[Senate Hearing 115-597]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 115-597

                     THE ROLES AND RESPONSIBILITIES
                     FOR DEFENDING THE NATION FROM
                              CYBER ATTACK

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

                                HEARING

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 19, 2017

                               __________

         Printed for the use of the Committee on Armed Services


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                      COMMITTEE ON ARMED SERVICES
                      
 JOHN McCAIN, Arizona, Chairman                   
JAMES M. INHOFE, Oklahoma,      	JACK REED, Rhode Island
ROGER F. WICKER, Mississippi		BILL NELSON, Florida
DEB FISCHER, Nebraska			CLAIRE McCASKILL, Missouri
TOM COTTON, Arkansas			JEANNE SHAHEEN, New Hampshire
MIKE ROUNDS, South Dakota		KIRSTEN E. GILLIBRAND, New York
JONI ERNST, Iowa			RICHARD BLUMENTHAL, Connecticut
THOM TILLIS, North Carolina		JOE DONNELLY, Indiana
DAN SULLIVAN, Alaska			MAZIE K. HIRONO, Hawaii
DAVID PERDUE, Georgia			TIM KAINE, Virginia
TED CRUZ, Texas				ANGUS S. KING, JR., Maine
LINDSEY GRAHAM, South Carolina		MARTIN HEINRICH, New Mexico
BEN SASSE, Nebraska			ELIZABETH WARREN, Massachusetts
LUTHER STRANGE, Alabama           	GARY C. PETERS, Michigan
                                     
                                 
                                     
               Christian D. Brose, Staff Director
            Elizabeth L. King, Minority Staff Director

                                  (ii)                     
                      
                      
                            C O N T E N T S

_________________________________________________________________

                            October 19, 2017

                                                                   Page

The Roles and Responsibilities for Defending the Nation From          1
  Cyber Attack.

Rapuano, Honorable Kenneth P., Assistant Secretary of Defense for     4
  Homeland Defense and Global Security, Department of Defense.
Smith, Scott, Assistant Director for the Cyber Division, Federal     10
  Bureau of Investigation.
Krebs, Christopher C., Performing the Duties of the Under            14
  Secretary for the National Protection and Programs Directorate, 
  Department of Homeland Security.

Questions for the Record.........................................    78

                                 (iii)

 
                     THE ROLES AND RESPONSIBILITIES
                     FOR DEFENDING THE NATION FROM
                              CYBER ATTACK

                              ----------                              


                       THURSDAY, OCTOBER 19, 2017

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:36 a.m. in Room 
SD-G50, 13800 Senate Office Building, Senator John McCain, 
(chairman) presiding.
    Committee members present: Senators McCain, Inhofe, Wicker, 
Fischer, Rounds, Ernst, Tillis, Sullivan, Sasse, Reed, Nelson, 
McCaskill, Shaheen, Gillibrand, Blumenthal, Donnelly, Hirono, 
Kaine, King, Heinrich, Warren, and Peters.

       OPENING STATEMENT OF SENATOR JOHN McCAIN, CHAIRMAN

    Chairman McCain. The committee meets today to receive 
testimony on the U.S. Government's policy, strategy, and 
organization to protect our Nation in cyberspace.
    To begin, I would like to thank Senators Rounds and Nelson 
for their leadership on these issues in our Cybersecurity 
Subcommittee. This hearing builds upon the good work that they 
and their subcommittee have done this year to tackle the 
critical challenge of cyber.
    This is a challenge that is growing more dire and more 
complex. Not a week passes that we do not read about some 
disturbing new incident: cyber attacks against our government 
systems and critical infrastructure, data breaches that 
compromise sensitive information of our citizens and companies, 
attempts to manipulate public opinion through social media, and 
of course attacks against the fundamentals of our democratic 
system and process. Those are just the ones that we know about.
    This is a totally new kind of threat, as we all know. Our 
adversaries, both state and non-state actors, view the entire 
information domain as a battlespace, and across it, they are 
waging a new kind of war against us, a war involving but 
extending beyond our military, to include our infrastructure, 
our businesses, and our people.
    The Department of Defense has a critical role to play in 
this new kind of war, but it cannot succeed alone. To be clear, 
we are not succeeding. For years, we have lacked policies and 
strategies to counter our adversaries in the cyber domain, and 
we still do. This is in part because we are trying to defeat a 
21st Century threat with the organizations and processes of the 
last century. This is true in the executive branch and, 
frankly, it is also true here in the Congress. We are failing.
    That is why this committee is holding today's hearing and 
why we have taken the unorthodox step of inviting witnesses 
from across our government to appear today. Our witnesses are 
the senior officials responsible for cyber within their 
respective agencies, and I want to thank them for joining us 
and welcome them now: Ken Rapuano, Assistant Secretary of 
Defense for Homeland Defense and Global Security; Scott Smith, 
Assistant Director for Cyber Division, Federal Bureau of 
Investigation; and Chris Krebs, Under Secretary for the 
National Protection and Programs Directorate at the Department 
of Homeland Security.
    I would also like to note at the outset the empty chair at 
the witness table. The committee invited the principal U.S. 
cyber official, White House Cybersecurity Coordinator Rob 
Joyce. Many of us know Mr. Joyce and respect him deeply for his 
significant experience and expertise on cyber and his many 
years of government service at the National Security Agency. 
Unfortunately, but not surprisingly, the White House declined 
to have its cyber coordinator testify, citing executive 
privilege and precedent against having non-confirmed NSC 
[National Security Council] staff testifying before Congress. 
While this is consistent with past practice on a bipartisan 
basis, I believe the issue of cyber requires us to completely 
rethink our old ways of doing business.
    To me, the empty chair before us represents a fundamental 
misalignment between authority and accountability in our 
government today when it comes to cyber. All of our witnesses 
answer to the Congress for their part of the cyber mission. But 
none of them is accountable for addressing cyber in its 
entirety. In theory, that is the White House Cyber 
Coordinator's job, but that non-confirmable position lacks the 
full authority to make cyber policy and strategy and direct our 
Government's efforts. That official is literally prohibited by 
legal precedent from appearing before the Congress. So when we, 
the elected representatives of the American people, ask who has 
sufficient authority to protect and defend our Nation from 
cyber threats and who is accountable to us for accomplishing 
that mission, the answer is quite literally no one.
    The previous administration's struggle to address this 
challenge between DOD [Department of Defense], DHS [Department 
of Homeland Security], and the FBI [Federal Bureau of 
Investigation], well-intentioned though it was, led to a result 
that is as complex and convoluted as it appears in this chart. 
Given that no single agency has all of the authorities required 
to detect, prevent, and respond to incidents, the model has 
created significant confusion about who is actually accountable 
for defending the United States from cyber attacks. Meanwhile, 
our increasingly capable adversaries continue to seek to 
exploit our vulnerabilities in cyberspace.
    Facing similar challenges, a number of our allies have 
pursued innovative models to emphasize increased coordination 
and consolidation. In doing so, they have significantly 
enhanced their ability to react and respond to incidents and to 
share information across government and with the public. For 
example, the United Kingdom recently established its National 
Cyber Security Centre, an organization that orchestrates 
numerous cyber functions across the British Government under 
one roof sitting side by side with industry.
    Today's hearing is an opportunity to have an honest and 
open conversation. Our concerns are not meant to be critical of 
our witnesses' leadership or of your organizations, as each of 
you are limited by the policy and legal frameworks established 
by Congress and the administration. Our intent is to better 
understand the coordination and de-confliction underway between 
agencies and to identify where and how we can improve. The last 
thing any of us wants is to waste precious time during a major 
cyber incident because everyone who rushed to the scene thought 
they were in charge, but none had the authority or, even worse, 
realizing after a cyber incident, that your organizations were 
not prepared and resourced to respond based on a flawed 
assumption that someone else was responsible.
    I thank the witnesses for their service to our country and 
their willingness to appear before this committee as we 
continue to assess and address our cyber challenges.
    Senator Reed?

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Well, thank you very much, Mr. Chairman, for 
holding this hearing.
    I welcome our witnesses today.
    Let me also commend Senator Rounds and Senator Nelson for 
their great leadership on the subcommittee.
    The cyber threat facing our Nation does not respect 
organizational or jurisdictional boundaries in the Government. 
The Defense Department, the intelligence community, the FBI, 
the Department of Homeland Security are all critical in 
countering the cyber threat. But each agency functions in 
siloes under specialized laws and authorities. In order to be 
successful, we must develop an integrated, whole-of-government 
approach to strategic planning, resource allocation, and 
execution of operations. I think I am echoing the chairman's 
points.
    This problem is not unique to the cybersecurity mission. 
Violent extremism, narcotics, and human trafficking, 
transnational crime, proliferation of weapons of mass 
destruction, and other challenges require an effective whole-
of-government response that cut across the missions and 
responsibilities of departments and agencies. As issues become 
more complex, these cross-cutting problems are becoming more 
numerous and serious over time.
    There have been various approaches to this problem, but 
with little demonstrated success. White House's czars generally 
have few tools at their disposal, while a lead agency 
designated to address a cross-cutting challenge must also 
remain focused on the mission of its own organization.
    Last year, President Obama signed PPD [Presidential Policy 
Directive 41] 41, the United States Cyber Incident Coordination 
Policy. It established a cyber response group to pull together 
a whole-of-government response in the event of major cyber 
incidents. But these are ad hoc organizations with little 
continuity that come together only in response to events.
    I believe what is needed instead is a framework with an 
integrated organizational structure authorized to plan and 
cooperate in peacetime against the constant aggression of cyber 
opponents. This arrangement has precedent. The Coast Guard is a 
service branch in the Department of Defense, but it is also a 
vital part of the Department of Homeland Security. It has 
intelligence authorities, defense responsibilities, customs and 
border enforcement, and law enforcement authority. The Coast 
Guard exercises these blended authorities judiciously and 
responsibly and enjoys the confidence of the American people. 
Therefore, we can solve this problem. We have examples of where 
we have solved this problem.
    Last year's National Defense Authorization Act created 
cross-functional teams to address problems that cut across the 
functional organizations of the Defense Department. These teams 
are composed of experts from the functional organizations but 
rise above the parochial interests of their bureaucracies. The 
team leads would exercise executive authority delegated by the 
Secretary of Defense. Such an approach might be a model for the 
interagency to address a cross-cutting problem like 
cybersecurity.
    There, indeed, is urgency to our task. Russia attacked our 
election last year. They similarly attacked multiple European 
countries, the NATO [North Atlantic Treaty Organization] 
alliance, and the European Union. The intelligence community 
assures us that Russia will attack our upcoming midterm 
elections. So far, we have seen no indication that the 
administration is taking action to prepare for this next 
inevitability.
    Finally, the Government cannot do this alone. As former 
Cyber Commander and NSA [National Security Administration] 
Director General Keith Alexander testified, ``While the primary 
responsibility of government is to defend the Nation, the 
private sector also shares responsibility in creating the 
partnerships necessary to make the defense of our nation 
possible. Neither the Government nor the private sector can 
capably protect their systems and networks without extensive 
and close cooperation.'' In many ways, the private sector is on 
the front lines of the cyber threat, and the Government must 
work with them if we are to effectively counter that threat. We 
need a government strategy, but it must be in cooperation with 
the private sector.
    I thank Chairman McCain for holding this hearing and for 
cosponsoring my legislation that is in the Banking Committee's 
jurisdiction, S. 536, the Cybersecurity Disclosure Act, which 
through disclosure and our federal securities laws tries to 
encourage companies to focus on avoiding cybersecurity risks 
before they turn into costly breaches.
    Thank you, Mr. Chairman.
    Chairman McCain. Welcome to the witnesses. Mr. Rapuano, 
please proceed.

STATEMENT OF HONORABLE KENNETH P. RAPUANO, ASSISTANT SECRETARY 
OF DEFENSE FOR HOMELAND DEFENSE AND GLOBAL SECURITY, DEPARTMENT 
                           OF DEFENSE

    Mr. Rapuano. Thank you, Chairman McCain, Ranking Member 
Reed, and members of the committee. It is an honor to appear 
before you to discuss the roles and responsibilities of the 
Department of Defense and its interagency partners in defending 
the Nation from cyber attacks of significant consequence.
    I am here today in my roles as the Assistant Secretary of 
Defense for Homeland Defense and Global Security, as well as 
the Principal Cyber Advisor to the Secretary of Defense, in 
which I oversee cyber policy in the Department, lead the 
coordination of cyber efforts across the Department and with 
our interagency partners, and integrate the Department's cyber 
capabilities with its mission assurance and defense support to 
civil authorities activities. I appreciate the opportunity to 
testify alongside my interagency colleagues because these 
challenges do require a whole-of-government approach.
    DOD is developing cyber forces and capabilities to 
accomplish several missions in cyberspace. Today, I will focus 
on our mission to defend the United States and its interests 
against high consequence cyber attacks and how we execute that 
mission in coordination with our interagency partners.
    The Department's efforts to build defensive capabilities 
through the Cyber Mission Force, or CMF, play an especially key 
role in carrying out this mission. From both a deterrence and 
response standpoint, the 133 CMF teams that will attain full 
operational capability in September of 2018 are central to the 
Department's approach to supporting U.S. Government efforts to 
defend the Nation against significant cyber attacks. With the 
goal of assuring U.S. military dominance in cyberspace, these 
teams conduct operations both to deny potential adversaries the 
ability to achieve their objectives and to conduct military 
actions in and through cyberspace to impose costs in response 
to an imminent, ongoing, or recent attack.
    In particular, the CMF's 68 Cyber Protection Teams 
represent a significant capability to support a broader 
domestic response. These forces are focused on defending DOD 
information networks, but select teams could provide additional 
capacity or capability to our federal partners, if and when 
necessary.
    DOD's role in cyberspace goes beyond adversary-focused 
operations and includes identifying and mitigating our own 
vulnerabilities. Consistent with statutory provisions related 
to these efforts, we are working with our U.S. domestic 
partners and with foreign partners and allies to identify and 
mitigate cyber vulnerabilities in our networks, computers, 
critical DOD infrastructure and weapons systems.
    While DOD has made significant progress, there is more to 
do alongside with our other agency partners in the broader 
whole-of-government effort to protect U.S. national interests 
in and through cyberspace. The outward focus of DOD's cyber 
capabilities to mitigate foreign threats at their points of 
origin complements the strengths of our interagency partners as 
we strive to improve resilience, should a significant cyber 
attack occur. In accordance with law and policy, during cyber 
incidents, DOD can be called to directly support the DHS in its 
role as the lead for protecting, mitigating, and recovering 
from domestic cyber incidents or the DOJ in its role as the 
lead in investigating, attributing, disrupting, and prosecuting 
cyber crimes.
    The significant work of our Departments has resulted in 
increased common understanding of our respective roles and 
responsibilities, as well as our authorities. Despite this, 
however, as a government we continue to face challenges when it 
comes to cyber incident response on a large scale, and it is 
clear we have more work to ensure we are ready for a 
significant cyber incident. Specifically, we must resolve seam 
and gap issues among various departments, clarify thresholds 
for DOD assistance, and identify how to best partner with the 
private sector to ensure a whole-of-nation response, if and 
when needed.
    DOD has a number of efforts underway to address these 
challenges and to improve both our readiness and that of our 
interagency partners. For instance, we are refining policies 
and authorities to improve the speed and flexibility to provide 
support, and we are conducting exercises such as Cyber Guard 
with a range of interagency and State and local partners to 
improve our planning and preparations to respond to cyber 
attacks.
    Additionally, the cyber executive order 13800 signed in May 
will go a long way in identifying and addressing the shortfalls 
in our current structure.
    Although the Department has several unique and robust 
capabilities, I would caution against ending the current 
framework and reassigning more responsibility for incident 
response to DOD. The reasons for this include the need for the 
Department to maintain focus on its key mission, the 
longstanding tradition of not using the military for civilian 
functions, and the importance of maintaining consistency with 
our other domestic response frameworks.
    It is also important to recognize that a significant 
realignment of cyber response roles and responsibilities risks 
diluting DOD focus on its core military mission to fight and 
win wars.
    Finally, putting DOD in a lead role for domestic cyber 
incidents would be a departure from accepted response practice 
in all other domains in which civilian agencies have the lead 
responsibility for domestic emergency response efforts. It 
could be disruptive to establishing that critical unity of 
effort that is necessary for success.
    The Federal Government should maintain the same basic 
structure for responding to all other national emergencies, 
whether they are natural disasters or cyber attacks.
    There is still work to be done both within the Department 
and with our federal partners to improve DOD and U.S. 
Government efforts overall in cyberspace. Towards this end, I 
am in the process of reinvigorating the role of the Principal 
Cyber Advisor, clarifying the Department's internal lines of 
accountability and authority in cyber, and better integrating 
and communicating DOD cyberspace strategy, plans, and train and 
equip functions. We will also be updating our DOD cyber 
strategy and policies on key cyber issues, such as deterrence, 
and translating this guidance into capabilities, forces, and 
operations that will maintain our superiority in this domain.
    The Department is also working to ensure that several 
strategic initiatives it is undertaking come to fruition, 
including the elevation of U.S. Cyber Command, the 
implementation of the cyber executive order, initiating the 
cyber excepted service program, and rationalizing the 
Department's cyber budget and investments.
    Our relationship with Congress is critical to everything we 
are doing to defend the Nation from high consequence cyber 
attacks. I am grateful for Congress' strong support and 
particularly this committee's interest in these issues. I look 
forward to your questions and working with you and your staff's 
going forward. Thank you.
    [The prepared statement of Mr. Rapuano follows:]

               Prepared Statement by Mr. Kenneth Rapuano
    Thank you Chairman McCain, Ranking Member Reed, and Members of the 
Committee. It is an honor to appear before you to discuss the roles and 
responsibilities for defending the Nation from cyberattacks of 
significant consequence. I appear before you today in my role as 
Assistant Secretary of Defense for Homeland Defense and Global Security 
and as Principal Cyber Advisor to the Secretary of Defense. In these 
roles, I oversee the development and implementation of DOD's strategy, 
policy, and strategic guidance to achieve DOD's cyber missions, goals, 
and objectives; lead the Department's interagency cyber coordination 
efforts, including for cyber incident response; advise the Secretary 
and the Deputy Secretary on cyber-related activities that support or 
enable DOD's missions in and through cyberspace; and, perhaps most 
relevant to today's discussion, ensuring that cyber forces and 
capabilities are integrated across all of DOD's priority missions, 
including mission assurance and Defense Support of Civil Authorities.
    I have been requested to discuss the Department's role as part of 
an interagency response to a cyberattack of significant consequence. I 
am grateful to testify alongside my interagency colleagues because 
adequately addressing these important challenges requires a whole-of-
government approach, of which the Department of Defense and its 
developing capabilities in cyberspace are just one part.
    This is a timely and important topic because the threats and level 
of malicious activity we face in cyberspace are real and growing. This 
diverse and persistent set of threats comes from state and non-state 
actors who probe and scan United States. networks for vulnerabilities. 
The states we watch most closely in cyberspace include China, Iran, 
North Korea, and especially Russia.
    To address these threats, the Department is developing cyber forces 
and capabilities to accomplish three primary missions in cyberspace: 1) 
to defend DOD networks, systems, and information to ensure that DOD can 
accomplish its core missions; 2) to defend the United States and its 
interests against malicious cyber activities and cyberattacks of 
significant consequence; and 3) to provide integrated cyber 
capabilities in support of operational and contingency plans. Although 
all of the missions are important, given your focus today, my intent is 
to speak primarily about DOD's efforts to defend the United States and 
its interests from cyberattacks of significant consequence and its 
efforts to provide Defense Support for Civil Authorities, as these 
define DOD's role within a whole-of-government framework.
    The Cyber Mission Force (CMF) is the Department's principal 
capability to carry out DOD's cyber mission. Consisting of more than 
6,000 soldiers, sailors, airmen, marines, and civilians, the CMF 
achieved initial operational capability (IOC) in October 2016 and is 
projected to reach full operational capacity (FOC) by the end of this 
new fiscal year. Today, nearly 80 percent of the CMF's 133 teams have 
reached FOC. In recent years, the Department has made significant 
investments in building the workforce and systems to develop the CMF, 
and it continues to do so consistent with the fiscal year 2018 budget 
request. In terms of readiness, as well as operational activities in 
support of the campaign to defeat the Islamic State in Iraq and Syria 
(ISIS), DOD is already seeing the results of those investments. United 
States Cyber Command's increased experience, expertise, and capability 
drove the President's decision this summer to elevate U.S. Cyber 
Command to a Unified Functional Combatant Command, consistent with 
section 923 of the National Defense Authorization Act of for fiscal 
year 2017. Among other benefits, elevation of the command will 
strengthen command and control and consolidate responsibility for 
cyberspace operations under a single commander, reporting directly to 
the Secretary.
    Although many elements of the CMF contribute to defending the 
Nation against malicious cyber activities and cyberattacks of 
significant consequence, the Cyber National Mission Force through its 
integrated operations plays a key role. This force combines the 
capabilities of National Mission Teams (NMTs) that pursue adversaries 
into red space; National Support Teams (NSTs) that provide additional 
capacity in analysis, linguists, reporting, capability development, and 
targeting; and national Cyber Protection Teams (CPTs) that hunt 
adversaries in friendly terrain. As the primary counter-cyber forces, 
the integration of NMTs, NSTs, and national CPTs enhances our ability 
to learn the tactics, techniques, and procedures of our adversaries to 
detect malicious cyber activity. These teams develop and, if directed, 
undertake operations to deter, delay, disrupt, and defeat an imminent 
or ongoing cyberattack or malicious cyber activity. The combined 
efforts of these teams give the CMF the capacity to operate on a global 
scale against the broad spectrum of adversaries and growing threats.
    Additionally, DOD is developing significant cyber capability and 
capacity within the Reserve Components, including the National Guard. 
The Air National Guard is developing 12 Air National Guard Squadrons to 
provide two full-time CPTs through rotations and is also providing 
three additional squadrons to deliver a portion of an NMT to the CMF. 
The Army National Guard has established the first of 11 CPTs, which 
will be built out through 2022. The U.S. Army Reserve will follow by 
establishing 10 teams of its own between now and 2024. Likewise, the 
Air Force Reserve is contributing personnel to fill three CPTs. All of 
these teams benefit from strong relationships with State and local 
authorities. To further strengthen these relationships and support 
preparedness, National Guard units may coordinate with, train, advise, 
and assist governmental entities outside DOD when incidental to 
military training in accordance with section 2012 of title 10, U.S. 
Code.
    From both a deterrence and response standpoint, CMF teams are 
central to the Department's approach to cyber operations and to support 
U.S. Government efforts to defend the Nation against a cyber incident 
of significant consequence. With a goal of ensuring U.S. military 
dominance in cyberspace, these teams support the Department's efforts 
to deny the adversary the ability to achieve its objectives and, when 
directed, to conduct military actions in and through cyberspace in 
response to an imminent, ongoing, or recent attack or malicious cyber 
activity. Although DOD's focus is on preparing for and defending 
against cyberattacks of significant consequence, the President may 
determine that a military response to malicious cyber activity below 
the threshold of significant consequence or an armed attack is 
necessary and appropriate.
    DOD's role in cyberspace goes beyond adversary-focused operations 
and includes identifying and mitigating our own vulnerabilities. DOD 
recognizes its own reliance on cyber-enabled critical infrastructure to 
conduct its core missions. The Department therefore understands 
congressional concerns regarding current and future cyber 
vulnerabilities and congressional efforts to authorize vulnerability 
identification programs. In response, we are working with our foreign 
partners and allies and our U.S. domestic partners, including the 
Department of Homeland Security (DHS), to identify cyber 
vulnerabilities in our networks, computers, critical DOD 
infrastructure, and weapon systems. In addition to these external 
partnerships, the Department is leveraging its own mission assurance 
risk-management processes to identify, prioritize, and mitigate the 
most impactful vulnerabilities to the critical infrastructure that is 
fundamental to DOD's ability to project power and protect the U.S. 
Homeland, our people, and our allies and partners.
    One last important element of our mission to defend the Nation is 
the Department's role as the sector-specific agency for the Defense 
Industrial Base (DIB), one of the 16 identified critical infrastructure 
sectors. Using voluntary and mandatory reporting requirements, the 
Department partners with DIB sector stakeholders to maintain a robust 
cybersecurity and information assurance program to protect sensitive 
defense information and protect DOD networks and systems.
    DOD has made significant progress; however, there is more to do, 
and we are only one piece of the broader whole-of-government effort to 
protect U.S. national interests in and through cyberspace. The outward, 
threat focus of DOD's cyber capabilities complements the strengths of 
our interagency partners, as we strive to improve resilience should a 
cyberattack of significant consequence occur. As articulated in law and 
policy, during cyber incidents, DOD may directly support the DHS's lead 
for protecting, mitigating, and recovering from domestic cyber 
incidents or, as appropriate and authorized by law, the Department of 
Justice's (DOJ) lead in investigating, attributing, disrupting, and 
prosecuting cybercrimes. Under DOD's broader Defense Support of Civil 
Authorities mission, the Department works closely with these domestic 
partners as they carry out their aforementioned responsibilities so 
that DOD is prepared to provide support when it is needed and DOD is 
called upon to do so. DOD also regularly works closely with domestic 
partners through cyber fusion center integration, robust information 
sharing arrangements, liaison and detailee programs, development of 
national plans, exercises to strengthen our response, and interagency 
deliberations on malicious cyber activity.
    The significant work of U.S. departments and agencies has resulted 
in a common understanding of our various roles, responsibilities, and 
authorities. That said, it is clear we have more work to do to resolve 
seam and gap issues among various departments and agencies. DOD has 
taken a number of steps to address these problems and to improve both 
our readiness and that of our interagency partners. For instance, we 
are continually refining policies and authorities to improve the speed 
and flexibility to provide support, and we organize and participate in 
exercises, such as CYBER GUARD, with a range of interagency, State, and 
local partners to improve our ability to respond to cyberattacks on 
critical infrastructure.
    Although DOD has built capacity and unique capabilities, for a 
number of reasons, I would caution against ending the current framework 
and against reassigning more responsibility for incident response to 
the Department of Defense. First, DOD's primary mission is to provide 
the military forces needed to deter war and to be prepared to defend 
the country should deterrence fail, which requires us to be prepared at 
all times to do so. DOD is the only department or agency charged with 
this mission, and success in this requires the Department's complete 
focus. In this case, any significant realignment of roles and 
responsibilities will have opportunity costs, including absorptive 
capacity to build mission capability in a new area, especially ones 
that could distract the Department from its core warfighting missions.
    Second, the United States has a long normative and legal tradition 
limiting the role of the military in domestic affairs. This strict 
separation of the civilian and the military is one of the hallmarks of 
our democracy and was established to protect its institutions. 
Designating DOD as the lead for the domestic cyber mission risks 
upsetting this traditional civil-military balance.
    Third, a primary civil reliance on DOD in the steady-state would 
result in increased demands that could not be met without significant 
changes in resource allocation. We would expect even greater demand in 
a conflict scenario, when there might be a natural tension in the need 
to preserve DOD mission capabilities and requests for support to 
civilian agencies. Even with such a change in resource allocation, the 
addition of a new mission would likely detract from the focus on and 
readiness for the warfighting mission.
    Finally, putting DOD in a lead role for cyber incidents creates an 
exception to accepted domestic response practice in all other domains, 
which would disrupt our efforts to establish and maintain unity of 
effort. Civilian agencies have the lead responsibility for domestic 
emergency response efforts; this should not be different for cyber 
incidents. The Federal Government should maintain a common approach to 
all national emergencies, whether they are natural disasters or 
cyberattacks.
    I have confidence that the President's Executive Order 13800 signed 
in May will address many of Congress's concerns by helping to identify 
and address the shortfalls in the present system. Through reports and 
other deliverables, the Executive Order specifically targets the areas 
of protecting critical infrastructure, strengthening the deterrence 
posture of the United States, and building international coalitions. As 
a result, the Federal Government--especially DHS and Sector Specific 
Agencies--is identifying current and prospective authorities and 
capabilities that it could use to support the cybersecurity efforts of 
critical infrastructure entities. DOD is contributing to these efforts 
and conducting its own review of how best to protect the Defense 
Industrial Base from cyber vulnerabilities. Through this process, we 
should have a better understanding of the key challenges facing the 
U.S. Government in this area and a way forward for addressing them.
    Therefore, my vision and highest priority in cyber are to address 
the challenges that still face the Department in cyberspace and its 
role in the broader interagency response effort. Specifically, I am 
working to reinvigorate the role of the Principal Cyber Advisor; to 
clarify the Department's internal lines of accountability and authority 
in cyber; and to integrate and communicate more effectively DOD 
cyberspace strategy, plans, and train and equip functions in cyber. It 
is also time to revise our Cyber Strategy, update policy on such key 
cyber issued as deterrence, and translate this and other guidance into 
capabilities, forces, and operations that will maintain our superiority 
in this domain. Meanwhile, the Department must ensure that several 
strategic initiatives it is undertaking in cyber come to fruition, 
including the elevation of U.S. Cyber Command to a unified combatant 
command, implementing the Cyber Executive Order, initiating the Cyber 
Excepted Service, and identifying and mitigating vulnerabilities in 
DOD's networks, systems, and platforms. I look forward to working with 
Congress on these efforts and welcome its feedback.
    In conclusion, the Department of Defense is committed to defending 
the U.S. Homeland and is prepared to defend the Nation from 
cyberattacks of significant consequence that may occur in or through 
cyberspace. It has undertaken comprehensive efforts, both unilaterally 
and in concert with interagency partners, allies, and the private 
sector to improve our Nation's cybersecurity posture and to ensure that 
DOD has the ability to operate in any environment at any time. Our 
relationship with Congress is absolutely critical to everything the 
Department is doing. To that end, I am grateful for Congress's strong 
support and particularly this Subcommittee's interest in these issues, 
and I look forward to your questions.

    Chairman McCain. Thank you.
    Mr. Smith?

  STATEMENT OF SCOTT SMITH, ASSISTANT DIRECTOR FOR THE CYBER 
           DIVISION, FEDERAL BUREAU OF INVESTIGATION

    Mr. Smith. Thank you, Mr. Chairman, and thanks to the 
committee for offering me an opportunity to provide remarks on 
the FBI's cyber capabilities.
    As the committee is aware, the frequency and sophistication 
of cyber attacks on our Nation have increased dramatically in 
the past decade and only look to be growing. There are 
significant challenges. The cyber domain is unique, constantly 
shifting, changing, and evolving. But progress has been made in 
improving structures and collaboration in innovation. But more 
can be done.
    Staying ahead of today's threats requires a different 
mindset than in the past. The scale, scope, and complexity of 
today's threats in the digital domain is unlike anything 
humanity or our Nation has ever experienced. Traditional 
approaches and mindsets are no longer suited to coping with the 
speed and mobility and complexity of the new digital domain. We 
have to include the digital domain as part of the threat 
ecosystem instead of separating it as a mechanical machine. 
This new era, often called the Fourth Industrial Revolution, 
requires the FBI to rapidly assign, align, and engage empowered 
networked teams who are purpose-driven and have fierce and 
unrelenting resolve to win.
    What does this all mean? What are we doing to meet and stay 
ahead of the new digital domain, attribute, predict, impose 
consequences?
    That is where the FBI cyber mission is going. The FBI Cyber 
Division and program is structured to address a lot of these 
unique set of challenges.
    In the field, the FBI is made up of 56 different field 
offices spanning all 50 States and U.S. territories, each with 
a cyber squad and each developing multi-agency cyber task 
forces which brings together technically proficient 
investigators, analysts, computer scientists from local, State, 
and Federal organizations.
    At FBI headquarters, in addition to those field resources, 
the Cyber Division offers program management and coordination 
and more technically advanced responders in our Cyber Action 
Teams. The CAT [Cyber Action Team] teams, our elite cyber rapid 
response force, is on call and prepared to deploy globally in 
response to significant cyber incidents.
    Additionally at FBI headquarters, we manage CyWatch, a 24-
hour watch center which provides continuous connectivity to 
interagency partners in an effort to facilitate information 
sharing and real-time incident management and tracking, 
ensuring all agencies are coordinating.
    In addition to these cyber-specific resources, the FBI has 
other technical assets that can be utilized in the event of 
cyber incidents. These include our Operational Technology 
Division, the Regional Computer Forensic Laboratory Program, 
and the Critical Incident Response Group providing additional 
expertise and capabilities and resources that the FBI can 
leverage at a cyber incident.
    Partnerships are absolutely a key focus area for the FBI. 
We rely on a robust international presence to supplement our 
domestic footprint. Through cyber assistant legal attaches, the 
FBI embeds cyber agents with our international counterparts in 
18 key locations across the globe. The FBI also relies upon 
private sector partnerships leveraging the National Cyber 
Forensic Training Alliance, InfraGard, and Domestic Security 
Alliance, just to name a few.
    Building capacity at home and abroad through training, 
investigations, and joint operations is where we are applying 
our efforts.
    The FBI has the capability to quickly respond to cyber 
incidents across the country and scale its response to the 
specific incident utilizing all its resources throughout the 
field, headquarters, and abroad. We have the ability to 
galvanize and direct all the available cyber resources 
instantaneously.
    Utilizing dual authorities as a domestic law enforcement 
organization and a member of the U.S. intelligence community, 
the FBI works closely with interagency partners within a whole-
of-government effort to countering cyber threats.
    The FBI conducts its cyber mission with the goal of 
imposing costs and consequence on the adversary. Though we 
would like to arrest every cyber criminal, we recognize 
indictments are just one tool in a suite of options that are 
available to the U.S. Government when deciding how best to 
approach this complex cyber threat.
    The FBI understands the importance of being coherently 
joined with, and we will continue to find ways to work with 
interagency partners in responding to cyber incidents. We look 
forward to expanding our partnerships with Cyber Command, given 
their new and unique capabilities, and with the National 
Guard's new cyber program in complementing our field offices 
and cyber task forces, all within the confines of current laws, 
authorities, and expectations of the American people.
    We at the FBI appreciate this committee's efforts in making 
cyber threat a focus and committing to improving how we can 
work together to better defend our Nation. We also look forward 
to discussing these issues in greater detail and answering any 
questions that you may have.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Smith follows:]

                  Prepared Statement by Scott S. Smith
    Chairman McCain, Ranking Member Reed, and members of the Committee, 
thank you for the invitation to provide remarks on the FBI's role in 
defending the Nation against cyber threats.
    As the Committee is well aware, the frequency and impact of 
cyberattacks on our nation's private sector and government networks 
have increased dramatically in the past decade and are expected to 
continue to grow. We continue to see an increase in the scale and scope 
of reporting on malicious cyber activity that can be measured by the 
amount of corporate data stolen or deleted, personally identifiable 
information compromised, or remediation costs incurred by U.S. victims. 
Within the FBI, we are focused on the most dangerous malicious cyber 
activity: high-level intrusions by state-sponsored hackers and global 
organized crime syndicates, as well as other technically sophisticated 
attacks.
    Cyber threats are not only increasing in scope and scale, they are 
also becoming increasingly difficult to investigate. Cyber criminals 
often operate through online forums, selling illicit goods and 
services, including tools that can be used to facilitate cyber attacks. 
These criminals have also increased the sophistication of their 
schemes, which are more difficult to detect and more resilient. 
Additionally, many cyber actors are based abroad or obfuscate their 
identities by using foreign infrastructure, making coordination with 
international law enforcement partners essential.
    The FBI has worked with the rest of the intelligence and law 
enforcement community to address the unique set of challenges presented 
by the cyber threat. The information domain is an inherently different 
battle space, requiring government bureaucracies to shift and transform 
to eliminate duplicative efforts and stovepipes and move toward real-
time coordination and collaboration to keep pace with the growing 
threat. Considerable progress has been made toward the shared goal of 
protecting the country from capable and unrelenting cyber adversaries, 
but there is still a lot to be done to ensure our government agencies 
have the proper resources, structure, and mission to seamlessly work 
together on the cyber threat. The FBI will continue to be a leader in 
this area, and we have taken a number of steps in the last several 
years to ensure we are adequately structured to respond to threats in 
an agile and efficient way.
    The decentralized FBI field structure is intended to support the 
investigation of crimes across the Nation. The FBI is made up of 56 
field offices spanning all 50 States and U.S. territories, each with a 
multi-agency Cyber Task Force (``CTF'') modeled after the successful 
Joint Terrorism Task Force program. The task forces bring together 
cyber investigators, prosecutors, intelligence analysts, computer 
scientists, and digital forensic technicians from various Federal, 
State, and local agencies present within the office's territory. Our 
field-centric business model allows us to develop relationships with 
local companies and organizations, putting us in an ideal position to 
engage with potential victims of cyber attacks and crimes. Cyber-
trained special agents are in each field office, providing locally 
available expertise to deploy to victim sites immediately upon notice 
of an incident. Computer scientists and intelligence analysts are also 
stationed in field offices to support incident response efforts and 
provide intelligence collection and analysis as well as technical 
assistance and capability.
    In addition to the resources in the field, the FBI has the Cyber 
Action Team (``CAT''), Cyber Division's elite rapid response force. On-
call CAT members are prepared to deploy globally to bring their in-
depth cyber intrusion expertise and specialized investigative skills to 
bear in response to significant cyber incidents. CAT's management and 
core team are based at headquarters, supplemented by carefully selected 
and highly trained field personnel. CAT members are available to 
supplement the technical capabilities in the field, and they are 
typically deployed in support of significant cyber incidents that have 
the potential to impact public health or safety, national security, 
economic security, or public confidence.
    Cybersecurity threats and incidents are occurring around the clock, 
which motivated Cyber Division in 2014 to establish a steady-state 24-
hour watch capability called CyWatch. Housed at the National Cyber 
Investigative Joint Task Force (``NCIJTF''), CyWatch is responsible for 
coordinating domestic law enforcement response to criminal and national 
security cyber intrusions, tracking victim notification, and 
coordinating with the other Federal cyber centers many times each day. 
CyWatch provides continuous connectivity to interagency partners to 
facilitate information sharing and real-time incident management and 
tracking as part of an effort to ensure all agencies are coordinating. 
CyWatch also manages FBI's Cyber Guardian program, through which more 
than 5,000 victim notifications were logged and coordinated in fiscal 
year 2016.
    In addition to these cyber specific resources, the FBI has other 
technical assets that can be utilized as necessary to combat cyber 
threats. Our Operational Technology Division develops and maintains a 
wide range of sophisticated equipment, capabilities, and tools to 
support investigations and assist with technical operations. The FBI 
maintains a robust forensic capability through its Regional Computer 
Forensic Laboratory Program, a national network of FBI-sponsored 
digital forensics laboratories and training centers devoted to the 
examination of digital evidence. The Critical Incident Response Group 
(``CIRG'') provides crisis support and incident management assistance. 
These resources can be leveraged throughout the FBI's response and 
investigative cycle to respond to cyber threats.
    Given the international nature of cybercrime and the reality that 
the actors who seek to harm the U.S. through cyber means are often 
located abroad, the FBI relies on a robust international presence to 
supplement its domestic footprint. Through the Cyber Assistant Legal 
Attache (``Cyber ALAT'') program, the FBI embeds cyber agents, who are 
trained both at FBI Headquarters and in the field, with our 
international counterparts in 18 key locations across the globe where 
they build relationships with our international partners. These 
relationships are essential to working cyber cases that often involve 
malicious actors using computer networks worldwide.
    In order to be successful in the mission of bringing cyber 
criminals to justice and deterring future activity in the cyber realm, 
the FBI relies on partnerships with the private sector. As frequent 
targets of malicious cyber activity, the private sector is on the front 
lines of defending our nation's critical information infrastructure, 
safeguarding its intellectual property, and preserving its economic 
prosperity. By building and maintaining partnerships with industry, the 
FBI is better able to share information about current and future 
threats, provide indicators of compromise for network defense, and 
provide context to help companies understand the intent behind the 
unnamed actors targeting their systems. These relationships also 
provide an optic into what kinds of nefarious activity they are 
observing on their systems, which helps the FBI better understand the 
threats.
    The FBI has the capability to quickly respond to cyber incidents 
across the country and scale its response to the specific circumstances 
of the incident by utilizing all resources at its disposal throughout 
the field, at FBI headquarters, and abroad. Utilizing dual authorities 
as a domestic law enforcement organization and a member of the U.S. 
Intelligence Community (``USIC''), the FBI works closely with 
interagency partners in a whole-of-government approach to countering 
cyber threats. Presidential Policy Directive 41, signed by President 
Obama in July 2016, designates the Department of Justice, through the 
FBI and NCIJTF, as the lead Federal agency for threat response. Threat 
response is defined as activities related to the investigation of an 
incident and the pursuit, disruption, and attribution of the threat 
actor. Through evidence collection, technical analysis, disruption 
efforts, and related investigative tools, the FBI works to quickly 
identify the source of a breach, connect it with related incidents, and 
determine attribution, while developing courses of action.
    The FBI is able to collect domestic intelligence on cyber threats, 
consistent with our authorities, to help us understand and prioritize 
identified threats, reveal intelligence gaps, and fill those gaps. By 
combining this intelligence with information from our interagency 
partners, the FBI contributes to painting a collective picture of cyber 
threats facing the Nation. This threat intelligence is critical to 
getting ahead of the threat and providing potential victims with 
information to assist them in better protecting their networks from 
compromise. The FBI liaises with the other intelligence community 
components through standing coordination calls among the various watch 
centers; participation in standing interagency groups as well as 
incident- and threat-based working groups; through embeds and liaison 
officers at other agencies and within the FBI; and through memoranda of 
understanding allowing close coordination on topics of high importance.
    The FBI along with the rest of the intelligence community 
understands the need to share information both within and outside the 
Government with the potential victims of cyber attacks. The FBI 
disseminates information regarding specific threats to the private 
sector through various methods, including Private Industry 
Notifications (``PINs'') and FBI Liaison Alert System (``FLASH'') 
reports. PINs provide unclassified information that will enhance the 
private sector's awareness of a threat, and FLASH reports contain 
unclassified technical information collected by the FBI for use by 
specific private sector partners. These communication methods 
facilitate the sharing of information with a broad audience or specific 
sector. The FBI also works with industry partners in forums such as 
InfraGard and industry-based Information Sharing and Analysis Centers 
(``ISACs'') to relay critical information. The FBI also works closely 
with its government partners to put out joint notifications and reports 
to help the private sector guard against potential cyber threats.
    In some cases, the FBI receives indicators of potential compromise 
from various sources, including USIC partners and foreign governments, 
that are used in notification to victims of cyber attacks. Victim 
notification is critical in preventing continued cyber intrusion 
activity and mitigating the damages associated with the theft of 
sensitive data, intellectual property, and proprietary information. The 
goal of notification is to provide timely and meaningful notification 
to the victim while protecting sensitive sources and methods and 
balancing investigative and operational equities of the FBI and other 
USIC agencies. FBI and the Department of Homeland Security (DHS) have 
well defined policies and procedures which guide how victims are 
identified and how notification should be made; typically, the FBI, in 
coordination with DHS, will notify the individuals responsible for 
handling network security for the victim organization to discuss the 
necessary information related to the intrusion. The FBI will also 
provide open source information that may assist in the detection and 
identification of the intrusion. After the initial notification, some 
victims will contact the FBI to provide an update regarding the 
compromise of their network, while others will not. Typically, any 
post-notification engagement between the FBI and the victim is 
voluntary and its scope is determined by the company.
    The FBI conducts its cyber mission with the goal of imposing costs 
on the adversary, and though we would like to arrest every cyber 
criminal who commits an offense against a U.S. person, company, or 
organization, we recognize indictments are just one tool in a suite of 
options available to the U.S. Government when deciding how best to 
approach complex cyber threats. Working with the rest of the USIC, the 
FBI is able to share intelligence, better understand the threat 
picture, identify additional victims or potential victims of cyber 
intrusions, and help inform U.S. policymakers. The FBI and the 
intelligence community must work closely on cyber threats to provide 
leaders with the information necessary to decide what tools are 
appropriate to respond to, mitigate, and counter cyber attacks, as well 
as deter cyber actors and reinforce peacetime norms of state behavior 
in cyberspace.
    Using unique resources, capabilities, and authorities, the FBI is 
able to impose costs on adversaries, deter illicit cyber activity, and 
help prevent future cyber attacks. While much progress has been made 
toward leveraging the FBI's unique authorities and resources in real-
time coordination with the interagency to combat cyber threats, there 
is still work to be done, specifically in ensuring agile and efficient 
incident response, seamless information sharing, and elimination of 
duplicative efforts. Although the resources of the FBI and of the 
Federal Government are not growing in proportion to the rapidly 
evolving threat, we remain steadfast in our resolve to finds ways to 
work together better as a government, so that we may respond to cyber 
threats with agility, efficiency, persistence, and ferocity.
    The FBI recognizes other agencies have technical expertise, tools, 
and capabilities to leverage as we work together against cyber 
adversaries, and is committed to working through challenges associated 
with sharing sensitive law enforcement information and intelligence 
with interagency partners. The FBI understands the importance of whole-
of-government collaboration, and will continue to find ways to work 
with the interagency in responding to cyber incidents in a coordinated 
manner. Given the recent developments in structuring the Department of 
Defense to defend the Nation against cyber adversaries, the FBI is 
committed to finding ways to partner more closely with U.S. Cyber 
Command in its newly elevated role as a Unified Combatant Command and 
its Cyber Mission Force teams.
    We at the FBI appreciate this committee's efforts in making cyber 
threats a focus and committing to improving how we can work together to 
better defend our nation against our increasingly capable and 
persistent adversaries. We look forward to discussing these issues in 
greater detail and answering any questions you may have.

    Chairman McCain. Thank you, Mr. Smith.
    Mr. Krebs?

STATEMENT OF CHRISTOPHER C. KREBS, PERFORMING THE DUTIES OF THE 
   UNDER SECRETARY FOR THE NATIONAL PROTECTION AND PROGRAMS 
          DIRECTORATE, DEPARTMENT OF HOMELAND SECURITY

    Mr. Krebs. Chairman McCain, Ranking Member Reed, members of 
the committee, thank you for the opportunity to appear before 
you today.
    In my current role performing the duties of the Under 
Secretary for the National Protection and Programs Directorate, 
I lead the Department of Homeland Security's efforts to secure 
and defend our federal networks and facilities, manage systemic 
risk to critical infrastructure, and improve cyber and physical 
security practices across our Nation.
    This is a timely hearing as during October, we recognize 
National Cybersecurity Awareness Month, a time to focus on how 
cybersecurity is a shared responsibility that affects every 
business and organization in America. It is one of the most 
significant and strategic risks to the United States.
    To address this risk as a Nation, we have worked together 
to develop the much needed policies, authorities, and 
capabilities across the interagency with State, local, and 
international partners in coordination with the private sector. 
The Department of Defense's Eligible Receiver exercise in 1997 
laid bare our Nation's cybersecurity vulnerabilities and the 
related consequences, initiating a cross-government journey to 
respond to the growing cyber threat.
    Over the ensuing 20 years, through a series of directives, 
executive orders, and other documents, culminating most 
recently with Executive Order 13800, we have established an 
increasingly defined policy foundation for the cyber mission 
space.
    Roles and responsibilities have been further bolstered by 
bipartisan legislation providing the executive branch, in 
particular DHS, much needed authorities to protect federal and 
critical infrastructure networks.
    We can further solidify DHS' role by giving my organization 
a name that clearly reflects our operational mission, and I 
look forward to working with you in that effort.
    Building on those policies and authorities, the Department 
continues to develop the operational capabilities to protect 
our networks. Today, the National Cybersecurity and 
Communications Integration Center, or NCCIC, is the center of 
gravity for DHS's cybersecurity operations. Here we monitor a 
federal-civilian enterprise-wide risk picture that allows us to 
manage risk across the .gov. More broadly, the NCCIC brings 
together our partners to share both classified and unclassified 
threat information and coordinate response efforts. Partners 
include representatives from the critical infrastructure 
community, State, local, tribal, and territorial governments, 
sector-specific liaisons from the Departments of Energy, Health 
and Human Services, Treasury, and Defense, intelligence 
community personnel, law enforcement partners such as the FBI, 
and liaisons from each of the cyber centers, including U.S. 
Cyber Command. They all sit with one another at the NCCIC.
    We know that we cannot stop here and need to accelerate 
efforts to develop scalable solutions to manage systemic 
cybersecurity risks across the Nation's infrastructure.
    Last year's Presidential Policy Directive 41, United States 
Cyber Incident Coordination, further clarified roles and set 
forth principles for the Federal Government's response to cyber 
incidents, including formalizing a cyber response group and 
cyber unified coordination group. It also required the 
Department to update the National Cyber Incident Response Plan, 
or NCIRP, which was completed last January.
    Updating the NCIRP, in partnership with industry and State 
and local partners, was a critical step in cementing our shared 
responsibility and accomplished three main goals. First, it 
defines the role and responsibilities of all stakeholders 
during a cyber incident. Second, it identifies the capabilities 
required to respond to a significant cyber incident. Third, it 
describes the way our Federal Government will coordinate its 
activities with those affected by a cyber incident.
    However, our focus going forward is to build on the NCIRP 
with multi-stakeholder operational plans and incident response 
playbooks, and then we must train and exercise to those plans 
in order to identify and address the seams and gaps that may 
exist.
    We are building on our cyber mission workforce within the 
framework of the NCIRP with our hunt and incident response 
teams that exercise the tenets of the NCIRP each day. We work 
across the various stakeholders within the NCCIC to accomplish 
this mission.
    In some cases, DHS teams are augmented with FBI and DOD 
personnel to provide a more robust and coordinated response. 
This model of collaboration and cross-agency cooperation will 
continue taking advantage of the respective strengths of each 
agency.
    To ensure we are focused on the mission that you, Congress, 
have tasked us with, we have prioritized filling all open cyber 
positions at DHS, cross training our workforce on instant 
response, and creating a cyber incident response surge capacity 
force modeled after FEMA's [Federal Emergency Management 
Agency] for natural disasters that can rise to meet any demand.
    Before I close, I would like to add one last but critical 
element. The cyber defense mission is much broader than just 
response. It also encompasses preparedness and resilience, and 
we must continually assess and improve our cybersecurity 
posture against the latest threats, denying our adversaries 
opportunities to wreak havoc.
    Finally, I would like to reinforce one more time we have 
made significant progress since Eligible Receiver, yet there is 
no question we have more to do. We must do it with a never-
before-seen sense of urgency. By bringing together all 
stakeholders, we are taking action to manage cybersecurity 
risks, improve our whole-of-government incident response 
capabilities, and become more resilient.
    I thank you for the opportunity to testify, and I look 
forward to any questions you may have.
    [The prepared statement of Mr. Krebs follows:]

                Prepared Statement by Christopher Krebs
    Chairman McCain, Ranking Member Reed, and members of the Committee, 
thank you for the opportunity to be here today. In this month of 
October, we recognize National Cybersecurity Awareness Month, a time to 
focus on how cybersecurity is a shared responsibility that affects all 
Americans. The Department of Homeland Security (DHS) serves a critical 
role in safeguarding and securing cyberspace, a core homeland security 
mission.
    The National Protection and Programs Directorate (NPPD) is 
responsible for protecting civilian Federal Government networks and 
collaborating with other federal agencies, as well as state, local, 
tribal, and territorial governments, and the private sector to defend 
against cyber threats. We endeavor to enhance cyber threat information-
sharing across the globe to stop cyber incidents before they start and 
help businesses and government agencies to protect their cyber systems 
and quickly recover should such an attack occur. By bringing together 
all levels of government, the private sector, international partners, 
and the public, we are taking action to protect against cybersecurity 
risks, improve our whole-of-government incident response capabilities, 
enhance information sharing on best practices and cyber threats, and to 
strengthen resilience.
                                threats
    Cyber threats remain one of the most significant strategic risks 
for the United States, threatening our national security, economic 
prosperity, and public health and safety. The past year has marked a 
turning point in the cyber domain, at least in the public 
consciousness. We have long been confronted with a myriad of attacks 
against our digital networks. But over the past year, Americans saw 
advanced persistent threat actors, including hackers, cyber criminals, 
and nation states, increase the frequency and sophistication of these 
attacks. Our adversaries have been developing and using advanced cyber 
capabilities to undermine critical infrastructure, target our 
livelihoods and innovation, steal our national security secrets, and 
threaten our democracy through attempts to manipulate elections.
    Global cyber incidents, such as the ``WannaCry'' ransomware 
incident in May of this year and the ``NotPetya'' malware incident in 
June, are examples of malicious actors leveraging cyberspace to create 
disruptive effects and cause economic loss. These incidents exploited 
known vulnerabilities in software commonly used across the globe. Prior 
to these events, NPPD had already taken actions to help protect 
networks from similar types of attacks. Through requested vulnerability 
scanning, NPPD helped stakeholders identify vulnerabilities on their 
networks so they could be patched before incidents and attacks occur. 
Recognizing that not all users are able to install patches immediately, 
NPPD shared additional mitigation guidance to assist network defenders. 
As the incidents unfolded, NPPD led the Federal Government's incident 
response efforts, working with our interagency partners, including 
providing situational awareness, information sharing, malware analysis, 
and technical assistance to affected entities.
    Historically, cyber actors have strategically targeted critical 
infrastructure sectors including energy, financial services, critical 
manufacturing, water and wastewater, and others with various goals 
ranging from cyber espionage to developing the ability to disrupt 
critical services. In recent years, DHS has identified and responded to 
malware such as Black Energy and Havex which were specifically created 
to target industrial control systems, associated with critical 
infrastructure such as power plants and critical manufacturing. More 
recently, the discovery of CrashOverride malware, reportedly used 
against Ukrainian power infrastructure in 2016, highlights the 
increasing cyber threat to our infrastructure.
    In one recent campaign, advanced persistent threat actors targeted 
the cyber infrastructure of entities within the energy, nuclear, 
critical manufacturing, and other critical infrastructure sectors since 
at least May 2017. In response, DHS led the asset response, providing 
on-site and remote assistance to impacted entities, help them evaluate 
the risk, and remediate the malicious actor presence. In addition, DHS, 
the Federal Bureau of Investigation (FBI), and the Department of Energy 
(DOE) shared actionable analytic products with critical infrastructure 
owners and operators regarding this activity. This information provides 
network defenders with the information necessary to understand the 
adversary campaign and allows them to identify and reduce exposure to 
malicious activity. In addition, DHS has been working together with DOE 
to assess the preparedness of our electricity sector and strengthen our 
ability to respond to and recover from a prolonged power outage caused 
by a cyber incident.
 relationship with the department of defense and intelligence community
    Responding to the full range of cyber threats facing government and 
critical infrastructure requires a whole-of-government, whole-of-nation 
effort. As it does with other stakeholders, DHS partners closely with 
the Department of Defense (DOD), FBI, and the intelligence community in 
carrying out its cybersecurity mission. DHS, FBI, DOD, and the 
intelligence community have multiple ongoing lines of effort. We 
continue to refine and mature planning to identify available resources 
and outline clear roles and responsibilities. We continue to focus on 
sharing cyber threat information relevant to defending against the most 
sophisticated malicious cyber actors. When appropriate, we can leverage 
existing authorities to provide technical assistance. In the event a 
significant cyber incident exhausts existing resources within DHS, DHS 
can leverage DOD resources, capabilities, and capacity to assist 
domestic response efforts under a well exercised mechanism--defense 
support of civil authorities. DHS and our partners also regularly 
participate in joint cyber exercises.
                        cybersecurity priorities
    Earlier this year, the President signed Executive Order (EO) 13800, 
on Strengthening the Cybersecurity of Federal Networks and Critical 
Infrastructure. This EO set in motion a series of assessments and 
deliverables to understand how to improve our defenses and lower our 
risk to cyber threats. DHS has organized around these deliverables, 
working with federal and private sector partners to work through the 
range of actions included in the EO.
    We are emphasizing the security of federal networks. Across the 
Federal Government, agencies have been implementing action plans to use 
the industry-standard Department of Commerce's National Institute of 
Standards and Technology Cybersecurity Framework. Agencies are 
reporting to DHS and the Office of Management and Budget (OMB) on their 
cybersecurity risk mitigation and acceptance choices. In coordination 
with OMB, DHS is evaluating the totality of these agency reports in 
order to comprehensively assess the adequacy of the Federal 
Government's overall cybersecurity risk management posture.
    Although federal agencies have primary responsibility for their own 
cybersecurity, DHS, pursuant to its various authorities, provides a 
common set of security tools across the civilian executive branch and 
helps federal agencies manage their cyber risk. NPPD's assistance to 
federal agencies includes (1) providing tools to safeguard civilian 
executive branch networks through the National Cybersecurity Protection 
System (NCPS), which includes ``Einstein'', and the Continuous 
Diagnostics and Mitigation (CDM) programs, (2) measuring and motivating 
agencies to implement policies, directives, standards, and guidelines, 
(3) serving as a hub for information sharing and incident reporting, 
and (4) providing operational and technical assistance, including 
threat information dissemination and risk and vulnerability 
assessments, as well as incident response services. NPPD's National 
Cybersecurity and Communications Integration Center (NCCIC) is the 
civilian government's hub for cybersecurity information sharing, asset 
incident response, and coordination for both critical infrastructure 
and the Federal Government.
    Einstein refers to the suite of intrusion detection and prevention 
capabilities that protects agencies' unclassified networks at the 
perimeter of each agency. Einstein provides situational awareness of 
civilian executive branch network traffic, so threats detected at one 
agency are shared with all others providing agencies with information 
and capabilities to more effectively manage their cyber risk. The U.S. 
Government could not achieve such situational awareness through 
individual agency efforts alone.
    Today, Einstein is a signature-based intrusion detection and 
prevention capability that takes action on known malicious activity. 
Leveraging existing investments in the Internet Service Provider 
``ISP'' infrastructure, our non-signature based pilot efforts to move 
beyond current reliance on signatures are yielding positive results in 
the discovery of previously unidentified malicious activity. DHS is 
demonstrating the ability to capture data that can be rapidly analyzed 
for anomalous activity using technologies from commercial, government, 
and open sources. The pilot efforts are also defining the future 
operational needs for tactics, techniques, and procedures as well as 
the skill sets and personnel required to operationalize the non-
signature based approach to cybersecurity.
    State, local, tribal, and territorial governments are able to 
access intrusion detection and analysis services through the Multi-
State Information Sharing and Analysis Center (MS-ISAC). MS-ISAC's 
service, called Albert, closely resembles some Einstein capabilities. 
While the current version of Albert cannot actively block known cyber 
threats, it does alert cybersecurity officials to an issue for further 
investigation. DHS worked closely with MS-ISAC to develop the program 
and considers MS-ISAC to be a principal conduit for sharing 
cybersecurity information with state and local governments.
    Einstein, the Federal Government's tool to address perimeter 
security will not block every threat; therefore, it must be 
complemented with systems and tools working inside agency networks--as 
effective cybersecurity risk management requires a defense-in-depth 
strategy that cannot be achieved through only one type of tool. NPPD's 
CDM program provides cybersecurity tools and integration services to 
all participating agencies to enable them to improve their respective 
security postures by reducing the attack surface of their networks as 
well as providing DHS with enterprise-wide visibility through a common 
federal dashboard.
    CDM is helping us achieve two major advances for federal 
cybersecurity. First, agencies are gaining visibility, often for the 
first time, into the extent of cybersecurity risks across their entire 
network. With enhanced visibility, they can prioritize the mitigation 
of identified issues based upon their relative importance. Second, with 
the summary-level agency-to-federal dashboard feeds, the NCCIC will be 
able to identify systemic risks across the civilian executive branch 
more effectively and closer to real-time. For example, the NCCIC 
currently tracks government-wide progress in implementing critical 
patches via agency self-reporting and manual data calls. CDM will 
transform this, enabling the NCCIC to immediately view the prevalence 
of a given software product or vulnerability across the Federal 
Government so that the NCCIC can provide agencies with timely guidance 
on their risk exposure and recommended mitigation steps. Effective 
cybersecurity requires a robust measurement regime, and robust 
measurement requires valid and timely data. CDM will provide this 
baseline of cybersecurity risk data to drive improvement across the 
civilian executive branch.
    DHS conducts a number of activities to measure agencies' 
cybersecurity practices and works with agencies to improve risk 
management practices. The Federal Information Security Modernization 
Act of 2014 (FISMA) provided the Secretary of Homeland Security with 
the authority to develop and oversee implementation of Binding 
Operational Directives (BOD) to agencies. In 2016, the Secretary issued 
a BOD on securing High Value Assets (HVA), or those assets, federal 
information systems, information, and data for which unauthorized 
access, use, disclosure, disruption, modification, or destruction could 
cause a significant impact to the United States' national security 
interests, foreign relations, economy, or to the public confidence, 
civil liberties, or public health and safety of the American people. 
NPPD works with interagency partners to prioritize HVAs for assessment 
and remediation activities across the Federal Government. For instance, 
NPPD conducts security architecture reviews on these HVAs to help 
agencies assess their network architecture and configurations.
    As part of the effort to secure HVAs, DHS conducts in-depth 
vulnerability assessments of prioritized agency HVAs to determine how 
an adversary could penetrate a system, move around an agency's network 
to access sensitive data, and exfiltrate such data without being 
detected. These assessments include services such as penetration 
testing, wireless security analysis, and ``phishing'' evaluations in 
which DHS hackers send emails to agency personnel and test whether 
recipients click on potentially malicious links. DHS has focused these 
assessments on federal systems that may be of particular interest to 
adversaries or support uniquely significant data or services. These 
assessments provide system owners with recommendations to address 
identified vulnerabilities. DHS provides these same assessments, on a 
voluntary basis upon request, to private sector and state, local, 
territorial, and tribal (SLTT) partners. DHS also works with the 
General Services Administration to ensure that contractors can provide 
assessments that align with our HVA initiative to agencies.
    Another BOD issued by the Secretary directs civilian agencies to 
promptly patch known vulnerabilities on their Internet-facing systems 
that are most at risk from their exposure. The NCCIC conducts Cyber 
Hygiene scans to identify vulnerabilities in agencies' internet-
accessible devices and provides mitigation recommendations. Agencies 
have responded quickly in implementing the Secretary's BOD and have 
sustained this progress. When the Secretary issued this directive, NPPD 
identified more than 360 ``stale'' critical vulnerabilities across 
federal civilian agencies, which means the vulnerabilities had been 
known for at least 30 days and remained unpatched. Since December 2015, 
NPPD has identified an average of less than 40 critical vulnerabilities 
at any given time, and agencies have addressed those vulnerabilities 
rapidly once they were identified. By conducting vulnerability 
assessments and security architecture reviews, NPPD is helping agencies 
find and fix vulnerabilities and secure their networks before an 
incident occurs.
    In addition to efforts to protect government networks, EO 13800 
continues to examine how the Government and industry work together to 
protect our nation's critical infrastructure, prioritizing deeper, more 
collaborative public-private partnerships in threat assessment, 
detection, protection, and mitigation. In collaboration with civilian, 
defense, and intelligence agencies, we are identifying authorities and 
capabilities that agencies could employ, soliciting input from the 
private sector, and developing recommendations to support the 
cybersecurity efforts of those critical infrastructure entities at 
greatest risk of attacks that could result in catastrophic impacts.
    For instance, by sharing information quickly and widely, we help 
all partners block cyber threats before damaging incidents occur. 
Equally important, the information we receive from partners helps us 
identify emerging risks and develop effective protective measures.
    Congress authorized the NCCIC as the civilian hub for sharing cyber 
threat indicators and defensive measures with and among federal and 
non-federal entities, including the private sector. As required by the 
Cybersecurity Act of 2015, we established a capability, known as 
Automated Indicator Sharing (AIS), to automate our sharing of cyber 
threat indicators in real-time. AIS protects the privacy and civil 
liberties of individuals by narrowly tailoring the information shared 
to that which is necessary to characterize identified cyber threats, 
consistent with longstanding DHS policy and the requirements of the 
Act. AIS is a part of the Department's effort to create an environment 
in which as soon as a company or federal agency observes an attempted 
compromise, the indicator is shared in real time with all of our 
partners, enabling them to protect themselves from that particular 
threat. This real-time sharing capability can limit the scalability of 
many attack techniques, thereby increasing the costs for adversaries 
and reducing the impact of malicious cyber activity. An ecosystem built 
around automated sharing and network defense-in-depth should enable 
organizations to detect and thwart the most common cyberattacks, 
freeing their cybersecurity staff to concentrate on the novel and 
sophisticated attacks. More than 129 agencies and private sector 
partners have connected to the AIS capability. Notably, partners such 
as information sharing and analysis organizations (ISAOs) and computer 
emergency response teams further share with or protect their customers 
and stakeholders, significantly expanding the impact of this 
capability. AIS is still a new capability and we expect the volume of 
threat indicators shared through this system to substantially increase 
as the technical standards, software, and hardware supporting the 
system continue to be refined and put into full production. As more 
indictors are shared from other federal agencies, SLTT governments, and 
the private sector, this information sharing environment will become 
more robust and effective.
    Another part of the Department's overall information sharing effort 
is to provide federal network defenders with the necessary context 
regarding cyber threats to prioritize their efforts and inform their 
decision making. DHS's Office of Intelligence and Analysis (I&A) has 
collocated analysts within the NCCIC responsible for continuously 
assessing the specific threats to federal networks using traditional 
all source methods and indicators of malicious activity so that the 
NCCIC can share with federal network defenders in collaboration with 
I&A. Analysts and personnel from the DOD, Energy, Treasury, Health and 
Human Services, FBI, and others are also collocated within the NCCIC 
and working together to understand the threats and share information 
with their sector stakeholders.
                         mitigating cyber risks
    We also continue to adapt to the evolving risks to critical 
infrastructure, and prioritize our services to mitigate those risks. 
Facing the threat of cyber-enabled operations by a foreign government 
during the 2016 elections, DHS and our interagency partners conducted 
unprecedented outreach and provided cybersecurity assistance to state 
and local election officials. Information shared with election 
officials included indicators of compromise, technical data, and best 
practices that have assisted officials with addressing threats and 
vulnerabilities related to election infrastructure. Through numerous 
efforts before and after Election Day, DHS and our interagency partners 
have declassified and publicly shared significant information related 
to the Russian malicious cyber activity. These steps have been critical 
to protecting our elections, enhancing awareness among election 
officials, and educating the American public. The designation of 
election infrastructure as critical infrastructure serves to 
institutionalize prioritized services, support, and provide data 
protections and does not subject any additional regulatory oversight or 
burdens.
    As the sector-specific agency, NPPD is providing overall 
coordination guidance on election infrastructure matters to subsector 
stakeholders. As part of this process, the Election Infrastructure 
Subsector Government Coordinating Council (GCC) is being established. 
The Election Infrastructure Subsector GCC will be a representative 
council of federal, state, and local partners with the mission of 
focusing on sector-specific strategies and planning. This will include 
development of information sharing protocols and establishment of key 
working groups, among other priorities.
    The Department also recently took action against specific products 
which present a risk to federal information systems. After careful 
consideration of available information and consultation with 
interagency partners, last month the Acting Secretary issued a BOD 
directing federal Executive Branch departments and agencies to take 
actions related to the use or presence of information security 
products, solutions, and services supplied directly or indirectly by AO 
Kaspersky Lab or related entities. The BOD calls on departments and 
agencies to identify any use or presence of Kaspersky products on their 
information systems in the next 30 days, to develop detailed plans to 
remove and discontinue present and future use of the products in the 
next 60 days, and at 90 days from the date of this directive, unless 
directed otherwise by DHS based on new information, to begin to 
implement the agency plans to discontinue use and remove the products 
from information systems. This action is based on the information 
security risks presented by the use of Kaspersky products on federal 
information systems.
    The Department is providing an opportunity for Kaspersky to submit 
a written response addressing the Department's concerns or to mitigate 
those concerns. The Department wants to ensure that the company has a 
full opportunity to inform the Acting Secretary of any evidence, 
materials, or data that may be relevant. This opportunity is also 
available to any other entity that claims its commercial interests will 
be directly impacted by the directive.
                               conclusion
    In the face of increasingly sophisticated threats, NPPD stands on 
the front lines of the Federal Government's efforts to defend our 
nation's critical infrastructure from natural disasters, terrorism and 
adversarial threats, and technological risk such as those caused by 
cyber threats. Our infrastructure environment today is complex and 
dynamic with interdependencies that add to the challenge of securing 
and making it more resilient. Technological advances have introduced 
the ``Internet of Things'' (IOT) and cloud computing, offering 
increased access and streamlined efficiencies, while increasing our 
footprint of access points that could be leveraged by adversaries to 
gain unauthorized access to networks. As our nation continues to evolve 
and new threats emerge, we must integrate cyber and physical risk in 
order to understand how to effectively secure it. Expertise around 
cyber-physical risk and cross-sector critical infrastructure 
interdependencies is where NPPD brings unique expertise and 
capabilities.
    We must ensure that NPPD is appropriately organized to address 
cybersecurity threats both now and in the future, and we appreciate 
this Committee's leadership in working to establish the Cybersecurity 
and Infrastructure Security Agency. As the Committee considers these 
issues, we are committed to working with Congress to ensure that this 
effort is done in a way that cultivates a safer, more secure and 
resilient Homeland.
    Thank you for the opportunity to testify, and I look forward to any 
questions you may have.

    Chairman McCain. Thank you, Mr. Krebs. I thank the 
witnesses.
    I am sure you can see that chart over there. Charts are 
always interesting, but this one we are going to need someone 
to translate for us because it is an example--and I think an 
accurate one--of the differences in authorities and 
responsibilities, none of which seem to have an overall 
coordinating office or individual. Of course, Mr. Joyce's 
absence here, whose job it is to do all this, is an example, 
frankly, of the disarray in which this whole issue rests.
    Mr. Rapuano, to start with, you said that it is not the 
Department of Defense's responsibility. Suppose that the 
Russians had been able to affect the outcome of the last 
election. Would that not fall under the responsibility and 
authority, to some degree, of the Department of Defense, if 
they are able to destroy the fundamentals of democracy, which 
would be to change the outcome of an election?
    Mr. Rapuano. Mr. Chairman, specifically the issues 
associated with protecting elections from cyber incursion----
    Chairman McCain. So you are saying cyber incursion is not 
something that requires the Department of Defense to be engaged 
in. Is that correct?
    Mr. Rapuano. No, Mr. Chairman. I was simply saying that 
based on the State authorities and the State control of the 
election process in each State, there are issues associated 
with Federal authorities to engage.
    Chairman McCain. So those issues could be corrected by 
legislation. They are not engraved in tablets. Okay? So for you 
to sit there and say, well, but it is not the Department of 
Defense's responsibility, it is, to defend the Nation. The very 
fundamental, the reason why we are here is because of free and 
fair elections. If you can change the outcome of an election, 
that has consequences far more serious than a physical attack. 
So I am in fundamental disagreement with you about the 
requirements of the Department of Defense to defend the 
fundamental of this Nation, which is a free and fair election, 
which we all know the Russians tried to affect the outcome of. 
Whether they did or not is a matter of opinion. I do not think 
so.
    But for you to shuffle off this, oh, well, it is not an 
attack, it is an attack of enormous proportions. If you can 
change the outcome of an election, then what is the 
Constitution and our way of life all about. I think Senator 
Rounds will be much more articulate on that issue.
    So, one, I disagree with your assessment. One of the 
reasons why we have been so frustrated is exactly what you just 
said. It is exactly what you just said that, well, it is not 
the Department of Defense's job. It is the Department of 
Defense's job to defend this Nation. That is why it is called 
the Department of Defense.
    Mr. Krebs, numerous experts over the past few years have 
highlighted the need for a dramatic change. According to the 
Presidential Commission on Enhancing National Cybersecurity, 
``The current leadership and organizational construct for 
cybersecurity within the Federal Government is not commensurate 
with the challenges of securing a digital economy and 
supporting the national economic security of the United 
States.''
    General Keith Alexander, one of the most respected men in 
the world, said before this full committee in March, ``When we 
talk to the different agencies, they don't understand the roles 
and responsibilities. When you ask each of them who is 
defending what, you get a different answer.''
    Admiral Jim Stavridis: ``There needs to be a voice in the 
cabinet that focuses on cyber.''
    Obviously, there is supposedly one there, but he is not 
appearing before this committee. That diminishes our ability to 
carry out our responsibilities.
    The list goes on and on.
    January 2017, the Center for Strategic and International 
Studies task force simply concluded, ``We must consider how to 
organize the United States to defend cyberspace, and that if 
DHS is unable to step up its game, we should consider the 
creation of a new cybersecurity agency.''
    The list goes on and on.
    I would like to have your responses to these assessments 
ranging from a presidential commission to General Keith 
Alexander to the Atlantic Council to the Center for Strategic 
and International Studies task force. All of them are saying 
the same thing, gentlemen. All of them are saying exactly the 
same thing. I look forward to getting a translator who can show 
us what this chart means. I will be glad to hear your 
responses. Secretary Rapuano?
    Mr. Rapuano. Mr. Chairman, I would say just on the issue of 
the election process, the Department is clearly there to 
support the response or the mitigation of potential threats to 
our electoral process. It is simply that when you look at the 
separation of authorities between State and local governments, 
the lead for that coordination and support in our current 
system is DHS. We provide defense support to civil authorities, 
as requested, to support those needs and requirements.
    Chairman McCain. That obviously assumes that the Department 
of Homeland Security has the capabilities and the authority in 
order to carry out that requirement, whereas this cyber is 
warfare. Cyber is warfare. Cyber is an attempt to destroy a 
democracy. That is what Mr. Putin is all about. So to somehow 
shuffle that off onto the Department of Homeland Security--of 
course, this goes back to this problem with this organizational 
chart. So I steadfastly reject your shuffling off the 
responsibilities of cyber over to the Department of Homeland 
Security. We have included in the NDAA [National Defense 
Authorization Act] a requirement for you to do so.
    Mr. Smith, do you want to respond? Or Mr. Krebs?
    Mr. Krebs. Sir, I am happy to.
    Fundamentally this is a complex and challenging operational 
environment. Every one of the agencies represented here at the 
table today, as you see in the bubble chart, as it is called, 
has a unique contribution across the ecosystem.
    Chairman McCain. Without coordination.
    Mr. Krebs. Sir, I would suggest that we are getting there, 
that we are working on the coordination. PPD 41, the National 
Cyber Incident Response Plan, the cyber response group, and the 
cyber unified coordination group provide a foundation under 
which we can coordinate. We do work closely with Mr. Joyce and 
the National Security Council. However, from an operational 
perspective, I think the Department of Homeland Security and I 
in my role as Under Secretary have the direction and 
authorities I need to move out.
    Now, the question is whether I have----
    Chairman McCain. Are we winning or losing?
    Mr. Krebs. Sir, this is a battle that is going to be going 
on for many years. We are still trying to get our arms around 
it.
    Chairman McCain. I repeat my question. Are we winning or 
losing?
    Mr. Krebs. Sir, it is hard to assess whether we are winning 
or losing. I would say that we are fighting this battle every 
day. We are working with the private sector. It is a complex 
environment, and I look forward to working with the Congress--
--
    Chairman McCain. Do you know that for 8 years we have been 
trying to get a policy? For 8 years, we have been trying to get 
a strategy. For 8 years, we have been trying to get something 
besides this convoluted chart. Do you know that?
    Mr. Krebs. Yes, sir. I have been in my role for 8 weeks. I 
understand your frustration. I share your frustration. I think 
we have a lot of work to do, and I think this is going to 
require both the executive branch and the Congress working 
together to continue understanding exactly how we need to 
address the threat.
    Chairman McCain. Well, when a coordinator does not show up 
for a hearing, that is not an encouraging sign.
    Senator Reed?
    Senator Nelson. I wish you would consider a subpoena to get 
the main witness.
    Chairman McCain. I think that has to be discussed in the 
committee.
    Senator Reed. Well, thank you, Mr. Chairman.
    Thank you, gentlemen, for your testimony.
    The chairman has raised the issue of Russian involvement in 
our last election, but our intelligence community essentially 
assured us that they are going to come back with more brio, or 
whatever the right term is.
    Have you been told to prepare for that, Mr. Rapuano? Has 
the Defense Department been given sort of the directions to 
coordinate, to take all steps advise the administration on what 
you can do to prevent, preempt, or to respond to a Russian 
intrusion in 2018?
    Mr. Rapuano. Senator, I am not aware of a specific 
direction in terms of a specific task associated with the 
election process. We are engaging on a routine basis with DHS 
and the rest of the interagency community to develop priorities 
and consider responses, as well as mitigation measures. As I 
tried to note earlier, the competing authorities associated 
with the electoral process really do call for a thoughtful 
orchestration of how we would direct and task and engage with 
those State and local authorities. It really does need to be 
coordinated because each agency brings something different. 
There is a private sector component because most States get 
very significant support in terms of their electoral systems 
from private entities. So we are certainly engaged in the 
process, and we are certainly available to support----
    Senator Reed. But you have not been directed to start 
actively planning and coordinating with respect to the 
elections specifically.
    Mr. Rapuano. No, not to my knowledge, Senator.
    Senator Reed. Mr. Smith, have you in your agency, the FBI, 
been told to begin actively coordinating with respect to the 
2018 election in terms of interrupting, preempting, and 
responding to Russian intrusions, which again the intelligence 
community practically assures this will happen?
    Mr. Smith. Yes, Senator.
    Senator Reed. You have been.
    Mr. Smith. Yes, sir.
    Senator Reed. Can you describe what you have been doing?
    Mr. Smith. Yes, sir.
    Senator Reed. In general terms.
    Mr. Smith. In general terms? Sir, we have not stopped since 
the last election coordinating and keeping together an election 
fusion cell, which is jointly located at the Hoover Building, 
and working with our interagency partners not only on what had 
transpired and getting deeper on that but also working forward 
as to what may come towards us in the upcoming midterms and 
2018 election cycles. So we are actively engaged both with 
outreach in the communities and with the DHS and their election 
task force, along with every field office has a designated 
election crimes coordinator who is on the ground out there in 
the event of any information coming towards us or any incidents 
that we would need to be aware of and react to.
    Senator Reed. Thank you.
    Mr. Krebs, the same question basically.
    Mr. Krebs. Sir, absolutely. But I will tell you this. I did 
not need anybody to tell me to stand up a task force or 
anything like that. The first thing I did when I came in 8 
weeks ago was assess the state of the election infrastructure 
activities underway at the Department of Homeland Security and 
establish an election security task force, which brings 
together all the components under me within NPPD [National 
Protection and Programs Directorate], but also works closely 
with the intelligence and analysis component within DHS, as 
well as the FBI and out other interagency partners.
    I think we have made some progress here. I think there is a 
lot more to do, as Director Smith mentioned. We are not just 
thinking about 2018. We are thinking about the gubernatorial 
elections that are coming up in a matter of weeks. Just last 
week, we worked with 27 States, the Election Assistance 
Commission, and established the Government Coordinating 
Council, a body under which all the State election officials 
can come together and provide a foundation which coordinates 
security practices and shares information. We are issuing 
security clearances to a number of election officials, and, in 
a matter of weeks, we are going to establish a sector 
coordinating council, which will bring those private sector 
elements that provide the systems and technologies and support.
    So I think there is still a lot to be done. We certainly 
have work ahead of us, and there is no question they are going 
to come back, and we are going to be fighting them every day. 
Yes, sir.
    Senator Reed. You mentioned several times the need to 
engage the private sector. That is a challenge. In fact, it 
might be more important in this context than in any other 
quasi-military context since they lead, whereas in other areas 
like missiles, bombers, and vehicles, it is the Government more 
than the private sector.
    But just quickly, some of the things that we have to 
consider are sort of not this committee's responsibility but 
the legislation that Senator McCain and I are sponsoring for 
the SEC [Securities and Exchange Commission] so that they would 
have to designate if they have a cybersecurity expert on the 
board or why not is a way in which to disclose to shareholders 
but also to provide an incentive for them to be more keyed into 
cyber. There have been some discussions. I was talking to Mr. 
Rapuano about using TRIA, the Terrorism Reinsurance, as a way 
to incentivize. Without that, I do not think we are going to 
get the kind of buy-in.
    So just very briefly because my time has expired, where are 
we in terms of private engagement? At the threshold or some 
engagement or it is still----
    Mr. Krebs. Sir, I actually came out of the private sector. 
I spent the last several years at a major technology company 
where I managed a number of the cybersecurity policy issues. So 
I have a unique, I think, understanding of what it takes on the 
private sector side, as well as working in government.
    We do have a number of private sector representatives 
within the NCCIC, and we have unique statutory authorities for 
coordinating with the critical infrastructure community.
    There is a lot of work ahead of us. We need to better 
refine our value proposition, I think, to get more companies to 
come in and share information with us. But we do have a unique 
liability protection capability.
    One thing that I think will certainly enable our 
advancement, as I mentioned in my opening, I need a name 
change. I need to be able to tell my stakeholders, my customers 
what it is I do. The National Protection and Programs 
Directorate does not tell you anything. I need something that 
says I do cybersecurity so I can go out there and I can clearly 
communicate what it is on a daily basis that I do. I think that 
is a big step forward.
    Chairman McCain. You tell us the title you want besides 
``President.''
    Senator Reed. Yes. We will get you a T-shirt too.
    [Laughter.]
    Chairman McCain. Senator Inhofe?
    Senator Inhofe. Thank you, Mr. Chairman.
    The three of you can relax because what I am going to 
address is to the empty chair. I know that this message will 
get through.
    It has to do with section 881 and 886. They are some 
provisions in the Senate's version of the NDAA, specifically 
those sections, that have raised concerns among the software 
developers critical to our national defense. The purpose of 
these provisions are to make available to the public the source 
code and proprietary data that is used by the Department of 
Defense.
    Now, I would like to submit for the record numerous 
letters, which I will do in just a moment, and documents from 
the industry stakeholders that share my concerns with this 
language. While I understand the goals and intentions of the 
legislation, it creates some unintended consequences and 
impacts, such as limit the software choices available to DOD to 
serve the warfighter, increase costs to the Department of 
Defense by compromising the proprietary nature of software and 
limiting contractor options, and potentially aid U.S. 
adversaries and threaten DOD cybersecurity by sharing DOD's 
source code by placing it in a public repository, and also 
reducing competitiveness of American software and technology 
companies by opening the software contractor's intellectual 
property and code to the public repository.
    As we progress into the conference report, I look forward 
to working with the Senate Armed Services Committee on a way 
forward on this topic and recommend that we study this issue 
prior to instituting new legislation. This is a provision that 
is in the Senate bill, not in the House bill.
    I would ask unanimous consent to include in the record at 
this point, Mr. Chairman, these documents from the 
stakeholders.
    Chairman McCain. Without objection.
    [The information follows:]
      
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
      
    Senator Inhofe. Thank you.
    Chairman McCain. Senator Nelson?
    Senator Nelson. Well, I would not exactly say that the 
three of you should relax, but I will address more directly not 
only to the empty chair but to General McMaster, to General 
Kelly, to the Vice President, and to the President. Did you 
realize that you handed out a chart that is 5 years old? The 
date on this chart is January of 2013. I mean, why in the 
world?
    By the way, Senator Rounds is acknowledging this, and I 
want to say what a pleasure it has been to deal with Senator 
Rounds as the two leaders of the cyber subcommittee. I can tell 
you we are alarmed. You heard the alarm in the voice of the 
chairman.
    Can we stipulate here that State election apparatuses, 
State election databases--can we stipulate that that is 
critical infrastructure?
    Mr. Krebs. Sir, the Department of Homeland Security has 
made that designation.
    Senator Nelson. Good.
    Mr. Krebs. I have an election infrastructure subsection, 
sir.
    Senator Nelson. Good. Therefore, a tampering or a changing 
or an interfering with State election databases being critical 
infrastructure would, in fact, be an attack upon our country. 
Can we stipulate that that would be the case?
    Why is there silence?
    Chairman McCain. Let the record show there was silence.
    Senator Nelson. Wow.
    So do you realize that you can change----
    Chairman McCain. Could I just----
    Senator Nelson. Please.
    Chairman McCain. In deference to the witnesses, they are 
not the ones who----
    Senator Nelson. I understand. That is why I am referring my 
comments not only to the empty chair but to the people behind 
that empty chair, which is the National Security Council 
Advisor, General McMaster, the fellow who runs the White House 
staff, General Kelly, both of whom I have the highest respect 
and esteem for, and ultimately the Vice President and the 
President.
    I would go back and listen. I would defer to the intensity 
of the chairman's remarks both in his opening remarks and his 
questions. You mess around with our election apparatus, and it 
is an attack on our country.
    So let me give you an example. It does not even have to be 
that the Russians come in or the Chinese or some third party 
that is not a nation state. We already know that they are in 20 
of our States. We know that from the reports that have been in 
the newspaper from the intelligence community. All you have to 
do is go into certain precincts. You do not even have to change 
the outcome of the actual vote count. You could just eliminate 
every 10th registered voter. So when Mr. Jones shows up on 
election day to vote, I am sorry, Mr. Jones, you are not a 
registered voter. You multiply that every 10th voter, you have 
got absolute chaos in the election. On top of it, you have the 
long lines that result, and as a result of that, people are 
discouraged from voting because they cannot wait in the long 
line and so forth and so on.
    Now, this is the ultimate threat. I have said so many times 
in this committee Vladimir Putin cannot beat us on the land, in 
the air, on the sea, under the sea, or in space, but he can 
beat us in cyber. To hand out a 5-year-old dated chart as to 
how we are going to fix this situation just is totally, totally 
insufficient.
    I rest my case, Mr. Chairman. I wish you would consider a 
subpoena.
    Chairman McCain. Would the witnesses desire to respond to 
that diatribe?
    Senator Nelson. That eloquent diatribe.
    [Laughter.]
    Chairman McCain. One of the most historic statements in the 
history of this committee.
    [Laughter.]
    Chairman McCain. Go ahead, please.
    Mr. Rapuano. Mr. Chairman, I would say just in terms of the 
Department of Defense's role, it is important to note that the 
National Guard in a number of States, on the authority of the 
Governors, trained cyber-capable forces are assisting those 
States, and they are addressing, identifying vulnerabilities, 
and mitigating those vulnerabilities. Elements of them are part 
of the Cyber Mission Force, and we certainly view quite 
appropriate the Governor tasking them under State authority 
versus the Department of Defense attempting to insert itself 
into a process without directly being requested.
    Chairman McCain. Could I just say, sir, again we are 
appreciative of what the Guard is doing. We are appreciative of 
what local authorities are doing. We are appreciative of what 
all these different agencies are doing. But we see no 
coordination and no policy and no strategy. When you are ready 
to give that to us, we would be eager to hear about it.
    Senator Fischer?
    Senator Fischer. Thank you, Mr. Chairman. Those are hard 
acts to follow--your diatribes.
    But I would like to focus on something else now with regard 
to response. Gentlemen, one of the things that Admiral Rogers 
has emphasized is the need to move quicker across the board and 
faster threat detection, faster decision-making, and faster 
responses.
    Mr. Krebs, can you walk us through the process by which an 
organization, an operator of a piece of critical 
infrastructure, for example, would reach out to you for help? I 
know they first have to detect the threat, and that can take 
some time. But what does the process look like once they 
contact you? How long does it take to begin working with them, 
and are there legal agreements that must be in place before a 
response team could operate on their network?
    Mr. Krebs. Ma'am, thank you for the question.
    There are, of course, a number of ways that a victim can 
discover they have been breached or they have some sort of 
intrusion. That is working whether with the intelligence 
community or the FBI can notify them or the Department of 
Homeland Security could inform them, or of course, one of their 
private sector vendors could discover an actor on their 
networks.
    Now, how they reach out, there are a number of ways as well 
they can reach out. They can email us. They can call us. We 
have local official cybersecurity advisors throughout the 
region. We have protective security advisors throughout the 
region. They could also contact the FBI.
    Once we are aware of an incident, we will then do an intake 
process. Every incident is going to be different. That is kind 
of a truism here. Every incident could be different.
    In terms of timing, it all does depend on what the 
situation is, what kind of information they want to provide. We 
do have to work through a legal agreement just to, for 
instance, get on their networks and install government 
equipment and take a look. That can take time. It can depend, 
of course, on the legal back and forth as hours or even days. 
But I would view this as kind of an elastic spectrum. It could 
take--we are talking hours. It could take a couple days to a 
week. It all, of course, depends on the nature of the breach.
    Senator Fischer. If you determine that DOD has to be 
involved in the response as part of that team, I assume that is 
going to take more time then. That decision currently rests 
with the President. Is that correct?
    Mr. Krebs. Ma'am, actually we do a fair amount of 
coordination with the Department of Defense. In fact, we do a 
cross-training on incident response matters. As I mentioned 
before, we do have blended teams that go out to the field for 
investigations that can be FBI or DOD assets.
    In terms of the decision-making process, we do have 
agreements in place. We have an understanding in place that we 
do not necessarily have to go to the President. We do not 
actually have to go to the Secretary level. There are sub-level 
understandings that we are able to use each other's resources.
    Senator Fischer. Those agreements would also cover what 
types of military assistance that is going to be needed?
    Mr. Krebs. It is a support function, but we are typically 
talking personnel.
    Senator Fischer. Mr. Rapuano, are the concepts of 
operations that define the specific requirements that DOD 
forces could be asked to fulfill and prioritize its assets or 
sectors that should be defended from cyber attack if we were 
going to have a high-end conflict?
    Mr. Rapuano. Senator, the focus of the domestic response 
capabilities, defense support to civil authorities when it 
comes to cyber, are those protection teams out of the Cyber 
Mission Force. Those are skilled practitioners who understand 
the forensics issues, the identification of the challenges of 
types of malware and different approaches to removing the 
malware from the systems.
    As Mr. Krebs noted, the DSCA process, Defense Support to 
Civil Authorities, is a direct request for assistance from DHS 
to the Department, and we have authorities all the way down to 
COCOM [Combatant Command] commanders, specifically Cyber 
Command. Admiral Rogers has the authority in a number of areas 
to directly task those assets. It then comes up to me, and for 
certain areas, the Secretary--it requires his approval. But 
most of these things can be done at lower levels, and we have 
provided that assistance previously to DHS.
    Senator Fischer. So do you have that policy guidance in 
place? If there is a high-end conflict, it is a first come, 
first served? Do you have a way that you can prioritize how you 
are going to respond? Is that in place now?
    Mr. Rapuano. Absolutely. So a high-end conflict for which 
we are receiving cyber attacks and threats in terms of against 
our capabilities to project power, for example, would be an 
utmost priority for the Department, as well as attacks against 
the DOD information system. If we cannot communicate 
internally, we cannot defend the Nation. So those are the 
equivalent of heart, brain, lung function DOD equities and 
capabilities that we prioritize. We have resources that are 
available unless tapped by those uppermost priorities, and then 
it becomes hard decision times in terms of do we apply assets 
for domestic and critical infrastructure protection, for 
example, or to protection of the DODIN [Department of Defense 
Information Network] or other DOD capabilities.
    Senator Fischer. Thank you.
    Senator Reed [presiding]. On behalf of Chairman McCain, let 
me recognize Senator Shaheen.
    Senator Shaheen. Thank you, Senator Reed.
    Thank you to all of our witnesses for being here this 
morning.
    I share the frustration that you are hearing from everyone 
on this committee about decisions that have not been made 
actually with respect to cyber threats affecting our Nation.
    One example is the use of Kaspersky Lab's antivirus 
software on U.S. Government systems. Kaspersky Lab has reported 
links to Russian intelligence, and it is based in Moscow, 
subjects client data to the Kremlin's intrusive surveillance 
and interception laws. We just had a recent report of 
Kaspersky's role in a successful Russian cyber operation to 
steal classified information from an NSA employee's home 
computer. They remained on the list of approved software for 
way too long.
    Now, this committee put an amendment in the NDAA that would 
have prohibited the use of that software by the Department of 
Defense. I am pleased that finally we have seen the 
administration act on that.
    But I think it really raises the question of how we got to 
this point. So what standards were used in approving Kaspersky 
Lab as an appropriate choice to fill the U.S. Government's 
antivirus protection needs? Does the Government vet the origins 
and foreign business dealings of cybersecurity firms and 
software companies before these products are used in our 
systems? Are companies looking to contract with the U.S. 
Government required to disclose all their foreign 
subcontractors, as well as their work and dealings with foreign 
governments who may be a threat to the United States?
    So I will throw those questions out to whoever would like 
to answer them.
    Mr. Krebs. Ma'am, thank you for the question.
    As you know, the binding operational directive that we 
issued several weeks ago, just over a month now, 30 some odd 
days ago, require federal civilian agencies to identify 
Kaspersky products if they have then and a plan to implement in 
over 90 days.
    So what that tells me is that we still have a lot of work 
to do in terms of the processes that are in place to assess 
technology products that are on the civilian----
    Senator Shaheen. I agree, and that is why I am asking those 
questions. I do not mean to interrupt, but I have limited time. 
What I would really like to know is what you can tell me about 
what standards we use, how do we vet those kinds of products, 
and how do we ensure that we do not have another case of 
Kaspersky being used in our sensitive government systems.
    Mr. Krebs. If I may suggest, I would like to come back with 
the General Services Administration to take a look at that with 
you, and I will give you a more detailed briefing on how we do 
that.
    Senator Shaheen. Thank you. I would appreciate that.
    Also, Mr. Rapuano, I appreciate your taking some time this 
morning to spend a few minutes with me to talk about the 
Hewlett-Packard Enterprise which allowed a Russian defense 
agency to review the source code of software used to guard the 
Pentagon's classified information exchange network. Can you 
tell me: is the disclosure of our source codes to other 
entities a usual way of doing business? How did that happen?
    Mr. Rapuano. Senator, the details on that--as I shared with 
you this morning, we are working that. Our CIO [Chief 
Information Officer] is leading that effort with HPE on 
ArcSight. I can get you additional details with regard to our 
procedures. We have a layered approach to defense of the DODIN. 
But we can follow up with those details for you.
    Senator Shaheen. Well, thank you. I appreciate that. That 
was a rhetorical question to raise the point again that I have 
serious concerns about the attention that we are paying to 
these kinds of issues.
    In April, DOD's logistics agency said that ``HP ArcSight 
software and hardware are so embedded'' that it could not 
consider other competitors'--``absence and overhaul of the 
current IT infrastructure.'' Do you believe that that is what 
is required? How are we ever going to address any of these 
problems if we say we cannot take action because it would 
create a problem in responding throughout other areas where we 
do business?''
    Again, I appreciate that you are going to respond to the 
concerns that I laid out, including that one, at a later time.
    I am almost out of time, but I just had one question for 
you, Mr. Krebs. That is, on this notice of this hearing, you 
are listed as performing the duties of the Under Secretary for 
the National Protection and Programs Directorate. You said you 
have been on the job for 8 weeks. What does that mean?
    Mr. Krebs. Yes, ma'am. Thank you for the question.
    I have actually been with the Department since March 2017 
where I was a senior counselor to General Kelly. He moved to 
the White House, of course. Soon after that, I was appointed by 
the President to be the Assistant Secretary for Infrastructure 
Protection. In the meantime, we do have an open vacancy at the 
Under Secretary position. So as the senior official within the 
National Protection and Programs Directorate, I am the senior 
official performing the duties of the Under Secretary.
    Senator Shaheen. Okay. So tell me what your current title 
is, in addition to having that as part of your 
responsibilities.
    Mr. Krebs. The senior official performing the duties of the 
Under Secretary----
    Senator Shaheen. No, no, no. I know that is what is on 
here. What is your actual title?
    Mr. Krebs. Assistant Secretary for Infrastructure 
Protection. That is what I have been appointed. Yes, ma'am.
    Senator Shaheen. Thank you, Mr. Chairman.
    Chairman McCain [presiding]. Thank you.
    Senator Rounds, I want to thank you and Senator Nelson for 
the outstanding work you are doing on the cyber subcommittee. 
It has been incredibly important and very helpful. Thank you.
    Senator Rounds. Thank you, Mr. Chairman. Let me just share 
with you my appreciation for you and the ranking member for 
elevating this particular discussion to the full committee 
status. Senator Nelson has been great to work with, and I 
appreciate the bipartisan way in which he has approached this 
issue.
    I wish we had the same type of cooperation this morning 
with Mr. Joyce coming to visit with us. I personally did not 
see this as an adversarial discussion today. I saw this as one 
in which we could begin in a cooperative effort the discussion 
about how we take care of the seams that actually exist between 
the different agencies responsible for the protection of the 
cyber systems within our country.
    I just wanted to kind of bring this out. This particular 
chart--I believe General Alexander indicated that there were 75 
different revisions to this particular chart when it was 
created. Let me just, to clear the record. Do you any of you 
have a more updated chart than the one that has been provided 
today?
    Mr. Smith. No.
    Mr. Krebs. No.
    Senator Rounds. No? No, okay.
    For the record, that was done in 2013.
    At the same time, for Mr. Krebs, let me just ask. As I 
understand it, DHS is responsible for the protection of some 
but not all of the critical infrastructure within the United 
States. I believe I am correct in my understanding that when it 
comes to the energy sector, the Department of Energy is the 
lead agency. Is that correct, sir?
    Mr. Krebs. Yes, sir. That is correct.
    Senator Rounds. Where does it fit in the chart?
    Mr. Krebs. So in the column here in the middle, protect 
critical infrastructure, there is an updated piece of policy 
surrounding this. I mentioned in my opening statement there is 
a progressive policy arc. This was a snapshot in time, 2013. 
The general muscle movements hold and have been reflected in 
Presidential Policy Directive 41.
    Senator Rounds. So do you have an updated chart someplace?
    Mr. Krebs. I may have something better than a chart. What I 
have is a plan and a policy around it, PPD 41 and the NCIRP, 
which lay out the responsibilities of our respective 
organizations.
    Senator Rounds. All of you are working on the same level as 
Mr. Krebs has described here with the information that he has? 
A yes or a no would be appropriate.
    Mr. Rapuano. Yes, Senator.
    Mr. Smith. Yes.
    Senator Rounds. Yes. Thank you. I appreciate that because 
what really would have bothered me is if this thing had not 
been updated or that you had not been working on anything since 
2013 with all the changes that have occurred.
    Let me ask just very quickly. I am just curious. It would 
seem to me that there is no doubt that there are three types of 
barriers that we need to overcome in order to strengthen the 
collective cyber defense of the Nation, legal organization and 
cultural. Have any of you identified legislative hurdles that 
restrict or prohibit interagency gaps and/or seams for our 
collective cyber defense? Mr. Rapuano?
    Mr. Rapuano. Senator, I would just note when you look at 
the National Response Framework that we use for non-cyber but 
kinetic in the range of state actor or natural events, what you 
see, particularly since Katrina, is a maturation of a very 
similar process, many disparate roles, responsibilities, and 
authorities and many different target stakeholders who may 
require assistance from local, State, all the way up. This 
system, the National Cyber Response Framework, is based very 
closely on that National Response Framework. We are obviously 
in a more nascent stage when comes to cyber and all the 
aspects, but I would just say if you look at the last several 
months in terms of very significant multiple hurricanes and 
what I think overall, in light of the consequences, was a very 
effective federal response, there has been a dramatic evolution 
in our ability to work as a whole-of-government team when it 
comes to complex problems with colliding authorities.
    Senator Rounds. I do have one more question. I get the gist 
of what you are suggesting.
    Let me just ask this in terms of the overall picture here. 
We can either have defense here within our country, or we can 
have defense which is to try to stop something in terms of a 
cyber attack before it actually gets here. That involves not 
only a cyber system which is universal, it involves talking 
about systems that are sometimes in our ally's country, 
sometimes in countries that are not necessarily our friends, 
but then also in areas where there actually are the bad guys 
located who are creating the attacks themselves.
    What are your views on the sovereignty as it relates to 
cybersecurity? Let me just add before you answer this.
    In Afghanistan, regardless of what you think about the 
strategy, the longstanding undertone that justifies why we are 
still there is that fighting the enemy abroad prevents another 
major attack at home. In this context, it is a defensive 
strategy played out via offensive maneuvering.
    As we evolve cyber and the cyber intelligence fields, it is 
inevitable that we will start to think of cyber defense in this 
offensively minded way.
    Given this, I would like to hear from you your thoughts on 
the sovereignty and where we ought to be fighting this battle 
to stop the attacks before they get here.
    Mr. Rapuano. Senator, that is a very important question. As 
I think you are aware, the concepts of sovereignty are still 
molting to some degree in the sense that there are differing 
views with regard to what constitutes sovereignty in what type 
of scenario or situation.
    Senator Rounds. It is, except for one thing. Mr. Chairman, 
if you would not mind.
    Here is the key part of this. These attacks are going on 
now. Tallin, Tallin 1.0, Tallin 2.0 and so forth are 
discussions about what our allies are looking at in terms of 
the sovereignty issues outside. But in the meantime, we have 
got a gap in time period here in which we have to make a 
decision about where we actually defend our country against the 
possibility of existing attacks today, tomorrow, and next week. 
Now, unless we have got a current strategy with regard to how 
we regard sovereignty and where we will actually go to defend 
our critical infrastructure--and I guess that is what I am 
asking. Do we have that on the books today, and are you 
prepared to say that we know where we would defend against 
those attacks? Are we prepared to take them beyond our borders?
    Mr. Rapuano. So, Senator, yes, we do. The details of our 
current posture with regard to those elements I think would 
need to be deferred to a closed hearing.
    Senator Rounds. Very good.
    Mr. Smith, Mr. Krebs?
    Mr. Krebs. It is a home and away game. We have got to go 
get them over there at the same time we need to be protecting 
our infrastructure here. I work very closely, for instance, 
with the electricity sector in the Electricity Sector 
Coordinating Council. During the hurricanes, I was on the phone 
with the CEOs [Chief Executive Officers] of major utilities on 
a daily basis. Every 5 p.m. with Secretary Perry, we were 
talking about the status of the electricity sector. We have to 
start here, network protection, close out the gaps, mitigate 
consequences. At the same time, we have to take down the threat 
actor. It is a whole-of-government best athlete approach.
    Senator Rounds. Thank you.
    Thank you, Mr. Chairman. I apologize for going over, but I 
think it is a critical issue that we have to address. Thank 
you.
    Chairman McCain. Senator Rounds, thank you for what you and 
Senator Nelson have been doing.
    Senator Blumenthal?
    Senator Blumenthal. Thanks, Mr. Chairman. Thank you very 
much for holding this critically important hearing and to the 
excellent witnesses that we have before us today.
    This week, the ``New York Times'' published an article--and 
I am going to submit it for the record, assuming there is no 
objection--which details North Korea's cyber attacks that are 
estimated to provide the North Korean Government with as much 
as $1 billion a year.
    [The information follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Blumenthal. That figure is staggering. It is 
equivalent to one-third of that country's total exports. North 
Korea's ransomware attacks and cyber attacks on banks around 
the world are producing a funding stream for that country, 
which in turn fuels its nuclear program. It is a funding source 
that must be stopped. At a time when the United States is 
leading efforts to sanction exports of coal, labor, textiles, 
and other products, in order to hinder North Korea's nuclear 
ambitions, we also have to be focusing on additional funding 
sources. This cash flow ought to be priority number one. Tough 
rhetoric must be supported by tough action and practical 
measures that make clear to North Korea that this kind of 
conduct will be answered.
    So the question is what actions are being taken to combat 
their offensive cyber operations and address this cyber 
revenue. I know that you may not be fully at liberty to discuss 
these steps in this forum, but I would like you to do so to the 
extent you can because North Korea knows what it is doing. You 
are not going to reveal anything to North Korea. The American 
people deserve to know what North Korea is doing and they do 
not. So this is a topic that I think ought to be front and 
center for the administration and for the Congress and for the 
American people. I look forward to your responses.
    Mr. Rapuano. I would simply say, yes, Senator, we do have 
plans and capabilities that are focused and directed on the 
North Korean threat in general and on the specific activities 
that you have noted. I think that it would be most appropriate, 
if we are going into detail, to do that in closed session.
    Mr. Smith. Senator, I would just say that we continue to 
work with our foreign partners in information sharing whenever 
possible when we are able to assist them in identifying these 
types of criminal activities. We provide them also technical 
assistance whenever asked or engaging with them in joint 
operations. Whenever possible, we are always looking to link it 
back or coordinate some indictment or investigative--some joint 
operation that would bring to light the people or the nation 
states that are conducting those activities.
    Mr. Krebs. I will pile on here and actually provide a 
little bit of detail on a particular unclassified activity. 
Working very closely with the FBI, we designated one effort 
called Hidden Cobra. On US-CERT [U.S.-Computer Emergency 
Readiness Team], we have a Hidden Cobra page that speaks to a 
botnet infrastructure, command and control infrastructure, that 
has certain indicators, that, hey, look at this. Go track this 
down. Working with federal partners where some of that command 
and control infrastructure may be in another country, we share 
that information with them, and we are looking to take action 
against it. So this is not just a whole-of-government approach, 
this is an international problem with international solutions. 
We are moving out aggressively. This is recent, last few weeks, 
where we have been able to partner some unlikely partners.
    Senator Blumenthal. I agree that it is an international 
problem with international solutions. But we provide the main 
solution, and we are, in effect, victims substantially if not 
primarily of the problem. I understand, Mr. Rapuano, that we 
have plans and capabilities. I am not fully satisfied with the 
idea that those forward-oriented measures of action are 
sufficient. I think we need action here and now.
    The Lazarus Group, a North Korean-linked cyber crime ring, 
stole $81 million from the Bangladesh Central Bank account at 
the New York Federal Reserve, which would have been $1 billion 
but for a spelling error, a fairly rudimentary spelling error 
on the part of North Koreans. They have also been tied to the 
WannaCry attack earlier this year and the Sony attack in 2014. 
This week they are being linked to a $60 million theft from the 
Taiwanese Bank. Measured in millions, given the way we measure 
amounts of money and this week with our budget in the billions 
and trillions, this may seem small but it is substantial given 
the North Korean economy and its size. So I am hoping that in 
another setting we can be more fully briefed on what is being 
done now to stem and stop this threat.
    I appreciate all of your good work in this area. Thank you.
    Thanks, Mr. Chairman.
    Chairman McCain. Senator Ernst?
    Senator Ernst. Thank you, gentlemen, for your willingness 
to tackle these issues. I think it goes without saying that 
your level of success in these areas will really influence 
American democracy for many, many years, as well as decades to 
come.
    So the conversation today so far has been focused very much 
on cyber defense coordination, which we would all say is very 
important. However, coordination does not do any good without 
the proper understanding of our capabilities across the 
Government. That is why I worked with Senators Coons, Fischer, 
and Gillibrand to introduce bipartisan legislation requiring 
the DOD to track National Guard cyber capabilities. Mr. Smith, 
you had given a shout-out to the new cyber program within the 
National Guard, and I really do appreciate that.
    So for each of you, how do you assess the capabilities of 
the individuals and the organizations under your charge? 
Because we see this lovely chart which is very old. But you do 
have a number of organizations that you are responsible for. 
How do you go in and assess what that organization can actually 
do and is it effective? So it is great to say, hey, we have a 
cyber team in DOJ or whatever, but how do you know that they 
are effective? Can you explain how you assess that? We will 
start with you, Mr. Secretary.
    Mr. Rapuano. Thank you, Senator. That is an excellent 
question and it does represent a significant challenge. We have 
got a lot of disparate organizations that obviously have cyber 
equities and are developing cyber capabilities. Within the 
Department of Defense, we have really committed in earnest to 
start to better understand the cross-cut in terms of the 
services, the commands, the full range, including the National 
Guard, what are their capabilities, what specific skills are 
they developing, what professional development program do we 
have to recruit, train, and develop very attractive career 
paths for the best and the brightest.
    So we have a number of initiatives, starting with the 
budget initiative. So when you start to see our budget 
formulations, it is apples to apples instead of what it has 
been historically which is each service's or organization's 
conception of what constitutes training or what constitutes the 
different elements of their budget. We did a first run this 
year that was off the budget cycle just to get us in the road 
to progress, so to speak, and we found that we really have got 
to ensure that there is common definitional issues so we were 
defining things the same way.
    The other area, in terms of the National Guard, we do track 
National Guard cyber capability development, training 
capabilities, and how they fit into the Cyber Mission Force. 
The one area that we do have a little bit of a challenge with 
is under State status, we do not have that same system of 
consistent definitions. So that is something that we are 
working at, but we definitely recognize the critical importance 
of having that common ability of across many different fronts 
to define those things so we can apply them----
    Senator Ernst. No. I appreciate that. That is good to 
understand that now and get those worked out--those details and 
discrepancies worked out.
    Mr. Smith, how about you?
    Mr. Smith. On our technical side, we tend to be on the job 
with that routinely. So most of the people who are out are 
currently actively engaged in either incidents response and 
following up on the threats and investigations. But we spend a 
significant amount of effort in enhancing those particularly at 
a much higher level on the cyber technical side.
    But in addition to that, we have taken steps to 
significantly elevate the entire workforce in the digital 
domain. We have created on-the-job training which allows non-
cyber personnel to be taken offline from investigating other 
matters to enhance that cyber capability so when they go back 
after a couple of months, they are capable of bringing both 
their normal traditional investigative methods along with the 
current modern digital investigative requirements.
    Looking longer term, though, when we are talking about the 
workforce of the future, we have been collaborating on a much 
more local level with STEM [Science, Technology, Engineering 
and Mathematics] high schools programs in developing and 
building a future workforce as opposed to trying to compete 
with everybody here and with the private industry, which can 
offer things and more benefits at times than we are capable of, 
but by building in FBI cyber STEM programs and bringing local 
university courses to high school students at an earlier age 
and supplementing that with some leadership development in 
those high school ranks. So looking long term building a 
workforce that will augment and maintain the necessity that we 
all require we are talking about here in this digital arena. 
Working with the non-cyber elements, our internal cyber 
people--they are at a very high level.
    Senator Ernst. Yes. I am running out of time. Mr. Krebs, if 
you could submit that to us for the record, I would be 
appreciative.
    [The information follows:]

    At the National Protection and Programs Directorate (NPPD), we have 
thousands of employees located throughout the Nation who are well 
qualified to carry out our mission. We assess the capabilities of these 
employees through our rigorous hiring process and continue assessing 
their capabilities through annual performance reviews. We also invest 
in training and professional development opportunities to ensure our 
employees remain at the forefront of the mission.
    There is often no single solution to security practices, and 
innovation, critical thinking, and diversity of opinion increase our 
likelihood for success. Accountability is critical to ensuring success 
as a team; success is rewarded, and falling short of goals presents 
opportunities to improve and correct. By communicating expectations and 
roles to team members, empowering them, and ensuring they have 
resources enables them and our organization to be successful. It is 
important to focus on putting the right people in the right jobs with 
the right responsibilities.
    Measuring success for any homeland security enterprise is 
challenging because typically success means we have prevented something 
from happening. For NPPD, success means we are receiving and sharing 
information in a timely manner, deploying resources where requested by 
our stakeholders, and providing actionable security recommendations 
which will raise the overall level of security across the nation. 
However, recognizing that perfect security is virtually impossible, we 
will continue moving towards an ``assume breach'' posture, ensuring 
that we are prepared to minimize the damage an attacker can inflict. 
Useful metrics in this vein are (1) time to detection of the adversary, 
(2) time to investigate the attack, and (3) time to mitigate the damage 
and evict the adversary. Our goal should be to get these time values to 
hours if not minutes, where they may now be weeks or even months.
    NPPD also tracks trends that provide insight into our overall level 
of security and the usefulness of the products and services we offer, 
such as rate of compliance with the Department of Homeland Security's 
Binding Operational Directive mandates, our ability to implement 
cybersecurity hygiene practices, and use of DHS services and 
capabilities by our stakeholders.

    Senator Ernst. But, gentlemen, one thing too, as we look 
across the board, is really assessing those organizations that 
fall under your purview but then making sure that we are not 
duplicating services amongst our agencies as well and operating 
as efficiently as possible. So thank you very much.
    Thank you, Mr. Chair.
    Chairman McCain. Senator Hirono?
    Senator Hirono. Thank you, Mr. Chairman.
    I am glad that we are having a discussion about the 
integrity of our elections as being fundamental to our 
democracy.
    Mr. Krebs, as I look at this chart, even if it is dated, 
your responsibility at DHS is to protect critical 
infrastructure, and you did say that election systems are 
critical infrastructure. You have an election security task 
force. So do you consider DHS to be the lead agency on making 
sure that our election systems are not hacked?
    Mr. Krebs. Ma'am, we need statutory authorities to 
coordinate protection activities across the critical 
infrastructure, and as a designated critical infrastructure 
subsector, yes, ma'am, I lead in coordinating.
    Now, I do not physically protect those networks. I enable 
State and locals and also the private sector to have better 
practices. Yes, ma'am.
    Senator Hirono. I understand that, but you would be the 
lead federal agency that would have this responsibility to work 
with the State and local entities to protect our election 
systems.
    Mr. Krebs. From a critical infrastructure protection 
perspective, yes, ma'am, alongside the FBI, as well as the 
intelligence community.
    Senator Hirono. What we are just looking for, as we are 
wrestling with the idea of who is responsible for what, I would 
just like to get down that with regard to election systems, we 
should look to DHS. That is all I want to know.
    Now, I hope that your task force is also addressing the 
purchases of political ads by foreign countries. I hope that is 
one of the things that your task force will address and whether 
there is a need for legislation to prevent those kind of 
purchases.
    I want to get to a question to Mr. Rapuano. Data protection 
is obviously an important issue with industrial espionage being 
carried out by some of our near-peer competitors. The DOD 
requires contractors to provide adequate security for our 
covered defense information that is processed, stored, or 
transmitted on the contractor's internal information system or 
network. By December 31st, 2017, contractors must, at a 
minimum, implement security requirements to meet the National 
Institute of Standards and Technology NIST, standards.
    So my question, Mr. Rapuano, can you talk about the 
importance of having industry comply with this requirement and 
how you are working with industry to get the word out so that 
everyone is aware, especially I would say small businesses that 
you all work with? They need to know that they are supposed to 
be doing this.
    Mr. Rapuano. Yes, Senator. Our primary focus is with the 
defense industrial base where we have the highest frequency and 
most significant DOD programs. But we are engaged with all of 
those private sector elements that work with the Department of 
Defense. I work that closely with the Chief Information Officer 
for the Department, Dr. Zangardi. I can get you additional 
details on the processes for doing that.
    Senator Hirono. Yes. I would like to make sure that, as I 
mentioned, particularly small businesses who may not be aware 
of this requirement, that they are very aware and that they 
have enough time to comply because December 2017 is just right 
around the corner. So whatever you have, fliers, whatever you 
use to get the word out.

    Mr. Rapuano did not respond in time for printing. When received, 
answer will be retained in committee files.

    Senator Hirono. For Mr. Krebs, you mentioned in your 
testimony how cyber actors have strategically targeted critical 
infrastructure sectors with the intent ranging from cyber 
espionage to disruption of critical services. Specifically you 
identified two malware attacks called BlackEnergy and Havoc. Is 
that the right pronunciation?
    Mr. Krebs. Yes, ma'am.
    Senator Hirono. They have specifically targeted industrial 
control systems. It does not take a lot of imagination to think 
of how a sophisticated cyber attack to a power plant's 
industrial control system could cause a massive disruption with 
grave consequences.
    What is being done by DHS to encourage the private sector 
to harden their defense of industrial control systems?
    Mr. Krebs. Yes, ma'am. Thank you for your question, and I 
do share your concern particularly with respect to those two 
toolkits.
    I think I would answer the question two ways. One, an 
endpoint protection. So we do work very closely with the 
electricity sector, as I mentioned early on, with the 
Electricity Sector Coordinating Council, again from a grid 
perspective. But then through our industrial control systems 
CERT, the ICS-CERT, we do look at kind of more scalable 
solutions that I mentioned in my opening statement, not just 
kind of the whack-a-mole approach at the individual facilities 
but try to understand what the actual individual control 
systems are, who manufactures them because it does tend to be a 
smaller set of companies. Instead of 100 or 1,000 endpoints, we 
can kind of go to the root of the problem, the systemic 
problem, as I also mentioned, address that at the manufacturer 
or coder level and then from there, kind of break out and hit 
those endpoints. So again, we do work at the endpoint, but we 
also work at kind of the root problem.
    Senator Hirono. So you perform outreach activities then 
through ICS-CERT to make sure that, for example, the utility 
sector is adequately----
    Mr. Krebs. Among other mechanisms, yes, ma'am.
    Senator Hirono. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Tillis?
    Senator Tillis. Thank you, Mr. Chairman.
    Gentlemen, thank you for being here.
    One quick question, and this is really from my perspective 
as the Personnel Subcommittee chair. What trends, either 
positive or negative, are we seeing? Mr. Rapuano, you mentioned 
I think earlier when I was here about the National Guard 
playing some role at the State level. But can you give me any 
idea, either positive or concerning trends, about the resources 
we are getting into the various agencies to really flesh out 
our expertise to attract them and retain them and to grow them?
    Mr. Rapuano. Well, I would simply say--and I think it has 
been a common experience for my colleagues at the table here--
that getting the best talent is a very significant challenge in 
the cyber realm for all the obvious reasons.
    Senator Tillis. Compensation? I mean, there is a variety of 
reasons, but what would you list as the top two or three?
    Mr. Rapuano. There is a very high demand signal throughout 
the entire economy. The compensation that individuals can get 
on the outside of government is significantly greater. We are 
trying to address that in terms of our workforce management 
process, and we have some additional authorities that we are 
applying to that, as I believe other agencies have as well. 
But, again, it is a demand versus supply question.
    Senator Tillis. We have had this discussed before, and 
actually Senator Rounds and I have talked about it. I would be 
very interested in feedback that you can give us on things that 
we should look at as a possible subject matter for future 
subcommittee hearings for retention. I worked in the private 
sector, and I had a cyber subpractice, ethical hack testing 
practice, back in the private sector. What you are up against 
is not only a higher baseline for salaries, but you are also up 
against what the industry would call hot skills. These are 
very, very important skills. Just when you think you have 
caught up or got within the range on the baseline comp, a firm, 
like the firm that I worked with, both Price Waterhouse and IBM 
[International Business Machines] says, okay, now we have got 
to come in with a signing bonus and some sort of retention 
measures that make it impossible in a governmental institution 
to stay up with. So getting feedback on that would be helpful.
    I am going to be brief because we have got votes and I want 
to stick to my time.
    I do want to just associate myself with the comments and 
questions that were made by Senator Inhofe and I think Senator 
Shaheen about open source software and some of the policy 
discussions we are having here. I will go back to the record to 
see how you all responded to their questions, but I share their 
concern.
    I want to get more of an idea of the scope and the scale of 
non-classified software that the Department uses. I am trying 
to get an idea of a volume, let us say, as a percentage of the 
entire portfolio. What are we looking at at non-classified 
software as a percentage of our base? I mean, is it safe to 
assume that it is in the thousands in terms of platforms, 
tools, the whole portfolio of the technology stack?
    Mr. Rapuano. Senator, that is a request that I have in to 
our system and to our CIO's office, and I can get that 
information back to you as soon as I get it.
    Mr. Smith. Yes. I would have to get back with you with more 
specifics.
    Senator Tillis. I think it would be helpful because I am 
sure that we have application portfolios out there--I hope, I 
should say--that we are following best practices. Somebody out 
there in the ops world knows exactly what our portfolio is and 
how they fit in the classified and unclassified realm. I think 
that would be very helpful, very instructive to this committee.
    I am going to yield back the rest of my time so hopefully 
other members can get their questions in before the vote. Thank 
you, Mr. Chair.
    Chairman McCain. Senator King?
    Senator King. Mr. Krebs, I just want to make you feel 
better about your title. I enjoyed that interplay with Senator 
Shaheen. 40 years ago I worked here as a staff member, and I 
was seeking a witness--I think I may have told the chairman 
this story--from the Office of Management and Budget from the 
administration. They said he is the Deputy Secretary under such 
and such. I said I do not know what that title means. The 
response was--and you can take this home with you--he is at the 
highest level where they still know anything. I now realize, by 
the way, that I am above that level. But I appreciate having 
you here.
    I think you fellows understated one important point, and I 
do not understand why the representative from the White House 
is not here because I think he has a reasonable story to tell. 
On May 11th, the President issued a pretty comprehensive 
executive order on this subject that is not the be-all and end-
all on the subject, but certainly is an important beginning.
    Now, here is my question, though. In that executive order, 
there were a number of report-back requirements that triggered 
mostly in August. My question is have those report-backs been 
done. Mr. Rapuano?
    Mr. Rapuano. Senator, they are starting to come in. As you 
note, there are a number that are still due out.
    Senator King. Some were 180 days, some were 90 days. So I 
am wondering if the 90 days, which expired in August, have come 
back.
    Mr. Rapuano. That is correct. I do not have the full 
tracker with me right here. I can get back to you on that.
    Senator King. I would appreciate that.
    [The information follows:]

    Mr. Rapuano did not respond in time for printing. When received, 
answer will be retained in committee files.

    Mr. Rapuano. Some have been submitted according to the 
original timeline. Others have been extended. But absolutely, 
those are the essential elements of information necessary to 
fully develop and update the strategy to the evolving threats 
and build that doctrine and requirements and plans.
    Senator King. You used the keyword of ``doctrine'' and I 
want to talk about that in a minute. But by the same token, 
this committee passed or the Congress passed as part of the 
National Defense Authorization Act last December a provision 
requiring a report from the Secretary of Defense to the 
President within 180 days and from the President to the 
Congress within 180 days. That report would have been due in 
June from the Secretary of Defense involving what are the 
military and non-military options available for deterring and 
responding to imminent threats in cyberspace. Do you know if 
that report has been completed?
    Mr. Rapuano. Yes, Senator. It was our original intent and 
desire to couple the two with the input both into the 
President's EO [Executive Order], as well as the input back to 
the Senate. Based on the delay of the President's EO, we 
decoupled that because we recognize your impatience and we need 
to----
    Senator King. You may have picked up some impatience this 
morning. Do we have it?
    Mr. Rapuano. So we will be submitting it to you shortly, 
and I will get a specific date for that.
    Senator King. ``Shortly'' does not make me feel much 
better. Is that geologic time or is that----
    Mr. Rapuano. Calendar time, Senator.
    Senator King. Please let us know.
    You mentioned the word ``doctrine,'' and I think that is 
one of the key issues here. If all we do is try to patch 
networks and defend ourselves, we will ultimately lose. Mr. 
Smith, you used the term ``impose consequences.'' Right now, we 
are not imposing much in the way of consequences. For the 
election hacking, which is one of the most egregious attacks on 
the United States in recent years, there were sanctions passed 
by the Congress, but it was 6 or 8 months later and it is 
unclear how severe they will be.
    We need a doctrine where our adversaries know if they do X, 
Y will happen to them. Mr. Rapuano, do you have any thoughts on 
that? Do you see what I mean? Just being on the defensive is 
not going to work in the end. If you are in a boxing match and 
you can bob and weave and you are the best bobber and weaver in 
the history of the world, if you are not allowed to ever punch, 
you are going to lose that boxing match.
    Mr. Rapuano. Yes, Senator. I certainly agree that both the 
demonstrated will and ability to respond to provocations in 
general and cyber in specific is critical to effective 
deterrence. I think the challenge that we have that is somewhat 
unique in cyber is defining a threshold that then does not 
invite adversaries to inch up close but short of it. Therefore, 
the criteria--it is very difficult to make them highly specific 
versus more general, and then the down side of the general is 
it is too ambiguous to be meaningful as----
    Senator King. Part of the problem also is we tend to want 
to keep secret what we can do when, in reality, a secret 
deterrent is not a deterrent. The other side has to know what 
is liable to happen to them. I hope you will bear that in mind. 
I think this is a critically important area because we have to 
have a deterrent capability. We know this is coming, and so far 
there has not been much in the way of price paid, whether it 
was Sony or Anthem-Blue Cross or the Government personnel 
office or our elections. There have to be consequences, 
otherwise everybody is going to come after us, not just Russia, 
but North Korea, Iran, and terrorist organizations. This is 
warfare on the cheap, and we have to be able not only to defend 
ourselves but to defend ourselves through a deterrent policy. I 
hope in the counsels of the administration that will be an 
emphasis in your response.
    Mr. Rapuano. Yes, I agree, Senator. That is the point of 
the EO in terms of that deterrence option set is to understand 
them in the wider context of our capabilities, different 
authorities, and to start being more definitive about what 
those deterrence options are and how we can best use them.
    Senator King. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Heinrich?
    Senator Heinrich. I want to return to that because I keep 
hearing the words, but I do not see something specific in 
place. We have struggled with this for years on this committee 
now. Imagine that tomorrow we had a foreign nation state cyber 
attack on our financial or our banking sector or next month on 
our utility or our transmission infrastructure or next year on 
our elections. I would suggest that any of those would cross a 
threshold. What is our doctrine for how, when, and with what 
level of proportionality we are going to respond to that kind 
of a cyber attack? Mr. Rapuano?
    Mr. Rapuano. First, I would note that obviously our 
deterrence options are expansive beyond cyber per se. So cyber 
is one of a large number of tools, including diplomatic, 
economic, trade, military options, kinetic, and then cyber. So 
looking at that broad space----
    Senator Heinrich. I agree wholeheartedly. You should not 
limit yourself to responding in kind with the same level of--or 
with the same toolbox. But do we have a doctrine? Because if we 
do not have a doctrine--one of the things that worked through 
the entire Cold War is we knew what the doctrine for the other 
side was and they knew what our doctrine was. That kept us from 
engaging in conflicts that neither side wanted to engage in. Do 
we have an overall structure for how we are going to respond? 
If we do not, I would suggest we have no way to achieve 
deterrence.
    Mr. Rapuano. We do not have sufficient depth and breadth of 
the doctrine as we have been discussing. That really is one of 
the primary drivers of the executive order, the 13800, is to 
have the essential elements to best inform that doctrine.
    Senator Heinrich. I mean, the chairman has been asking for 
an overall plan for I do not know how long. I think that is 
what we are all going to be waiting for. I wish I could ask the 
same question of Mr. Joyce, but maybe in a future hearing.
    For any of you, I spent a good part of yesterday looking at 
Russian-created, Russian-paid for Facebook ads that ran in my 
State and in places across this country and were clearly 
designed to divide this country, as well as to have an impact 
on our elections. What is the administration doing to make sure 
that in 2018 we are not going to see the same thing all over 
again? Do not all speak at once.
    Mr. Krebs. Sir, yes, let me start with the election 
infrastructure subsector that we have established. So from a 
pure cyber attack perspective, we are working with State and 
local officials to up their level of defense. But specific to 
the ad buys and social media use, it is still an emerging issue 
that we are assessing. I can defer to the FBI on their efforts.
    Senator Heinrich. Well, it is not emerging. It emerged. We 
have been trying to get our hands around this for close to a 
year now, and we still do not seem to have a plan and that 
worries me enormously. We have special elections in place. We 
have gubernatorial elections in place. We are continuing to see 
this kind of activity, and we need to get a handle on it.
    Let me go back to your issue of election infrastructure 
because as a number of people have mentioned, it has been 
widely reported that there as cyber intrusion into State-level 
voting infrastructure. It is my understanding that DHS, before 
you got there, was aware of those threats well before last 
year's election but only informed the States in recent months 
as to the nature of the intrusions in those specific States. 
Why did it take so long to engage with the subject-matter 
experts at the State level, and is there a process now in place 
so that we can get those security clearances that you mentioned 
in a timely way so that that conversation can head off similar 
activity next year?
    Mr. Krebs. Sir, thank you for the question.
    I understand that over the course of the last year or so, 
officials in each State that was implicated were notified at 
some level. Now, as we continued to study the issue and got a 
fuller understanding of how each State has perhaps a different 
arrangement for elections--in some cases, it is State-local. 
You have a chief election official. You have a CIO for the 
State. You have a CIO for the networks. You have a homeland 
security advisor. As we continued to get our arms around the 
problem in the governance structure across the 50 States plus 
territories, we got a better sense of here are the fuller range 
of notifications we need to make.
    So when you think about the notifications of September 
22nd, that was a truing up perhaps of each State opening the 
aperture saying, okay, we let this person know, but we are not 
letting these additional two or three officials know. So I 
would not characterize it necessarily as we just let them know 
then. It was we broadened the aperture, let the responsible 
officials know, and we gave them additional context around what 
may have happened.
    Senator Heinrich. I am working on legislation and have been 
working with the Secretary of State from my State, who is 
obviously involved in the National Association of Secretaries 
of State. It is not rocket science. I mean, it is basically 
building a spreadsheet of who and at what level. When we see 
things happen in a given geographic area, you pull out the book 
and you figure out who you need to be talking to. We need to 
make sure that that is in place.
    Mr. Krebs. Yes, sir. We are actively working that right 
now.
    Senator Heinrich. Thank you.
    Chairman McCain. Senator McCaskill?
    Senator McCaskill. Thank you.
    To reiterate some of the things that I have said 
previously, but the empty chair is outrageous. We had a foreign 
government go at the heart of our democracy, a foreign 
government that wants to break the back of every democracy in 
the world. A very smart Senator I heard say in this hearing 
room, who cares who they were going after this time. It will be 
somebody else next time. I am disgusted that there is not a 
representative here that can address this.
    I also am worried----
    Chairman McCain. Can I interrupt, Senator, and just say 
that we need to have a meeting of the committee and decide on 
this issue? I believe you could interpret this as a 
misinterpretation of the privileges of the President to have 
counsel. He is in charge of one of the major challenges, major 
issues of our time, and now he is not going to be able to show 
up because he is, quote, a counselor to the President. That is 
not what our role is.
    Senator McCaskill. I mean, I think in any other situation--
let us take out this President, take out Russia--this 
circumstance would not allow to stand by the
    United States Senate typically.
    Chairman McCain. I agree.
    Senator McCaskill. You would know more about that than I 
would. You have been here longer than I have. But I just think 
this is something that we need--in these times, when there is 
an issue every day that is roiling this country, we have a 
tendency to look past things that are fundamental to our 
oversight role here in the Senate. I am really glad that the 
chairman is as engaged as he is on this issue, and I look 
forward to assisting.
    Chairman McCain. Well, this should not count against the 
Senator's time, but we are discussing it and we will have a 
full committee discussion on it. I thank the Senator.
    Senator McCaskill. That is great.
    Mr. Krebs, I am also worried that we have no nominee for 
your position. So if the White House reviews this testimony, I 
hope they will understand that your job is really important. I 
am not taking sides as to whether or not you are doing a good 
job or a bad job, but the point is we do not need the word 
``acting'' in front of your name for this kind of 
responsibility in our government.
    Unfortunately, the chairman of the committee that I am 
ranking on, Homeland Security, has chosen not to have a 
hearing, believe it or not, on the election interference. So 
this is my shot and I am hoping that the chairman will be a 
little gentle with me because I have not had a chance to 
question on some things.
    Why in the world did it take so long to notify the States 
where there had been an attempt to enter their systems, their 
voter files?
    Mr. Krebs. Again, ma'am, as I mentioned earlier, at some 
point over the course of the last year, not just September 
22nd, an appropriate official, whether it was the owner of an 
infrastructure, a private sector owner, or a local official, 
State official, State Secretary, someone was notified.
    Senator McCaskill. But should not all of the Secretaries of 
State been notified? I mean, is that not just like a duh?
    Mr. Krebs. Ma'am, I would agree. I share your concern. I 
think over the course of the last several months we, as I 
mentioned, had a truing up and we have opened a sort of 
governance per each State. These are the folks that need to be 
notified of activity.
    Senator McCaskill. So what is the explanation for a State 
being told one day that it had been and the next day it had not 
been? How did that happen?
    Mr. Krebs. I understand the confusion that may have 
surrounded the notifications of September 22nd. I think the way 
that I would explain that is there was additional context that 
was provided to the individual States. So in one case perhaps, 
the election system network may not have been scanned, 
targeted, whatever it was. It may have been another State 
system. I would analogize that to the bad guy walking down your 
street checking your neighbor's door to see if they had a key 
to get into your house. So it is not always that they are 
knocking on the network. They may be looking for other ways in 
through other networks or similarities----
    Senator McCaskill. That does not change the fact that the 
Secretaries of State should immediately have been notified in 
every State whether they had been knocking on a neighbor's door 
or their own door. The bottom line is--good news--we have a 
disparate system in our country so it is hard to find one entry 
point. The bad news is if we do not have clear information 
going out to these Secretaries of State, then they have no shot 
of keeping up with the bad guys.
    Mr. Krebs. That is right, and going forward, we have that 
plan in place. We have governance structures. We have 
notifications. As I mentioned earlier, we have security 
clearance processes ongoing for a number of officials. We will 
get them the information they need when they need it and they 
can act on.
    Senator McCaskill. Because they do not want to take 
advantage of what you are offering, which is terrific, that you 
will come in and check their systems. No mandate, no hook, no 
expense. I talked to the Secretary of State of Missouri, and he 
was saying, listen, they are not even talking to us. Now, this 
was before September.
    But I do think somebody has got to take on the 
responsibility of one-on-one communication with 50 people in 
the country plus--I do not know who does voting in the 
territories--as to what is happening, what you are doing, what 
they are doing. I am not really enamored of the idea of moving 
all of this to DOD because I think what you guys do with the 
civilian workforce--I think there would be some reluctance to 
participate fully if it was directed by DOD.
    But the point the chairman makes is a valid one. If you all 
do not begin a more seamless operation with clear lines of 
accountability and control, we have no shot against this enemy. 
None. It worries me that this has been mishandled so much in 
terms of the communication between the States that are 
responsible for the validity of our elections.
    Let me talk to you briefly about Kaspersky. I do not even 
know how you say it. How are you going to make sure it is out 
of all of our systems?
    Mr. Krebs. So, ma'am, a little over a month ago, we did 
issue a binding operational directive for federal civilian 
agencies.
    Senator McCaskill. They get another 90 days to be able to 
get stuff because you are giving them a long time.
    Mr. Krebs. Yes, that is a 90-day process to identify, 
develop plans to remove. There may be budgetary implications 
and we have to work through that and then 30 days to execute. 
We have seen a number of activities in the intervening 30-plus 
days of actually people going ahead and taking it off.
    Senator McCaskill. Let me just ask you. Do you think if 
this happened in Russia, if they found a system of ours that 
was looking at all of their stuff--do you think they would tell 
their agencies of government you have 90 days to remove it? 
Seriously?
    Mr. Krebs. I have learned not to predict what the Russians 
would do.
    Senator McCaskill. I mean, really but the point I am trying 
to make is, I mean, why do you not say you have got to do it 
immediately?
    Mr. Krebs. Ma'am, you cannot just rip out a system. There 
are certain vulnerabilities that can be introduced by just 
turning a critical antivirus product off. So what we need to do 
is have a process in place that you can replace with something 
that is effective. In the meantime, we are able to put 
capabilities around anything that we do identify to monitor for 
any sort of traffic.
    Senator McCaskill. Is the private sector fully aware and 
are our government contractors fully aware of the dangers of 
the Kaspersky systems?
    Mr. Krebs. Ma'am, we have shared the binding operational 
directive with a number of our partners, including State and 
local partners, and working with some of our interagency 
partners as well. We are sharing risk information.
    Senator McCaskill. Yes. Is that a little bit like sharing 
with all the appropriate people at the time but not the 
Secretaries of State? I mean, I just think there needs to be a 
really big red siren here. What about government contractors? 
Is the BOD [Binding Operational Directive]--is it binding on 
our government contractors?
    Mr. Krebs. No, ma'am, it is not. Actually I am sorry. Let 
me follow up on that to get the specifics.
    Senator McCaskill. Should it not be?
    Mr. Krebs. It would make sense.
    Senator McCaskill. Since we have more contractors on the 
ground in Afghanistan than we have troops, would you not think 
it would be important that we would get Kaspersky out of their 
systems?
    Mr. Krebs. That would be a Department of Defense. My 
authority only extends to federal civilian agencies.
    Senator McCaskill. Department of Defense, have you guys 
told the contractors to get Kaspersky out?
    Mr. Rapuano. We have instructed the removal of Kaspersky 
from all of the DOD information systems. I will follow up 
specifically on contractors.
    Senator McCaskill. I would like an answer on the 
contractors.
    Thank you, Mr. Chairman, for your indulgence.
    Chairman McCain. Senator Gillibrand?
    Senator Gillibrand. Thank you, Mr. Chairman.
    Your agency, Mr. Krebs, declared that Russian-linked 
hackers targeted voting systems in 21 States this past 
election. Why did it take over a year to notify States that 
their election systems were targeted?
    Mr. Krebs. Ma'am, as I have stated, we notified an official 
within each State that was targeted or scanned. In the 
meantime, we have offered a series of services and 
capabilities, including cyber hygiene scans, to every State in 
the Union and every commonwealth. So not only did we notify the 
States, granted, there was a broader notification that we 
subsequently made. But we did make capabilities available to 
all 50 States and commonwealths.
    Senator Gillibrand. Are all 50 States using the 
capabilities that you offered?
    Mr. Krebs. I do not have the specific numbers of the States 
that are using ours, but we have seen a fairly healthy 
response.
    Senator Gillibrand. I would like a report on whether all 
States are using the recommended technology that you offered to 
them because I think we need to have that kind of transparency 
given what Senator McCain started this hearing with. I think it 
is a national security priority. If the States are not doing 
their jobs well, we need to provide the oversight that is 
necessary to make sure they do do their jobs well.
    Do you believe that making these election cybersecurity 
consultations optimal is sufficient?
    Mr. Krebs. I am sorry. Making them--oh, optional. Optional.
    Senator Gillibrand. Excuse me. Optional.
    Mr. Krebs. You know, fundamentally there are some 
constitutional questions in play here. What we do in the 
meantime is ensure that every resource that we have available 
and out there, that the State and local governments and 
election systems have the ability to access.
    Senator Gillibrand. I understand that there is a 9-month 
wait for a risk and vulnerability assessment. Is that accurate?
    Mr. Krebs. We offer a suite of services from remote 
scanning capabilities, cyber hygiene scans, all the way up to a 
full-blown vulnerability assessment that sometimes just to 
execute that vulnerability assessment, because the breadth and 
depth of the assessment, can actually take a number of weeks, 
if not months. So we are in the process of looking into whether 
that 9-month backlog exists and how to ensure, again, that in 
the meantime, we can provide every other tool needed out to the 
State and local officials.
    Senator Gillibrand. I guess what I am trying to get at is 
are we ready for the next election? Do you believe we are 
cyber-secure for the next election?
    Mr. Krebs. I think there is a lot of work that remains to 
be done. I think as a country, we need to continue ensuring 
that we are doing the basics right. Even at the State and local 
levels, even the private sector, there are still a lot of basic 
hygiene activities that need to be done.
    Senator Gillibrand. I would like a full accounting of what 
has been done, what is left to be done, and what are your 
recommendations to secure our electoral system by the next 
election? I would like it addressed to the entire committee 
because we just need to know what is out there, what is left.
    Senator Graham and I have a bill to have a 9/11 style 
commission to do the deep dive you are doing, to make 
recommendations to the Congress on the 10 things we must do 
before the next election, and then have the authority to come 
back to us so we can actually implement it because doing it on 
an ad hoc basis is not sufficient. I am very worried that 
because there is no accountability and because of the 
constitutional limitations that you mentioned, that we are not 
going to hold these States accountable when they have not done 
the required work.
    So we at least need to know what have you succeeded in 
doing, what is still left to be done, what are the impediments. 
Is it delays? Is it lack of enough expertise? Is it a lack of 
personnel? Is it a lack of resources? I need to know because I 
need to fix this problem.
    Mr. Krebs. Yes, ma'am. I will say that we are making 
significant progress. We have a working relationship, a strong 
partnership with the State and local election officials, and we 
are moving forward towards the next election.
    Senator Gillibrand. Okay.
    Mr. Rapuano, in your confirmation hearing, you said that 
the Russian interference in our election is a credible and 
growing threat and that Russians will continue to interfere as 
long as they view the consequences of their actions as less 
than the benefits that they accrue. Given the likelihood of 
continued cyber interference in American elections, what are 
the immediate steps that you are going to take and that the 
Federal Government should take to restore the integrity of our 
elections? I know you answered one of the earlier questions 
with the work we are doing with the National Guard, but I know 
that you are not necessarily doing all the training necessary 
or spending the resources to do all the National Guard training 
consistently with other active duty personnel.
    Mr. Rapuano. Senator, we stand at the ready in terms of the 
process that DHS has put into place to support all the States 
with regard to the election system vulnerabilities. To date, we 
have not been tasked directly to support that effort, but we 
certainly have capabilities that we could apply to that.
    Senator Gillibrand. Can I just have your commitment that in 
the next budget, you will include the full amount needed for 
the training of these cyber specialists within the National 
Guard?
    Mr. Rapuano. What I need to do, Senator, is check on the 
status of our current funding for that effort, and I will get 
back to you in terms of any deltas.
    Senator Gillibrand. Thank you.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Warren?
    Senator Warren. Thank you, Mr. Chairman.
    So I want to follow up, if I can, on these questions about 
the attacks on our voting systems. We know that 21 States faced 
attacks on their networks by Russian actors during the run-up 
to the 2016 election. It seems like the Russians are pretty 
happy with those efforts, and I do not see any reason to 
believe that they will not try again.
    In fact, Mr. Krebs, your predecessor at Homeland Security 
recently urged Congress to, quote, have a strong sense of 
urgency about Russian tampering in the upcoming elections. I 
know that Homeland Security designated our election system as 
critical infrastructure earlier this year.
    So I would just like to follow up on the question that 
Senator Gillibrand was asking and what I think I heard you say. 
Are you confident that our Nation is prepared to fully prevent 
another round of cyber intrusions into our election systems in 
2018 or 2020, Mr. Krebs?
    Mr. Krebs. So what I would say is that we have structures 
in place. This is not an overnight event. We are not going to 
flip a switch and suddenly be 100 percent secure.
    Senator Warren. So we are not there now.
    Mr. Krebs. We are working towards the goal of securing our 
infrastructure. Yes, ma'am.
    Senator Warren. It is a simple question. We are not there 
now?
    Mr. Krebs. I believe there is work to be done. Yes, ma'am.
    Senator Warren. Okay. So we are not there now.
    Can I just ask on maybe some of the specifics? Have you 
done a State-by-State threat assessment of the cyber 
environment leading up to the next election?
    Mr. Krebs. Are you speaking specific to the election 
infrastructure or statewide?
    Senator Warren. Election infrastructure.
    Mr. Krebs. I would have to check on that.
    Senator Warren. So you do not know whether or not there has 
been a State-by-State threat assessment?
    Mr. Krebs. We have engaged every single State. We are 
working with their----
    Senator Warren. But my question is actually more specific: 
a threat assessment for each State on their election 
infrastructure.
    Mr. Krebs. I would have to get back to you on that.
    Senator Warren. Okay.
    Are there minimum cyber standards in place for election 
systems?
    Mr. Krebs. We do work with the National Institute of 
Standards and Technology and the Election Assistance Commission 
to look at security standards for voting----
    Senator Warren. I understand you work on it. My question is 
are there minimum cyber standards in place.
    Mr. Krebs. There are recommended standards. Yes, ma'am.
    Senator Warren. There are minimum cyber standards.
    Mr. Krebs. There are recommended standards. Yes, ma'am.
    Senator Warren. All right. In place.
    Are there established best practices?
    Mr. Krebs. I believe there are best practices.
    Senator Warren. Those are in place.
    Any plans for substantial support for States to upgrade 
their cyber defenses?
    Mr. Krebs. If you are talking about investments----
    Senator Warren. I am.
    Mr. Krebs. Okay. That is a different question that I think 
that we need to have a conversation between the executive 
branch and Congress about how----
    Senator Warren. Was that a no?
    Mr. Krebs. At this point, I do not personally have the 
funds to assist----
    Senator Warren. So that is a no.
    Mr. Krebs. That is a resourcing to States that are grant 
programs that we can put in place perhaps to improve 
capability.
    Senator Warren. So you not only do not have the money to do 
it. Do you any plans--I will ask the question again--for 
substantial support for States to upgrade their cyber defenses? 
Do you have plans in place?
    Mr. Krebs. We are exploring our options.
    Senator Warren. So the answer is no. You do not have them 
in place.
    Mr. Krebs. We are working on plans. Yes, ma'am. We are 
assessing what they need.
    Senator Warren. Yes, the answer is no? Okay.
    Look, I understand that States have the responsibility for 
their own elections and also that States run our Federal 
elections. But I do not think anybody in this room thinks that 
the Commonwealth of Massachusetts or the City of Omaha, 
Nebraska should be left by themselves to defend against a 
sophisticated cyber adversary like Russia. If the Russians were 
poisoning water or setting off bombs in any State or town in 
America, we would put our full national power into protecting 
ourselves and fighting back. The Russians have attacked our 
democracy, and I think we need to step up our response and I 
think we need to do it fast.
    Thank you, Mr. Chairman.
    Chairman McCain. Senator Peters?
    Senator Peters. Thank you, Mr. Chairman.
    Thank you to our witnesses for your testimony today.
    I think I would concur with all of my colleagues up here 
that the number one national security threat we face as a 
country is the cyber threat. It is one we have to be laser-
focused on. I will concur with the chairman others who are very 
frustrated and troubled by the fact that it does not seem like 
we have a comprehensive strategy, we do not have a plan to deal 
with this in a comprehensive way integrating both State and 
local officials with federal officials, as well as the business 
sector which is under constant attack.
    We know the risk is not just military. It is not just the 
elections, as significant as that is, because it goes to the 
core of our democracy, but significant attacks against our 
economic security, which also goes to the core of our 
civilization. We have just been hit with an absolutely 
incredible hack with Equifax that basically has taken now--some 
actor out there has taken the most private information 
necessary to open up accounts and to take somebody's identity. 
You are talking over 100 million people in this country. I 
cannot think of a worse type of cyber attack.
    So, Mr. Smith, my question to you is do you think we will 
be able to determine who is responsible for that hack?
    Mr. Smith. Yes.
    Senator Peters. When will be able to do that?
    Mr. Smith. I would not want to put a specific time frame on 
it.
    Senator Peters. Generally.
    Mr. Smith. Generally within maybe 6 or 8 months. That is on 
the far side.
    Senator Peters. So hopefully within less than that time. So 
we will be able to identify. I know attribution is always very 
difficult. Do you believe that we will be able to identify who 
was responsible?
    Then second, do we have to tools to effectively punish 
those individuals or whoever that entity may be? Those are two 
separate questions.
    Mr. Smith. Correct and two separate issues.
    First, on the attribution point, to get it to a certain 
destination is easier than the second question, which is 
imposing significant consequences on an individual or on a 
specific--if it becomes nation state or associate like that. As 
you have seen recently, though, with the Yahoo compromise where 
we have seen a blended threat targeting our businesses and our 
country where you have criminal hackers working at the 
direction of Russian intelligence officers, so that is where I 
become a little more vague as to my answer on specific, would 
we be able to impose consequences.
    Senator Peters. Which is a significant problem that you 
cannot answer that, I would think, not you personally--you 
cannot answer it--that we do not have a plan, we do not have a 
deterrence plan that says if you do this, these are the 
consequences for you and they will be significant, particularly 
if there is a state actor associated with it.
    Now, I know, Mr. Rapuano, you mentioned the line. We do not 
want to actually put a line somewhere because everybody will 
work up to that line. I think we have a problem now, as we have 
zero lines right now. So it is like the Wild West out there.
    But would you concur that if a state actor, hypothetically 
a state actor, was behind an Equifax breach that compromised 
the most personal financial information of over 100 million 
Americans--would that be over any kind of line that you could 
see?
    Mr. Rapuano. Sir, I think that the process that we have in 
play right now in terms of all the reports being submitted in 
response to the executive order, looking at how we protect 
critical infrastructure, modernizing IT, develop the workforce, 
develop deterrence options, looking across those suite of 
issues, what are our capabilities, what are our 
vulnerabilities, what are the implications of adversaries that 
are exploiting those vulnerabilities, that helps inform that 
doctrine and that also helps inform an understanding of how to 
best establish what those thresholds are, those deterrence 
thresholds, what may be too specific to be useful, but what is 
too vague to be useful as well. We are on the path to 
developing that.
    Senator Peters. Well, having said that, I think it is a 
straightforward question, someone who hacks in and steals 
information from over 100 million Americans and something that 
compromises their potential identity for the rest of their 
lives. I would hope the directive would say that that is well 
over any kind of line.
    Mr. Rapuano. It certainly warrants a consequence, 
absolutely. Is it an act of war? I think that is a different 
question, and I think there are a number of variables that go 
into that. There would be more details that we would be looking 
at in terms of understanding what the actual impact is, who the 
actor is, what is our quality and confidence in attribution.
    Senator Peters. Mr. Krebs, you answered some questions 
related to Kaspersky and taking out that software from the 
machines of the Federal Government, the United States 
Government, because of the risk that is inherent there. If the 
risk is there for the U.S. Government, is it not risky for the 
average citizen as well to have this software on their 
computers when we have millions of Americans that have the 
software and potentially access to their personal information 
on that computer? Is that not a significant security risk that 
we should alert the public to?
    Mr. Krebs. So risk, of course, is relative. The Department 
of Homeland Security made a risk assessment for the civilian 
agencies that we were not willing to have these products 
installed across our networks. I think that is a pretty strong 
signal of what our risk assessment was, and we have shared 
information across the critical infrastructure community and 
State and locals on that decision.
    Senator Peters. So you say that is an indication of the 
seriousness of the problem. So the average citizen also will 
take this software off their system?
    Mr. Krebs. I think the average citizen needs to make their 
own risk-informed decision. Again, the Federal Government has 
made the decision that this is an unacceptable risk position, 
and we are instructing agencies to remove at present.
    Senator Peters. Right. Thank you so much.
    Chairman McCain. Senator Reed?
    Senator Reed. Thank you very much, Mr. Chairman.
    Just quickly, Mr. Rapuano, following up on Senator Peters? 
line of questioning, is Cyber Command prepared to engage and 
defeat an attack on our critical infrastructure in the United 
States? I know there is an issue here of what is the trigger, 
but are they prepared to do that right now?
    Mr. Rapuano. So Cyber Command is developing a suite of 
capabilities against a variety of targets that are--yes, it is 
inclusive of responding to attack on U.S. critical 
infrastructure.
    Senator Reed. The question is--and Senator Peters raised 
it--what is, for want of a better term, the trigger? You 
suggested act of war. We are still on sort of the definitional 
phase of trying to figure out what would prompt this. We have 
the capability, but the question is under what circumstance do 
we use it. Is that fair?
    Mr. Rapuano. That is fair. Absolutely.
    Senator Reed. Thank you.
    Chairman McCain. I want to thank the witnesses, and I want 
to thank you for the hard work you are doing and your candor in 
helping this committee understand many of the challenges. I 
must say I appreciate your great work on behalf of the country. 
But I come back 4 years ago, I come back 2 years ago, I come 
back 1 year ago. I get the same answers. We put into the 
defense authorization bill a requirement that there be a 
strategy, followed by a policy, followed by action. We have 
now, 4 months late, a report that is due before the committee. 
We have our responsibilities and we are going to carry them 
out. We have authorities that I do not particularly want to 
use, but unless we are allowed to carry out our 
responsibilities to our voters who sent us here, then we are 
going to have to demand a better cooperation and a better 
teamwork than we are getting now.
    Again, I appreciate very much the incredible service that 
you three have provided to the country, and I am certainly not 
blaming you for not being able to articulate to us a strategy 
which is not your responsibility. The implementation of actions 
dictated by the strategy obviously is yours.
    So when we see the person in charge at an empty seat here 
today, then we are going to have to react. The committee is 
going to have to get together and decide whether we are going 
to sit by and watch the person in charge not appear before this 
committee. That is not constitutional. We are co-equal branches 
of government. So I want to make sure that you understand that 
every member of this committee appreciates your hard, 
dedicated, patriotic work and what you are dealing with and 
doing the best that you can with the hand you are dealt.
    This hearing has been very helpful to us in assembling--not 
assembling but being informed as to one of the major threats to 
America's security. I thank you for that. I thank you for your 
honest and patriotic work. But we are going to get to this 
because of the risk to our very fundamentals of democracy among 
which are free and fair elections.
    So is there anything that the Senator from Maine would like 
to editorialize? He usually likes to editorialize on my 
remarks.
    Senator King. My mind is racing, but I think prudence 
dictates no response, Mr. Chairman.
    [Laughter.]
    Chairman McCain. I thank the witnesses for your 
cooperation. I thank you for your service to the country.
    This hearing is adjourned.
    [Whereupon, at 11:53 a.m., the committee was adjourned.]

    [Questions for the record with answers supplied follow:]

               Questions Submitted by Senator Deb Fischer
                         supply chain security
    1. Senator Fischer. Beyond the specific actions taken with respect 
to Kaspersky products, what is your department doing holistically to 
manage the risks cyber risks associated with companies--particularly IT 
or telecom companies--that have relationships with foreign governments?
    Mr. Krebs. Our supply chain presents a significant source of risk 
that is being targeted with growing regularity by our most 
sophisticated adversaries. The acquisition or use of equipment or 
services from foreign suppliers within U.S. telecommunications networks 
without a full understanding of the associated risk may undermine the 
security, integrity, and reliability of those networks. To understand 
and appropriately mitigate such risks to U.S. telecommunications 
networks requires significant collaboration with industry, including 
sharing intelligence related to specific risks to U.S. 
telecommunications networks and assessments of vulnerabilities.
    The Department of Homeland Security (DHS) works in coordination 
with other federal agencies to address supply chain risk. Several 
agencies have programs in place to assess supply chain risk of 
information and communications technology (ICT) purchased by federal 
agencies. To address these growing risks, the National Protection and 
Programs Directorate (NPPD) is launching a Cyber Supply Chain Risk 
Management (C-SCRM) initiative. The objective of the C-SCRM initiative 
is to enable stakeholders to make better informed procurement decisions 
by providing supply chain risk assessments and mitigation 
recommendations. This initiative is focused on closing known 
information sharing gaps and supporting DHS's efforts to address supply 
chain risk for government and private sector entities.
    DHS and other interagency partners have engaged with private sector 
entities to better understand supply chain risk and examine options to 
mitigating risk. DHS participates in two industry-government working 
groups addressing increasing concerns regarding business risk and 
commercial threats. Both of these working groups are making near-term 
incremental improvements in the identification, communication, and 
analysis of third party risk-related information.
    DHS is a member of the Committee on Foreign Investment in the 
United States (CFIUS). CFIUS reviews transactions which could result in 
foreign control of any person engaged in interstate commerce in the 
United States. As a member of CFIUS, DHS can identify risks to DHS 
equities arising from CFIUS transactions, including those related to 
cybersecurity. CFIUS generally takes one of two mitigating actions when 
unresolved risk is identified: (1) establishment of a binding national 
security agreement with the parties involved in the transaction, or (2) 
in rare circumstances, recommend the President prohibit the 
transaction.
    DHS is also a member of Team Telecom, a working group of federal 
agencies who review FCC applications for new service authorizations, 
including mergers and acquisitions, involving telecommunications 
operators with foreign ownership in order to protect U.S. national 
security, law enforcement, and public safety interests. This allows for 
dialogue and the sharing of information between DHS and companies with 
which Team Telecom has mitigation agreements in an effort to address 
any national security risk that may arise from the FCC granting a new 
service authorization.
    Additionally, DHS implemented a policy to include a requirement to 
address supply chain risks as a part of efforts related to the 
management and protection of sensitive DHS systems. DHS requires supply 
chain risk management principles to be included in the contracting 
process for all hardware and software to ensure the confidentiality, 
integrity, and availability of government information.
    Mr. Rapuano. This is a complex challenge because there is a global 
market for commercial information technology and communications 
products. Many of the commercial off-the-shelf products used by the DOD 
can be purchased by foreign governments as well. It is important to 
distinguish such products produced by a U.S.-based company, or by a 
company that is headquartered in an allied nation, which can also be 
purchased by adversaries, from commercial IT products produced by 
companies based in countries whose interests are not always aligned 
with United States' interests. One should view such products with 
caution. The risk associated with global telecom companies is equally 
complicated due to their global customer base. In each of these cases, 
DOD has policies in place, or is in the process of putting policies in 
place, which govern these complex business relationships. The 
Department has implemented a Trusted Systems and Networks (TSN) 
strategy as a risk-based approach to address Supply Chain Risk 
Management (SCRM) concerns for globally sourced information and 
communications technology being integrated into DOD critical systems 
and networks. This TSN/SCRM strategy seeks to establish trust and 
confidence in our critical systems and DOD's ability to execute its 
missions in a cyber contested environment, around the globe and 
throughout the system's lifecycle. The DOD Chief Information Officer 
(CIO) and the Undersecretary of Defense for Acquisition, Technology, 
and Logistics (AT&L) established DOD policy and regulations (DOD 
Instruction (DODI) 5200.44, Protection of Mission Critical Functions to 
Achieve Trusted Systems and Networks (November 12, 2012)), to enable 
robust SCRM processes across DOD. DODI 5200.44 outlines a SCRM approach 
for vetting critical components prior to acquiring or integrating them 
into national security systems (NSS). The multi-discipline approach 
integrates systems engineering, SCRM, security, counterintelligence, 
intelligence, cybersecurity, hardware and software assurance, assured 
services, and information systems security engineering. DOD CIO leads 
the TSN-Roundtable, which meets quarterly with Service and Agency TSN 
Focal Points and other stakeholders, to support DOD-wide implementation 
of DODI 5200.44 by sharing best practices and defining TSN-enterprise 
capability requirements. In support of the TSN strategy, the Department 
established enterprise capabilities to support the Services and 
Agencies in their implementation: The Defense Intelligence Agency 
established the SCRM Threat Analysis Center to provide supply chain 
threat assessments to Programs for their critical components. AT&L 
established the Joint Federated Assurance Center (JFAC) to manage 
sharing of hardware and software (HW/SW) assurance testing capabilities 
and foster improved HW/SW test research and development. In addition, 
the Department has specialized authorities available to address supply 
chain risks by excluding specific sources. More specifically, section 
806 of the NDAA for fiscal year 2011, as amended by section 806 of the 
NDAA for fiscal year 2013, has been implemented at DFARS Subpart 
239.73, ``Requirements for Information Relating to Supply Chain Risk.'' 
The rule enables DOD components to exclude a source that fails to meet 
established qualifications standards or fails to receive an acceptable 
rating for an evaluation factor regarding supply chain risk for 
information technology acquisitions, and to withhold consent for a 
contractor to subcontract with a particular source or to direct a 
contractor to exclude a particular source. DOD is also active in 
interagency and private sector SCRM efforts. DOD CIO participated in 
development of National Institute of Standards and Technology (NIST) 
Special Publication (SP) 800-161 on SCRM Practices for Federal 
Information Systems and Organizations and co-led with NIST the 2017 
update of the Committee on National Security Systems (CNSS) update of 
the CNSS Directive No. 505, Supply Chain Risk Management. DOD and other 
interagency partners host quarterly Software & Supply Chain Assurance 
Forums bringing together industry-academia-government SCRM experts. DOD 
CIO also continues to engage trade organizations and standards 
development organizations on ``commercially acceptable global sourcing 
standards.''
                               __________
                Questions Submitted by Senator Ben Sasse
                          senate cybersecurity
    2. Senator Sasse. How likely is it that Congressional IT systems 
have been compromised by hostile foreign intelligence services?
    Mr. Rapuano. I respectfully defer to the DOJ (FBI) and DHS, since 
the DOD has no jurisdiction or role in the defense of Congressional IT 
systems, unless a request for technical assistance (RTA) is issued to 
secure DOD support as part of a cyber incident response effort.
    Mr. Smith did not respond in time for printing. When received, 
answer will be retained in committee files.

    3. Senator Sasse. Is it possible that foreign intelligence services 
are sitting on our systems right now undetected?
    Mr. Rapuano. If by saying ``our systems'' you mean congressional 
computer networks, I again defer to DOJ to address the question of 
whether or not foreign intelligence services have intruded onto 
congressional computer networks.
    Mr. Smith did not respond in time for printing. When received, 
answer will be retained in committee files.
                  cybersecurity doctrine and strategy
    4. Senator Sasse. Where is the Secretary of Defense's cyber 
strategy?
    Mr. Rapuano. The Department has begun the process to update the 
2015 Cyber Strategy. However, it is necessary that this strategy be 
nested within the National Security, National Military and National 
Defense Strategies, which are still in development. Therefore, I cannot 
provide you a specific date when the updated cyber strategy will be 
released, but I pledge to keep Congress updated as this process 
progresses.

    5. Senator Sasse. Why has this strategy not been produced?
    Mr. Rapuano. The Department continuously assesses the efficacy and 
scope of its existing Cyber Strategy. Previously, the decision to 
update our 2011 DOD Cyber Strategy was made in 2014 and resulted in our 
current DOD Cyber Strategy being published in April 2015. The 
Department recognizes the need to begin our next cyber strategy update 
and is building the framework for a new strategy that not only keeps 
pace with the cyber threat but also addresses congressional concerns. 
This strategy will be informed by the broader National Security and 
National Defense Strategies that the Department is currently working 
with the other departments and agencies. We believe the updated Cyber 
Strategy must be synchronized with these overarching strategies to 
produce the most informed and effective final product.

    6. Senator Sasse. When will it be completed and when will the SASC 
be able to review it?
    Mr. Rapuano. Although I cannot provide a specific completion date 
at this time for the reasons stated above, I can assure the Committee 
that this is a priority for the Department's efforts in cyberspace and 
that substantive work is already underway to produce a final product as 
soon as possible.

    7. Senator Sasse. Mr. Rapuano, what are the fundamentals of cyber 
deterrence--not cybersecurity per se--but, cyber deterrence? How do we 
reduce our enemies' desire to conduct cyberattacks against us?
    Mr. Rapuano. Deterring enemies in cyberspace requires intensive 
interagency policy planning to harmonize (integrate laterally) and 
synchronize (sequence over time correctly) the use of all instruments 
of national power to persuade adversaries not to attempt to harm us 
using cyberspace. First, we must implement world-leading cybersecurity 
capabilities to make the networks, systems, and information supporting 
our critical infrastructure and our military forces highly resilient in 
a cyber-contested environment. This would greatly increase the 
difficulty encountered by adversaries in mounting successful 
cyberattacks and could serve to discourage them from making such 
attempts. At the same time, we must utilize an optimum combination of 
messaging (e.g., declaratory policy, diplomacy, and capability 
demonstrations); shaping of the strategic environment in ways that are 
inhospitable to malicious cyber activities; imposing substantial 
consequences such as economic penalties for actual cyberattacks 
attributable to particular actors; law enforcement actions; and 
building coalitions of like-minded nations to join with us in these 
efforts. In addition, increasing our capability to detect, block, and 
disrupt or subvert malicious cyber threat activities will minimize any 
adversary's success, making such activities less attractive and more 
costly. Exposing cyber threat activity as unacceptable behavior, and 
attaching civil, criminal or monetary or trade sanctions when we have 
adequate attribution can create disincentives and hesitation on the 
part of our adversaries. Establishing and enforcing a cyber behavior 
threshold with escalating severity will build structure of predictable 
and unpredictable consequences that will help shape cyber threat actor 
intentions and actions.

    8. Senator Sasse. How is DOD doing in building our nation's cyber 
deterrence doctrine?
    Mr. Rapuano. Deterring malicious behavior in cyberspace requires a 
whole-of-government approach. Consequently, DOD is actively 
participating in interagency efforts to develop a report on the 
Nation's strategic options for deterring adversaries and better 
protecting the American people from cyber threats, as required by the 
President's Executive Order 13800, Strengthening the Cybersecurity of 
Federal Networks and Critical Infrastructure. That report, when 
completed, will shape our deterrence activities in support of national 
level cybersecurity policy, which will entail numerous follow-on 
implementation efforts by all interagency players. As DOD formulates 
its own Department-level cyber deterrence doctrine, an effort currently 
underway, we will seek to ensure that it is compatible with, and 
supports, the emerging national-level strategy.
                         threat of cyber attack
    Senator Sasse. Mr. Smith, are there any ongoing efforts by Russia, 
China, North Korea, or any other State to digitally target U.S. 
critical infrastructure or systems?
    Mr. Smith did not respond in time for printing. When received, 
answer will be retained in committee files.

    9. Senator Sasse. On a scale of 1-10 (10 being the most dangerous), 
how would you rank the current cyber threat against the U.S.?
    Mr. Smith did not respond in time for printing. When received, 
answer will be retained in committee files.

    10. Senator Sasse. What cyber threat or vulnerability are you most 
concerned about these days?
    Mr. Krebs. There are a range of high priority risk areas based on 
the current threat environment. Adversaries continue to test our 
critical infrastructure, and as a result we are focusing efforts on the 
interconnectedness and communications reliance of our nation's critical 
infrastructure, particularly those services that underpin the essential 
functions of our economy and way of life. Over the past year, Americans 
saw advanced persistent threat actors, including hackers, cyber 
criminals, and nation-states increase the frequency and sophistication 
of these attacks. Our adversaries have been developing and using 
advanced cyber capabilities to undermine critical infrastructure, 
target our livelihoods and innovation, steal our national security 
secrets and threaten our democracy through attempts to manipulate 
elections. We are working with our partners in the Government and 
private sector to defend against and mitigate the risk posed by our 
adversaries.

    Senator Sasse. All Witnesses: Please provide a one-word answer to 
the following question:

    11. Is the nation's cyber vulnerability level ``acceptable'' 
(meaning we have the threat under control), is it ``concerning'' 
(meaning the threat is rising and may soon pose a significant risk to 
our national interests and our way of life), or is it ``critical'' 
(meaning the threat already poses a significant risk to our national 
interests and our way of life)?
    Mr. Joyce did not respond in time for printing. When received, 
answer will be retained in committee files.
    Mr. Rapuano. It is difficult to state definitively the Nation's 
level of vulnerability in cyberspace at any one moment. However, the 
evolving nature of the cyber threat and the pace and scope at which the 
U.S. Government is witnessing cyber incidents against key sectors of 
the U.S. economy and infrastructure highlight the continued need to 
address our Nation's cyber vulnerabilities as a priority. As 
highlighted in my testimony, it is not likely that we can address every 
vulnerability and thus must prioritize efforts to protect the most 
critical assets and manage risk strategically. In the defense 
industrial sector, this threat already poses a significant risk to the 
U.S. warfighting capability today and in the future. Recent changes in 
acquisition regulations regarding protection of controlled defense 
information on contractor information systems will provide some risk 
reduction, as will the emphasis on countering insider threats. The 
President's Cyber Executive Order directs the Executive Branch to 
provide such an updated framework.
    Mr. Smith did not respond in time for printing. When received, 
answer will be retained in committee files.
    Mr. Krebs. Cyber threats remain one of the most significant 
strategic risks to the United States, threatening our national 
security, economic prosperity, and public health and safety. The level 
of vulnerability varies across sectors and fluctuates based on new 
technology that is acquired. Instead of focusing on a general score, 
DHS is committed to defending federal networks and ensuring the 
security of cyberspace and critical infrastructure.

    12. Senator Sasse. What concrete steps need to be taken to reduce 
our cyber risk to an acceptable level?
    Mr. Joyce did not respond in time for printing. When received, 
answer will be retained in committee files.
    Mr. Rapuano. Individual cyber risks are assessed by evaluating the 
combination of criticality, vulnerability, and threat variables. DOD 
assesses the cyber risk by following the National Institute of 
Standards and Technology (NIST) Risk Management Framework, which 
defines risk as a ``measure of the extent to which an entity is 
threatened by a potential circumstance or event, and a function of: (i) 
the adverse impacts that would arise if the circumstance or event 
occurs; and (ii) the likelihood of occurrence.'' DOD is taking a number 
of concrete steps to reduce our cyber risk to an acceptable level, 
including conducting cyber assessments of its critical assets, 
enhancing cyber defensive capabilities, updating contracting rules to 
improve accountability and responsibility for protection of DOD data 
within the Defense Industrial Base (DIB), updating information systems 
security requirements, developing policies to support cyber damage 
assessment processes, and focusing on protection of the Department's 
critical acquisition programs and technologies. In addition, DOD is in 
the process of conducting cyber vulnerability assessments of our major 
weapon systems and our critical infrastructure, in response to section 
1647 of the fiscal year 2016 NDAA and section 1650 of the fiscal year 
2017 NDAA.
    Mr. Smith did not respond in time for printing. When received, 
answer will be retained in committee files.
    Mr. Krebs. Safeguarding and securing cyberspace is a core homeland 
security mission. Malicious cyber actors target the paths of least 
resistance, lowest effort for the biggest payoff, and simplicity. Many 
information technology system compromises exploit basic vulnerabilities 
such as: email phishing, insecure password practices, default and 
improper configuration, and poor patch management. Continuing to 
address these basic vulnerabilities will make significant progress in 
reducing the Nation's cybersecurity risk.
    Executive Order 13800, Strengthening the Cybersecurity of Federal 
Networks and Critical Infrastructure, recognizes that effective 
cybersecurity requires entities to identify, detect, respond, and if 
necessary, recover from cyber intrusions. We are fully engaged in 
outreach to stakeholders to provide cybersecurity threat information 
and highlight the need to prioritize and manage cybersecurity risks. We 
also promote the standardization of information technology and 
cybersecurity capabilities to control costs and improve asset 
management, and provide support to improve incident detection, 
reporting and response capabilities.
    Section 9 of Executive Order (EO) 13636, Improving Critical 
Infrastructure Cybersecurity, states that DHS ``shall use a risk-based 
approach to identify critical infrastructure where a cybersecurity 
incident could reasonably result in catastrophic regional or national 
effects on public health or safety, economic security, or national 
security.'' Further, section 9 states, ``the Secretary shall review and 
update the list of identified critical infrastructure under this 
section on an annual basis.'' The National Protection and Programs 
Directorate (NPPD) executes this program using a collaborative approach 
with expertise from public and private sector partners and Sector-
Specific Agencies.
    Identification supports both critical infrastructure needs and 
national security objectives by providing the Federal Government with 
the ability to more effectively disseminate specific and targeted 
cybersecurity threat information to identified cyber-dependent critical 
infrastructure. This then supports the prioritization, as appropriate, 
of government resources and programs available to identified cyber-
dependent critical infrastructure, helping improve the Government's 
understanding of those systems or assets whose incapacity or disruption 
would have catastrophic consequences. This understanding helps inform 
the Government's planning, protection, mitigation and response efforts 
provided in partnership with impacted state, local, territorial, tribal 
and private sector entities in the event of a cyber incident.
                               __________
             Questions Submitted by Senator Jeanne Shaheen
         removal of kaspersky software from government systems
    13. Senator Shaheen. Secretary Krebs, Kaspersky Lab partners with 
many well-known companies that specialize in areas beyond anti-virus 
protection. How are you ensuring that every bit of Kaspersky software 
whether it be on government computers, networks, and TVs is completely 
removed from U.S. systems within 90 days (according to the DHS 
directive)?
    Mr. Krebs. On September 13, 2017, the Acting Secretary of Homeland 
Security issued Binding Operational Directive (BOD) 17-01: Removal of 
Kaspersky-Branded Products. BOD 17-01 instructs federal agencies to 
identify and report to the Department of Homeland Security (DHS) by 
October 13, 2017, the use or presence of Kaspersky Lab-branded products 
on federal information systems. This process has identified the use of 
Kaspersky Lab-branded products on some systems at some agencies. Those 
agencies also developed plans to remove such products as required by 
the BOD.
    DHS provided an opportunity for Kaspersky Lab to submit a written 
response addressing the Department's concerns. This opportunity 
provided the company a full opportunity to inform the Acting Secretary 
of any evidence, materials, or data that may be relevant. This 
opportunity was also made available to any other entity that claims its 
commercial interests are directly impacted by the directive.

    14. Senator Shaheen. Secretary Krebs, what is the standard applied 
to agencies working to successfully remove all Kaspersky products from 
their systems?
    Mr. Krebs. On September 13, 2017, the Acting Secretary of Homeland 
Security issued Binding Operational Directive (BOD) 17-01: Removal of 
Kaspersky-Branded Products. BOD 17-01 instructs federal agencies to 
identify and report to the Department of Homeland Security (DHS) by 
October 13, 2017, the use or presence of Kaspersky Lab-branded products 
on federal information systems. This process has identified the use of 
Kaspersky Lab-branded products on some systems at some agencies. Those 
agencies also developed plans to remove such products as required by 
the BOD.
    DHS provided an opportunity for Kaspersky Lab to submit a written 
response addressing the Department's concerns. This opportunity 
provided the company a full opportunity to inform the Acting Secretary 
of any evidence, materials, or data that may be relevant. This 
opportunity was also made available to any other entity that claims its 
commercial interests are directly impacted by the directive.

    15. Senator Shaheen. Secretary Krebs, do you plant to consult with 
this Committee on the directive's progress after the initial 60-day 
review?
    Mr. Krebs. On September 13, 2017, the Acting Secretary of Homeland 
Security issued Binding Operational Directive (BOD) 17-01: Removal of 
Kaspersky-Branded Products. BOD 17-01 instructs federal agencies to 
identify and report to the Department of Homeland Security (DHS) by 
October 13, 2017, the use or presence of Kaspersky Lab-branded products 
on federal information systems. This process has identified the use of 
Kaspersky Lab-branded products on some systems at some agencies. Those 
agencies also developed plans to remove such products as required by 
the BOD.
    DHS provided an opportunity for Kaspersky Lab to submit a written 
response addressing the Department's concerns. This opportunity 
provided the company a full opportunity to inform the Acting Secretary 
of any evidence, materials, or data that may be relevant. This 
opportunity was also made available to any other entity that claims its 
commercial interests are directly impacted by the directive.
                             other agencies
    16. Senator Shaheen. Secretary Krebs, have other agencies been 
successful in identifying and removing Kaspersky products on their 
information systems?
    Mr. Krebs. On September 13, 2017, the Acting Secretary of Homeland 
Security issued Binding Operational Directive (BOD) 17-01: Removal of 
Kaspersky-Branded Products. BOD 17-01 instructs federal agencies to 
identify and report to the Department of Homeland Security (DHS) by 
October 13, 2017, the use or presence of Kaspersky Lab-branded products 
on federal information systems. This process has identified the use of 
Kaspersky Lab-branded products on some systems at some agencies. Those 
agencies also developed plans to remove such products as required by 
the BOD.
    DHS provided an opportunity for Kaspersky Lab to submit a written 
response addressing the Department's concerns. This opportunity 
provided the company a full opportunity to inform the Acting Secretary 
of any evidence, materials, or data that may be relevant. This 
opportunity was also made available to any other entity that claims its 
commercial interests are directly impacted by the directive.
                               __________
           Questions Submitted by Senator Richard Blumenthal
                         election interference
    17. Senator Blumenthal. Mr. Rapuano, Mr. Smith, and Mr. Krebs, do 
you agree that Russia must pay a steeper price for its cyberattacks and 
interference in our election? Do you agree that our actions so far have 
not made Russia realize that they have more to lose than gain with 
their behavior?
    Mr. Rapuano. Russia is a determined adversary with advanced cyber 
capabilities that it is willing to employ to advance Russia's national 
interests. Although I think the United States response to Russian 
election interference clearly communicated how seriously we took their 
actions, I am not convinced that it was sufficient to deter Russia from 
undertaking similar activities in the future. If Russia views the 
benefits of its actions to be greater than the risks, its unacceptable 
conduct is likely to continue. All that said, no single U.S. Government 
action, and no single DOD activity, will successfully counter Russia's 
malign influence activities. The United States must approach this as a 
sustained long-term campaign that leverages all instruments of national 
power to deter, counter, and when required, respond to Russia's 
attempts to undermine United States national interests and values.
    Mr. Smith did not respond in time for printing. When received, 
answer will be retained in committee files.
    Mr. Krebs. The U.S. Government seeks to leverage our various 
authorities and capabilities to secure vital systems and assets, 
improve resilience against cyber incidents, and quickly respond to and 
recover from incidents when they occur. Regarding Russia or any other 
state or non-state actor, deterrence is an important component of 
national efforts to change the behaviors of malicious cyber actors and 
to protect information and information systems, including critical 
infrastructure, from harm. The foundation of our deterrence and broader 
cybersecurity efforts includes securing our own systems before an 
adversary acts thereby making exploitation of U.S. infrastructure more 
difficult and costly. This denies malicious cyber actors any benefit to 
less sophisticated attempts at intrusion and reduces benefits to more 
sophisticated attacks. Deterrence by denial requires a whole of 
Government, and indeed whole of Nation, approach that is coordinated 
with our private sector, state and local, and international partners 
across all areas of national preparedness.
    The Department of Homeland Security (DHS) supports and enables the 
security and resilience of non-federal entities through its network 
protection efforts. Network protection includes providing entities with 
information and technical capabilities they can use to secure their 
networks, systems, assets, information, and data, by providing 
technical assistance and risk management support as well as 
recommendations on security and resilience measures to facilitate 
information security and strengthen information systems against 
cybersecurity risks and incidents. These efforts are carried out by 
DHS's National Protection and Programs Directorate, which includes the 
National Cybersecurity and Communications Integration Center (NCCIC). 
The NCCIC operates at the intersection of the private sector, civilian, 
law enforcement, intelligence, and defense communities.
    Network protection is only one component of the Federal 
Government's overall effort to deter malicious cyber actors. DHS's law 
enforcement agencies and intelligence offices play a key role as well. 
Additionally, our interagency partners make important contributions to 
overall deterrence efforts through proactive risk reduction efforts, 
sanctions, diplomatic actions, and offensive operations.
    This year DHS stood up an Election Task Force (ETF) to improve 
coordination with and support to our stakeholders. NPPD is leading the 
task force, which includes personnel from across the Department, as 
well as interagency partners. NPPD is working with interagency partners 
to address risk to elections, including countering influence campaigns.

    18. Senator Blumenthal. Mr. Rapuano, Mr. Smith, and Mr. Krebs, what 
is being done to prevent Russia--or any other state or non-state 
actor--from conducting influence campaigns designed to disrupt our 
elections?
    Mr. Rapuano. Consistent with Mr. Krebs' testimony, the Federal 
government is engaging with domestic authorities to ensure they that 
have the information and resources necessary to secure their 
information systems, databases, and other related election 
infrastructure. Although DOD is not directly involved in these 
activities, it is prepared to support DHS and the FBI in these efforts, 
if requested and where appropriate. Consistent with DOD's mission, DOD 
seeks actively to characterize adversary threats to provide advance 
warning and, when directed, employ potential response options to 
counter adversary cyber activities. Fundamentally, Russia's complex 
information operation targeted United States citizens by exploiting 
existing political and social divisions, and the digital media 
environment. It's important to note that developing and fielding state-
of-the-art cyber defenses alone will be insufficient to counter ongoing 
or future nation-state influence operations. Building our nation's 
resiliency to these types of actions will require a whole of nation 
response that involves working with the private technology sector, 
educating the public, increasing awareness, exposing malicious actions, 
etc. Many such actions exceed DOD authorities or resources.
    Mr. Smith did not respond in time for printing. When received, 
answer will be retained in committee files.
    Mr. Krebs. The U.S. Government seeks to leverage our various 
authorities and capabilities to secure vital systems and assets, 
improve resilience against cyber incidents, and quickly respond to and 
recover from incidents when they occur. Regarding Russia or any other 
state or non-state actor, deterrence is an important component of 
national efforts to change the behaviors of malicious cyber actors and 
to protect information and information systems, including critical 
infrastructure, from harm. The foundation of our deterrence and broader 
cybersecurity efforts includes securing our own systems before an 
adversary acts thereby making exploitation of U.S. infrastructure more 
difficult and costly. This denies malicious cyber actors any benefit to 
less sophisticated attempts at intrusion and reduces benefits to more 
sophisticated attacks. Deterrence by denial requires a whole of 
Government, and indeed whole of Nation, approach that is coordinated 
with our private sector, state and local, and international partners 
across all areas of national preparedness.
    The Department of Homeland Security (DHS) supports and enables the 
security and resilience of non-federal entities through its network 
protection efforts. Network protection includes providing entities with 
information and technical capabilities they can use to secure their 
networks, systems, assets, information, and data, by providing 
technical assistance and risk management support as well as 
recommendations on security and resilience measures to facilitate 
information security and strengthen information systems against 
cybersecurity risks and incidents. These efforts are carried out by 
DHS's National Protection and Programs Directorate, which includes the 
National Cybersecurity and Communications Integration Center (NCCIC). 
The NCCIC operates at the intersection of the private sector, civilian, 
law enforcement, intelligence, and defense communities.
    Network protection is only one component of the Federal 
Government's overall effort to deter malicious cyber actors. DHS's law 
enforcement agencies and intelligence offices play a key role as well. 
Additionally, our interagency partners make important contributions to 
overall deterrence efforts through proactive risk reduction efforts, 
sanctions, diplomatic actions, and offensive operations.
    This year DHS stood up an Election Task Force (ETF) to improve 
coordination with and support to our stakeholders. NPPD is leading the 
task force, which includes personnel from across the Department, as 
well as interagency partners. NPPD is working with interagency partners 
to address risk to elections, including countering influence campaigns.

    19. Senator Blumenthal. Mr. Rapuano, Mr. Smith, and Mr. Krebs, how 
do you define a cyberattack? What constitutes an act of war?
    Mr. Rapuano. As is the case in all other domains, a determination 
of whether a malicious cyber activity constitutes an act of war 
(equivalent to an ``armed attack'' or use of force) or a cyberattack 
warranting a U.S. response is made on a case-by-case basis by the 
President, regardless of the actor. It is the context and consequence, 
not the means, of an attack that matter most. Malicious cyber 
activities could result in death, injury or significant destruction, 
and any such activities likely would be regarded with the utmost 
concern and could well be considered an armed attack or use of force. 
It is also important to note that malicious cyber activity does not 
need to be deemed an ``act of war'' or an ``armed attack'' to warrant a 
response. If a decision is made by the President to respond to a 
cyberattack on U.S. interests, the United States reserves the right to 
respond at a time, in a manner, and in a place of our choosing, using 
appropriate instruments of U.S. power.
    Mr. Smith did not respond in time for printing. When received, 
answer will be retained in committee files.
    Mr. Krebs. In December 2016, the Department of Homeland Security 
led development of the National Cyber Incident Response Plan, in 
coordination with the Department of Justice, the Department of Defense, 
Sector Specific Agencies, other interagency partners, state and local 
governments, and private sector critical infrastructure entities. While 
this plan was not intended to define terms such as cyberattack or act 
of war, it did establish a common framework for understanding the 
severity of a cyber incident. Included in this plan is a cyber incident 
severity schema established by the Federal Government's cybersecurity 
centers, in coordination with departments and agencies with a 
cybersecurity or cyber operations mission. The schema established a 
framework for describing the severity of cyber incidents affecting the 
Homeland, U.S. capabilities, or U.S. interests, providing a common view 
of the severity of a given incident, urgency required for responding to 
a given incident, seniority level necessary for coordinating response 
efforts, and level of investment required for response efforts. The 
schema has proven helpful in coordinating interagency response efforts 
during previous cyber incidents. Additional information regarding the 
National Cyber Incident Response Plan and related schema can be found 
online at: https://www.us-cert.gov/ncirp.

    20. Senator Blumenthal. Mr. Rapuano, Mr. Smith, and Mr. Krebs, in 
January, former DHS Secretary Johnson designated election 
infrastructure as critical infrastructure. Last month we learned Russia 
tried to access voter information in over 20 states, including CT. What 
concrete steps have been taken to fortify our election systems? What 
will be done differently for the 2018 elections?
    Mr. Rapuano. The Department of Defense respectfully defers to the 
Department of Homeland Security (DHS) as the Executive Branch entity 
with purview over election-related cybersecurity.
    Mr. Smith did not respond in time for printing. When received, 
answer will be retained in committee files.
    Mr. Krebs. The designation of election infrastructure as a critical 
infrastructure subsector in January 2017 by the Department of Homeland 
Security (DHS) has formalized the prioritization of assistance from the 
Federal Government for state, local, tribal, and territorial 
governments, and private sector entities in their efforts to reduce 
risks to election infrastructure. Participation with the Federal 
Government, as part of this subsector, is voluntary. This dynamic is 
consistent with the engagements between the Federal Government and 
other previously established critical infrastructure sectors and 
subsectors, including the chemical, commercial facilities, 
communications, critical manufacturing, dams, defense industrial base, 
emergency services, energy, financial services, food and agriculture, 
government facilities, healthcare and public health, information 
technology, nuclear reactors, material, and waste, transportation 
systems, and water and wastewater systems sectors.
    This year DHS stood up an Election Task Force (ETF) to improve 
coordination with and support to our stakeholders. DHS's National 
Protection and Programs Directorate (NPPD) is leading the task force, 
which includes personnel from across the Department, as well as 
interagency partners.
    The ETF focuses efforts on:
        Improving communication with election officials in 
order to provide understanding and actionable information to assist 
them in strengthening the security of their election infrastructure as 
it relates to cybersecurity risk.
        Ensuring coordination of these activities across the 
Department.
        Increasing coordination with intelligence community and 
law enforcement partners.
        Supporting regional efforts to ensure they are 
coordinated and provide election officials with the support and 
expertise they need.
    DHS is committed to improving the effectiveness of information 
sharing protocols, both from DHS and among state officials. As the 
sector-specific agency, DHS is providing overall coordination guidance 
on election infrastructure matters to subsector stakeholders. As part 
of this process, the Election Infrastructure Subsector Government 
Coordinating Council (GCC) was established. The Election Infrastructure 
Subsector GCC is a representative council of federal, state, and local 
partners with the mission of focusing on sector-specific strategies and 
planning. The GCC structure is established under the department's 
authority to provide a forum in which the Government and private sector 
entities can jointly engage in a broad spectrum of activities to 
support and coordinate critical infrastructure security and resilience 
efforts. It is used in each of the critical infrastructure sectors 
established under Presidential Policy Directive 21 on Critical 
Infrastructure Security and Resilience.
                            foreign software
    21. Senator Blumenthal. Mr. Rapuano and Mr. Krebs, last month, DHS 
banned Moscow-affiliated company Kaspersky Labs software products and 
services from being used by all government agencies. DHS will give 
agencies 90 days to discontinue use of Kaspersky products. Senator 
Shaheen worked to include a provision in this year's Senate-passed NDAA 
to prohibit the use of Kaspersky products across the Government as 
well. What efforts has DOD and DHS taken to identify foreign software 
products being used within government agency systems?
    Mr. Rapuano. DOD has processes in place to systematically identify 
software products being used in its national security systems that 
present counterintelligence risk, foreign or domestic. While DOD 
remains concerned about software that is developed in a foreign 
country, that concern is heightened when a foreign government may have 
undue influence on the development of software (e.g., inject or modify 
code). Additionally, software is often developed in many places around 
the globe and is often based on pre-existing software modules. One of 
the major tenets of DOD's Trusted Systems and Networks (TSN) Strategy 
and policy (DOD Instruction 5200.44) is the use of all-source 
intelligence analysis on critical components of DOD's National Security 
Systems. The all-source intelligence analyses, performed by the Defense 
Intelligence Agency's Supply Chain Risk Management (SCRM) Threat 
Analysis Center, performs a deep analysis into the supply chain of the 
sub-components that make up a particular product, including embedded 
software. The Joint Federated Assurance Center also coordinates the 
sharing of hardware and software testing capabilities to assess for 
vulnerabilities in these products. Once a specific threat is 
identified, DOD has processes to identify and mitigate the threat posed 
by foreign software. DOD queries contract tools (System for Award 
Management (SAM); Federal Procurement Data System (FPDS); Electronic 
Document Access (EDA); and Wide Area Workflow (WAWF)) to identify where 
DOD has procured software of interest. DOD can also initiate scans of 
software on networks. DOD is continuing to enhance our capability to 
investigate our global supply chain and is currently investigating use 
of commercial due-diligence tools to identify strategic alliances 
between foreign sources with potential foreign intelligence entity 
influence and original equipment manufacturers.
    Mr. Krebs. On September 13, 2017, the Acting Secretary of Homeland 
Security issued Binding Operational Directive (BOD) 17-01: Removal of 
Kaspersky-Branded Products. BOD 17-01 requires federal agencies to 
identify and report to the Department of Homeland Security (DHS), by 
October 13, 2017, the use or presence of Kaspersky Lab-branded products 
on federal information systems. This process has identified the use of 
Kaspersky Lab-branded products on some systems at some agencies. Those 
agencies either removed the products or are in the process of removing 
the products.

    +22. Senator Blumenthal. Mr. Rapuano and Mr. Krebs, what threats do 
foreign goods present to our cyber security?
    Mr. Rapuano. U.S. competitors and adversaries increasingly 
participate in the information and communications technology supply 
chain, making it increasingly untrustworthy. There are supply chain 
threats to our systems at every point of the acquisition lifecycle: an 
adversary may maliciously introduce unwanted function or otherwise 
subvert the design, integrity, manufacturing, product, distribution, 
installation, operation, or maintenance of a system so as to surveil, 
deny, disrupt, or otherwise degrade the function, use, or operation of 
such capabilities. Adversaries may also exploit vulnerabilities in 
systems and those in the Defense Industrial Base (DIB) partners to 
obtain DOD information. Once a specific threat is identified, DOD has 
processes to identify and mitigate the threat posed by foreign 
software. DOD queries contract tools to include System for Award 
Management (SAM); Federal Procurement Data System (FPDS); Electronic 
Document Access (EDA); and Wide Area Workflow (WAWF) to identify where 
DOD has procured software of interest. DOD can also initiate scans of 
software on networks. DOD is continuing to enhance our capability to 
investigate our global supply chain and is currently investigating use 
of commercial due-diligence tools to identify strategic alliances 
between foreign sources with potential FIE influence and original 
equipment manufacturers.
    Mr. Krebs. The globalization of the information technology supply 
chain introduces additional risks to product integrity and software and 
hardware assurance. Goods which are produced in foreign countries or 
domestically within the U.S. have the potential for vulnerabilities; 
however there are growing concerns associated with foreign ownership, 
control, manipulation, or influence of certain products. It is critical 
to understand that the problem is not a simple function of geography. 
Products with known cyber vulnerabilities or exploitable weaknesses are 
also produced by domestic companies.

    23. Senator Blumenthal. Mr. Rapuano and Mr. Krebs, are agencies 
using Kaspersky still facing a security concern as they've been given 
90 days from the DHS directive to discontinue use?
    Mr. Rapuano. DOD is following the principles associated with the 
DHS Binding Operational Directive to identify and remove Kaspersky Lab 
software. As long as the software is in use on agency networks and 
mitigations have not been taken, they are at risk of Kaspersky having 
access to files and elevated privileges on computers on which the 
software is installed. This information could be used to compromise 
federal information and information systems.
    Mr. Krebs. On September 13, 2017, the Acting Secretary of Homeland 
Security issued Binding Operational Directive (BOD) 17-01: Removal of 
Kaspersky-Branded Products. BOD 17-01 requires federal agencies to 
identify and report to the Department of Homeland Security (DHS), by 
October 13, 2017, the use or presence of Kaspersky Lab-branded products 
on federal information systems. This process has identified the use of 
Kaspersky Lab-branded products on some systems at some agencies. Those 
agencies either removed the products or are in the process of removing 
the products.

    24. Senator Blumenthal. Mr. Rapuano and Mr. Krebs, what additional 
authorities do you need to secure our networks?
    Mr. Rapuano. The Department currently assesses that it has all the 
authorities it needs from Congress to achieve its missions in 
cyberspace. However, DOD constantly evaluates its ability to conduct 
these missions, and I will reach out to the Committee should additional 
authorities be needed to secure DOD networks.
    Mr. Krebs. The Department of Homeland Security (DHS) appreciates 
the opportunity to continue its work with Congress to fully authorize 
and fund DHS's efforts to safeguard and secure cyberspace, a core 
homeland security mission. The National Protection and Programs 
Directorate (NPPD) at DHS leads the Nation's efforts to enhance the 
security and resilience of our cyber and physical infrastructure. DHS 
will continue to work with Congress regarding legislation that would 
mature and streamline NPPD's authorities and rename our organization to 
clearly reflect our essential mission and role in securing cyberspace, 
in a manner that protects privacy and civil liberties. DHS strongly 
supports this much-needed effort.

    25. Senator Blumenthal. Mr. Rapuano and Mr. Krebs, how are you 
ensuring the commercial sector is adequately protecting its networks so 
that highly sensitive information linked to DOD is protected?
    Mr. Rapuano. With the release of the Binding Operational Directive 
(BOD), DHS has encouraged private sector entities and the public to 
assess their cybersecurity risk and to take actions they deem 
appropriate. DOD has briefed Information Technology Sector and Defense 
Industry Base members on the threat associated with Kaspersky's 
antivirus products over the past year (prior to the BOD release) 
through formal public-private partnerships. In a September 28, 2017, 
notice to National Industrial Security Program (NISP) Contractors with 
Authorized Information Systems (i.e., classified information systems), 
the Defense Security Service (DSS) directed the removal of all 
Kaspersky Labs software or hardware from classified information systems 
under DSS cognizance.
    The DSS uses the National Institute of Standards and Technology 
Risk Management Framework (RMF) to oversee the protection of DOD 
classified information and technologies. RMF provides companies a 
standard and comprehensive structure for managing cybersecurity risks 
across their enterprises, enabling them to devise, implement and 
monitor security measures to address any identified risks. Industry 
networks that process or hold classified information operate under DSS 
authority and oversight, use the National Security Agency-approved 
encryption, and function independent of the unclassified internet. DSS 
continually collects information from U.S. Government organizations, 
cleared contractors, and commercial sources on threats to that 
information. Those threats may operate directly against the information 
system or against unclassified networks that give the adversary 
information concerning classified programs it can use to determine, 
define, and execute intelligence activities through cyber and human 
means.
    DOD continues to engage and share information with direct support 
contractors on cyber security and supply chain risks. DOD has a range 
of activities that include both regulatory and voluntary programs to 
improve the collective cybersecurity of the nation and to protect 
sensitive DOD information on private sector networks. These activities 
include securing DOD's information systems and networks, codifying 
cybersecurity responsibilities and procedures for the acquisition 
workforce in defense acquisition policy, implementing contractual 
requirements through the Defense Federal Acquisition Regulation 
Supplement (DFARS), sharing cyber threat information where appropriate 
through DOD's voluntary Defense Industrial Base (DIB) Cybersecurity 
Program, and leveraging National Institute of Standards and Technology 
(NIST) security standards.
    In October 2016, DOD updated DFARS Clause 252.204-7012, 
Safeguarding Covered Defense Information and Cyber Incident Reporting. 
DFARS Clause 252.204-7012, required in all contracts except for 
contracts solely for the acquisition of COTS items, requires 
contractors to provide ``adequate security'' for covered defense 
information that is processed, stored, or transmitted on the 
contractor's internal information system or network. To do so, the 
clause requires contractors to, at a minimum, implement National 
Institute of Standards and Technology (NIST) Special Publication (SP) 
800-171, ``Protecting Controlled Unclassified Information in Nonfederal 
Information Systems and Organizations,'' not later than December 31, 
2017. The clause also requires defense contractors to report to DOD 
cyber incidents that affect covered defense information or the 
contractor's ability to provide operationally critical support; to 
submit malicious software associated with the cyber incident; to 
facilitate damage assessment processes; and to flow down the clause to 
subcontractors when the contract performance will involve covered 
defense information or operationally critical support. Since 
publication of the final rule in October of 2016, the Department has 
embarked on an extensive outreach effort to inform and assist the 
defense industrial base in implementing DFARS Clause 252.204-7012 and 
NIST SP 800-171.
    Since 2008, DOD has partnered with companies in the Defense 
Industrial Base (DIB) through the cyber threat information sharing DIB 
Cybersecurity (CS) program. This voluntary program has add steadily 
expanded and has matured as a model for public-private cyber 
collaboration. The program is codified as a permanent DOD program in 32 
Code of Federal Regulations part 236. During fiscal year 2017 the DIB 
CS program expanded by 37 percent during with participants now totaling 
over 250 companies. DOD's approach to safeguarding DOD and DIB 
controlled unclassified information DOD is intended to raise the bar on 
cybersecurity in the DIB and better protect unclassified DOD 
information residing in or transiting DIB networks or information 
systems.
    Mr. Krebs. The Department of Homeland Security (DHS) supports and 
enables the security and resilience efforts of the commercial sector 
through its network protection efforts. Network protection includes 
providing organizations with information and technical capabilities 
they can use to secure their networks, systems, assets, information, 
and data, by reducing vulnerabilities, ensuring resilience to cyber 
incidents, and supporting their holistic risk management priorities. 
These efforts are carried out by DHS's National Protection and Programs 
Directorate, which includes the National Cybersecurity and 
Communications Integration Center (NCCIC). The NCCIC operates at the 
intersection of the private sector, civilian, law enforcement, 
intelligence, and defense communities. DHS also works with government 
partners, including the National Institute of Standards and Technology, 
to support the adoption of the NIST Framework for Improving Critical 
Infrastructure cybersecurity, which is a voluntary, flexible, risk-
based approach an organization can use to manage its cybersecurity 
risks.
                 russian interference with nato troops
    26. Senator Blumenthal. Mr. Rapuano, earlier this month, the Wall 
Street Journal reported that Russia is targeting NATO troops' personal 
smartphones in an effort to intimidate them, as well as glean 
operational information. What is being done to protect our 
servicemembers and counter Russia's intrusions? What are you doing to 
educate our servicemembers?
    Mr. Rapuano. The Department of Defense (DOD) is mitigating the risk 
of Russian targeting of the personal smartphones of NATO personnel 
through a combination of cybersecurity training and procedural 
controls. DOD continues to update and disseminate its Identity 
Awareness, Management, and Protection Guide to enable service members 
to harden their personal devices from any malicious activity, whether 
by a nation-state or non-state actor. For Force Protection purposes, 
DOD also provides guidance to its personnel on how to protect their 
personally identifiable information. Additionally, the DOD continues to 
integrate cybersecurity best practices related to personal devices into 
its annually required cybersecurity/information assurance refresher 
training. Procedurally, DOD continues to enforce and improve procedural 
controls for where and how service members utilize their personal 
smartphones in and around military sites and facilities. DOD also is 
considering a range of options to ensure that we are best postured 
against this threat as it evolves.

    27. Senator Blumenthal. Mr. Rapuano, while Russia's targeting of 
servicemembers for intelligence is not new, personal smartphones 
provide significantly more knowledge about a person than was easily 
accessible in the past. In what ways are you ensuring this 
vulnerability is not having an impact on our efforts in Eastern Europe?
    Mr. Rapuano. The Department of Defense (DOD) is mitigating the risk 
of Russian targeting of the personal smartphones of NATO personnel 
through a combination of cybersecurity training and procedural 
controls. DOD continues to update and disseminate its Identity 
Awareness, Management, and Protection Guide to enable service members 
to harden their personal devices from any malicious activity, whether 
by a nation-state or non-state actor. For Force Protection purposes, 
DOD also provides guidance to its personnel on how to protect their 
personally identifiable information. Additionally, the DOD continues to 
integrate cybersecurity best practices related to personal devices into 
its annually required cybersecurity/information assurance refresher 
training. Procedurally, DOD continues to enforce and improve procedural 
controls for where and how service members utilize their personal 
smartphones in and around military sites and facilities. DOD also is 
considering a range of options to ensure that we are best postured 
against this threat as it evolves. The DOD has also emphasized training 
for service members regarding social media use; this training includes 
education of privacy and security settings as well as operational 
security considerations before posting, tagging, etc. to social media 
sites.

    28. Senator Blumenthal. Mr. Rapuano, what precautions are being 
taken to address the risk of a compromised phone being able to collect 
information from its surroundings?
    Mr. Rapuano. The Department of Defense continues to integrate 
personal device cybersecurity best practices within its annually 
required cybersecurity/information assurance refresher training. 
Procedurally, DOD continues to enforce and improve procedural controls 
for where and how service members utilize their personal smartphones in 
and around military sites and facilities. This includes the powering 
off and secured storage of personal smart phones before entering secure 
official work spaces. These procedures are also being evaluated and 
considered for other military sites and areas, including official 
unclassified work spaces.
                               __________
                Questions Submitted by Senator Tim Kaine
              interagency international cyber coordination
    29. Senator Kaine. Who is your direct peer at the Department of 
State that you consult with regularly or would consult with on 
international cyber threats and do you believe it is within U.S. 
strategic interests to move the State Department's Cyber Coordinator 
office under the Bureau of Economic and Business Affairs, from a 
national security standpoint?
    Mr. Rapuano. My current counterpart at the State Department is the 
Assistant Secretary of State for Economic and Business Affairs. I 
believe the State Department plays an indispensable role in promoting 
U.S. interests in cyberspace. I would respectfully defer the State 
Department about how it can and should be best organized to play this 
role.
    Mr. Smith did not respond in time for printing. When received, 
answer will be retained in committee files.
    Mr. Krebs. The Department of Homeland Security (DHS) works closely 
with the Department of State, and other interagency partners, as well 
as foreign governments, regional and international organizations, the 
private sector and civil society, to foster collaborative efforts to 
accomplish national and homeland security objectives and to advance an 
open, interoperable, secure, and reliable cyberspace. At the Under 
Secretary level, this work is done by the State Department's Under 
Secretary for Economic Growth, Energy and Environment. NPPD works 
closely with the State Department's Deputy Assistant Secretary for 
Cyber and International Communications and Information Policy. DHS 
defers to the State Department on how best to organize itself to carry 
out its authorities. Regardless of organizational structure, DHS will 
continue to work closely with all appropriate offices at the State 
Department in order to achieve our mission of safeguarding and securing 
cyberspace. The State Department serves a key role in enabling DHS's 
international efforts.

    30. Senator Kaine. A 2013 Council on Foreign Relations Task Force 
report titled Defending an Open, Global, Secure, and Resilient 
Internet, written by a bipartisan group of officials, recommended 
elevating State Department's Cyber Coordinator position to an Assistant 
Secretary position and to be the lead of a cyber bureau. Do you feel 
that Economic and Business Affairs is in an appropriate place, with 
effective lines of communication with your offices to ensure that you 
will have all of State Department's equities with a peer level input 
when you consider options to respond to an international cyberattack?
    Mr. Rapuano. I believe the State Department plays an indispensable 
role in promoting U.S. interests in cyberspace and agree with many of 
the recommendations in this report. As stated previously, I 
respectfully defer to Secretary Tillerson on matters about how the 
State Department can and should be best organized to contribute to U.S. 
Government efforts in cyberspace.
    Mr. Smith did not respond in time for printing. When received, 
answer will be retained in committee files.
    Mr. Krebs. The Department of Homeland Security (DHS) works closely 
with the Department of State, and other interagency partners, as well 
as foreign governments, regional and international organizations, the 
private sector and civil society, to foster collaborative efforts to 
accomplish national and homeland security objectives and to advance an 
open, interoperable, secure, and reliable cyberspace. At the Under 
Secretary level, this work is done by the State Department's Under 
Secretary for Economic Growth, Energy and Environment. NPPD works 
closely with the State Department's Deputy Assistant Secretary for 
Cyber and International Communications and Information Policy. DHS 
defers to the State Department on how best to organize itself to carry 
out its authorities. Regardless of organizational structure, DHS will 
continue to work closely with all appropriate offices at the State 
Department in order to achieve our mission of safeguarding and securing 
cyberspace. The State Department serves a key role in enabling DHS's 
international efforts.

    31. Senator Kaine. Do you believe it is more or less in U.S. 
national security interests to gain international agreements on cyber 
policy compared to when the 2013 Council on Foreign Relations Task 
Force report titled Defending an Open, Global, Secure, and Resilient 
Internet report was published?
    Mr. Rapuano. There has been a marked increase in the number and 
severity of disruptive and damaging cyber activities undertaken by 
States since the 2013 Council on Foreign Relations report. The May 11, 
2017 Executive Order on Strengthening the Cybersecurity of Federal 
Networks and Critical Infrastructure recognizes that the United States, 
as a highly connected nation, depends on a globally secure and 
resilient internet. The Executive Order directs the Department of State 
to develop an engagement strategy for international cooperation in 
cybersecurity. The Department of Defense is working closely with the 
Department of State to develop this strategy and I would be happy to 
discuss this further when the strategy is completed.
    Mr. Smith did not respond in time for printing. When received, 
answer will be retained in committee files.
    Mr. Krebs. A secure and resilient cyberspace is essential to 
support critical national functions, enable economic prosperity for the 
United States, and support American values at home and abroad. Strong 
cybersecurity is therefore as key element of homeland security. The 
Department of Homeland Security (DHS) carries out its cybersecurity 
mission by leading Federal Government efforts to secure its civilian 
government information systems; working with the private sector to 
enhance critical infrastructure cybersecurity and resilience; 
leveraging the Department's law enforcement authorities to prevent, 
counter, and disrupt cyber criminals; responding effectively to cyber 
incidents; and strengthening the security and reliability of the cyber 
ecosystem through research and development. Each of these DHS 
cybersecurity missions has an international dimension.
    Robust international engagement and collaboration are vital to 
accomplish the Department's cybersecurity objectives. Poor 
cybersecurity practices in other countries threaten both federal 
civilian government information systems and the information systems of 
non-federal entities, including the owners and operators of critical 
infrastructure. Insecure devices abroad can be leveraged to directly 
target networks in the United States. U.S. critical infrastructure is, 
in particular, increasingly interconnected and dependent on a global 
infrastructure with widely varied cybersecurity practices.
    Other nations and international organizations must therefore be key 
partners for DHS risk management, network protection, law enforcement, 
and research and development efforts. Although DHS recognizes that 
international engagement is essential to achieving its cybersecurity 
mission, it also understands that this engagement must always be 
considered in the context of larger national economic and security 
goals and foreign policy objectives. Accordingly, DHS works closely 
with the Department of State, other interagency partners, foreign 
governments, regional and international organizations, the private 
sector, and civil society, to foster collaborative efforts to 
accomplish national and homeland security objectives and to advance an 
open, interoperable, secure, and reliable cyberspace.
                      securing information systems
    32. Senator Kaine. Secretary Rapuano, can you please describe the 
effectiveness of the SharkSeer program and your plans to bolster it 
going forward?
    Mr. Rapuano. SharkSeer is highly effective at real-time Active 
Cyber Defense. It employs advanced near real-time detection, analysis, 
and mitigation for both known and unknown threats. This includes strong 
detection and mitigation of zero-day malware and advanced persistent 
threats (APTs). SharkSeer also includes identification of malicious 
attachments and links in any email coming from the public internet to 
DOD users. SharkSeer is already deployed across DOD's unclassified 
(NIPR), collateral Secret (SIPR), and Top Secret (JWICS) domain 
boundaries. Leveraging behavioral-based and cloud technologies, 
SharkSeer provides an integrated solution that stops complex or 
obfuscated zero-day malware attacks. This includes first order triage 
of anomalous network traffic and delivery of quick reaction 
capabilities for critical operational needs. By all accounts, SharkSeer 
is performing well at desired levels of functionality. The National 
Security Agency (NSA) and the Defense Information Systems Agency (DISA) 
are partnering on the development and execution of plans to transfer 
the SharkSeer Program to DISA under a phased transition plan. Phase I 
of the transition was successfully achieved on April 20, 2017 with DISA 
assuming operational C2 and execution of 24/7 SharkSeer perimeter 
defense operations to include: event triage and malware analysis, 
countermeasure analysis, mitigation approval, and operational 
reporting. As the operator of the SharkSeer system, DISA should provide 
the official evaluation of SharkSeer's effectiveness. Under Phase I of 
the transition, NSA continues to operate, maintain, and sustain 
SharkSeer systems and infrastructure. The SharkSeer Program is in 
sustainment mode pending transfer of the SharkSeer Program to DISA and 
DISA defining their Perimeter Defense Strategy. Potential future plans 
for this program include its expansion to the intelligence community, 
civil, agencies, and mobile device pilots for a comprehensive 
coordinated defense.
               countering adversaries in the cyber domain
    33. Senator Kaine. Do any of you participate in war-gaming 
exercises to better anticipate the ideas and concepts our adversaries 
may develop for use in the cyber-domain to challenge our national 
interests both at home and abroad and can you provide some examples 
that your teams have come up with?
    Mr. Rapuano. The Department of Defense regularly engages in 
wargaming exercises to improve our ability to anticipate the ideas and 
concepts our adversaries may develop for use in the cyber-domain to 
challenge our national interests both at home and abroad. Such games 
typically involve ``red teams'' that attempt to emulate adversary 
actions in the context of the scenario at play. These games occur at 
all leadership levels of the Department, including within and across 
combatant commands, Services and components. The rank and make-up of 
participants are determined by the wargame's objectives. Such games are 
typically classified, but one example would be the wargame the Chairman 
of the Joint Chiefs of Staff, in consultation with the Principal Cyber 
Advisor, conducted as directed by section 1646 of the National Defense 
Authorization Act for Fiscal Year 2016. A second example is a wargame 
conducted at the OSD level in May of 2017 that focused on the cyber 
resiliency of the GPS Operational Control System.
    Mr. Smith did not respond in time for printing. When received, 
answer will be retained in committee files.
    Mr. Krebs. Exercises are a core component of the Department of 
Homeland Security's (DHS) efforts to safeguard and secure cyberspace, a 
core homeland security mission. DHS conducts or participates in 
exercises with our interagency partners, including the Department of 
Defense.
    DHS's National Cybersecurity and Communications Integration Center 
(NCCIC) includes the National Cyber Exercise and Planning Program 
(NCEPP). The full portfolio of exercises range from small-scale, 
limited scope, discussion-based exercises to large-scale, 
internationally scoped, operations-based exercises, such as the 
biennial Cyber Storm exercise. In addition to Cyber Storm, DHS is a 
full participant in the annual Cyber Guard exercise. Exercises are 
designed to assist organizations at all levels, including federal and 
non-federal entities, in the development and testing of cybersecurity 
prevention, protection, mitigation, and response capabilities.
              public-private interaction in cyber response
    34. Senator Kaine. Does the Government have a formalized process to 
evaluate reports generated in the private sector to utilize within 
government, or is that dependent on personal relationships between 
public and private officials working in the cyber arena?
    Mr. Rapuano. I respectfully defer to my DHS colleague regarding the 
details of broader public/private information sharing activities. For 
DOD, we maintain a robust information-sharing relationship with the 
private sector and in particular the Defense Industrial Base (DIB) 
using both formal and informal channels. DOD partners with companies in 
the DIB through the DIB Cybersecurity (CS) program, sharing both 
classified and unclassified cyber threat information with industry, 
including voluntary cyber threat reporting. Additionally, DOD requires 
defense contractors to report cyber incidents that affect DOD 
controlled unclassified information, or the contractor's ability to 
provide operationally critical support. These requirements are 
implement through Defense Federal Acquisition Regulation Supplement 
(DFARS) Clause 252.204-7012, ``Safeguarding Covered Defense Information 
and Cyber Incident Reporting''. DOD's partnerships with the private 
sector combined with regulatory activities help DOD and its private 
sector partners maintain awareness of the threat environment, track 
malicious cyber activity relevant to DOD, and inform efforts to harden 
and protect networks, systems, and information. DOD also benefits from 
robust information sharing across the Federal Government.
    Mr. Smith did not respond in time for printing. When received, 
answer will be retained in committee files.
    Mr. Krebs. Collaboration between the public and private sectors is 
necessary to successfully safeguard and secure cyberspace. Information 
sharing is a key part of the Department of Homeland Security's (DHS) 
mission to create shared situational awareness of malicious cyber 
activity. The National Protection and Programs Directorate's (NPPD) 
National Cybersecurity and Communications Integration Center (NCCIC) 
serves as the round the clock operational center that executes the 
Department's core cybersecurity and communications mission and, as 
such, facilitates multi-directional information sharing between the 
Federal Government and the private sector.
    There are many formalized processes used to evaluate and share 
reports generated in the private sector. These processes vary based on 
the type of report. For instance, the NCCIC has formalized processes 
for receiving reports of cyber threat indicators, or technical data, 
which can be shared broadly with network defenders to assist them with 
their efforts. Through coordinated vulnerability disclosure, the NCCIC 
regularly receives reports of software vulnerabilities from non-federal 
entities. By working with partners to identify, validate, mitigate, and 
disclose these vulnerabilities, DHS leverages formalized processes in 
its cybersecurity efforts. Finally, the NCCIC has a formalized process 
for receiving reports of cyber incidents generated by the private 
sector. DHS and interagency partners follow processes laid out in the 
National Cyber Incident Response Plan to coordinate our efforts. These 
are only a few examples of formalized processes. Many others exist to 
enable successful collaboration between the public and private sectors.
    35. Senator Kaine. WannaCry was one of the most effective and 
timely public private internet attack responses. Was there an 
institution in place to facilitate this response for us to replicate 
elsewhere in government, or did this rely on personal relationships?
    Mr. Rapuano. The response to WannaCry followed the U.S. 
Government's existing framework for incident response, with the 
Department of Homeland Security functioning as the lead for asset 
response and the Federal Bureau of Investigation as the lead for threat 
response. DOD was postured to assess and respond to the incident within 
DOD and the Defense Industrial Base (for which DOD is the sector 
specific agency) as well as to support DHS's and the FBI's efforts. In 
addition, the DOD Cyber Crime Center development and distributed cyber 
threat products to the DIB.
    Mr. Smith did not respond in time for printing. When received, 
answer will be retained in committee files.
    Mr. Krebs. The WannaCry incident is one of many examples where 
sectors have demonstrated a willingness to work closely with the 
Department of Homeland Security, a civilian government agency. During 
WannaCry, the Department of Homeland Security (DHS) led coordination of 
Federal Government incident response efforts by working with partners 
in industry, other Federal agencies, state and local governments, and 
international partners to share information related to WannaCry 
ransomware. In addition to the regular information sharing prior to the 
WannaCry ransomware incident, the DHS NCCIC implemented enhanced 
coordination procedures after learning of the incident in order to 
coordinate incident response actions across the Federal Government. 
Through a coordinated federal effort, the NCCIC worked with private 
sector critical infrastructure owners and operators to assess exposure 
to the vulnerability exploited by WannaCry ransomware and to share 
information, including technical data. If requested, NCCIC was also 
able to provide technical assistance. Relevant private sector outreach 
included Sector-Specific Agencies for the purposes of engaging their 
sectors, the information technology sector, the health sector, and 
small businesses, among others.
    During cyber incidents, the Federal Government's roles and 
responsibilities are guided by statutory authority, Presidential Policy 
Directive 41, the National Cyber Incident Response Plan, and other 
presidential direction. When a cyber incident affects a private entity, 
federal agencies undertake three concurrent lines of effort: threat 
response, asset response, and intelligence support and related 
activities. During significant incidents, the Department of Justice, 
acting through the Federal Bureau of Investigation and the National 
Cyber Investigative Joint Task Force, is the federal lead agency for 
threat response activities; the Department of Homeland Security, acting 
through the National Cybersecurity and Communications Integration 
Center, is the federal lead agency for asset response activities; and 
the Office of the Director of National Intelligence, through the Cyber 
Threat Intelligence Integration Center, is the federal lead agency for 
intelligence support and related activities. Sector-Specific Agencies 
for affected critical infrastructure sectors contribute to the 
interagency response effort by leveraging their well-established 
relationships within their sector and understanding the potential 
business or operational impacts on private sector critical 
infrastructure.

    36. Senator Kaine. Mr. Krebs, using WannaCry response as an 
example, have you found certain sectors or companies less willing to 
engage in information sharing with civilian government agencies as 
opposed to Intelligence Community or DOD?
    Mr. Krebs. The WannaCry incident is one of many examples where 
sectors have demonstrated a willingness to work closely with the 
Department of Homeland Security, a civilian government agency. During 
WannaCry, the Department of Homeland Security (DHS) led coordination of 
Federal Government incident response efforts by working with partners 
in industry, other Federal agencies, state and local governments, and 
international partners to share information related to WannaCry 
ransomware. In addition to the regular information sharing prior to the 
WannaCry ransomware incident, the DHS NCCIC implemented enhanced 
coordination procedures after learning of the incident in order to 
coordinate incident response actions across the Federal Government. 
Through a coordinated federal effort, the NCCIC worked with private 
sector critical infrastructure owners and operators to assess exposure 
to the vulnerability exploited by WannaCry ransomware and to share 
information, including technical data. If requested, NCCIC was also 
able to provide technical assistance. Relevant private sector outreach 
included Sector-Specific Agencies for the purposes of engaging their 
sectors, the information technology sector, the health sector, and 
small businesses, among others.
    During cyber incidents, the Federal Government's roles and 
responsibilities are guided by statutory authority, Presidential Policy 
Directive 41, the National Cyber Incident Response Plan, and other 
presidential direction. When a cyber incident affects a private entity, 
federal agencies undertake three concurrent lines of effort: threat 
response, asset response, and intelligence support and related 
activities. During significant incidents, the Department of Justice, 
acting through the Federal Bureau of Investigation and the National 
Cyber Investigative Joint Task Force, is the federal lead agency for 
threat response activities; the Department of Homeland Security, acting 
through the National Cybersecurity and Communications Integration 
Center, is the federal lead agency for asset response activities; and 
the Office of the Director of National Intelligence, through the Cyber 
Threat Intelligence Integration Center, is the federal lead agency for 
intelligence support and related activities. Sector-Specific Agencies 
for affected critical infrastructure sectors contribute to the 
interagency response effort by leveraging their well-established 
relationships within their sector and understanding the potential 
business or operational impacts on private sector critical 
infrastructure.

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