiaries.
    Mr. Giannetta, do you know how Altegrity responded?
    Mr. Giannetta. I understand they declined the request.
    Mr. Cummings. Yeah, that's right. They refused. They would 
not allow DHS to examine the other Altegrity subsidiaries. Mr. 
Giannetta Altegrity is your parent company at USIS. Who at 
Altegrity made decision to refuse the government's requests?
    Mr. Giannetta. I don't have that information. I am not 
aware who made that decision. It certainly wasn't me.
    Mr. Cummings. Well, can you find out for us?
    Mr. Giannetta. I can ask.
    Mr. Cummings. How soon can we get that information?
    Mr. Giannetta. I will take it back to counsel and see what 
we can do.
    Mr. Cummings. I will just ask you get it to us within the 
next 24 hours. I would like to have that. We have been trying 
to get it for a long time. I would like you to tell the 
committee the names of the specific members of the board who 
made the decision. All right?
    Mr. Giannetta. Sir, I am the chief information officer at 
USIS. I interact almost never with the board of directors. I 
don't know----
    Mr. Cummings. Mr. Giannetta, you are about as close--we 
have been trying to get this information for a while. You are 
all we got. I know you are just back from vacation from Italy. 
Did you get a bonus, by the way?
    Mr. Giannetta. I did.
    Mr. Cummings. Oh, my goodness. How much did you get?
    Mr. Giannetta. I don't recall the exact amount.
    Mr. Cummings. You can tell me.
    Mr. Giannetta. It was in the neighborhood of $95,000.
    Mr. Cummings. All right. Your company also refused to 
provide answers to questions that I asked at a hearing in 
February 2014 and again by committee letter, dated March 18, 
2014. Mr. Giannetta, do you know what your company 
representatives said when the committee attempted to get these 
    Mr. Giannetta. I am not in that communication chain, so I 
    Mr. Cummings. Let me tell you. They sent an email sent to 
our committee staff, and Altegrity's attorney wrote, ``The 
company does not anticipate making a further response.'' Would 
you know why they would say that?
    Mr. Giannetta. Again, I am the chief information officer at 
USIS. I really don't know.
    Mr. Cummings. It sounds pretty arrogant to me. So let me 
ask you right now the same question I asked back in February of 
2014, more than 16 months ago. Name the members of Altegrity's 
board of directors who decided not to answer those questions. 
You wouldn't know that either.
    Mr. Giannetta. I don't know the board of directors. I know 
the chairman's name is Steve Alesio. I don't anybody else at 
the board. I apologize.
    Mr. Cummings. So you are still working for USIS. Is that 
    Mr. Giannetta. That's correct.
    Mr. Cummings. How long will you be there?
    Mr. Giannetta. Indeterminate, but within the next month or 
so, I will be departing.
    Mr. Cummings. And will you try to get me those names?
    Mr. Giannetta. I will certainly take your request back to 
the appropriate people.
    Mr. Cummings. All right.
    Thank you very much, Mr. Chairman.
    Chairman Chaffetz. I will now recognize the gentleman from 
Florida, Mr. Mica.
    Mr. Mica. Thank you, Mr. Chairman.
    And, Ms. Archuleta, there has been a discussion today about 
how many people's--Federal employees' and retirees'--records 
have been breached. And you testified at the beginning you 
estimated about 2.4 million. Was that correct?
    Ms. Archuleta. No, in the personnel records, it was 4.2. 
And we haven't given an estimate for the second incident.
    Mr. Mica. 4.2 in personnel. Because half of that is 
retirees, is that 2.4, and then you add the other balance?
    Ms. Archuleta. I don't know exact percentage, but it's 
about half and half.
    Mr. Mica. Okay. Then the second figure you started to 
debate a bit about was 18 million, which has been reported by 
the media, but--and that would deal with breach of Social 
Security numbers?
    Ms. Archuleta. The analysis right now is taking a look at 
all the PII because PII comes in various forms. It could be a 
Social Security number.
    Mr. Mica. But you are not prepared to tell us how many of 
the Social Security numbers are breached.
    Ms. Archuleta. No, sir.
    Mr. Mica. And then the chairman pointed out your statement, 
I guess it was in February, that you had, say, over 32 million 
    Ms. Archuleta. That was a number he used, yes.
    Mr. Mica. You really don't know then how many records have 
been breached beyond the 4.2?
    Ms. Archuleta. No, sir. That's the investigation we are 
doing right now.
    Mr. Mica. You know, I thought about this a little bit. And 
I thought, well, first thing, were my records breached, my 
staff, and others? And then I was thinking of people downtown 
that work in the agencies. And we have an important 
responsibility to protect the information, their personal 
information. Over the weekend, in fact Monday, I spent at one 
of our embassies overseas being briefed all morning on a bunch 
of issues. And brought to my attention by some of the people 
serving in some sensitive positions were that they were 
notified by you all of a breach of their records. So our 
overseas personnel in sensitive positions have also been 
subject to this breach. Is that correct?
    Ms. Archuleta. Employee personnel records on current 
employees who have records at OPM have been----
    Mr. Mica. How much data? Is their address? But there is 
personal information about these individuals. You know, you 
think a little bit about people down in the glass places here, 
you want everyone safe. I was absolutely stunned to find out 
that some of the people, United States citizens serving 
overseas, were notified that their personnel records have been 
breached, and information is available on them, and they are in 
possible situations that could be compromised by that 
information. But you have notified them, right?
    Ms. Archuleta. We have notified the 4.2 million people.
    Mr. Mica. Those are the people. They mentioned this to me. 
I was there on other subjects but expressed concern.
    Ms. Archuleta. And I am as concerned as you are, sir, about 
this because these are the individuals who have been--whose 
data has been taken by these attackers. I am as concerned as 
you are.
    Mr. Mica. These people are on the front lines overseas, and 
they are representing us. And I could hear concern in their 
voice about what's been--what has taken place. I read--is it 
Chinese hackers? Does anyone know? Was it Chinese? Do we know 
for sure? Do you know for sure?
    Ms. Archuleta. That's classified information, sir.
    Mr. Mica. So you have some idea, but it's classified?
    Ms. Archuleta. That's classified information. I can't 
comment. I would be glad to in another----
    Mr. Mica. Okay. Now whether it's Chinese or some group that 
could give this information to people who would want to do 
harm, that means some of those people to me are at risk.
    Ms. Archuleta. Sir, every employee is important to me, not 
whether they are serving in Kansas City or they are serving 
overseas. Every employee is important to me.
    Mr. Mica. Yesterday morning before I left, I visited a site 
of a terrorist act in one of the capitals. And I saw that--
well, that place still hasn't been opened, and it has been 
months since that terrorist attack. And our people are over 
there on the front lines and, their information has been 
    Now, you have been there the longest, Ms. Barron-DiCamillo, 
is that the truth? I mean, since about 2012, is it?
    Ms. Barron-DiCamillo. I am sorry, what was----
    Mr. Mica. You have been in position since 2012 at OPM?
    Ms. Barron-DiCamillo. No, I work for Department of Homeland 
    Mr. Mica. Homeland Security, I am sorry, but you are 
responsible overseeing OPM's----
    Ms. Barron-DiCamillo. So DHS has a shared responsibility 
for cybersecurity. We are partnering with departments and 
agencies to ensure the cybersecurity of the dot-gov and working 
with critical infrastructure partners. And we work with them 
protecting at the boundaries as well as----
    Mr. Mica. When did we first find out about this breach?
    Ms. Barron-DiCamillo. It was notified by a third-party 
partner to us----
    Mr. Mica. When? What date?
    Ms. Barron-DiCamillo. --in March of 2014.
    Mr. Mica. 2014. So when you came on, Ms. Seymour, about 
    Ms. Seymour. I came on board in December of 2013, sir.
    Mr. Mica. 2013, so you were there. They talked about his 
bonus. Finally, are you SES?
    Ms. Seymour. Yes, sir, I am.
    Mr. Mica. Did you get a bonus too?
    Ms. Seymour. Yes, sir, I did.
    Mr. Mica. How much?
    Ms. Seymour. I do not know the exact amount, but I believe 
it was about $7,000.
    Mr. Mica. Okay. So whether you were private or public, 
people were getting bonus while some of this was going on.
    Thank you, Mr. Chairman.
    Chairman Chaffetz. I thank the gentleman.
    I now recognize the gentlewoman from New York, Mrs. 
Maloney, for 5 minutes.
    Mrs. Maloney. Thank you.
    I am trying to get this straight. OPM was breached 
directly. Is that correct? And I am going to ask Ms. Seymour, 
the information officer. OPM was breached twice directly. Is 
that correct?
    Ms. Seymour. Yes, ma'am, that's correct.
    Mrs. Maloney. And one was in--one occurred in December of 
2014, detected in April 2015. And then the security breach--
when were the two breaches? When were the two breaches? The 
    Ms. Seymour. The first OPM breach goes back to we 
discovered it in March of 2014, and the breach actually--the 
breach actually occurred in----
    Mrs. Maloney. You discovered it in March 2014?
    Ms. Seymour. Yes, ma'am. And the breach actually occurred, 
the adversary had access back to November of 2013.
    Mrs. Maloney. November 2013. Okay. And then the second 
breach was when? There were two breaches, correct?
    Ms. Seymour. That is correct, ma'am. The second breach we 
discovered in April of 2015, and the date that that breach goes 
back to is October of 2014--I am sorry, June of 2014.
    Mrs. Maloney. June of 2014.
    Ms. Seymour. Yeah.
    Mrs. Maloney. Who discovered this breach? How did OPM 
discover this breach?
    Ms. Seymour. The first breach we were alerted by DHS.
    Mrs. Maloney. So you did not discover it. The Department of 
Homeland Security discovered it?
    Ms. Seymour. The first breach in March of 2014----
    Mrs. Maloney. In 2014. Wait a minute. I think this is 
important. Homeland Security discovered it.
    Ms. Seymour. Yes, ma'am.
    Mrs. Maloney. Okay. And then the second one, who discovered 
    Ms. Seymour. OPM discovered it on its own in April of 2015. 
By then, we had put significant security measures in our 
    Mrs. Maloney. Now, when did you report these breaches, and 
who did you report them to?
    Ms. Seymour. On April 15, when we discovered the most 
recent breach, we reported that to US-CERT and to----
    Mrs. Maloney. Who?
    Ms. Seymour. The Computer Emergency and Readiness Team, 
    Mrs. Maloney. You did it to DHS. Did you report it to 
    Ms. Seymour. We also reported it to the FBI, and then we 
made our FISMA-required notification to Congress as well.
    Mrs. Maloney. Okay. That was the April 15 one. What about 
the first one?
    Ms. Seymour. For the first breach, and again DHS notified 
us of that activity in our network. And so they already knew 
about that one. And yes, ma'am, we made notifications to 
Congress of that one as well.
    Mrs. Maloney. When?
    Ms. Seymour. I am sorry, ma'am, I don't have that date in 
my notes. I would be happy to get you a response.
    Mrs. Maloney. Would you please get that back to the 
committee for us?
    Mrs. Maloney. Did you notify the contractors of the breach?
    Ms. Seymour. At the first breach, there was not an 
awareness of that--of what the adversaries were targeting and 
that this may go beyond OPM. I know that our staffs, my staff, 
my security staff had conversations with the security staffs at 
the contractor organizations. I also know that the indicators 
of compromise that DHS had were provided to other government 
organizations, were put into EINSTEIN, as well as they have 
communications that they would normally----
    Mrs. Maloney. But the breaches were direct. Now, I want to 
understand the interaction with the contractors. Now, when they 
breached you, did it go into OPM? I am asking both Mr. Hess and 
Mr. Giannetta. When they went into your system, did that 
connect into OPM, or was it held in your system?
    Mr. Giannetta. In our intrusion in June of 2014, it was 
within our systems.
    Mrs. Maloney. So it was within your system. So the 4 
million identities that they have and information they have, it 
came from OPM, or it came from the contractors? Are they one 
and the same, or are they separate? And I will go back to Ms. 
    Ms. Seymour. No, ma'am, these are separate incidents. So 
with the breach at USIS, the way that OPM does business with 
its contractors is different from the way other agencies may do 
business with both KeyPoint and with USIS. And so there were 
approximately 49,000, I believe it was, individuals who we 
notified based on the KeyPoint incident. There were other 
agencies who made notifications both on the USIS--based on the 
USIS and the KeyPoint incidents.
    The 4.2 number that you are getting to, ma'am, is about the 
personnel records that are the incident at OPM.
    Mrs. Maloney. What I would like to get in writing is 
exactly what information came out of OPM, what information came 
out of the contractors. Is it the one and the same? You are the 
final database. So I want to understand the connection and how 
the breaches occurred and how they interconnected. If you could 
get it back to Chairman Chaffetz, I think it is important 
    Chairman Chaffetz. Thank you. Thank the gentlewoman.
    Now recognize the gentleman from Ohio, Mr. Turner, for 5 
    Mr. Turner. Thank you, Mr. Chairman.
    Ms. Archuleta and Ms. Seymour, I just want to remind you 
that you are under oath. And I have a series of questions that 
follow on to Chairman Maloney's questions.
    It was reported in the Wall Street Journal that a company 
named CyTech has related that they were involved in discovering 
the breach that apparently has been, according to this article, 
linked to Chinese hackers. OPM's press secretary said the 
assertion that CyTech was somehow responsible for the discovery 
of the intrusion into OPM's network during a product 
demonstration is inaccurate. CyTech related that they were 
invited in by OPM, that they--Ms. Seymour? Ms. Seymour, could I 
have your attention? That they were invited in by OPM and that 
their equipment was run on OPM and that their equipment 
indicated that there had been an intrusion of your system, that 
they notified you.
    But your response officially from OPM is that it's 
inaccurate, that they were not involved. Ms. Archuleta, I 
believe you were asked this question previously, were you not, 
and you said that they were not involved?
    I remind you both that you are under oath. Anybody want to 
change their answer? Was CyTech involved in the discovery of 
this data breach? Ms. Archuleta?
    Ms. Archuleta. No, they were not.
    Mr. Turner. Ms. Seymour?
    Ms. Seymour. No, sir, they were not.
    Mr. Turner. Okay. Now, reminding you again you are under 
oath, was CyTech ever brought in to run a scan on OPM's 
    Ms. Seymour. CyTech was engaged with OPM, and we had--we 
were looking at using their tool in our network. We gave them--
it is my understanding that we gave them some information to 
demonstrate whether their tool would find information on our 
network, and that--in doing so, they did indeed find those 
indicators on our network.
    Mr. Turner. Great. Well, thanks, Ms. Seymour. Because I sit 
on the Intelligence Committee. And CyTech Services president 
and CEO, Ben Cotton, and his vice president of technology 
development, John Irvine, came in and briefed the Intelligence 
Committee staff. And they relate that they were given access to 
your system, ran their processes, and their processes 
discovered it. And I think you are confirming this now, where 
previously it was denied that they had any involvement.
    So you want to relate again, Ms. Seymour, what exactly did 
CyTech do? Were they given access to your system? Did they run 
it on your system?
    Ms. Seymour. Here is what I understand, sir. OPM discovered 
this activity on its own.
    Mr. Turner. That wasn't the question, Ms. Seymour. And I am 
assuming that you would have greater than an understanding, 
that you would actually know, considering you are the chief 
information officer, and you are testifying before us as to how 
this happened, and there has already been a news article on 
this. So please tell us clearly what access was CyTech given to 
your system.
    Ms. Seymour. I will be happy to answer your question, sir. 
I am trying to explain to you how CyTech had access. OPM 
discovered the breach, and we were doing market research, and 
we were also--we had purchased some licenses for CyTech's tool. 
We wanted to see if that tool set would also discover what we 
had already discovered. So, yes, they put their tools on our 
network, and yes, they found that information as well.
    Mr. Turner. So you were tricking them? You like already 
knew this, but you brought them in and said, Shazam, you caught 
it too? That seems highly unlikely, don't you think?
    Ms. Seymour. We do a lot of research before we decide on 
what tools we are going to buy for our network.
    Mr. Turner. At that point you hadn't removed the system 
from your system? I mean, you knew it was there, you brought 
them in, and their system discovered it too, which means it 
would have to have been continuously running, and that 
personnel information would have been still at risk.
    Ms. Seymour. No, sir. We had latent malware on our system 
that we were watching that we had quarantined.
    Mr. Turner. You had quarantined it. So it was no longer 
    Ms. Seymour. That is correct.
    Mr. Turner. Okay. Well, clearly, you are going to have to 
give us all an additional briefing and certainly the Intel 
Committee staff an additional briefing on exactly how you did 
this because, you know, CyTech's relating what they did is very 
compelling. And, quite frankly, what you say sounds highly 
suspicious, that you would have brought them in, tricked them 
to see if they could discover it, something you have already 
discovered. I mean, why would you need them if you have already 
discovered it? And then further tricked them to say, Well, you 
don't really have the system on your system anymore? It just 
contradicts in so many ways it defies logic.
    But the other thing I want to ask you, Ms. Archuleta, is on 
your SF-86 forms that were compromised----
    Ms. Archuleta. Yes.
    Mr. Turner. When you say a form, it just sounds so minor. 
But this is the form, this is the Security Form 86 that people 
looking to work on national security and get clearance have to 
fill out. It's not just their Social Security, but their Social 
Security number is all over this. What are you doing--I have 
Wright-Patterson Air Force Base in my district. My community 
has a number of people who have had to fill these out to be 
able to serve their country. What are you doing about the 
additional information that's in this form that's being 
released and that's out there about these individuals?
    Ms. Archuleta. I filled out exactly the same form. And----
    Mr. Turner. I didn't ask that. I asked you, what are you 
doing? Because it is not about just identity theft. This is not 
just their credit cards and their checking accounts. What are 
you doing about the rest of information that is in here about 
counseling them and assisting them?
    Ms. Archuleta. I just used that by way of example that I 
understand what is in the form, personally, and as Director of 
OPM and because, at OPM, as you know, we do Federal background 
investigations, and I am clearly aware of what is in the form. 
As I mentioned in my testimony, that we are working with a very 
dedicated team to determine what information was taken from 
those forms and how we can begin to notify the individuals who 
were affected by that. That form is very complicated. And that 
is why I am very, very careful about not putting out a number 
that would be inaccurate. That is a complicated form, with much 
information. It has PII and other information. So we want to be 
sure that as we look at how we protect the individuals who 
completed those forms that we are doing everything we can. We 
are looking at a wide range of options to do that.
    This is an effort that was working on together throughout 
government, not just OPM. We are all concerned about the data 
that was lost as a result of this breach by these hackers who 
were able to come into our systems. And I will repeat again, 
but for the fact that we found this, this malware would still 
be in our systems.
    Mr. Turner. Mr. Chairman, I just want to thank them for at 
least acknowledging that CyTech had access to their equipment 
and that did run and did identify this, even though they 
previously denied CyTech's involvement. Thank you.
    Chairman Chaffetz. I thank the gentleman.
    I now recognize the gentlewoman from the District of 
Columbia, Ms. Norton, for 5 minutes.
    Ms. Norton. Thank you, Mr. Chairman.
    Actually, I have a question for Ms. Barron-DiCamillo.
    But, first, I want to ask Ms. Archuleta, members have been 
concerned about this 4.2 million number. You have tried to 
straighten that out. For the record, that is not a final 
number. It almost surely will go up. Is that the case?
    Ms. Archuleta. There are two incidents.
    Ms. Norton. I understand that.
    Ms. Archuleta. So, in the first incident, that number is 
4.2 million. In the second incident, we have not reached a 
    Ms. Norton. So the number is going to go up. I understand--
indeed, I am receiving calls from Federal employees about OPM's 
promise of 18 months, I believe it is, free credit monitoring. 
Is it true that Federal employees must pay for this service----
    Ms. Archuleta. No.
    Ms. Norton. --after that time?
    Ms. Archuleta. The service--well, the services that we are 
offering is identity theft protection up to a million dollars. 
We are also offering credit monitoring for 18 months, which is 
the standard industry practice. As we look at the second 
notification, we are looking at our whole range of options.
    Ms. Norton. Ms. Archuleta, there is a great deal of 
concern, not so much about how much to pay for it but the 
amount of time, that the 18 months may be too short a period of 
time given how much you don't know and we don't know.
    Ms. Archuleta. And we are getting tremendous information 
back from not only----
    Ms. Norton. Well, are you prepared to extend that time if 
    Ms. Archuleta. I have asked my experts to include this 
feedback that we have received on a number of different 
considerations that need to be made.
    Ms. Norton. I will ask, are you prepared to extend that 18 
months in light of what has happened to Federal employees if 
    Ms. Archuleta. As I said, we don't know the scope of the 
impact of the--the scope of----
    Ms. Norton. Precisely for that reason, Ms. Archuleta, I 
have got to go on. If the scope is greater as you get more 
information, will you correlate that to extending the amount of 
time that Federal employees have for this credit monitoring?
    Ms. Archuleta. Congresswoman, I will get back with you as 
to how and what range of options we have.
    Ms. Norton. Will you get back to us within 2 weeks on that?
    Ms. Archuleta, we have people out there, all of us have 
constituents out there who have been directly affected. When 
you won't even tell me that you are prepared to extend the time 
for credit monitoring, what kind of satisfaction can they get 
from OPM? I am just asking you that if necessary----
    Ms. Archuleta. Congresswoman, I am as concerned as you are.
    Ms. Norton. In other words, you are not even willing to 
answer that question. Are you willing to answer this question: 
They report having to wait long periods of time, sometimes 
hours, to even get anybody on the phone from OPM. Can you 
assure me that if a Federal employee calls they can get a 
direct answer forthwith today if they call? And if not, what 
are you going to do about it?
    Ms. Archuleta. We are already taking steps. And what the 
contractor has actually implemented is a system similar to what 
the Social Security is using. So if they get a busy tone, they 
also can leave their number, and they will get a call back.
    Ms. Norton. Within what period of time, Ms. Archuleta?
    Ms. Archuleta. For example, I have heard a gentleman told 
me this morning that he left his number, and he was called back 
in an hour. So that individual does not have to wait on the 
phone. It is a very simple process.
    Ms. Norton. Ms. Archuleta, you let the chairman know before 
the end of this week what is the wait time for a return call.
    Ms. Archuleta. Yes.
    Ms. Norton. That was a subject of great concern.
    Ms. Archuleta. I would be glad do that. We get those 
numbers every day. I would be glad do that.
    Ms. Norton. We need to do all we can to give some 
assurance. We can't even assure them that beyond 18 months, 
they are going to get credit monitoring. That's a very 
unsatisfactory answer, I want you to know.
    I want to ask Ms. Barron-DiCamillo, we understand that much 
of this is classified, and we keep hearing: We can't tell you 
things because it's classified.
    Of course, the press is finding out lots of stuff. They 
reported that law enforcement authorities have been examining 
the connection between the cyber attack at OPM and a previous 
data breach that occurred at KeyPoint. So I want to ask you, 
Ms. Barron-DiCamillo, and I don't want to discuss--I am not 
asking about anything classified--in the course of your own 
investigation at US-CERT into KeyPoint's data breach, did you 
find that hackers were able to move around the company network 
prior to detection?
    Ms. Barron-DiCamillo. In the case of the KeyPoint 
    Ms. Norton. Yes.
    Ms. Barron-DiCamillo. Yes, ma'am, they were able to move 
around in the KeyPoint network. We had an interagency response 
team that spent time reviewing the KeyPoint network after a 
request for technical assistance.
    Ms. Norton. Even to the domain level?
    Ms. Barron-DiCamillo. Correct. They had access to--we were 
there in August of 2014. The onsite assistance team was able to 
discover that they had access----
    Ms. Norton. What does that allow hacker to do if you can 
get to the domain level?
    Ms. Barron-DiCamillo. Well, they had access to the network 
    Ms. Norton. KeyPoint.
    Ms. Barron-DiCamillo. Yeah, KeyPoint network, from that 
point in time through the fall of 2013. So, during that time, 
they were able to leverage certain malware to escalate 
privileges for the entry points. So they entered the network, 
we are not quite sure how. Because of a lack of login, we 
couldn't find the----
    Ms. Norton. But they could get the background checks on 
    Mr. Walberg. [Presiding.] The gentlelady's time has 
    Ms. Norton. I just want to get to this final thing. They 
could get the background checks on Federal employees.
    Ms. Barron-DiCamillo. No, they could not. They were not 
able to--there was no--or there was a PII loss associated with 
27,000 individuals associated with that case, I believe. But it 
was potentially exposed. Because of a lack of evidence, we 
weren't able to confirm that. So they had potential access, but 
we weren't able to confirm exfiltration of that data.
    Mr. Walberg. I thank the gentlelady.
    Ms. Norton. Thank you, Mr. Chairman.
    Mr. Walberg. I now recognize myself for 5 minutes of 
    Let me ask Ms. Archuleta, what do you believe was the 
intent behind the attack? We are talking all about the attack. 
So what do you think the intent was?
    Ms. Archuleta. You would have to ask my partners in 
cybersecurity about that. I am not an expert in what the----
    Mr. Walberg. Ms. Seymour, maybe you could respond?
    Ms. Archuleta. I think that may be better placed with DHS 
and perhaps others.
    Mr. Walberg. Let me start, Ms. Seymour, do you have any 
idea as to why the attack?
    Ms. Seymour. OPM does not account for attribution or the 
purpose to which this data would be used.
    Mr. Walberg. Ms. Barron-DiCamillo?
    Ms. Barron-DiCamillo. I would be happy to discuss those 
types of issues further in a closed setting, as we did 
yesterday with the staff, because the details around that is 
something that would be more appropriate for a closed 
classified setting.
    Mr. Walberg. Ms. Archuleta, how would you assess OPM's 
communication with current and former Federal employees 
regarding the breach?
    Ms. Archuleta. I believe----
    Mr. Walberg. At this point in time, how would you assess 
    Ms. Archuleta. I believe that we are very--we want to work 
very hard with our contractor to make sure that we are 
delivering the service that we want. We have asked them 
throughout this process to make improvements. We have demanded 
improvements. We are holding them accountable to deliver the 
services we contracted for. Ms. Seymour is in communications 
with them.
    I do not, I do not want our employees to sit and wait on 
the phone. I do not want them to have to wonder whether their 
data has been breached. I want to serve them in every way that 
we can. And that is why we are demanding from our contractor 
the services that the contractor said they would deliver. And 
we are working very hard on that and each day give them the 
appropriate feedback from what we are hearing from our 
    Mr. Walberg. Federal News Radio conducted an online survey 
about the data breach. You probably are aware of this. One of 
the questions asked respondents was to rate OPM's communication 
with current and former Federal employees about the data 
breach. The results showed that 78 percent of the respondents 
rated that OPM's communication as poor. An additional 12 
percent rated it as fair. Only 3 percent described it as good. 
And less than 1 percent said it was excellent. I appreciate the 
fact that you want to improve that. We expect you to make sure 
that who you have contracted with improves that.
    Ms. Archuleta. Those numbers don't make me happy, sir. And 
I am going do everything I can to make sure that we are doing 
everything for our employees. I care deeply about our 
    Mr. Walberg. Let me move on.
    Ms. Barron-DiCamillo, some news reports indicate that 
attackers may now be in possession of the personal file of 
every Federal employee, every Federal retiree, and up to 1 
million former Federal employees. If true, that means the 
hackers have every affected person's Social Security number, 
address, date of birth, job and pay history, and more that 
could be there. For years we have been hearing about the risk 
of a cyber Pearl Harbor. Is this a cyber Pearl Harbor?
    Ms. Barron-DiCamillo. The impact associated with the data 
breach that was confirmed, the records that were taken out of 
the personal records is what we would call on a severity scale 
a significant impact.
    Mr. Walberg. Significant impact. What does ``significant 
impact'' mean?
    Ms. Barron-DiCamillo. Meaning that the data, if it was 
correlated with other data sources, could be severely--it could 
impact the environment as well as the individual.
    Mr. Walberg. The ``environment'' meaning?
    Ms. Barron-DiCamillo. The fact that they were able to take 
the data out of the environment, that's a significant impact to 
the environment, and ensuring that they are able to mitigate 
the ability that the attacker used to get into that 
environment. And then the fact that that data was exfilled is 
also considered to be a high significant impact.
    Mr. Walberg. So it's blown up.
    Ms. Barron-DiCamillo. I am sorry?
    Mr. Walberg. It's blown up a lot of things, protection, 
security. It's a Pearl Harbor.
    Ms. Barron-DiCamillo. That's not a term I am comfortable 
with using, but on the severity scale that we use----
    Mr. Walberg. It's pretty significant.
    Ms. Barron-DiCamillo. Yeah. It would be medium to high 
significance, yes.
    Mr. Walberg. Let me ask, Ms. Seymour, do you think issuing 
a request for quotes on May 28 and establishing a deadline of 
May 29 to potential contractors was a reasonable opportunity to 
respond in this significant issue of cybersecurity?
    Ms. Seymour. Our goal was to be able to notify individuals 
as quickly as possible. And so we worked with the GSA schedule. 
We contacted schedule holders. We also put it on FedBizOpps for 
other opportunities. We received quotes from both schedule 
holders as well as nonschedule holders. And so our goal was to 
make sure that we could notify individuals as quickly as 
    Mr. Walberg. That was quick. Maybe too quick. My time has 
    I now recognize the gentleman from Massachusetts, Mr. 
    Mr. Lynch. Thank you, Mr. Chairman.
    And, again, I want to thank the witnesses for participating 
    Ms. Archuleta, you testified before the Senate. Let me ask 
you at the outset, who is ultimately responsible for protecting 
the personal identification information of employees at OPM? Or 
that are covered by OPM, Federal employees.
    Ms. Archuleta. Yes, the responsibility of the records is 
with me and my CIO.
    Mr. Lynch. Okay. So you also testified that no one was to 
blame. Is that right?
    Ms. Archuleta. I think my full statement, sir, was that I 
believe that the breach was caused by a very dedicated, a very 
focused actor who has spent much funds to get into our systems. 
And I have worked--the rest of my testimony was I have worked 
since day one to improve legacy systems.
    Mr. Lynch. I understand that. I understand that. You are 
blaming the perpetrators, that those are the people that are 
responsible. Is that basically what you are saying?
    Ms. Archuleta. The action was caused by a very focused, 
aggressive perpetrator.
    Mr. Lynch. Okay. I can't have repeated the same answers.
    Let me just, Mr. McFarland, the assistant inspector 
general, Michael Esser, testified that a number of the systems 
that were hacked were not older legacy systems, but they were 
newer systems. Is that your understanding?
    Mr. McFarland. Yes.
    Mr. Lynch. So this isn't the old stuff, this is the new 
    Mr. McFarland. Yes, that's correct.
    Mr. Lynch. Okay. And the former chief technology officer at 
the IRS and the Department of Homeland Security said that the 
breaches were found bound to happen given OPM's failure to 
update its cybersecurity. Is that your assessment, Mr. 
    Mr. McFarland. Well, I think, without question, it 
exacerbated the possibility, yes.
    Mr. Lynch. Yeah. He also, this is a quote, he said: ``If I 
had walked in there as the chief information officer and I saw 
the lack of protection for very sensitive data, the first thing 
we would have been working on is how to protect that data.''
    I am concerned as well about the flash audit that you just 
put out. And your ultimate determination was that you believed 
that what they are doing will fail.
    Mr. McFarland. The approach that they are taking I believe 
will fail.
    Mr. Lynch. Okay.
    Mr. McFarland. They are going too fast. They are not doing 
the basics. And if that's the case, then we are going to have a 
lot of problems down the road.
    Mr. Lynch. Let me ask you, so very crudely describing this, 
they are creating a shell, a protective shell. And then we're 
going to migrate applications in under the shell. And because 
they will be under the shell, they'll be resistant or 
impervious to hacking. It doesn't seem like we should have to 
wait until the last application is under the shell before we 
find out whether or not the shell is working. Will that give us 
an opportunity to look at the early stages of this project?
    Mr. McFarland. Well, I am not sure if it will give us that 
opportunity or not. What is important, I think from our 
perspective, is that they have the opportunity, OPM has the 
opportunity right now to do certain things that will increase 
the security a great deal. And that shouldn't be abandoned and 
just placed in place of. And I don't mean to imply it is 
abandoned, but it should not be in place of speeding through 
the rest of the project to get it done. The crisis part--may 
not seem this way to a lot of people, but the actual crisis at 
OPM was with the breach. That part is over. The best thing to 
do is safeguard the system as it is right now and then move 
appropriately for a full restructuring.
    Mr. Lynch. Okay. Do you think that OPM's estimates of $93 
million is accurate?
    Mr. McFarland. I don't think it's anywhere close to 
    Mr. Lynch. I don't either. It doesn't seem to include the 
whole migration function where they pull the information in.
    Mr. McFarland. As an example, the financial system that we 
have, CBIS, in 2009, we had to migrate that information.
    Mr. Lynch. Right.
    Mr. McFarland. And in so doing, it had a lot of oversight 
and went pretty well. And, in fact, our office was part of that 
oversight. But just that one system took 2 years and $30 
    Mr. Lynch. Right. And that's a small fraction of what we 
are talking about here, right? A very small fraction.
    Mr. McFarland. Very small.
    Mr. Lynch. Okay.
    I will yield back. Thank you, Mr. Chairman.
    Chairman Chaffetz. [presiding.] I thank the gentleman.
    I now recognize the gentleman from South Carolina, Mr. 
Gowdy, for 5 minutes.
    Mr. Gowdy. Thank you, Mr. Chairman.
    Mr. Chairman, I want to read a regulation. I would ask all 
the panelists to pay attention. It's a little tedious, but it's 
important: If new or unanticipated threats or hazards are 
discovered by either the government or the contractor, or if 
existing safeguards have ceased to function, the discoverer 
shall immediately bring the situation to the attention of the 
other party.
    That's a regulation. Mr. Hess, Mr. Giannetta, were there 
also contractual obligations in this realm between you and the 
    Mr. Hess. There are.
    Mr. Gowdy. And they would be what, similar to that, notice? 
A notice provision?
    Mr. Hess. I don't have an immediate recollection of exact 
text, but it is similarly worded.
    Mr. Gowdy. Okay. I think it's helpful sometimes to define 
terms, particularly for those of us that are liberal arts 
majors and don't deal with this. What is a ``new or 
unanticipated threat or hazard''? Mr. Hess?
    Mr. Hess. That would be an indication of compromise of a 
system or a failure of any of the system protections.
    Mr. Gowdy. Oh. So when Chairman Chaffetz was having a 
difficult time getting answers to that question because the 
focus was on the loss of personal information, that's really 
not what that phrase means. It's just a threat or hazard. It 
doesn't actually have to be a loss, does it?
    Mr. Hess. Not the way I would define it.
    Mr. Gowdy. Me either.
    What about ``existing safeguards have ceased to function?'' 
What does that mean? Mr. Hess?
    Mr. Hess. Sir, it's pretty explanatory.
    Mr. Gowdy. It did strike me as being self-explanatory. It 
    Mr. Giannetta, is that self-explanatory to you, ``existing 
safeguards have ceased to function?''
    Mr. Giannetta. Yes.
    Mr. Gowdy. Here is the really tough question, and I will 
let both of you weigh in on this one because it is tough. What 
does the word ``immediately'' mean?
    Mr. Hess. Without delay.
    Mr. Gowdy. Without delay.
    Mr. Giannetta, is there another meaning that you are 
familiar with?
    Mr. Giannetta. I think that's a good definition.
    Mr. Gowdy. All right. So you had both a contractual 
obligation with the government and there is a regulatory 
obligation that if new or unanticipated threats or hazards are 
discovered by either the government or the contractor, or if 
existing safeguards have ceased to function, the discoverer 
shall immediately bring the situation to the attention of the 
other party.
    Ms. Archuleta, I have heard this morning about a March 2014 
data breach. Did I hear that right?
    Ms. Archuleta. Yes, sir, you did.
    Mr. Gowdy. And when did you bring that breach to the 
attention of either Mr. Hess or Mr. Giannetta? And you are 
welcome to turn on your microphone or else bring it closer to 
    Ms. Archuleta. I would have to get that information back to 
you. I don't have it in my notes. Perhaps Ms. Seymour would 
know. But if not, we would get that information back to you.
    Mr. Gowdy. Do you know if it was immediately?
    Ms. Archuleta. I would expect that it was immediate, yes.
    Mr. Gowdy. Let's find out. Ms. Seymour, do you know?
    Ms. Seymour. No, sir, I don't. But I don't think that we--I 
certainly don't think that we immediately notified our 
contractors of a breach to our network because at that time we 
did not have any question as to whether it was affecting them. 
It was to our network at that time.
    Mr. Gowdy. Mr. Hess, Mr. Giannetta, is that your 
understanding, that they were under no duty to bring that to 
your attention? Not all at once. It's your contractual 
language, and you are looking at the regulation. Do you think 
you should have been notified because of the March breach?
    Mr. Giannetta. Absolutely.
    Mr. Gowdy. Well, why? Because I just heard one person say 
she didn't know and the other say it was really none of your 
business. So why should you have been notified? Despite the 
plain language of the regulation and the contractual language, 
why do you think it was important that you be notified?
    Mr. Giannetta. So that we could take appropriate or more 
appropriate actions to protect data.
    Mr. Gowdy. Were you notified?
    Mr. Giannetta. I was not.
    Mr. Gowdy. Were you notified immediately?
    Mr. Giannetta. No.
    Mr. Gowdy. Huh. What do you have to say about that, Ms. 
    Ms. Seymour. I believe that that's accurate, sir.
    Mr. Gowdy. I am with you there. I guess my question is, 
why? Why, despite the plain language of the contract and the 
plain language of the regulation, why did you not immediately 
notify the contractors?
    Ms. Seymour. We worked with DHS and partners to understand 
the potential compromise to our system so that we could----
    Mr. Gowdy. Was DHS one of your contractors?
    Ms. Seymour. No, sir.
    Mr. Gowdy. Well, I didn't think so. Which that doesn't 
really help me understand the regulation because it says 
``contractor;'' it doesn't say ``DHS.'' So why didn't you 
notify the contractor?
    Ms. Seymour. At that time, we were still investigating what 
had happened in our network.
    Mr. Gowdy. What does the word ``immediately'' mean to you?
    Ms. Seymour. Without undue delay.
    Mr. Gowdy. Did you do so?
    Ms. Seymour. No, sir, we did not.
    Mr. Gowdy. Does the regulation say ``as soon as you figure 
out what happened'' or ``after you talk to DHS?'' That is not 
in my version of the regulation. Is it in yours?
    Ms. Seymour. I have not read that regulation, sir.
    Mr. Gowdy. You know why you haven't? Because that one 
doesn't exist. The one that says ``notify DHS'' or ``try to 
figure it out.'' The only one that exists says to immediately 
notify the contractor, and you are telling me you didn't do it. 
And my question is, why?
    Ms. Seymour. I can't answer that question.
    Mr. Gowdy. Who can?
    Ms. Seymour. I will take that back and get you----
    Mr. Gowdy. To whom will you take it?
    Ms. Seymour. I believe--I would take it back to my staff to 
see if we have processes in place that----
    Mr. Gowdy. Do you think it's staff's responsibility to 
notify the contractor?
    Ms. Seymour. We have processes in place for making 
notifications when we find these things.
    Mr. Gowdy. Who is ultimately responsible for that process? 
Who failed to meet the contractual and regulatory obligations?
    Ms. Seymour. I would have to read that regulation, sir. I 
am not familiar with it.
    Mr. Gowdy. I just read it.
    Ms. Seymour. I would be happy to read it. I would like to 
read the full context of it.
    Mr. Gowdy. You think the context is different from what I 
just read?
    Ms. Seymour. I would want to read the context and----
    Mr. Gowdy. How about the contract? Have you read the 
    Ms. Seymour. I have read most of the parts of the contract, 
    Mr. Gowdy. Well, I can't speak for the chairman, but my 
guess is that he and the other members would be really 
interested in who failed to honor both the letter and the 
spirit of the contractual obligation and the regulatory 
    With that, I will yield back.
    Chairman Chaffetz. I thank the gentleman.
    We will now recognize the gentleman from California, Mr. 
Lieu, for 5 minutes.
    Mr. Lieu. Thank you, Mr. Chairman.
    I have concerns not just about the failures of OPM 
leadership but also the failures of its contractors, in 
particular USIS, because it looks like what happened here 
wasn't just recklessness or negligence; it was fraud. And I 
want to know how far up this fraud went. I want to know if the 
parent company knew about it. I want to know if the hedge fund 
managers that funded these companies knew about it.
    So let me begin with Mr. McFarland. As you know, the 
Department of Justice joined a lawsuit against USIS in January 
for defrauding the government under its contract with OPM. And 
according to Justice Department filing, ``Beginning in at least 
March 2008 and continuing for through at least September 2012, 
USIS management devised and executed a scheme to deliberately 
circumvent contractually required quality reviews of completed 
background investigations in order to increase the company's 
revenues and profits.'' You assisted their investigation in 
this case, correct?
    Mr. McFarland. That's correct.
    Mr. Lieu. As I understand it, the parent company, 
Altegrity, paid bonuses to top executives at USIS during the 
period of their fraud that amounted to about $30 million.
    Mr. McFarland, to your knowledge has USIS or Altegrity paid 
the government back for those bonuses?
    Mr. McFarland. I am not positive, but I believe not.
    Mr. Lieu. All right. Let me enter into the record, Mr. 
Chairman, if possible, an article from the Wall Street Journal 
entitled ``Altegrity Executives Got Pay Out Before Screener 
Went Bankrupt.''
    Chairman Chaffetz. Pardon me.
    Mr. Lieu. If I could enter an article into the record.
    Chairman Chaffetz. Without objection, so ordered.
    Mr. Lieu. Thank you.
    I ask a second one to be entered, which is an article from 
The Washington Post. It states that the Justice Department 
filed a motion in this case on Friday in U.S. bankruptcy court, 
seeking $44 million from USIS' parent company, Altegrity. That 
is from this Monday.
    If we could enter that, as well.
    Chairman Chaffetz. Without objection, so ordered.
    Mr. Lieu. Okay.
    Now, let me ask Ms. Barron-DiCamillo: For USIS to have 
upgraded assistance to prevent these kinds of breaches, it 
would have cost well less than $30 million; isn't that correct?
    Ms. Barron-DiCamillo. So, not having investigated 
specifically, you know, the breadth and depth of all of the 
parent companies as well as subsidiaries--we were focused just 
on the USIS network--the findings estimates were actually 
higher than $30 million for the recommendations that we had 
provided to them at the end of our assessment. And that number 
could be as high as $50 million.
    Mr. Lieu. Got it. Thank you. I appreciate that.
    So now I want to ask Mr. Giannetta about the bonuses 
awarded during the alleged fraud.
    Who on the board reviewed the deplorable performance of the 
CEO and decided to award him with $1 million in bonuses during 
the 4-1/2 years USIS was defrauding the government? Was it the 
board? Who made that decision?
    Mr. Giannetta. So my role began at USIS in August of 2013 
as the chief information officer. I don't have any knowledge, 
direct or indirect, of who approved or disapproved----
    Mr. Lieu. So you don't know if it is the parent company or 
the hedge fund managers? We don't know who did this?
    Mr. Giannetta. I don't have that knowledge.
    Mr. Lieu. Okay. All right.
    So we are going to send you written questions after today's 
hearing, and I want your commitment that USIS or Altegrity will 
provide answers within 30 days to our questions. Will you 
commit to at least that?
    Mr. Giannetta. Certainly.
    Mr. Lieu. All right.
    Mr. Chairman, I also think the committee should call 
Jeffrey Campbell, the president of Altegrity, as well.
    And let me now turn to Mr. McFarland.
    You issued two IG reports, one in November of 2013 and one 
in November of 2014, correct, on OPM?
    Mr. McFarland, you issued two IG reports, dated November 
2013 and November 2014?
    Mr. McFarland. I'm sorry. I didn't hear the very first 
    Mr. Lieu. Okay. So you issued two IG reports, dated 
November 2013 and November 2014, on OPM?
    Mr. McFarland. You're speaking on FISMA. I'm sorry.
    Mr. Lieu. No, no----
    Mr. McFarland. Yes.
    Mr. Lieu. Yeah. All right.
    So these two IG reports, would you agree with me the 2014 
report is quite similar to the 2013 report because OPM actually 
failed to implement many of your recommendations?
    Mr. McFarland. I think there were many carryovers, yes.
    Mr. Lieu. Okay.
    And would you agree with me that this isn't a difference of 
opinion; you actually had OPM violating standards that the 
administration had put in?
    So, for example, in 2014, your report on page 24 says OPM 
was not compliant with the Office of Management and Budget 
Memorandum M-11-11 that required two-factor authentication. On 
page 12, you also said that OPM was not compliant with National 
Institute of Standards guidance saying that they should just do 
a risk assessment.
    And you would agree that OPM was not following these 
standards, correct?
    Mr. McFarland. Yes.
    Mr. Lieu. Okay.
    Director Archuleta, do you take responsibility for not 
following OMB guidance as well as guidance from the National 
Institute of Standards, which, had you followed, could have 
prevented these breaches?
    Ms. Archuleta. Well, sir, I----
    Mr. Lieu. Yes or no, do you accept responsibility for those 
two failures?
    Ms. Archuleta. It can't be a yes-or-no answer.
    Mr. Lieu. It is a yes or no. The IG identified that--look, 
do you accept responsibility for not following the OMB guidance 
and the National Institute of Standards guidance?
    Ms. Archuleta. I have to----
    Mr. Lieu. It's just a yes or no. Either you----
    Ms. Archuleta. I have to take----
    Mr. Lieu. You don't have to accept responsibility. I just 
want to know if you do.
    Ms. Archuleta. I have to take into consideration when an 
audit is conducted by the auditor. I have to make an informed 
decision about his recommendations. It's not an issue of 
whether I disagree with him. I want to be sure that I----
    Mr. Lieu. This is not an audit. This is the OMB. It is this 
administration's guidance.
    Ms. Archuleta. And we have worked very closely with OMB to 
make sure that we're tracking, documenting, and justifying all 
of our steps in this----
    Mr. Lieu. All right. My time is up.
    Ms. Archuleta. --as we move forward.
    Mr. Lieu. So I take it, you actually don't take 
    I yield back.
    Chairman Chaffetz. I thank the gentleman.
    I now recognize the gentleman from North Carolina, Mr. 
Meadows, for 5 minutes.
    Mr. Meadows. Thank you, Mr. Chairman.
    Ms. Seymour, let me come to you, because there seems to be 
some conflicting information. Before this committee, on April 
the 22nd, you had indicated that it was the adversary's modern 
technology and the OPM's antiquated system that helped thwart--
in your words--thwart hackers at the first OPM attack. Is that 
    Ms. Seymour. Yes, sir.
    Mr. Meadows. Okay.
    Last week, you testified repeatedly that it was the OPM's 
antiquated systems that were the problem and the chief reason 
that the system was not secure and you didn't do just the basic 
cybersecurity measures of encryption and network protection.
    So, I guess, my question to you, Ms. Seymour: Which is it? 
Is it the fact that the old system helped you or the old system 
hurt you? Those are two conflicting pieces of testimony.
    Ms. Seymour. I don't believe that they're conflicting, sir.
    In the first incident, the old technology thwarted the 
actor because they did not know what they were doing in that 
environment. We immediately put in place a plan to provide 
better security----
    Mr. Meadows. So you caught them immediately is what you are 
    Ms. Seymour. No, sir. I said we----
    Mr. Meadows. Well----
    Ms. Seymour. --immediately put in place a plan so that we 
could improve the security posture. What we did was we moved to 
build a new architecture where we could put in additional 
security controls.
    We also, at the very same time, put security controls in 
our current environment.
    Mr. Meadows. Okay.
    Ms. Seymour. We did not wait.
    Mr. Meadows. Well, you say you didn't wait once you found 
the problem, but is there----
    Ms. Seymour. Sir, we didn't wait----
    Mr. Meadows. Hold on.
    Ms. Seymour. --from the day that I came on board.
    Mr. Meadows. Let me ask the question. Is there, in the 
security IT/cybersecurity technology chief operators, is there 
anyone who would apply for a job who would suggest not to do 
encryption of sensitive data?
    Ms. Seymour. Encryption is not a panacea because of----
    Mr. Meadows. I didn't ask that. Is there anybody in your 
job or a similar job who would come in and say, ``We are going 
to protect everything; let's leave it unencrypted''? Can you 
think of anyone? Because I have been asking all over the United 
States. I can't find anybody.
    Ms. Seymour. So I'm going to--I'm trying to explain the 
situation to you.
    Our databases are very, very large. Our applications are 
not always able to work properly and encrypt and decrypt that 
data. So what we have done----
    Mr. Meadows. So you are saying that this was a volume 
problem, not a management problem.
    Ms. Seymour. Well----
    Mr. Meadows. Because you are under oath----
    Ms. Seymour. Yes, sir.
    Mr. Meadows. --and that is concerning, because you are 
saying that you just didn't have the resources to handle the 
large volume of information?
    Ms. Seymour. It's not a resource issue. It's whether our 
applications are built so that they can--so that----
    Mr. Meadows. So they are not encrypted today.
    Ms. Seymour. --the encryptions can be done.
    Mr. Meadows. So they are not encrypted today?
    Ms. Seymour. We have purchased the toolset, sir, and we are 
in the process of encrypting pieces of our databases, as 
opposed to the entire database. We are trying to focus on the 
sensitive information. That allows----
    Mr. Meadows. I agree, we need to focus on the----
    Ms. Seymour. --our applications to run in an operable 
    Mr. Meadows. --sensitive information.
    So what do we tell the millions and millions of Federal 
workers, that now, because their system has been breached, now 
you are going to encrypt it? Do you feel like you have done 
your job?
    Ms. Seymour. I do, sir.
    Mr. Meadows. Well----
    Ms. Seymour. I came on board, and I recognized these 
issues. And I worked with Director Archuleta to put in place a 
    Mr. Meadows. Okay. Well, both of you all came in----
    Ms. Seymour. --that would improve OPM's security posture.
    Mr. Meadows. --in 2013. You both came in in 2013.
    Ms. Seymour. At the end of 2013, yes, sir.
    Mr. Meadows. How long did it take you to buy equipment to 
start encrypting?
    Ms. Seymour. The tool----
    Mr. Meadows. Simple answer.
    Ms. Seymour. June of 2014.
    Mr. Meadows. All right. So you bought equipment in June of 
    Ms. Seymour. Uh-huh.
    Mr. Meadows. So when did you start encrypting?
    Ms. Seymour. We have a couple of databases that are 
encrypted already, and we are----
    Mr. Meadows. A couple out of how many?
    Ms. Seymour. Sir, we have numerous databases.
    Mr. Meadows. Well, and that is my point.
    Ms. Seymour. And so it takes time, and it takes resources, 
and we have to test before we can just----
    Mr. Meadows. All right.
    Ms. Archuleta, let me come to you. When you applied for the 
job and you were going through your Senate confirmation, you 
said that you would make IT, technology your number-one 
priority. Again, in this committee, you said that it was your 
number-one priority.
    Can you explain to the Federal workers and all those that 
have had their personal information breached how making it your 
number-one priority when you were confirmed in 2013 is still to 
be believed? Or was it just what you said during a confirmation 
hearing and you really never intended to act on it?
    Ms. Archuleta. I believe that the record will show that I 
have acted on it, that I am dealing with a legacy system that 
has been in place for 30 years, and we are working as hard as 
we can. In 18 months, we have made significant progress, but so 
have our aggressors.
    Cybersecurity is an enterprise responsibility, and I am 
working with all of my partners across government. And I have 
shown that we have prioritized this even as early as 2014 and 
2015 in our budgets and in the resources that we have directed 
towards that.
    I do not take this responsibility lightly. And, as I 
pledged in my confirmation hearing and as I pledged to you last 
week and as I have pledged to you today, I take it extremely 
seriously. And I am as upset as you are about every employee 
that is impacted by this.
    That is why we're dedicating resources throughout 
government, not just as OPM but at every level of government, 
to be sure that this does not occur again.
    Mr. Meadows. All right.
    Ms. Archuleta. We're working very hard. I am serious about 
    Mr. Meadows. I appreciate that.
    And I appreciate the patience of the chair.
    Mr. Hurd. [Presiding.] Thank you, Mr. Meadows.
    Now I would like to recognize my colleague from the great 
State of New Jersey, Mrs. Watson Coleman.
    Mrs. Watson Coleman. Thank you, Mr. Chairman.
    Thank you for your being here today. I have a couple of 
questions, and I would like as short an answer as possible.
    So, with regard to the one breach that involved the 4.2 
million employees, those are actual employees and retirees. 
That is a closed system. We know how many that is.
    With regard to the individuals whose information was in a 
system because background checks were being done with them, A, 
we don't know how many; B, every one of those individuals 
didn't ultimately get a job, so we have some people's 
information who aren't even employed by the Federal Government.
    Is that yes--is that true, Ms. Archuleta?
    Ms. Archuleta. Yes, that's true.
    Mrs. Watson Coleman. Okay.
    Ms. Archuleta. If there was a background investigation 
    Mrs. Watson Coleman. Right.
    So, in that second breach of that universe that is so 
large, that information was breached through a breach in the 
security of KeyPoint? Is that true, Ms. Archuleta? Is that----
    Ms. Archuleta. Yes.
    Mrs. Watson Coleman. Someone who had credentials with----
    Ms. Archuleta. There was a credential that was used, and 
that was the way that they got in----
    Mrs. Watson Coleman. Thank you.
    Ms. Archuleta. --from an employee of KeyPoint.
    Mrs. Watson Coleman. So who is trying to identify all the 
universe that has been compromised through the latter breach? 
Is it KeyPoint who is trying to clean up its mess, or is it----
    Ms. Archuleta. No, no.
    Mrs. Watson Coleman. --OPM?
    Ms. Archuleta. We have a total enterprise-wide security 
team, or forensic team, that is doing the forensics on this.
    Mrs. Watson Coleman. Okay.
    So Mr. McFarland has made a number of observations and 
recommendations, and I believe that I was left with the feeling 
that he didn't believe that OPM was moving in the right 
direction, on the right path to get to where it needs to go. 
And so I was also informed that his recommendations or his 
findings are a result of auditors and specialists in this area.
    So I have two questions for you, Ms. Archuleta. Number one 
is, are you using experts and the same kinds of skill sets that 
Mr. McFarland is using in looking at the same things that he is 
looking at, number one? And, number two, do you agree with his 
recommendations? And if not, on what areas do you disagree?
    Ms. Archuleta. The flash audit I can just take by way of 
    And, first of all, I want to say that I respect the 
inspector general's diligence in overseeing this topic. And 
there are areas where we have areas of agreement, and there's 
areas that I think we need to have further conversation about.
    In terms of the existing contracts and the use of full and 
open competition, I would like to assure the IG that the 
processes we used to award the already-existing contracts have 
been perfectly legal, and we're going to continue to ensure 
that our future contracts and processes entered into will also 
be legal.
    I also understand that he's concerned about the sole-source 
contract of tactical and shell that he spoke about. I 
understand his concerns. And I would like to remind him that 
the contracts for migration and cleanup have not yet been 
awarded, and we will consult with him as we do that.
    Where we don't--where we have areas that we need to 
consider together--and, by the way, the IG and I meet on a 
monthly basis, and our staffs meet on a weekly basis or at 
least biweekly--I look forward to discussing to him about the 
major IT business case so that we can figure out what the 
    Mrs. Watson Coleman. Okay.
    Ms. Archuleta. --timeline should be.
    Mrs. Watson Coleman. Thank you. I kind of get the drift 
    Tell me what you think is the timeframe for the IG's office 
and your office--and, Mr. McFarland, you might weigh in--
necessary to get to where we need to get. Not that all these 
things are going to be implemented, but that we agree on what 
needs to be done. Are we talking about 3 months from now? 
Thirty days from now? Six months from now? Do we have any idea?
    Ms. Archuleta. I would ask Donna just to talk about the 
tactical and the shell processes that we're using. We're trying 
to do that as rapidly as possible so that we can move out of 
the legacy network.
    The issue about the migration and the cleanup we'll 
continue to discuss, but we're trying to rapidly move towards 
that shell.
    Mrs. Watson Coleman. Do we still have contracts with 
    Ms. Archuleta. Yes.
    Mrs. Watson Coleman. And KeyPoint--this is to Mr. Hess, I 
    How many contracts with how many departments do you have?
    Mr. Hess. Our primary contracts are through Homeland 
Security and OPM.
    Mrs. Watson Coleman. Okay. And so, are your contracts 
active contracts? Are they coming to an end? Or are you at the 
end of these contracts? What is the----
    Mr. Hess. They're all active contracts.
    Mrs. Watson Coleman. They are all active contracts.
    Mr. McFarland, should we be ceasing our relationship with 
    Mr. McFarland. Based on what I know at this point, I have 
no reason to believe that we should.
    Mrs. Watson Coleman. That we should. That we----
    Mr. McFarland. No. I have no reason to believe that we 
should cease relationship.
    Mrs. Watson Coleman. That we should cease.
    Mr. McFarland. No. That we should not cease.
    Mrs. Watson Coleman. Should not.
    Ms. Archuleta, do you agree with that?
    Ms. Archuleta. I do agree with that. KeyPoint has taken the 
steps necessary to mitigate any security questions. They have 
been very active in working with us on that.
    Mrs. Watson Coleman. So but my question is, should we cease 
contracting with them? Mr. McFarland says yes, and you said 
    Ms. Archuleta. No. He said no.
    Mrs. Watson Coleman. Both of you said no. Okay.
    Mr. McFarland. No, I'm sorry. I said no.
    Mrs. Watson Coleman. Okay. I am sorry. Thank you very much.
    Mr. McFarland, last question to you. What are the three 
important things that we need to do just to get us back on the 
right track, and how long do you think it should take?
    And that will be the end of my questioning, Mr. Chairman. 
Thank you very much.
    Mr. McFarland. Well, I'll give you four, if I could.
    First, we'd like to see the implementation of multifactor 
authentication using PVI cards; then develop a comprehensive 
inventory of information systems, servers, and databases; then 
further protect existing data with encryption and data-loss-
prevention technique tools; and then proceed with the 
infrastructure overhaul with a disciplined project management 
    And I have no idea how long that will take for a 
    Mrs. Watson Coleman. Thank you.
    Thank you very much, Mr. Chairman. I yield back.
    Mr. Hurd. Thank you.
    And I would now like to recognize Mr. DeSantis from Florida 
for 5 minutes.
    Mr. DeSantis. Thank you, Mr. Chairman.
    You know, this is a really, really frustrating hearing and, 
obviously, a colossal failure. I mean, we have a government 
that will tell us how much water we can have flushing in our 
toilets, how much corn we have to put in the gasoline we use to 
drive our cars and boats, and the government will tell us the 
type of health insurance we can and cannot buy. And yet, on the 
core functions of government, the things that we all need the 
government to do, it seems to me that it fails habitually. And 
this is a major example of that.
    The numbers of people affected, when Ms. Archuleta talked 
about we don't know on the clearance side, yeah, we don't know. 
You know why? Because it is not just the person who filled out 
the form that is at risk of that. I mean, you have friends, 
family members, associates, foreign nationals who you may know, 
who China would like to know who those foreign nationals are. 
So you are talking about an exponentially larger number than 
just simply the number of people who filled out those forms.
    And yet it seems to me that we just have bureaucratic 
paralysis. Nobody is really accountable.
    Now, Ms. Archuleta, let me ask you: Members of this 
committee have called upon you to resign. You have rebuffed 
that. Do you still believe you should remain in your position?
    Ms. Archuleta. I am more committed than ever to serve the 
employees of this administration. I am working very hard, and I 
    Mr. DeSantis. Do you accept responsibility?
    Ms. Archuleta. I accept the responsibilities that are given 
to the Director of the OPM. And I have fulfilled those 
responsibilities by making sure that we have the right people 
in the right places and seeking the resources that we need to 
do our work and to make sure that the systems that we have in 
place can do the work that they're expected to do. Again, we 
have a legacy system that is 30 years old.
    Mr. DeSantis. So----
    Ms. Archuleta. We have dedicated money and human 
    Mr. DeSantis. And I appreciate that. And I have been here 
for your statements, and I have heard you make that point.
    Ms. Archuleta. Thank you, sir.
    Mr. DeSantis. But if not you, then who, if anybody, in OPM 
should be held accountable for this colossal failure?
    Ms. Archuleta. I am responsible, as the Director of OPM, 
for a number----
    Mr. DeSantis. Is anybody going to be held responsible?
    Ms. Archuleta. --for a number of different 
responsibilities. I take very seriously, as I said in my 
confirmation hearing and many other hearings after, including 
    Mr. DeSantis. But what about responsibility? Because I 
    Ms. Archuleta. I accept----
    Mr. DeSantis. --tell you what my constituents will tell me. 
They will say, ``Ron, we have people mess up in the government 
all the time, and nothing ever happens.'' And that is not the 
world that our constituents live in, where there are usually 
    And so you are not committing that anybody will be fired or 
held accountable because of this, correct?
    Ms. Archuleta. I am committing to you that we are going to 
do the best job we can.
    Mr. DeSantis. Well, and I appreciate that, but that, quite 
frankly, is not something that I think the American people have 
confidence in right now, given what has happened.
    Now, let me ask Ms. Barron-DiCamillo: People have been 
warning about the risk of a cyber Pearl Harbor. Obviously, the 
IG had warned OPM about vulnerabilities in their system for 
years and years. Does this constitute a cyber Pearl Harbor?
    Ms. Barron-DiCamillo. That question was asked to me 
earlier. I don't know if you were here.
    We use a severity scale, and on the severity scale, based 
on the impact to data, the impact to the network, and getting 
back to a known, good, healthy state, we would consider this to 
be a medium- to high-severity-level kind of an event based on 
the kind of data that was possibly exposed and exfilled and 
then the ability for the mitigations that we put in place as 
part of the plan that we provided to OPM post-assessment.
    Mr. DeSantis. But those are mitigations for the system 
itself, correct? The mitigations that you have performed don't 
include mitigations for any of the capabilities that some of 
the people whose identities may have been compromised perform 
on behalf of our country, correct?
    Ms. Barron-DiCamillo. Correct. I am a technical operator in 
cybersecurity operations, and we're focused on helping OPM and 
other departments' and agencies' critical infrastructure ensure 
the protection of their networks.
    So when we do an event like this, we provide mitigations to 
help them get back to a known, good, healthy state as well as 
prevent these kinds of things and, if they are targeted again, 
which a lot of times they are, helping them detect that 
activity quicker in the cycle so they can contain it and then 
clean that up.
    Mr. DeSantis. So if China gets blackmail information that 
they could use against people serving in our government in 
important positions, if China is able to identify foreign 
nationals, Chinese foreign nationals maybe, who are friendly 
with the United States and with people, there is no way you can 
calculate the damage that that causes, correct?
    Ms. Barron-DiCamillo. I'm a cybersecurity operator. That's 
clearly a question for intelligence--the intelligence 
    Mr. DeSantis. And I think it is a very important question. 
And I think the damage to this is very, very severe.
    And I yield back the balance of my time.
    Mr. Hurd. Thank you, sir.
    I would now like to recognize my colleague from Virginia, 
Mr. Connolly.
    Mr. Connolly. I thank the chairman.
    And I thank my good friend from Pennsylvania, Mr. 
Cartwright, for allowing me to go at this moment because I have 
to chair a meeting at 12:30.
    Let me just say, you know, I was just listening to our 
colleague from Florida. It is easy to make a scapegoat out of 
somebody or something. That isn't to absolve people of 
responsibility. But what we are facing is a much bigger threat 
than a management snafu.
    We are facing a systemic, organized, financed, pernicious 
campaign by the Chinese Government, in the form of the People's 
Liberation Army, with a trained unit to penetrate weak spots in 
our cyber world. And that includes the Federal Government, and 
it may include retail and commercial enterprises, certainly 
banks among them.
    To pretend somehow this is Ms. Archuleta's fault is to 
really miss the big picture and, frankly, a disservice to our 
country. We have a bigger threat. Whether we want to 
acknowledge it or not, we now are engaged in a low-level but 
intense new kind of cold war, a cyber war, with certain 
adversaries, including China and Russia. And it is every bit as 
much a threat to the security and stability of this country, 
and we need to gird ourselves for this battle.
    And it is not okay to dismiss testimony that resources were 
denied. This committee led the effort, and I probably 
cosponsored the bill, to try to modernize how we purchase and 
manage IT assets in the Federal Government. Is that important? 
Why are these people here today before us? Because it is 
important. And Congress has neglected it. We can't have it both 
    So, while we certainly hold Ms. Archuleta responsible, as 
the head of OPM, for how they are managing this breach and we 
have every right to question why the breach occurred, to make a 
scapegoat in this ``Alice in Wonderland,'' you know, world we 
have created here sometimes, where the answer is, ``Off with 
your head,'' how easy. What a cheap headline that gets. And it 
does get a headline every time. But it begs the question which 
is far more fundamental, far more profound, and far more 
disturbing as a threat. And that is ultimately what we need to 
deal with, it seems to me.
    Mr. McFarland, last week, your office issued a flash audit 
alert to raise awareness of serious concerns over OPM's ongoing 
overhaul of its entire IT infrastructure. According to that 
flash alert, your office stated, ``In our opinion, the project 
management approach for this major infrastructure overhaul is 
entirely inadequate and introduces a very high risk of project 
    If I understand correctly, what you are saying is that the 
project won't do what we need it to do. Is that correct, Mr. 
    Mr. McFarland. No, I'm not saying that the project wouldn't 
ultimately do what is hoped for. I'm saying that the potential 
for problems exists, and it is very high probability----
    Mr. Connolly. Well, I want to use the word in the report: 
``entirely inadequate''; ``introduces a very high risk of 
project failure.'' That doesn't say, to me, there is the 
possibility of failure. It kind of predicts it is more likely 
than not.
    Mr. McFarland. I agree.
    Mr. Connolly. Okay.
    Mr. McFarland. A high risk, for sure.
    Mr. Connolly. You also indicated it will cost too much. Do 
you want to expand on that a little bit?
    Mr. McFarland. Well, the $93 million that's set aside at 
this point won't come close. The migration itself is going to 
be an extremely costly measure.
    Mr. Connolly. Right. One would note that the CIA used an 
outside vendor, and I think they spent $600 million, but their 
system seems to be working. But it cost $600 million, I think, 
over 10 years, if I am not correct. Ring a bell? Sound right?
    Mr. McFarland. I'm not familiar with that, sir.
    Mr. Connolly. Worth looking at, because they partnered with 
the private sector rather than try to find all the answers 
    Ms. Archuleta, what is your response to that IG flash audit 
    Ms. Archuleta. The IG brought up some process issues that 
were very important, I think some that we don't agree with, but 
there are other areas that we do agree with.
    I think the important thing is to underscore the 
relationship that we have with our IG. And we will continue to 
value his opinion and to bring forth his ideas into the 
considerations that we make.
    I do believe that we have to move carefully but we have to 
work swiftly. As you said, these aggressors are spending a lot 
of money--a lot of money to get into our systems.
    We need his assistance. We will seek his guidance. We will 
listen carefully to his recommendations and certainly consider 
those as we move forward.
    Mr. Connolly. Just a final note, Mr. Chairman. I introduced 
the Federal Agency Data Breach Notification Act of 2014. 
Unfortunately, although we blended that on a bipartisan basis 
into the Safe and Secure Federal Websites Act, the Senate did 
not act.
    Had we acted, we would have had protocols in place for 
dealing with this kind of breach, at least after the fact, so 
that, you know, we could reassure the victims, who are Federal 
employees and Federal retirees. And I would hope that this 
committee once again will help prod the system, as it did last 
year, only this time getting the Senate to act, because that is 
really important.
    Thank you, Mr. Chairman. My time is up.
    And, again, thank you to my dear friend from Pennsylvania.
    Chairman Chaffetz. [Presiding.] I thank the gentleman.
    I now recognize the gentleman from Texas, the chairman of 
the Subcommittee on IT, Mr. Hurd, for 5 minutes.
    Mr. Hurd. Thank you, Mr. Chairman.
    My mom always told me that you can always find the good in 
any situation, so let me try to start off with that.
    DHS caught them, caught the problem, right? I think that is 
a good thing. When they were engaged, we found it. Wish it was 
a little bit sooner, but we caught the problem, so that is 
    I also got a letter from the Chief Information Officer of 
OPM. I am going to read a little bit.
    ``Dear Mr. Hurd, I am writing to inform you that the U.S. 
Office of Personnel Management recently became aware of a 
cybersecurity incident affecting its systems and data, and you 
may have been exposed. You are receiving this notification 
because we have determined that the data compromised in this 
incident may have included your personal information, such as 
your name, Social Security number, date and place of birth, and 
current or former address.''
    I know Ranking Member Cummings and Mr. Mica were talking 
about how could an adversary use this information. I spent 9 
years as an undercover officer in the CIA. I think I have a 
little bit of idea and perspective on this.
    If it was the Chinese, any Federal official traveling to 
China, former official, someone there is a subject of being 
targeted for elicitation of information about what is going on 
in the Federal Government.
    If it was the Russians, all this information is going to be 
sold and then used against them to drain people's bank 
accounts, use this to create new access codes to get into 
private information.
    If it was narcotraficantes in Mexico, which have the 
capability of doing cyber attacks, it is the home addresses of 
men and women in Border Patrol, people that are keeping us 
safe, right?
    So the threat is huge. The impact is fantastic.
    And one thing my dad always said was, ``It never hurts to 
say you're sorry.'' And further in this letter, it says, 
``However, nothing in this letter should be construed as OPM or 
the U.S. Government accepting liability for any of the matters 
covered by this letter or for any other purpose.'' Later, it 
says, ``We regret this incident.'' ``I'm sorry'' actually goes 
a long way.
    Now, I agree with what my colleague from Virginia had said 
about this long, committed attack by advanced, persistent 
threats. And my issue is actually not with how we responded to 
the threat, because I think the immediate technical steps that 
were taken were good things, right? And I believe all the folks 
involved in the mitigation of the immediate threat were doing 
some things that I think can be used in other places.
    But what I have a problem with is everything before this. 
If you were in the private sector, the head of a publicly 
traded company, and Ernst & Young was doing your yearly audit, 
and you had at least 5 years of audit information saying that 
your digital infrastructure had some high risk to it and needed 
to be immediately fixed, the board of directors would be held 
accountable for criminal activity, multiple years.
    I did this for a living. I would penetrate the networks of 
companies and identify the problems that they had. And a lot of 
times, if there was a high-risk issue, we would call the 
customer immediately and say, ``This has to be fixed right 
now,'' and the company and the customer would do that 
immediately. And so then, you know, we would issue our report, 
saying, ``Here was the high-risk report, but it was fixed.'' 
Because a company like Ernst & Young doing an audit would 
probably not even put this information into an audit report to 
go to the board, because it is, ``Guys, y'all gotta fix it.'' 
So my problem is that these high-risk issues that were 
identified by the IG haven't been addressed.
    KeyPoint--and I guess my first question is to Ms. Ann 
    Has US-CERT reviewed KeyPoint's network?
    Ms. Barron-DiCamillo. Yes, sir. We were on site last summer 
at KeyPoint's network in Loveland, Colorado. And we were there 
with our interagency protesters and did an assessment of the 
    We actually went there in an abundance of caution based off 
of the event that happened both at USIS and OPM. It was decided 
by leadership that we needed to take a look at contractors that 
were performing background clearance investigations.
    So there wasn't an indication that led for us--or led our 
teams to go on site, as the case with OPM. This was done out of 
an abundance of caution because of the target that we saw 
associated with background clearance information.
    Mr. Hurd. Thank----
    Ms. Barron-DiCamillo. So our team did an assessment, a 
network integrity assessment. Some results came back that 
caused some concern, so we sent an incident response team on 
site and reviewed their network. We were there for a couple of 
weeks last summer.
    Mr. Hurd. When we hire contractors, are they subject to the 
same standards of network hygiene that U.S. Government networks 
    Ms. Barron-DiCamillo. Are contractors subject to the same? 
It would be part of the contract language associated with FISMA 
requirements. There's FISMA requirements that are--for any kind 
of network that houses government data, there are certain 
requirements, per the FISMA law of 2002.
    Mr. Hurd. And, Mr. Chairman, my last question.
    In his opening remarks, Ranking Member Cummings read some 
of Director Archuleta's comments to the Senate committee. ``The 
adversary leveraged a compromised KeyPoint user credential to 
gain access to OPM's network.''
    And then the written information that KeyPoint submitted 
said, ``We have seen no evidence of a connection between the 
incursion at KeyPoint and the OPM breach that is the subject of 
this hearing.''
    Mr. Hess, feedback?
    Mr. Hess. Congressman Hurd, it is true that the KeyPoint 
incursion, we've seen no evidence of a connection with the OPM 
    Mr. Hurd. So are you saying that Ms. Archuleta is lying?
    Mr. Hess. No, I'm saying she is correct. From knowledge 
that I have been given, there was an individual who had an OPM 
account that happened to be a KeyPoint employee and that the 
credentials of that individual were compromised to gain access 
to OPM.
    Mr. Hurd. Thank you.
    I yield back.
    Chairman Chaffetz. I thank the gentleman.
    We will now recognize the gentlewoman from the Virgin 
Islands, Ms. Plaskett, for 5 minutes.
    Ms. Plaskett. Thank you. Thank you very much.
    Good afternoon, everyone.
    I think that it is very interesting--I was listening to 
Ranking Member Cummings talking about the vulnerability of 
government contractors and the questions of my colleague Mr. 
Hurd regarding whether or not companies that have government 
contracts must keep the same level of security and care that 
the OPM or other agencies would have to, in terms of preparing 
for cyber attacks.
    Mr. Giannetta, I have a letter that was sent from USIS to 
Ranking Member Cummings on December 5 of 2014, and the letter 
says that the Federal agencies have the failure of the company. 
And I wanted to ask you some assertions that you made in that 
    In the letter, it says--their counsel wrote that the 
critical cyber attack defense information only flowed in one 
direction, from USIS to the government. Is that correct?
    Mr. Giannetta. In the discussion we had earlier about the 
shared responsibility to notify from a contractor to the 
government and the government to the contractor, that is 
    Ms. Plaskett. You are qualifying it now. So you are saying 
that in terms of----
    Mr. Giannetta. I'm not qualifying it. I'm suggesting that 
we were required and obligated by our contract to notify OPM 
that we had an intrusion, which we did immediately. And in the 
discussion that was held earlier, OPM recognized that they did 
not notify USIS or, I believe, KeyPoint of their intrusion of 
March of 2014.
    Ms. Plaskett. So, in terms of the cyber defense 
information, was it one-way or did it go both ways?
    Mr. Giannetta. In my humble estimation, it was one-way.
    Ms. Plaskett. So it was from yours to the others.
    What would have, in your estimation, been the requirement 
of OPM or others towards you?
    Mr. Giannetta. Well, I'm not a lawyer or a contract expert. 
I don't have the contract in front of me. But my understanding 
is that there's a requirement to notify, to say, we've got an 
issue, here's what the issue is, so that there's a free flow 
and sharing of information.
    Ms. Plaskett. So, if you have an issue, you are supposed to 
let them know, correct?
    Mr. Giannetta. That's correct.
    Ms. Plaskett. And that is what you felt you did.
    Mr. Giannetta. Absolutely.
    Ms. Plaskett. And then U-CERT, did U-CERT then--what did 
they do about that information that you gave them?
    Mr. Giannetta. The CERT team?
    Ms. Plaskett. Yes.
    Mr. Giannetta. We invited the CERT team to our facilities 
in Grove City, PA, formally via a letter. And the CERT team 
arrived shortly after receiving that letter and enumerated our 
network and understood through discussions with our technicians 
as well as the third party that we hired what had transpired 
from the 5th of June through the time they arrived.
    Ms. Plaskett. So why does your letter also state that U-
CERT has not provided USIS with any sort of briefing regarding 
information it may have uncovered during the course of its 
limited review?
    Mr. Giannetta. Let me just be clear that I didn't write the 
letter you're referring to.
    Ms. Plaskett. You are here testifying for your company. 
Your attorney--I am an attorney. I would never write a letter, 
as an attorney, for a company without the entire company 
agreeing to that.
    Mr. Giannetta. I'm just suggesting that I didn't write the 
    Ms. Plaskett. But you are here to testify for the veracity 
of the letter. Was the letter correct or no?
    Mr. Giannetta. We did not receive a briefing from CERT as 
to the findings that they had vis--vis the intrusion. We did 
    Ms. Plaskett. Okay. Then let's ask CERT, since they are 
    Mr. Giannetta. If I could finish, we did receive some 
recommendations relative to what we might do to----
    Ms. Plaskett. That is not a review?
    Mr. Giannetta. Our invitation to CERT requested their 
assistance in identifying threats to our network, and we did 
not receive that.
    Ms. Plaskett. Okay. Well, let's ask Ms. Barron-DiCamillo.
    Can you speak to that?
    Ms. Barron-DiCamillo. Yes.
    So our team was on site. It was an interagency response 
team including our law enforcement partners. We worked--just 
part of the incident response team, what we do is we're working 
with the system administrators daily. We're informing them 
every day at the end of the day of----
    Ms. Plaskett. How many days did you inform them on a daily 
    Ms. Barron-DiCamillo. We were there for about 2 weeks. I'd 
have to go back and get the specific timeframe.
    Ms. Plaskett. So that's at least 10 reports that you've 
given them.
    Ms. Barron-DiCamillo. We worked through the weekend, ma'am.
    Ms. Plaskett. Through the weekend?
    Ms. Barron-DiCamillo. Yes.
    Ms. Plaskett. So that's 14 reports that they were given 
asserting what the issues were.
    Ms. Barron-DiCamillo. The daily findings. And they can 
change, so that's why we----
    Ms. Plaskett. And did you find something, and did you give 
them ideas about what needed to be done?
    Ms. Barron-DiCamillo. Yes. We were able to discover that 
there was malicious malware present on the network, that there 
was compromised credentials, specifically----
    Ms. Plaskett. And how did that happen? How did those 
compromised credentials--what were the two areas that you found 
within their own system that should have been taken care of 
    Ms. Barron-DiCamillo. We found a lack of some security 
mechanisms that would have helped to prevent this kind of 
intrusion, but, because of the lack of logging, we weren't able 
to find the initial point of entry. We were able to find----
    Ms. Plaskett. Can you talk about that, the lack of logging? 
What is that?
    Ms. Barron-DiCamillo. There's a number of types of logs 
that we look at forensically that can help us piece together a 
picture of what's happened within your network.
    Ms. Plaskett. And why weren't those there?
    Ms. Barron-DiCamillo. I suppose a number of reasons. It's a 
risk decision, a risk-based decision. It can cost a lot of 
money, depending on the volume.
    Ms. Plaskett. It is a risk and a cost decision made by the 
company itself.
    Ms. Barron-DiCamillo. It can be, because it can require 
quite a bit of storage associated with some of the kinds of 
    Ms. Plaskett. So the government contractor that we hired to 
do government work for us decided that a risk and a cost 
decision on their part did not require them--they didn't put in 
the logins that were necessary to protect the system.
    Ms. Barron-DiCamillo. I can't answer that specifically. I 
can just give you some of the reasons I've seen, that people 
are not continuing to have the historical logs because of the 
volume of data. You know, there's millions of net flow records 
that happen a day, and that does require quite a bit of 
storage. And----
    Ms. Plaskett. So the letter that was sent by USIS to 
Ranking Member Cummings, would you agree with the assertions 
that were made there?
    Ms. Barron-DiCamillo. No, I would not. We did provide them 
daily reports as well as a final findings report. We went over 
that with the team. And then we also provided a mitigation 
report. And I have documented evidence of all of that.
    Chairman Chaffetz. I thank the gentlewoman.
    Did you want to respond to that?
    Mr. Giannetta. If I may.
    Chairman Chaffetz. Sure.
    Mr. Giannetta. It's my understanding from our forensic 
investigator, Stroz Friedberg, that what was found by the CERT 
team vis--vis Ms. Barron-DiCamillo's comments was not 
information that they hadn't already discovered. In other 
    Ms. Plaskett. So the logins that were needed for them to be 
able to go and do a deeper forensic was something that they 
already knew?
    Mr. Giannetta. That----
    Ms. Barron-DiCamillo. I think what he's saying----
    Ms. Plaskett. Yes or no, did they already know?
    Ms. Barron-DiCamillo. --is we confirmed the forensic 
evidence of the third-party partner.
    Mr. Giannetta. Thank you.
    Ms. Barron-DiCamillo. Right. So I believe what he's saying 
is, it sounds a bit of a--you know, it was a confirmation. And 
we were able also to confirm the compromised credentials 
associated with the third-party forensic firm that they had in 
there. And then we were able to discover additional findings 
throughout the assessment that we did.
    Chairman Chaffetz. I thank the gentlewoman.
    We will have to further explore that, but, for now, we will 
recognize the gentleman from Alabama, Mr. Palmer, for 5 
    Mr. Palmer. Thank you, Mr. Chairman.
    Ms. Archuleta, last week, I brought up a letter from two of 
my legislative staffers received warning them that their 
personally identifiable information may have been compromised 
in the cybersecurity hack.
    I bring this up again because, earlier, you disputed the 
number of people that are affected by this when Ms. Seymour 
admitted, after I questioned her about the letter that she 
signed, that this goes beyond the people who filled out the 
Form 86.
    And I just want to know, considering the fact that a vast 
amount of personally identifiable information stored by OPM was 
vulnerable due to the login credentials, was it likely exposed 
by foreign contractors, outsourced by OPM and OPM's failure to 
communicate with and abide by the IG's recommendations?
    Ms. Archuleta. I'm sorry, sir. Could you repeat that 
    Mr. Palmer. I am just asking you, do you--let me rephrase 
it. Do you standby your assertion that this is limited to a 
smaller group than is being indicated in the media and might be 
indicated by the fact that this extends beyond the people who 
filled out Standard Form 86?
    Ms. Archuleta. Thank you for clarifying the question, sir.
    I think it's really important not to conflate to the two 
incidents. The first incident was the employee personnel 
records, which is the 4.2 million.
    Mr. Palmer. That is not--I am just asking----
    Ms. Archuleta. And the second----
    Mr. Palmer. --is it more than 4.2 million?
    Ms. Archuleta. And the second incident, we haven't 
determined the number yet, of the scope of that incident and 
the number of employees that would have been affected by that 
and others.
    Mr. Palmer. Okay. So the answer is yes, that it is more.
    I think it is very evident that this attack on the Federal 
employees' personally identifiable information not only puts 
those workers at risk but also puts secondary groups at risk. 
For instance, if they have their personal email addresses, as 
it is pretty evident from, as I pointed out last week, that 
some of the breaches occurred through personal email addresses, 
that all of these employees and their secondary relationships, 
is it possible that certain information was exposed there as 
    Ms. Archuleta. Yes, the team that is working on the 
analysis of the scope is--it's exactly why we're taking our 
time to make sure that it's accurate. And the SF-86s we've 
talked about earlier. The data in there is--includes not only 
the employee but may include other information and PII for 
other individuals. That's why we're being very, very careful 
about that and looking at the data, because it could be that 
there was no PII for some individuals.
    Mr. Palmer. But, ma'am, beyond the SF-86s, I am talking 
about where the breach apparently occurred, as well, through 
personal email addresses, particularly at the Immigration and 
Customs Enforcement Agency, that was reported in The Wall 
Street Journal.
    I brought this up to you last week. I will be happy to 
provide this information to you----
    Ms. Archuleta. Yes.
    Mr. Palmer. --if you need to see it. But where they got in 
on personal email addresses, that would expose everybody in 
their email chain.
    Ms. Archuleta. Ah. I'm sorry. Yeah.
    Mr. Palmer. And I think we have----
    Ms. Archuleta. I understand your question.
    Mr. Palmer. Let me go on to something else.
    You received a letter last week from Senator Mark Warner 
with some specific questions about a contract that you awarded 
to CSID. Have you responded to Senator Warner's letter yet?
    Ms. Archuleta. I'd have to check with my staff, sir. I 
    Mr. Palmer. Have you----
    Ms. Archuleta. --that we were attempting to respond as 
quickly as possible, yes.
    Mr. Palmer. Have you personally read his letter?
    Ms. Archuleta. I have read his letter, but I have not--I 
don't know that our response has made it through our system 
    Mr. Palmer. All right.
    He raises a question here about how quickly this contract 
was awarded to CSID. You didn't go through the normal process, 
and it was awarded in 36 hours, I think, is what Senator Warner 
    Was it intentionally steered to CSID?
    Ms. Archuleta. No, sir.
    Mr. Palmer. Who made the decision?
    Ms. Archuleta. I would ask Donna to talk about the process 
that we used. It was a fair and competitive process.
    Mr. Palmer. A fair and competitive process.
    Ms. Seymour. Our contracting officer made the selection on 
the contract, sir.
    Mr. Palmer. Okay. Did you evaluate the management of CSID?
    Ms. Seymour. I did evaluate both the technical and the cost 
proposals for----
    Mr. Palmer. Did you evaluate the people who run the 
    Ms. Seymour. I had resumes for the people--or for the key 
personnel that they provided in the proposal.
    Mr. Palmer. Are you familiar with their board of directors?
    Ms. Seymour. No, sir, I'm not.
    Mr. Palmer. Okay. Do you know Owen Li, one of their 
    Ms. Seymour. No, sir, I don't.
    Mr. Palmer. Okay.
    Mr. Chairman, my time has expired. I yield the balance.
    Chairman Chaffetz. From start to finish, how long was it 
from when you got the proposal that you awarded the contract?
    Ms. Seymour. I would have to go back and look at exactly 
when we released the RFQ. But I believe it--and I don't want to 
misspeak. So let me go back and find out when exactly we 
released the RFQ and exactly when we awarded the contract. I 
don't have that data with me.
    Chairman Chaffetz. But it was less than 48 hours, right?
    Ms. Seymour. I think it was about in that timeframe, sir.
    Chairman Chaffetz. And the award is how much money?
    Ms. Seymour. The contract is about $21 million for the 
services that we're providing for credit monitoring, 
notification, and the identity theft insurance.
    Mr. Cummings. Will the gentleman yield?
    Chairman Chaffetz. Sure.
    Mr. Cummings. Why was it made so fast?
    Ms. Seymour. We wanted to----
    Mr. Cummings. And was there other companies that could do 
just as good a job? I am just trying to figure out how we got 
that company.
    Ms. Seymour. We received a number of proposals, and we 
evaluated them based on the government's needs, several 
requirements that we had put in the RFQ that the companies 
responded to. And we evaluated all of those proposals that we 
received against that criteria, and Winvale provided the best 
value to the government based on those requirements.
    Chairman Chaffetz. Will you also copy--when you give 
Senator Warner the answer to his questions, will you send us 
copies of that, as well?
    Ms. Archuleta. Yes.
    Ms. Seymour. Yes, sir.
    Chairman Chaffetz. Okay. Thank you. I think he raises a 
number of important questions, as does Mr. Palmer here, and we 
will continue to pursue that.
    We now will recognize the gentleman from Pennsylvania, who 
has been waiting patiently, Mr. Cartwright, for 5 minutes.
    Mr. Cartwright. Thank you, Mr. Chairman.
    Mr. Chairman, I find myself utterly dissatisfied with the 
explanations we have heard today.
    And I want to train my attention on you, Mr. Hess. You have 
made some fine distinctions about what that employee of your 
company was doing, the one that got hacked and who was working 
on OPM's systems at the time. And, because of that hack, that 
employee became a victim and lost personal information. And 
that led to the successful hacking of OPM's systems.
    Have I broadly described that correctly, sir?
    Mr. Hess. We actually do not know how the employee's 
credentials were compromised.
    Mr. Cartwright. All right. But it was a KeyPoint employee; 
am I correct in that?
    Mr. Hess. That is correct.
    Mr. Cartwright. And you are the CEO of KeyPoint, right?
    Mr. Hess. That is correct.
    Mr. Cartwright. All right. And you are denying 
accountability for that hack, for the OPM hack. And what you 
said was the employee was working on OPM's systems at the time, 
not KeyPoint's. That is what your testimony was, correct?
    Mr. Hess. That is correct.
    Mr. Cartwright. Well, so we have an individual's OPM 
credentials that were taken. That individual happened to be a 
KeyPoint employee. Did that KeyPoint employee have OPM 
credentials as part of his or her scope of employment with 
    Mr. Hess. Correct.
    Mr. Cartwright. Okay. It wasn't a coincidence that this 
KeyPoint employee had OPM credentials. It was part and parcel 
of his or her scope of employment with your company, wasn't it?
    Mr. Hess. That is correct.
    Mr. Cartwright. All right.
    And it was KeyPoint paying this person as the person was 
working on OPM's systems at the time; am I correct in that?
    Mr. Hess. That is correct.
    Mr. Cartwright. And you understand, under traditional 
concepts of the law, KeyPoint is responsible for the acts of 
its employees acting within the scope and course of their 
employment with your company. You understand that, don't you?
    Mr. Hess. I'm not familiar with that construct.
    Mr. Cartwright. All right.
    Mr. Hess, you are here today because a cyber espionage 
operation succeeded in breaching very personal information that 
your company was entrusted with.
    On January 6, 2015, my ranking member, Mr. Cummings, sent 
you a letter requesting information about the data breach. His 
letter requested a number of documents. Did you get the letter?
    Mr. Hess. Immediately upon receiving the letter, KeyPoint 
counsel reached out to the ranking member's staff to arrange 
for a briefing. And we tried to have a date and time set up, 
and we are still waiting for confirmation on that.
    Mr. Cartwright. You got the letter, right?
    Mr. Hess. Yes, sir.
    Mr. Cartwright. And more than 5 months later you haven't 
responded with documents; am I correct in that?
    Mr. Hess. We reached out immediately to the ranking 
member's staff to brief the staff, and we have not received a 
response on a time and day to do so.
    Mr. Cartwright. Well, let's go through the document request 
that Mr. Cummings made.
    He requested a log of all successful cyber intrusions into 
your company's networks in the last 4 years. That is a 
reasonable request, isn't it, Mr. Hess?
    Mr. Hess. I don't find it unreasonable.
    Mr. Cartwright. Will you provide this to the committee?
    Mr. Hess. I will take that back to my team and let you 
    Mr. Cartwright. You are the boss there, aren't you?
    Mr. Hess. I am the CEO.
    Mr. Cartwright. All right. But you are going to get 
permission from your team, who work for you; is that it?
    Mr. Hess. I'm going to take it back and discuss it with my 
    Mr. Cartwright. Let's go to the next request: copies of all 
forensic analyses and reports concerning the data breach, 
including findings about vulnerabilities to malware.
    When will you provide these documents to the committee?
    Mr. Hess. I'll take that request back to my team and let 
you know.
    Mr. Cartwright. Ranking Member Cummings requested a list of 
all Federal customers affected by the data breach. Will you 
provide those to the committee?
    Mr. Hess. I will take that back to my team and let you 
    Mr. Cartwright. Mr. Hess, your company exists because of 
the largesse of the United States Federal Government. We expect 
you to respond to requests from this committee.
    Mr. Cummings does not write letters because he just enjoys 
writing letters. He is concerned about the security and the 
safety not only of Federal employees but of the United States 
    This is really important. Will you please treat it as such?
    Mr. Hess. I do, Congressman Cartwright. Just--we responded 
immediately to Congressman Cummings' request by calling their 
staff, having our counsel. And I would also inform----
    Mr. Cartwright. By responding and calling but not providing 
the documents. We want the documents, Mr. Hess.
    I yield back.
    Mr. Cummings. Will the gentleman yield?
    I just want to clear this up, because you just said some 
things that--you talked about my staff.
    Mr. Hess. Yes, sir.
    Mr. Cummings. And it is my understanding that they did get 
back to us, but for months--for months, some back-and-forth 
because you all did not want to agree to the scope of the 
    And then, just recently, because of this hearing, you 
finally said, scrap the limitations on the meeting, the scope, 
and we'll meet.
    And so I don't want you to, you know--I don't know whether 
you have the information or what, but I want you to be 
    Mr. Hess. That's not the information that I have, sir.
    Mr. Cummings. Well, then your information is inaccurate.
    Mr. Hess. I will research that.
    Chairman Chaffetz. Mr. Hess, is it reasonable by the end of 
this week to provide us the documentation on the communication 
and the lack of the meeting over the last several months? Is 
that fair? By the end of the week?
    Mr. Hess. I will take that back to my team and get back to 
    Chairman Chaffetz. You are the CEO. You can make these 
decisions. Are you or are you not going to do that?
    Mr. Hess. I'm going to take it back to my team and discuss 
    Chairman Chaffetz. No. That is not good enough. Give me a 
date that you think is reasonable to give us the correspondence 
dealing with setting up a meeting. It can't be that difficult.
    Mr. Hess. Chairman Chaffetz, I was asked last week, on 
Wednesday, to brief both your staff----
    Chairman Chaffetz. But you were asked months ago to brief 
the minority staff, and that didn't happen. I just want to see 
the documentation; is that fair?
    Mr. Hess. I will take that request back to my team.
    Chairman Chaffetz. No. I want an answer from you. I want to 
know when you will provide that information to this committee.
    Mr. Hess. I will take that request back----
    Chairman Chaffetz. No. I want a--you give me the date. When 
is it reasonable? You are the CEO.
    Mr. Hess. I understand, sir. I will take that request back 
to my team.
    Chairman Chaffetz. No. I need an answer from you. All 
right, we will sit here all day if you want. You want me to 
issue a subpoena? Is that what you want me to do? Because I 
will sign it. I will sign it today.
    Give me a date that is reasonable.
    Mr. Hess. I need to take that information back to my staff.
    Chairman Chaffetz. Sir, seriously, when are you going to 
provide that information?
    Mr. Hess. I'm trying to be helpful, Chairman. I did do a 
briefing last week, and we did reach out to Congressman 
Cummings' staff immediately upon receipt of the letter. And we 
did not receive, by the information that I have----
    Chairman Chaffetz. Am I asking for anything unreasonable, 
to provide the correspondence and the interaction? I mean, they 
are going to have their half. I just want to see your half. I 
am trying to give you an equal opportunity here.
    Mr. Hess. I understand that, sir.
    Chairman Chaffetz. When is it a reasonable date?
    Mr. Hess. Let me get back to you with that information.
    Chairman Chaffetz. No. I want you to decide before the end 
of this hearing. We are going to go to the next set of 
questioning. You can counsel with all the people that are 
sitting behind you, but it is a reasonable question. What Mr. 
Cartwright said is not unreasonable. And so, if you think it 
is, tell me. But I just want to see the correspondence.
    Counsel all you want while we ask the next set of 
questions, but I suggest you keep an ear to Mr. Grothman, who 
we are going to recognize for 5 minutes.
    Mr. Grothman. Thank you.
    Two comments before I ask questions. First of all--and this 
is kind of a followup on what I think Congressman Hurd was 
trying to get at--it surprises me you folks are not more 
contrite over what happened. It seems like you don't understand 
the enormity of the disaster that has happened here.
    Secondly, I think sadly this is all too often common for 
government, and it is something that I think everybody in this 
institution should remember as we pass bills having the 
government have these huge data banks of educational 
information or medical information or what have you. Because if 
the people in charge of these banks of information don't 
display more sense of urgency than you folks, I think, you 
know, the possibility of this happening at other agencies is 
something we should be considering.
    But now I have some questions for Ms. Seymour.
    You are going to be in charge of a whole overhaul of this 
whole IT thing, correct?
    Ms. Seymour. Yes, sir.
    Mr. Grothman. Do you feel you have got the skill set to 
oversee something of this magnitude?
    Ms. Seymour. I don't ever believe that I have the skill set 
to do something this large. And that's why I employ people who 
have a broader skill set or a different skill set than me in 
various areas. I don't have all the technical skills that I 
would need to do something like this. It takes a team.
    Mr. Grothman. Okay. In your past positions, have you 
overseen--what were the largest projects that you have 
overseen, IT projects in your prior work experience?
    Ms. Seymour. I have overseen some very large projects, sir, 
both in my past employment with Department of Defense as well 
as the Department of Transportation. Systems that were 
certainly enterprisewide and served large populations of people 
like OPM.
    Mr. Grothman. Sizewise similar to----
    Ms. Seymour. Yes, sir, sizewise similar.
    Mr. Grothman. And how quickly were they able to complete 
these projects?
    Ms. Seymour. Some of them took--some of them were much 
faster than others. You know, it depended on when I came into 
them. Some of them were delivered within a year, and some of 
them took years, multiple years to deliver. I think sometimes 
the way that we're changing the way that we deliver IT 
solutions now, we're trying to be much more agile. And so we're 
trying to find what we call a minimal viable product. We are 
trying to find segments of capability that we can deliver in 
shorter term. So we are trying to deliver, you know, capability 
within 6 months, 6-month segments, and then build on that to 
get to a whole system.
    Mr. Grothman. And how quickly do you think you will be able 
to complete this current project? Do you have a goal or an 
    Ms. Seymour. When we started the project, sir, we kind of 
divided it into two pieces so that we could understand it. The 
first we called our tactical phase, which was shoring up the 
network that we have today. And we have put a great number of 
security tools into our current network. And that's what 
allowed us to find this adversarial activity this year.
    The second piece of this was building the shell. And we 
estimated that it would take us approximately a year to be able 
to deliver that. That project is on schedule, and it is on 
budget. And we will be delivering the shell environment this 
    The next phase is migration. And we have recognized from 
the very beginning that we did not have a full enough scope, 
certainly not from my tenure on board back to June of 2014, 
that I have enough scope or understanding of exactly the OPM--
the full OPM environment to be able to assess what it was going 
to take to do that migration. And so that's why we only 
contracted for the first two pieces. And we said as we worked 
through this project, to understand it, we will be able to 
better estimate and understand what needs to move into that 
shell. But we knew from the beginning that there were some 
systems that were very old, that are about 30 years old, that 
we were going to have to migrate into that shell. So we focused 
on those first.
    Mr. Grothman. Okay. One other question. Last time you were 
before this committee, you referred to the fact that you deal 
closely with the IG. And last time we had a major IG project 
you apparently did not notify him of the project. Do you have a 
reason for that or an explanation for that?
    Ms. Seymour. I am not aware of a requirement, and I 
certainly could be corrected, but I am not aware of a 
requirement to notify the IG of every project that we take on. 
Certainly we included in our budget request for 2016, we talked 
through this project and documented it in that arena. We also 
discussed on a couple of occasions with the IG this project 
because they have an interconnection with our network. And some 
of their systems, we actually host some of their systems. And 
so they have to come along with us in this project if we are 
going to continue to provide those services.
    Mr. Grothman. Okay. But an undertaking of this size, you 
know, maybe it's not something you normally tell the IG about, 
but you would not have felt the necessity to notify them what's 
going on here?
    Ms. Seymour. Sir, it's just based on my experience that if 
I am--no, sir, I would not normally advise the IG of a project 
that we are doing. That doesn't mean I am holding the 
information from them. But I also do know that we discussed 
with the IG on a number of occasions the fact that we were 
taking on this project and that they needed to modernize their 
systems and upgrade their systems to be able to meet the 
security requirements for this project.
    Mr. Grothman. Okay. Thank you.
    Chairman Chaffetz. I thank the gentleman.
    I will now recognized the gentlewoman from New Mexico, Ms. 
Lujan Grisham, for 5 minutes.
    Ms. Lujan Grisham. Thank you, Mr. Chairman.
    I just got back down to this hearing after a meeting in my 
office with the leadership of one of the five national labs, 
Sandia Laboratories, which is in my district, Albuquerque, New 
Mexico. And, of course, the theme of many of those meetings are 
the constant threats. Every second of every minute of every 
day, they are clear that someone, something is entertaining a 
cybersecurity attack. And it's a constant threat. And they're 
clear that that's the environment that they work in. They are 
also clear that they need our support and recognition to be 
proactive and to do something about these problems both 
internally and externally. And I appreciate their constant 
surveillance and their awareness of this critical problem.
    I too--before I ask my question--am extremely disappointed 
in the reaction from this panel at this hearing, that we know 
that these are issues that we have to deal with, that we are in 
fact accountable, and in fact you are liable. And what I hear 
is that none of those really are occurring, that if you don't 
provide us the answers at this hearing and the answers that we 
are requesting in the documents, you cannot help us assure that 
we are protecting or adequately identifying the scope, which 
means that then you become part of the problem again. And I 
find it incredibly offensive that that's what is occurring in 
this hearing. What we all ought to be doing is assuring that we 
are protecting not only the thousands of Federal employees in 
my district, and the hundreds of thousands of employees around 
the country, and the millions of employees who are affected, we 
are all scrambling to figure out who is the most accountable 
and who is the most responsible and who is the most liable. And 
I am expecting much better cooperation.
    There is a lot of work to do in accountability, identifying 
the scope, doing something about the legacy systems, making 
sure we are prepared for the next potential breach. And as we 
do that, I do want to focus on how we are treating these 
employees. And so, Director Archuleta, I hold in my hand one of 
the letters that many of my employees and my constituents are 
getting. And I am concerned about some of the aspects of the 
letter, and want you to talk me through about some of the 
concepts identified in the letter and how you came to these 
conclusions and what we might do to broaden those. For example, 
in the letter, you say that, your information--to an employee--
could have been compromised, that potentially affected--I don't 
know when you are going to find out about that--will receive a 
subscription to CSID, protection and identity theft, for 18 
months. Now, what happens if you have an issue after the 18 
months? Is that individual going to be covered?
    Ms. Archuleta. The individual on the identity theft, yes.
    Ms. Lujan Grisham. So even though the letter says you have 
got an 18-month, when are we going to know in writing? Because 
these are lifetime issues. Unfortunately, they don't go away. 
Once that's been compromised, that's the problem, you're 
compromised. I don't think that these consequences are just 18 
months. And I was interested in how you came with that 
framework. It seems to me people should know that they're going 
to be protected by you and supported, irrespective of the 
    Ms. Archuleta. I understand your concerns. And I understand 
the responsibility that we have to our employees about their 
PII. I take that responsibility very, very seriously. I want to 
say that there are--in the letter, the first sentence that you 
wrote, the difference between exposure and exfiltration. It 
could be that their data was exposed and not exfiltrated. But 
we feel strongly that we need to offer the same protections to 
those employees who their data might only have been exposed.
    Ms. Lujan Grisham. I got it. But I want to know that you 
are going to be responsible and supportive of these employees.
    Ms. Archuleta. Absolutely.
    Ms. Lujan Grisham. Not just in the short term, but the long 
haul. So they can expect maybe another letter, something that 
says, ``We are here,'' because the other thing I would like you 
to consider--and I appreciate that response--is that if you 
look at the letter, again, and I read it carefully, we are 
pushing folks, I get also, I agree, to the right kinds of 
experience, I hope, contractors to provide that support and 
identity restoration. I would like more clarity about what that 
will involve.
    Ms. Archuleta. Sure.
    Ms. Lujan Grisham. But in addition, you have got to call 
all these outside numbers. You have to call all these credit 
agencies. You have to enroll yourself. I would really strongly 
encourage you that there ought to be a phone number that I can 
call to OPM.
    Ms. Archuleta. By law, they have to enroll in the credit 
    Ms. Lujan Grisham. I understand that part. But in terms of 
managing and supporting employees, I expect that the 
organization that's the source of the breach would be available 
to me and not just outside numbers. And I don't know if you 
have done any mystery shopping of the toll-free numbers or 
calling these credit folks, but there is an interesting long 
waiting period. I would really strongly suggest that we step up 
H.R. and that there is a quick and immediate response in your 
own department.
    Ms. Archuleta. Thank you. I appreciate your comments.
    And I agree with you totally that we need to hold our 
contractor responsible for their response. We are also 
instituting new ways that they can respond to the employees. I 
think I mentioned before you got here is that we are using the 
SSA model where we in fact are being able to call them back, 
that no one has to wait on line.
    Chairman Chaffetz. I thank the gentlewoman.
    We will new recognize the gentlewoman from Virginia, Mrs. 
Comstock, for 5 minutes.
    Mrs. Comstock. Thank you, Mr. Chairman.
    Thank you for letting me sit in on this hearing. And I 
think, as I have already talked with OPM, we do plan on doing 
some hearings in the Science and Technology Subcommittee, which 
I chair also. Like some of my colleagues have already 
mentioned, and they have had that experience, I have received 
those same letters, as have, more importantly, tens of 
thousands of my constituents here in northern Virginia, like 
Mr. Connolly.
    I also had the unfortunate experience of also getting a 
letter from the IRS saying my tax information had been 
compromised. But that's probably another hearing, Mr. Chairman.
    But what I am concerned about is I am not hearing 
leadership here. I know when I visit the Visa data center in my 
district, and I see all the things they have in place and the 
leadership they are exerting there and the leadership that 
comes from the top there, I see a very strong culture of 
leadership in their cybersecurity and how they are attacking 
    So my question, Ms. Archuleta, now when you came here 18 
months ago, you understood that we had a very real threat from 
China and other bad actors, that this was constant, like the 
Congresswoman was just talking. It is constant. It is something 
every day, and it is something you are always going to face. Do 
you understand that?
    Ms. Archuleta. Yes, I do.
    Mrs. Comstock. Okay. So, in doing that, because I think 
really what we know here from what Mr. Connolly said, I think 
what we have all recognized is they are at war with us. And we 
aren't up to speed. And we aren't responding in kind in terms 
of the problem. Now, what I am hearing is the blaming the actor 
here, saying that, well, we know they are bad actors. And we 
know that; that's part of the job. So what I would like to know 
is in the 18 months, how many meetings have you had yourself 
personally where it's been exclusively about cybersecurity, and 
you have had those meetings, and who have they been with?
    Ms. Archuleta. I have had those meetings with individuals 
throughout government. I have had those almost on a daily basis 
with my own staff and the CIO. I would say that since the 18 
months that I arrived, I recognized the same problem that you 
did. And we have taken tremendous steps but, as you say, that 
there are these actors, and they are aggressive, and they are 
well funded, and they are persistent. And the first thing I did 
was to implement an IT strategic plan with a focus on IT 
    Mrs. Comstock. I appreciate that because we have gone 
through those details. Have you visited a private sector, a 
data center and seeing what the private sector does?
    Ms. Archuleta. I have had discussions with the----
    Mrs. Comstock. No, have you visited? Have you visited 
    Ms. Archuleta. I have visited other, yes, other companies. 
The issue of cybersecurity was not the one that we discussed. 
But as the plan that I outlined this morning is that we are 
holding a summit in the very near future to bring those private 
individuals who are facing the exact same threats that we are 
so that we can learn from them. We need to access experts.
    Mrs. Comstock. But in the past 18 months, you had not done 
    Ms. Archuleta. I have not met personally on cybersecurity 
    Mrs. Comstock. Okay. With the private sector.
    Ms. Archuleta. With the private sector. But my colleagues 
from across government have, like Tony Scott and others, the 
Federal CIO. And I have been the benefit of those conversations 
and his experiences, as well as other people throughout 
government. We recognize that cybersecurity is an enterprise 
issue for all of us in government. And it's not just one person 
who has to take responsibility. All of us across government 
have to.
    Ms. Comstock. I appreciate that. But I think the point that 
has been made to me by people who are leaders in this field is 
the person at the very top has to take that role. And I would 
note that when Target, when they had this breach, when they had 
this problem, it wasn't just their CIO that lost their job, it 
was the CEO who lost their job. And that's how that was 
responded to in the private sector. So I want to continue with 
some of the points that have been made by Mr. McFarland. Have 
you sat down with Mr. McFarland to discuss his recommendations? 
You personally.
    Ms. Archuleta. I sit with Mr. McFarland. He has brought 
some of those to my attention. I also, with the flash audit, I 
have not had the opportunity because of the time period that it 
was released. But it's my full intention not only to talk with 
him about the flash audit but also to engage him as we move 
forward, as we always have.
    Mrs. Comstock. Okay. Now, when I sent you the letter that 
you had sent back, really one of the questions I had in there 
was how many people in my district have been impacted by this? 
I think it's a fairly simple question because you sent out the 
4.2 million letters, right? And letters usually have a ZIP 
Code. So when you asked--you should be able to tell us how many 
people we have in our districts that have been impacted by 
this. I certainly have been hearing from many. And they have a 
lot of questions.
    And I would like to also mention I would like to submit for 
the record questions from the Federation of Government 
    Mrs. Comstock. And I have had a lot of incoming questions 
that have come that obviously we don't have time here. But just 
a simple question that did not get answered was, how many 
constituents do I have impacted by this?
    Ms. Archuleta. I would be able to get you that information 
from our data, and we would be glad to share it with you.
    Mrs. Comstock. Okay.
    Thank you, Mr. Chairman. I yield back.
    Chairman Chaffetz. I thank the gentlewoman.
    I will now recognize the gentleman from California, Mr. 
DeSaulnier, for 5 minutes.
    Mr. DeSaulnier. Thank you, Mr. Chairman.
    I apologize for having had to leave. Very troubling. I have 
what may be a character flaw for this committee. I tend to give 
the benefit of the doubt.
    So, Ms. Archuleta, I would like to give you the benefit of 
the doubt, but the flash report really is quite concerning to 
me. So, Mr. McFarland, a quote from that says, ``In our 
opinion, the project management approach for this major 
infrastructure overhaul is entirely inadequate and introduces a 
very high risk of project failure.''
    Having sat here and listened to multiple hours now in this 
hearing, would you say that your level of confidence in OPM is 
heightened, or do you stand by that comment?
    Mr. McFarland. I stand by that comment.
    Mr. DeSaulnier. And you also asked for responses from OPM. 
It says you asked for it on June 2 of 2015, and you asked for 
comments by June 5, and then later extended that to June 10. By 
June 17, we had still not received comments or indication that 
comments would be forthcoming. Did you ever get comments back 
before the hearing?
    Mr. McFarland. I think we may have gotten comments back 
that day.
    Mr. DeSaulnier. Okay. Well, I got something this morning, 
U.S. Office of Personnel Management, actions to strengthen 
cybersecurity and protect critical IT systems. It doesn't have 
a specific date, June 2015. But, Ms. Archuleta, is this the 
response that you provided the IG, or is this for the 
committee? It is a 7-page report.
    Ms. Archuleta. No, I am familiar with it, sir. The action 
plan that you received today is an action plan that I developed 
along with my staff in response to the very serious issues and 
threats that we are facing right now. It outlines what we have 
done and what we will be doing.
    The response to the IG on the flash audit he has received. 
As I said before, Mr. McFarland and I have not had the 
opportunity because of the time period that where we have been 
engaged with other things. But it's our intent, as in the plan, 
to make sure that he is engaged with this alongside us, and 
that we value his opinion and the work of his staff.
    Mr. DeSaulnier. So, Mr. McFarland, heretofore you haven't 
got that kind of impression--at least that's my impression from 
your testimony--I am sorry, you were distracted for a second.
    Mr. McFarland. Sorry.
    Mr. DeSaulnier. That Ms. Archuleta said she valued your 
input and looked forward to working with you. But, heretofore, 
you haven't gotten that, from what I ascertained from your 
comments today and the written commentary.
    Mr. McFarland. Well, what is on paper is exactly what I----
    Mr. DeSaulnier. Do you have any heightened confidence that 
what Ms. Archuleta just said about your relationship will 
improve? It doesn't seem there is any evidence to that.
    Mr. McFarland. Well, I think in general we have a good 
relationship. Just, I mean, truly, I think we have a good 
relationship. Regarding this matter, I think we are worlds 
    Mr. DeSaulnier. That's fairly significant. As you said to 
Mr. Lynch, $93 million you said isn't even close to the amount 
needed in your opinion and that the ability to succeed--there 
is a high risk that these efforts will ultimately be 
unsuccessful. Given how horrible the consequences of what has 
already happened doesn't really give me a lot of confidence 
that going forward anything is going to improve. As a matter of 
fact, it sounds like it is going to get worse.
    Mr. McFarland. I think going forward at the right pace and 
concentration might be very successful. What I think is planned 
by OPM I think is dangerous.
    Mr. DeSaulnier. Would you like to respond to that, Ms. 
Archuleta? And I can only imagine how difficult it is coming in 
here. But I must tell you, just sitting here and being willing 
to give you the benefit of the doubt, you appear to come across 
as petulant, defensive, and evasive.
    Ms. Archuleta. I don't mean to do that at all. I take very, 
very seriously what has happened.
    Mr. DeSaulnier. You said that over and over again. With all 
due respect, I believe you, but it doesn't appear to be the 
    Ms. Archuleta. Well, I do--what I have tried to do today is 
to convey to the members how seriously I take this and that we 
are garnering all the resources, including the opinion of the 
IG. We disagree on some issues, but we do have other areas of 
agreement. We also have areas that would benefit from 
discussion between me and the IG. I think that's an important 
step. IGs work very closely with their administrations to make 
sure that we are doing the best job we can. I take his 
information very seriously. I do not want to convey that I am 
angry or petulant about it. What I am is respectful for the 
position he holds and value the input that he gives.
    But I do feel passionately about what has happened. I feel 
very passionate about the employees. I am a champion and have 
worked very hard throughout my entire career. And if I sound 
passionate about it, I have to say that I am.
    Mr. DeSaulnier. So I just, personal observation, sometimes 
you can feel passionate about things but not be capable of 
doing what you desire to do. And I think we need to have a 
serious conversation. I know the chairman has these concerns 
about, to be perfectly honest, whether the current 
administration is competent enough to protect this information 
from people who would hack us.
    Mr. Cummings. The gentleman yield?
    Mr. DeSaulnier. Yeah.
    Mr. Cummings. I think the gentlemen gets to the point that 
I was trying to get to a little bit earlier. And the question 
becomes we have got Mr. McFarland saying that--I think he used 
the word ``dangerous.'' Is that what you said?
    Mr. McFarland. That's correct.
    Mr. Cummings. We are heading down a dangerous path.
    Mr. McFarland. I believe so.
    Mr. Cummings. And when you say ``dangerous,'' you are 
saying we are headed for some very serious trouble. Is that a 
fair definition of ``dangerous''?
    Mr. McFarland. Absolutely.
    Mr. Cummings. So, Ms. Archuleta, our problem is this: We 
sit here, and we have got an IG who we believe in and trust. 
The IG is saying that you need to take his advice, and what you 
are doing is not going to get us there, as a matter of fact, 
may harm us. Am I right, Mr. McFarland?
    Mr. McFarland. That's correct.
    Mr. Cummings. So you have put us in kind of a difficult 
situation. We have now been given notice as Members of Congress 
that we are headed down this path by somebody who we rely on. 
You disagree with him, but then you expect us to be supportive 
of you. No, no, no. Listen to me. That's a problem because now 
you put us in a kind of bad position.
    So that means that if this happens again, problems get 
worse, then people say: Well, wait a minute, Chaffetz, 
Cummings, you all were sitting there. You heard what the IG 
said. I mean, why did you let this go on?
    That's the position that we find ourselves in. And so I 
don't care whether you like each other or not. That doesn't 
matter to me. A lot of people get along. The question is it 
sounds like you are refusing--no, no, answer me now; I am going 
to give you a chance--to do what he has asked you to do because 
you disagree. But on the other hand, he is saying that we are 
going down a dangerous path. I mean, come on now. Do you have a 
    Ms. Archuleta. Yes. I just wanted to be sure. The flash 
audit identified issues. A flash audit is meant to alert the 
administration about concerns. It merits an opportunity for the 
IG and his staff and my staff to sit down and find out where 
his concerns are. If he says it is a dangerous path, I want to 
know specifically why.
    Mr. Cummings. Mr. McFarland, haven't you told her that 
before? Is this new?
    Mr. McFarland. As far as the word ``dangerous,'' I probably 
didn't use that.
    Mr. Cummings. But, I mean, you told her the urgency of the 
    Mr. McFarland. Absolutely.
    Mr. Cummings. And the problems that we are having and where 
you see it heading.
    Mr. McFarland. Yes, in a letter.
    Mr. Cummings. Well, come on now.
    Ms. Archuleta. He sent a letter attached to the flash 
audit. And we have not had the opportunity to sit down with 
him. And I take very seriously his concerns, Mr. Cummings. And 
the opportunity, if he uses the word ``dangerous,'' I need to 
understand clearly from him and his staff why he attaches that 
word. And the flash audit needs the scrutiny of both him and I 
together to protect the employees and to protect our data, to 
protect our systems.
    Chairman Chaffetz. Ms. Archuleta, with all due respect, and 
I know you are fairly new to this position, but the audits have 
been coming from the Inspector General's Office since 1997. 
They come year in and year out. They have happened and happened 
and happened and happened. I mean, I started the other hearing 
by reading through all the comments that have come along.
    So this is a flash audit. You haven't had time to talk 
about it. You haven't had time to go through it. And yet you 
can award a multimillion dollar contract in less than 48 hours. 
That's what we don't understand. And we are going to go through 
that here in a minute. We are almost done with this hearing. 
But this isn't just one audit. This isn't just one observation. 
The good people in the Inspector General's Office have been 
warning about this since the 1990s. And it was never taken care 
    Ms. Archuleta. Thank you for pointing that out. And I 
appreciate it and acknowledge that.
    I have been here 18 months, and I took seriously the audits 
that came before me. And that is why I have done and taken the 
    Chairman Chaffetz. We don't believe you. I think you are 
part of the problem. I think if we want different results, we 
are going to have to have different people. And if you want to 
refresh the deck, and we want to put Mr. Ozment or somebody 
else in charge like that, let's to it because you know what, we 
got a crisis. That hurricane has come and blown this building 
down. And I don't want to hear about putting boards up on 
windows, and it's going to take years to get there. That's why 
I think it's time for you to go.
    And, Ms. Seymour, I am sorry, but I think you are in over 
your head. And I think the seriousness of this requires new 
leadership and a new fresh set of eyes to do that. I wish you 
both the best in life. I am not out here to get you. But you 
know what, this is as big as it gets. And there are going to 
have to be a new team brought in. That's where I am at on this.
    Yield back to the gentleman.
    Mr. Cummings. I yield back.
    Chairman Chaffetz. I am going to recognize myself.
    We have got to talk about some things.
    Mr. Hess, have you come up with a decision about the timing 
of when you will provide this information I asked for 
    Mr. Hess. You will have it by next week.
    Chairman Chaffetz. Fair enough. Next week, if we can get 
that information, we would certainly appreciate it. And we will 
follow up. I will follow up.
    Chairman Chaffetz. I got Mr. Cummings' back on this one, 
and I will support him in this. He is asking reasonable 
questions. And I appreciate the cooperation. Thank you.
    I am going to yield to the gentleman from Alabama, who has 
brought up a great issue and a great point. And I want to go 
through this contract timeline here again. We are getting close 
to wrapping up. But, on Thursday, May 28 of this year, just not 
too long ago, at 11:33 a.m., OPM posted a 29-page request for 
quotes to provide notification, credit report access, credit 
monitoring, identity theft insurance, and recovery service, and 
project management services.
    On May 28, 2015, at 1:46 p.m., OPM posted amendment 1, a 
pricing sheet. On May 29, at 1:32 p.m., OPM changed the 
deadline from May 20 to May 30. On May 29, at 2:45 p.m. OPM 
posted another change, modified info to be submitted, and 
deleted some of the clauses. And, on Tuesday, June 2, a 
contract was Winvale Group. I don't know the Winvale Group. 
Could be nice people. I don't know.
    But they immediately turned around and subcontracted this 
to a group I don't know a whole lot about. I want to have Mr. 
Palmer ask you some questions about this.
    Mr. Palmer. Thank you, Mr. Chairman.
    This question is to you, Ms. Seymour. Do you know any of 
the management of CSID?
    Ms. Seymour. Not that I am aware of, sir.
    Mr. Palmer. Do you know or have any knowledge about the 
management of CSID?
    Ms. Seymour. No, sir, not that I am aware of. I got key 
personnel resumes in the proposals.
    Mr. Palmer. Did anyone discuss with you any knowledge about 
the CEO Scott Cruickshank? He is the chairman of the board.
    Ms. Seymour. No, sir.
    Mr. Palmer. About Hazem Ben-Gacem?
    Ms. Seymour. No, sir.
    Mr. Palmer. How about James Mansour?
    Ms. Seymour. No, sir.
    Mr. Palmer. There are only four directors. So the last one 
is Owen Li. I asked you about him earlier.
    Ms. Seymour. No, sir. I have no recollection of them.
    Mr. Palmer. You know, you let a contract in a very 
sensitive area. I mean, this literally impacts millions of 
people. It potentially impacts their financial well-being, 
their careers, yet it appears that you didn't do the most basic 
research into the company that you have contracted this with. 
If you had, I think you might have discovered that Mr. Li is 
under investigation by the Department of Justice and the 
Securities and Exchange Commission. They are looking into his 
management of a group called Canarsie, in which in 9 months, he 
lost 99.7 percent of the money invested in that hedge fund.
    Mr. McFarland, let me ask you this. If you had known this, 
would this have raised a red flag with the Inspector General's 
    Mr. McFarland. Absolutely.
    Mr. Palmer. I have listened to Mr. Cummings. I have 
listened to the chairman. And the more I listen to these guys 
and the members of this entire committee ask these questions, 
the more concerned and more frightened I have become about how 
OPM has handled this. And then to find this and to find that 
just the most basic analysis has not been done just adds to 
    One other question I want to ask you. Mr. Ozment, who 
testified last week, made this comment. I want to ask you, are 
you aware of any outside contractors who are foreign nationals? 
Have you contracted any work with them?
    Ms. Seymour?
    Ms. Seymour. I am sorry, I didn't realize that was my 
question. I apologize. Am I aware of any----
    Mr. Palmer. Have you contracted any of this work to foreign 
    Ms. Seymour. Not that I am aware of, sir.
    Mr. Palmer. How about you, Ms. Archuleta?
    Ms. Archuleta. No, sir.
    Mr. Palmer. May I read this? Or do you want to read it? 
This is from the Wall Street Journal. This is Mr. Ozment. He 
said: Some of the contractors that have helped OPM with 
managing internal data have had security issues of their own, 
including potentially giving foreign governments direct access 
to the data long before the recent reported breaches. A 
consultant who did some work with the company contracted by OPM 
to manage personnel records for a number of agencies told ARS 
that he found the Unix systems administrator for the project 
was in Argentina, and his coworker was physically located in 
the People's Republic of China. Both had direct access to every 
row of data and every database. They were root. Another team 
that worked with these databases had at its head it two teams 
members with Republic of China passports--People's Republic of 
China passports. I know that because I challenged and 
personally revoked the privileges.
    You are not aware of that?
    Ms. Seymour. Sir, I am aware of two of our--two Federal 
employees who have ties to foreign countries. They are U.S. 
citizens, and they work on our programs.
    Mr. Palmer. How are they--does it not raise--here is what 
Ozment said. He said from his perspective, OPM compromised this 
information more than 3 years ago. And his take on the current 
breach is, so what is new?
    I yield the balance of my time.
    Chairman Chaffetz. I would like to ask unanimous consent to 
enter into the record this article. This is written by Julia La 
Roche. It is March 27, 2015, ``Hedge Fund Manager Who Said 
Sorry for Losing 99.7 Percent of His Client's Money is Now 
Being Investigated By the SEC and the Department of Justice.''
    Ms. Seymour, were you aware that the contract that you let 
for Winvale was going to be sublet, or there would be a 
    Without objection, by the way, I will enter this article 
into the record.
    Chairman Chaffetz. Did you know that there was going to be 
a subcontract?
    Ms. Seymour. Winvale's proposal included the fact that it 
had work--that it was subcontracting or partnering with CSID on 
    Chairman Chaffetz. So when you did your due diligence and 
you looked into some of the resumes of the people that would be 
involved and engaged in this, did that include the employees 
and the board at this subcontractor?
    Ms. Seymour. It did not include the board. We used past 
performance, and there are other systems that the contracting 
officer uses to research a firm to make sure that they are 
qualified to do work with the Federal Government.
    Chairman Chaffetz. Had either Winvale or the subcontractor, 
or if there is more than one subcontractor, do you personally 
know anybody who is in any way, shape, or form involved in any 
of those companies?
    Ms. Seymour. Not to my knowledge, sir.
    Chairman Chaffetz. There is nobody from the former 
Department of Defense or from the Office of Personnel 
Management? You know none of those people?
    Ms. Seymour. I do not believe I know anyone that's working 
for those firms.
    Chairman Chaffetz. Ms. Archuleta, do you know anybody that 
works for either of those two firms?
    Ms. Archuleta. Not to my knowledge.
    Chairman Chaffetz. So here we have somebody who lost 
millions of dollars, under investigation by the Department of 
Justice. We have got to figure out how in the world these 
people get the contract because now what we are doing is we are 
saying: Okay, all you Federal employees, millions of you that 
were affected, go give them your information.
    And that's the kind of person we are dealing with. I am not 
saying he is guilty. But he is under investigation. Why should 
we take the chance? Why didn't you go to the GSA list? I mean, 
there is a list of approved vendors out there. Why not use one 
of them?
    Ms. Seymour. We did consult with GSA and the GSA schedule 
on this. There were some requirements that we wanted to include 
in our contract that were not available on the GSA schedule.
    Chairman Chaffetz. Like what?
    Ms. Seymour. D duplication of services is one of them. What 
we were trying to do at OPM was to set up a contract vehicle 
that we could use in the future for any additional breaches, 
whether it's one or twosies or anything else. We wanted to set 
up a vehicle that would not cause us to pay or to offer the 
same services to affected individuals at the same time. That is 
not something that the GSA schedule afforded us the opportunity 
to do, even after we talked with the schedule holder at GSA.
    Chairman Chaffetz. I am just telling you, this reeks. And 
for any contract to go out that fast, I understand the gravity 
of this situation, you are going to deviate from that and then 
they immediately go out to subcontract, I would encourage you 
to as swiftly as possible get back to Senator Warner and Mr. 
Palmer as well as this committee.
    I do need to ask about credentials. Ms. Archuleta, is there 
anybody in the OPM system, whether they be an employee or a 
contractor, who is a foreign national?
    Ms. Archuleta. Sir, I want to be sure of that answer. I 
would have to come back to you to be sure that I----
    Chairman Chaffetz. Ms. Seymour, is there anybody who is a 
foreign national who is involved as either a contractor or 
directly as an employee at OPM?
    Ms. Seymour. I will get back to you on that, sir.
    Chairman Chaffetz. The fact that you two don't know, that's 
what scares me. That's what really scares me is that you don't 
    Ms. Seymour. I know about my staff, sir.
    Chairman Chaffetz. How many people on your staff?
    Ms. Seymour. About 280.
    Chairman Chaffetz. How many people have credentials to 
become a network administrator or have access to the network? 
How many?
    Ms. Seymour. I believe it is about 50.
    Chairman Chaffetz. So of those 50 people--and how often do 
you routinely audit that?
    Ms. Seymour. We review them very frequently.
    Chairman Chaffetz. Like what?
    Ms. Seymour. Probably monthly. We have processes for when 
people come onboard and when they leave, that we remove their 
access privileges.
    Chairman Chaffetz. Do you review the traffic that's going 
through there? Because that's evidently part of what happened 
is somebody gained network administrator access and----
    Ms. Seymour. So that's how we were able to track through 
and understand that our background investigations----
    Chairman Chaffetz. After they had been there for than a 
year, right?
    Ms. Seymour. Yes, sir.
    Chairman Chaffetz. So how often do you track that and 
monitor that?
    Ms. Seymour. So we had put the tools on our network just 
over the last 6 months or so to be able to see this type of 
activity in our network. Again, sir, when I came on board, I 
recognized that these systems were in need of some 
modernization. We put in place a plan and began to execute that 
immediately to put the security tools in place so that we had 
visibility in our network. That's what led us to understand 
this latent activity that went back to even prior to my arrival 
at OPM.
    Chairman Chaffetz. I have got a series of other questions, 
but let's recognize the gentleman from Georgia, Mr. Carter, for 
5 minutes.
    Mr. Carter. Thank you, Mr. Chairman.
    And thank all of you for being here.
    Ms. Seymour, I would like to start with you. It's my 
understanding that OPM's legacy system, that you are currently 
using COBOL, a system that was developed originally in 1959, is 
that correct?
    Ms. Seymour. I don't know when it was invented, sir, but 
yes, we are using COBOL in some of our systems at OPM.
    Mr. Carter. Okay. According to my research and my staff 
research, it was originally developed in 1959. And that's the 
system that we are using?
    Ms. Seymour. Yes, sir.
    Mr. Carter. Ms. Archuleta, OPM since 2008 has spent $577 
million on IT. Is that correct?
    Ms. Archuleta. I don't know exactly that number, but I will 
accept that.
    Mr. Carter. You think that's pretty close?
    Ms. Archuleta. I would have to trust your judgment. I don't 
know that number yet, but I could get back to you. But yes, if 
you want to----
    Mr. Carter. But would you say that's in the ballpark, $577 
million? I mean, give or take a couple hundred million, what 
are we talking about?
    Ms. Archuleta. I can tell you what we spent on it, but yes, 
I will----
    Mr. Carter. $577 million dollars since 2008, yet we are 
still using a legacy system that was developed in 1959?
    Ms. Archuleta. I agree with you totally, sir. We are using 
a legacy system that was designed in 1959. And that is what we 
are working to change.
    Mr. Carter. It's my understanding that approximately 80 
percent of our IT budget is being spent on legacy systems. Is 
that correct?
    Ms. Archuleta. Right now, we are working off of our legacy 
system. That's why we are making the investments into a new 
    Mr. Carter. I am sorry, I am just flabbergasted by this. 
It's just mind-boggling that we can spend--first of all, we can 
spend $577 million; secondly, that we are spending 80 percent 
of what we have budgeted on legacy systems. I mean, it's just 
amazing to me that we're doing that.
    Nevertheless, Ms. Seymour, let me ask you, the IG's flash 
audit indicated that the estimated cost for just two phases, 
only two phases of your infrastructure improvement project, is 
going to be $93 million. Is that correct?
    Ms. Seymour. Yes, sir. We put together the plan with a very 
robust interagency team and had that reviewed by a number of 
    Mr. Carter. $93 million?
    Ms. Seymour. Yes, sir.
    Mr. Carter. I am sorry, I don't mean to be dramatic, but 
$93 million?
    Ms. Seymour. That covers both securing our legacy 
architecture, the one that we have today----
    Mr. Carter. The one that was originally developed in 1959?
    Ms. Seymour. Not all of it was developed that long ago.
    Mr. Carter. If any of it was developed.
    Ms. Seymour. So our network was designed, you know, about a 
decade ago. So we are trying to shore that up, provide as much 
security around that network as we can. That's part of what the 
money is going to. And then the other part of the money is 
going towards building a more modern and more securable network 
that we will transition to.
    Mr. Carter. Okay. Okay. Well, it's my understanding that 
despite the decades that we have been spending all this money, 
these millions of dollars, that we are still using paper forms 
in some cases? Is that true?
    Ms. Seymour. A number of our business offices still use 
paper forms.
    Mr. Carter. We have spent $577 million on IT since 2008, 
and we are still using paper forms. Of course, hey, paper forms 
may be better in this case. I mean, at least we have still got 
control of those.
    Ms. Seymour. I can't speak to what's happened before me, 
sir. I can tell you that when I came in and saw the state of 
our IT systems, I worked with Director Archuleta to put in 
place a plan, an aggressive plan, for migrating to more modern, 
more secure network and systems.
    Mr. Carter. Does it include paper forms? Does it include 
paper forms? Will we still have paper forms after you make 
these adjustments?
    Ms. Seymour. We want to remove as much paper as we can from 
our environment, sir. That's one of our goals.
    Mr. Carter. I can't help but wonder if that's not a move in 
the wrong direction. At least we can have some control over 
these paper forms. We obviously don't have control over the 
computers and the information that we have on the Internet.
    Ms. Seymour. I would offer, sir, that there are security 
concerns with paper just as well. We have, you know, violations 
or issues with paper as well as you leave paper around. The 
other issue we have with paper, sir----
    Mr. Carter. So we leave paper around?
    Ms. Seymour. Sir, when you leave it in your office or when 
you are working with it. I would also offer that when we have 
paper, we don't have backup systems. That's a concern as well 
as we move forward with our automated----
    Mr. Carter. Ms. Seymour, I agree with every point you are 
making here. My point is that we spent $577 million since 2008, 
and we are still using paper.
    Ms. Seymour. And, sir, I also said I can't tell you what 
has gone on before me. What I can tell you is the plan we are 
putting in place, we are planning to put in place an enterprise 
case management system. We are working towards that. That will 
eliminate a lot of our paper. We will modernize our systems and 
provide better protections around our data and our systems.
    Mr. Carter. And that includes that $577 million that we 
have already spent?
    Ms. Seymour. I am sorry, sir?
    Mr. Carter. This is going to be more money we are going to 
throw at this problem, right?
    Ms. Seymour. Again, sir, I cannot account for what has 
happened before me.
    Chairman Chaffetz. Thank the gentleman.
    We have a vote on the floor. I will recognize Mr. Cummings, 
who has got a few more questions.
    Mr. Cummings. I will be very quick, Mr. Chairman. Thank you 
very much. I want to go back to this contract. Winvale got this 
contract. Is that right, Ms. Seymour?
    Ms. Seymour. Yes, sir, that's correct.
    Mr. Cummings. What was the process? It doesn't smell right. 
Something doesn't smell right about this contract. Winvale gets 
it, and then they turn around and CSID, what?
    Ms. Seymour. No, sir. The proposal that we got was from 
Winvale partnered with CSID. We knew up front that they were--
they had support from CSID. It was part of their proposal 
package to the government.
    Mr. Cummings. And you didn't know about Mr. Li?
    Ms. Seymour. No, sir, I did not.
    Mr. Cummings. You didn't know of his apology for losing 
99.7 percent of $60 million went viral?
    Ms. Seymour. No, sir, I did not.
    Mr. Cummings. In March?
    Ms. Seymour. No, sir, I did not.
    Mr. Cummings. And so the question becomes--I mean, do you 
think you should have done some better due diligence?
    Ms. Seymour. So we did due diligence on the company. There 
are several ways that the contracting officer validates that 
the company is able to do business with the government.
    Mr. Cummings. And, Mr. McFarland, this concerns you I take 
    Mr. McFarland. Yes, of course.
    Mr. Cummings. And why is that, sir?
    Mr. McFarland. Just because of the reasons that you have 
espoused. It was very fast. And as a matter of fact, a few days 
ago, we were talking about that in the office. And we are going 
to be looking into it.
    Mr. Cummings. I appreciate that. I just have one statement 
real quick, Mr. Chairman. I want to conclude by thanking you 
again for agreeing to invite the contractors here today. We 
have obtained some significant information. But there are also 
many, many unanswered questions. We asked USIS for information 
they have refused to give us for more than a year. Mr. 
Giannetta promised to help us get those answers. But I am 
concerned that he may not be there in a couple weeks. So we may 
need to follow up with USIS' parent company, Altegrity.
    We also asked KeyPoint for documents we originally 
requested months ago. And you pressed them to provide those 
documents. I think you understand how frustrating it has been 
for me over the past year. So I thank you for your help, for 
agreeing to invite them, for helping us get the information we 
need. We will prepare questions for the record for today. And I 
hope we will be able to get all of these answers. And I really 
do hope it won't require a subpoena.
    With that, I thank you, and I yield back.
    Chairman Chaffetz. I thank the gentleman.
    We are now at the halfway point. I am just teasing. We are 
wrapping up here. We are wrapping up. You all have been sitting 
here for a long time. All right. So a couple more questions. We 
do have votes on the floor.
    Director Archuleta, I need to go back to some of your 
previous comments. This has to do with what you said in July of 
2014 regarding the OPM data breach that became public in March 
of that year. At the time, you said that you did not have a 
breach in security. Ms. Seymour was very candid in saying that 
she did think it was a breach in security. So is she wrong?
    Ms. Archuleta. As I explained earlier, sir, in the question 
that was asked me, the conversation was around PII, and I 
answered it in that context.
    Chairman Chaffetz. But you don't believe there was any 
access to see that information?
    Ms. Archuleta. I don't believe that there was--that that 
data was breached and that there was no data exfiltrated.
    Chairman Chaffetz. Exfiltrated. But do you believe that 
they had at least access to it to look at it?
    Ms. Archuleta. That's why we understand that there was in 
fact a breach. I am not the forensics. I don't know what they 
did with it. What I was assured of, sir, and why I responded in 
that interview was there was no PII extricated from the system.
    Chairman Chaffetz. So you did know that the OPM network, 
the network platform, that the blueprint, essentially the keys 
to the kingdom, was exfiltrated, right? You did know that.
    Ms. Archuleta. As I said, the question was around the PII, 
and that's the way I answered it.
    Chairman Chaffetz. I am asking you now. I am asking you 
now, do you believe--you knew, somehow you had to know, I hope.
    Ms. Archuleta. Ms. Seymour informed me that other data had 
been taken from, but it was not--it was in different context to 
that question.
    Chairman Chaffetz. But that was essentially a blueprint of 
how the system worked. Correct?
    Ms. Archuleta. She had informed me that some manuals had 
also been exposed and potentially exfiltrated, yes. I knew 
that. Again, in that interview, the question was around PII.
    Chairman Chaffetz. Okay. So but you did know that there was 
a security breach. Correct?
    Ms. Archuleta. Correct.
    Chairman Chaffetz. And you did know that there were things 
other than the PII that were potentially exfiltrated. Correct?
    Ms. Archuleta. I did.
    Chairman Chaffetz. You did know that.
    What do you think is a bigger success for hackers, you 
know, stealing the files for tens of thousands of employees or 
the files for 32 million, up to 32 million employees?
    Ms. Archuleta. I believe that all of that is very 
important, sir. I can't distinguish between both of them. They 
are each equally as important.
    Chairman Chaffetz. So when did the hackers first gain 
access to OPM's network? The ones we just learned about? Maybe 
Ms. Seymour is in a better position to answer that. Either one 
of you. If you know what the timeline is on that.
    Ms. Barron-DiCamillo. I have the timeline associated with 
that, sir.
    Chairman Chaffetz. Yes.
    Ms. Barron-DiCamillo. So the actors first gained--adversary 
access was first noted within the network around November of 
    Chairman Chaffetz. The ones that we just learned about?
    Ms. Barron-DiCamillo. I am sorry, that was from the 2014 
intrusion that you were referencing based upon the manuals.
    Chairman Chaffetz. I am sorry, that happened in what 
    Ms. Barron-DiCamillo. We were able to confirm, based upon 
the onsite assessment, that they had access, confirmed access 
in November of 2013.
    Chairman Chaffetz. Okay. Ms. Seymour, I think you were 
going to say something.
    Ms. Seymour. I was just going to try clarify for you, sir, 
that for this most recent incident, it dates backs to June of 
2014. The access that the adversary had dates back to June of 
2014, I believe.
    Chairman Chaffetz. Is it possible that when they took this 
blueprint--I call it the keys to the kingdom--that that would 
have potentially aided the hackers in coming back into the 
system and stealing these millions of records?
    Ms. Seymour. These are available manuals typically for 
commercial IT equipment. So, yes, it would aid an adversary in 
understanding our platform. They did not get, you know, 
specific configuration diagrams of our entire environment. But 
these are commercially available--a lot of these are 
commercially available documents about platforms, computing 
    Chairman Chaffetz. Ms. Barron-DiCamillo, did they include 
any proprietary information, anything that was----
    Ms. Barron-DiCamillo. Based on what we saw as the potential 
exfil, it did not include proprietary information or specific 
information around the architecture of the OPM environment. It 
was manuals associated with certain types of platforms. But, 
again, as Ms. Seymour stated, a lot of that information is also 
publicly available. It's available on--I think IBM is one of 
    Chairman Chaffetz. Did the hackers have access to be able 
to see the information regarding personal employees?
    Ms. Barron-DiCamillo. So, in 2014, is that the incident you 
are referring to?
    Chairman Chaffetz. Yes.
    Ms. Barron-DiCamillo. So based on the onsite assessment, we 
weren't able to confirm that they were able to access any of 
the PII information. So not only so your question about seeing 
it, they did not--there is certain portion of the network they 
were specifically focused on, and they were not able to 
infiltrate into those portions of the network.
    Chairman Chaffetz. Ms. Seymour--or let me ask Ms. 
Archuleta. If Ms. Seymour was responsible for safeguarding the 
PII, as we call it, information in 2014, who do you hold 
responsible for its loss today?
    Ms. Archuleta. I hold all of us responsible. That's our job 
at the OPM. We work very hard to do this, and we work with our 
partners across government. I know that you are perhaps tired 
of hearing this from me, but we are facing a very aggressive 
attacker. We protect against 10 million attempts each month. So 
we are working very hard to do that. We are working extremely 
hard to prevent the types of things that we are seeing here 
    Chairman Chaffetz. Mr. Cummings.
    Mr. Cummings. Mr. Hess, I want to make sure you are going 
to get us some documents. We have been requesting documents a 
long time. I want to make sure what documents you are going to 
provide us. Are those the ones we have been asking for?
    Mr. Hess. We are going to be addressing----
    Mr. Cummings. I can't hear you.
    Mr. Hess. I am sorry. We are going to be addressing that 
letter and each of the requests that you made to the extent 
that we are able to.
    Mr. Cummings. All right. Thank you.
    Chairman Chaffetz. It's been a long morning and into the 
afternoon. I thank you all. You all represent a number of 
people that have a lot of staff, people who work hard. They are 
patriotic. They care about this country. To that extent, please 
let them know how much we appreciate them and all that you are 
doing. But we will have somebody help you know where the 
restroom is. It's been a while.
    So, again, thank you for your participation today. We stand 
    [Whereupon, at 1:54 p.m., the committee was adjourned.]



               Material Submitted for the Hearing Record