Information Security: Code Red, Code Red II, and SirCam Attacks  
Highlight Need for Proactive Measures (29-AUG-01, GAO-01-1073T). 
								 
Organizations and individuals have recently had to contend with  
particularly vexing computer attacks. The most notable is Code	 
Red, but potentially more damaging are Code Red II and SirCam.	 
Together, these attacks have infected millions of computer users,
shut down websites, slowed Internet service, and disrupted	 
businesses and government operations. They have already caused	 
billions of dollars of damage, and their full effects have yet to
be completely assessed. Code Red and Code Red II are both	 
"worms," which are attacks that propagate themselves through	 
networks without any user intervention or interaction. Both take 
advantage of a flaw in a component of versions 4.0 and 5.0 of	 
Microsoft's Internet Information Services Web server software.	 
SirCam is a malicious computer virus that spreads primarily	 
through E-mail. Once activated on an infected computer, the virus
searches through a select folder and mails user files acting as a
"Trojan horse" to E-mail addresses in the user's address book. In
addition to spreading, the virus can delete a victim's hard drive
or fill the remaining free space on the hard drive, making it	 
impossible to save files or print. On July 19, 2001, the Code Red
worm infected more than 250,000 systems in just nine hours,	 
causing more than $2.4 billion in economic losses. SirCam is	 
allegedly responsible for the leaking of secret documents from	 
the Ukrainian government. U.S. government agencies do not have an
effective information security program to prevent and respond to 
these attacks and often lack effective access controls to their  
computer resources and consequently cannot protect these assets  
against unauthorized modification, loss, and disclosure. However,
several agencies have taken significant steps to redesign and	 
strengthen their information security programs. Also, Congress	 
recently enacted legislation to provide a comprehensive framework
for establishing and ensuring the effectiveness of information	 
security controls over information resources that support federal
operations and assets.						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-1073T					        
    ACCNO:   A01693						        
  TITLE:     Information Security: Code Red, Code Red II, and SirCam  
             Attacks Highlight Need for Proactive Measures                    
     DATE:   08/29/2001 
  SUBJECT:   Computer security					 
	     Computer viruses					 
	     Electronic mail					 
	     Hackers						 
	     Internet						 
	     Code Red Computer Worm				 
	     Code Red II Computer Worm				 
	     ILOVEYOU Computer Virus				 
	     Melissa Computer Virus				 
	     Morris Computer Worm				 
	     SirCam Computer Virus				 
	     Ukraine						 

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GAO-01-1073T
     
Testimony Before the Subcommittee on Government Efficiency, Financial
Management, and Intergovernmental Relations, Committee on Government Reform,
House of Representatives

United States General Accounting Office

GAO For Release on Delivery Expected at 10 a. m., PDT Wednesday August 29,
2001

INFORMATION SECURITY

Code Red, Code Red II, and SirCam Attacks Highlight Need for Proactive
Measures

Statement of Keith A. Rhodes Chief Technologist

GAO- 01- 1073T

Page 1 GAO- 01- 1073T

Mr. Chairman and Members of the Subcommittee: Thank you for inviting me to
participate in today?s hearing on the most recent rash of computer attacks.
This is the third time I?ve testified before Congress over the past several
years on specific viruses- first, the ?Melissa? virus in April 1999 and
second, the ?ILOVEYOU? virus in May 2000. At both hearings, I stressed that
the next attack would likely propagate faster, do more damage, and be more
difficult to detect and counter.

Again, we are having to deal with destructive attacks that are reportedly
costing billions. In the past 2 months, organizations and individuals have
had to contend with several particularly vexing attacks. The most notable,
of course, is Code Red but potentially more damaging are Code Red II and
SirCam. Together, these attacks have infected millions of computer users,
shut down Web sites, slowed Internet service, and disrupted business and
government operations. They have already caused billions of dollars of
damage and their full effects have yet to be completely assessed.

Today, I would like to discuss the makeup and potential threat that each of
these viruses pose as well as reported damages. I would also like to talk
about progress being made to protect federal operations and assets from
these types of attacks and the substantial challenges still ahead.

Despite some similarities, each of the recent attacks is very different in
its makeup, method of attack, and potential damage. Generally, Code Red and
Code Red II are both ?worms,? which are attacks that propagate themselves
through networks without any user intervention or interaction. They both
take advantage of a flaw in a component of versions 4.0 and 5.0 of
Microsoft?s Internet Information Services (IIS) Web server software.

Code Red originally sought to do damage by defacing Web pages and by denying
access to a specific Web site by sending it massive amounts of data, which
essentially would shut it down. This is known as a denial- ofservice (DoS)
attack. Code Red II is much more discreet and potentially more damaging.
Other than sharing the name of the original worm, the only similarity Code
Red II has with Code Red is that it exploits the same IIS vulnerability to
propagate itself. Code Red II installs ?backdoors? on infected Web servers,
making them vulnerable to hijacking by any attacker who knows how to exploit
the backdoor. It also spreads faster than Code Red. Both attacks have the
potential to decrease the speed of the Internet and cause service
disruptions. More importantly, these worms broadcast The Attacks

Page 2 GAO- 01- 1073T

to the Internet the servers that are vulnerable to this flaw, which allows
others to attack the servers and perform other actions that are not related
to Code Red.

SirCam is a malicious computer virus that spreads primarily through Email.
Once activated on an infected computer, the virus searches through a select
folder and mails user files acting as a ?Trojan horse? to E- mail addresses
in the user?s address book. A Trojan horse, or Trojan, is a program
containing hidden code allowing the unauthorized collection, falsification,
or destruction of information. If the user?s files are sensitive in nature,
then SirCam not only succeeds in compromising the user?s computer, but also
succeeds in breaching the data?s confidentiality. In addition to spreading,
the virus can attempt to delete a victim?s hard drive or fill the remaining
free space on the hard drive making it impossible to perform common tasks
such as saving files or printing. This form of attack is extremely serious
since it is one from which it is very difficult to recover.

SirCam is much more stealthy than the Melissa and ILOVEYOU viruses because
it does not need to use the victim?s E- mail program to replicate. It has
its own internal capabilities to mail itself to other computers. SirCam also
can spread through another method. It can copy itself to other unsuspecting
computers connected through a Windows network (commonly referred to as
Windows network computers) that has granted read/ write access to the
infected computer. Like Code Red and Code Red II, SirCam can slow the
Internet. However, SirCam poses a greater threat to the home PC user than
that of the Code Red worms.

Table 1 provides a high- level comparison of the attacks. The attachment to
this testimony answers the questions in the table in greater detail.

Page 3 GAO- 01- 1073T

Table 1: High- level Comparison of the Attacks What is it? How does it
spread? Who is at risk? What damage can it do?

Code Red Code Red is a worm, which is a computer attack that propagates
through networks without user intervention. This particular worm makes use
of a vulnerability in Microsoft?s Internet Information Services (IIS) Web
server software- specifically, a buffer overflow.

The worm scans the Internet, identifies vulnerable systems, and infects
these systems by installing itself. Each newly installed worm joins all the
others, causing the rate of scanning to grow rapidly.

Users with Microsoft IIS server installed with Windows NT version 4.0 or
Windows 2000.

The program can deface Web sites, and was designed to perform a DoS attack
against the www. whitehouse. gov Web site. It can also decrease the speed of
the Internet.

Code Red II Code Red II is also a worm that exploits the same IIS
vulnerability. However, the worm also opens a backdoor on an infected server
that allows any follow- on remote attacker to execute arbitrary commands.

Code Red II spreads like Code Red; however, in doing so, it selects Internet
addresses that are in the same network range as the infected computer to
increase the likelihood of finding susceptible victims.

Users with Microsoft IIS Web server software installed with Windows 2000.

Like Code Red, Code Red II can decrease the speed of the Internet. Unlike
Code Red, it also leaves the infected system open to any attacker who can
alter or destroy files and create a denial of service. It does not deface
Web pages. SirCam SirCam is a malicious

computer virus that spreads through E- mail and potentially through
unprotected network connections. Once the malicious code has been executed
on a system, it may reveal or delete sensitive information.

This mass- mailing virus attempts to send itself to Email addresses found in
the Windows Address Book and addresses found in cached browser files. It
also attempts to copy itself to specific Windows networked computers.

Any E- mail user or user of a computer with unprotected Windows network
connections to the infected computer.

SirCam can publicly release sensitive information and delete files and
folders. It can also fill the remaining free space on the computer?s hard
drive. Furthermore, it can lead to a decrease in the speed of the Internet.

Systems infected by Code Red and SirCam can be fixed relatively easily. A
patch made available by Microsoft can remove the vulnerability exploited by
Code Red and rebooting the infected computer removes the worm itself.
Updating and using antivirus software can help detect and partially recover
from SirCam. Patching and rebooting an infected server is not enough when a
system is hit by Code Red II. Instead, the system?s hard drive should be
reformatted, and all software should be reinstalled to ensure that the
system is free of other backdoor vulnerabilities.

Of course, there are a number of other immediate actions organizations can
take to ward off attacks. These include:

 using strong passwords,

 verifying software security settings,

Page 4 GAO- 01- 1073T

 installing firewalls,

 backing up files early and often,

 ensuring that known software vulnerabilities are reduced by promptly
implementing software patches available from vendors,

 ensuring that policies and controls already implemented are operating as
intended,

 using scanners that automatically search for system vulnerabilities,

 using password- cracking tools to assess the password strength of the
audited users,

 using network monitoring tools to identify suspicious network activity,
and

 developing and distributing lists of the most common types of
vulnerabilities and suggested corrective actions.

Reports from various media and computer security experts indicate that the
impact of these viruses has been extensive. On July 19, the Code Red worm
infected more than 250,000 systems in just 9 hours, according to the
National Infrastructure Protection Center (NIPC). An estimated 975, 000
servers have been infected in total, according to Computer Economics, Inc.
Code Red and Code Red II have also reportedly disrupted both government and
business operations, principally by slowing Internet service and forcing
some organizations to disconnect themselves from the Internet.

For example, reports have noted that (1) the White House had to change the
numerical Internet address that identifies its Web site to the public, and
(2) the Department of Defense was forced to briefly shut down its public Web
sites. Treasury?s Financial Management Service was infected and also had to
disconnect itself from the Internet. Code Red worms also reportedly hit
Microsoft?s popular free E- mail service, Hotmail; caused outages for users
of Qwest?s high- speed Internet service nationwide; and caused delays in
package deliveries by infecting systems belonging to FedEx Corp. There are
also numerous reports of infections in other countries.

The economic costs resulting from Code Red attacks are already estimated to
be over $2.4 billion. 1 These involve costs associated with cleaning
infected systems and returning them to normal service, inspecting servers

1 Estimate was developed by Computer Economics Inc. Impact of the Attacks

Page 5 GAO- 01- 1073T

to determine the need for software patches, patching and testing services as
well as the negative impact on the productivity of system users and
technical staff.

Although Code Red?s reported costs have not yet surpassed damages estimated
for last year?s ILOVEYOU virus, which is now estimated to be more than $8
billion 2 , the Code Red attacks are reportedly more costly than 1988?s
Morris worm. This particular worm exploited a flaw in the Unix operating
system and affected VAX computers from Digital Equipment Corp. and Sun 3
computers from Sun Microsystems, Inc. It was intended to only infect each
computer once, but a bug allowed it to replicate hundreds of times, crashing
computers in the process. Approximately 10 percent of the U. S. computers
connected to the Internet effectively stopped at the same time. At that
time, the network had grown to more than 88,000 computers and was a primary
means of communication among computer security experts. 3

SirCam has also reportedly caused some havoc. It is allegedly responsible
for the leaking of secret documents from the government of Ukraine. And it
reportedly infected a computer at the Federal Bureau of Investigation (FBI)
late last month and sent some private, but not sensitive or classified,
documents out in an E- mail. There are reports that SirCam has surfaced in
more than 100 countries.

GAO has identified information security as a governmentwide high risk issue
since 1997. As these incidents continue, the federal government continues to
face formidable challenges in protecting its information systems assets and
sensitive data. These include not only an ever changing and growing
sophistication in the nature of attacks but also an urgent need to
strengthen agency security controls as well as a need for a more concerted
and effective governmentwide coordination, guidance, and oversight. Today, I
would like to briefly discuss these challenges. I would also like to discuss
progress that has been made in addressing them, including improvements in
agency controls, actions to strengthen warning and crisis management
capabilities, and new legislation to provide a comprehensive framework for
establishing and ensuring effectiveness of information security controls
over information resources that support

2 Computer Economics, Inc. 3 http:// www. cert. org/ encyc_ article/
tocencyc. html. Attacks Underscore

Challenges Involved in Protecting Systems

Page 6 GAO- 01- 1073T

federal government operations and assets. These are positive steps toward
taking a proactive stand in protecting sensitive data and assets.

First, these latest incidents again show that computer attack tools and
techniques are becoming increasingly sophisticated. The Code Red attack was
more sophisticated than those experienced in the past because the attack
combined a worm with a denial- of- service attack. Further, with some
reprogramming, each variant of Code Red got smarter in terms of identifying
vulnerable systems. Code Red II exploited the same vulnerability to spread
itself as the original Code Red. However instead of launching a DoS attack
against a specific victim, it gives an attacker complete control over the
infected system, thereby letting the attacker perform any number of
undesirable actions. SirCam was a more sophisticated version of the ILOVEYOU
virus, no longer needing the victim?s E- mail program to spread.

In the long run, it is likely that hackers will find ways to attack more
critical components of the Internet, such as routers and network equipment,
rather than just Web site servers or individual computers. Further, it is
likely that viruses will continue to spread faster as a result of the
increasing connectivity of today?s networks and the growing use of
commercial- off- the- shelf (COTS) products, which, once a vulnerability is
discovered, can be easily exploited for attack by all their users because of
the widespread use of the products.

Second, the recent attacks foreshadow much more devastating Internet threats
to come. According to official estimates, over 100 countries already have or
are developing computer attack capabilities. Further, the National Security
Agency has determined that potential adversaries are developing a body of
knowledge about U. S. systems and methods to attack them. Meanwhile, our
government and our nation have become increasingly reliant on interconnected
computer systems to support critical operations and infrastructures,
including telecommunications, finance, power distribution, emergency
services, law enforcement, national defense, and other government services.
As a result, there is a growing risk that terrorists or hostile foreign
states could severely damage or disrupt national defense or vital public
operations through computer- based attacks on the nation?s critical
infrastructures.

Third, agencies do not have an effective information security program to
prevent and respond to attacks- both external attacks, like Code Red, Code
Red II, and SirCam, and internal attempts to manipulate or damage systems
and data. More specifically, we continue to find that poor security

Page 7 GAO- 01- 1073T

planning and management are the rule rather than the exception. Most
agencies do not develop security plans for major systems based on risk, have
not formally documented security policies, and have not implemented programs
for testing and evaluating the effectiveness of the controls they rely on.

Agencies also often lack effective access controls to their computer
resources and consequently cannot protect these assets against unauthorized
modification, loss, and disclosure. Moreover, application software
development and change controls are weak; policies and procedures governing
segregation of duties are ineffective; and access to the powerful programs
and sensitive files associated with a computer systems operation is not
well- protected. In fact, over the past several years, our analyses as well
as those of the Inspectors General have found that virtually all of the
largest federal agencies have significant computer security weaknesses that
place critical federal operations and assets at risk to computer- based
attacks.

In recognition of these serious security weaknesses, we and the Inspectors
General have made recommendations to agencies regarding specific steps they
should take to make their security programs effective. 4 Also, in 2001, we
again reported information security as a high- risk area across government,
as we did in our 1997 and 1999 high- risk series. 5

Fourth, the government still lacks robust analysis, warning, and response
capabilities. Often, for instance, reporting on incidents has been
ineffective- with information coming too late for agencies to take proactive
measures to mitigate damage. This was especially evident in the Melissa and
ILOVEYOU attacks. There is also a lack of strategic analysis to determine
the potential broader implications of individual incidents. Such analysis
looks beyond one specific incident to consider a broader set of incidents or
implications that may indicate a potential threat of national importance.

4 See, for example, Information Security: Serious and Widespread Weaknesses
Persist at Federal Agencies (GAO/ AIMD- 00- 295, September 6, 2000). 5 High-
Risk Series: An Update (GAO- 01- 263, January 2001).

Page 8 GAO- 01- 1073T

Further, as we recently reported, 6 the ability to issue prompt warnings
about attacks is impeded because of (1) a lack of a comprehensive
governmentwide or nationwide framework for promptly obtaining and analyzing
information on imminent attacks, (2) a shortage of skilled staff, (3) the
need to ensure that undue alarm is not raised for insignificant incidents,
and (4) the need to ensure that sensitive information is protected,
especially when such information pertains to law enforcement investigations
underway. Lastly, government entities have not developed fully productive
information- sharing and cooperative relationships. We recently made a
variety of recommendations to the Assistant to the President for National
Security Affairs and the Attorney General regarding the need to more fully
define the role and responsibilities of the NIPC, develop plans for
establishing analysis and warning capabilities, and formalize information-
sharing relationships with the private sector and federal entities. 7

Fifth, most of the nation?s critical infrastructure is owned by the private
sector. Solutions, therefore, need to be developed and implemented in
concert with the private sector, and they must be tailored sector by sector,
through consultation about vulnerabilities, threats, and possible response
strategies. Putting together effective partnerships with the private sector
is difficult, however. Disparate interests between the private sector and
the government can lead to profoundly different views and perceptions about
threats, vulnerabilities, and risks, and they can affect the level of risk
each party is willing to accept and the costs each is willing to bear.
Moreover, industry has raised concerns that it could potential face
antitrust violations for sharing information. Lastly, there is a concern
that an inadvertent release of confidential business material, such as trade
secrets or proprietary information, could damage reputations, lower consumer
confidence, hurt competitiveness, and decrease market shares of firms.

6 Critical Infrastructure Protection: Significant Challenges in Developing
Analysis, Warning, and Response Capabilities (GAO- 01- 1005T, July 25,
2001). 7 The NIPC agreed with generally agreed with our findings and stated
that the NIPC considers it of the utmost urgency to address the shortcomings
we identified. However, the NIPC did not comment on several key
recommendations, including the need to improve cooperative relationships
with other federal entities, such as Defense and the Secret Service. See
Critical Infrastructure Protection: Significant Challenges in Developing
National Capabilities (GAO- 01- 323, April 25, 2001).

Page 9 GAO- 01- 1073T

Fortunately, we are beginning to see improvements that should help agencies
ward off attacks. We reported earlier this year 8 that several agencies have
taken significant steps to redesign and strengthen their information
security programs. For example, the Internal Revenue Service (IRS) has made
notable progress in improving computer security at its facilities, corrected
a significant number of identified weaknesses, and established a service-
wide computer security management program. Similarly, the Environmental
Protection Agency has moved aggressively to reduce the exposure of its
systems and data and to correct weaknesses we identified in February 2000.

Moreover, the Federal Computer Incident Response Center (FedCIRC) and the
NIPC have both expanded their efforts to issue warnings of potential
computer intrusions and to assist in responding to computer security
incidents. In responding to the Code Red and Code Red II attacks, FedCIRC
and NIPC worked together with Carnegie Mellon?s CERT Coordination Center,
the Internet Security Alliance, the National Coordinating Center for
Telecommunications, the Systems Administrators and Network Security (SANS)
Institute, and other private companies and security organizations to warn
the public and encourage system administrators and home users to voluntarily
update their software.

We also recently reported on a number of other positive actions taken by
NIPC to develop analysis, warning, and response capabilities. For example,
since its establishment, the NIPC has issued a variety of analytical
products to support computer security investigations. It has established a
Watch and Warning Unit that monitors the Internet and other media 24 hours a
day to identify reports of computer- based attacks. It has developed crisis
management capabilities to support a multi- agency response to the most
serious incidents from FBI?s Washington, D. C., Strategic Information
Operations Center.

The administration is currently reviewing the federal strategy for critical
infrastructure protection that was originally outlined in Presidential
Decision Directive (PDD) 63, including provisions related to developing
analytical and warning capabilities that are currently assigned to the NIPC.
On May 9, 2001, the White House issued a statement saying that it was
working with federal agencies and private industry to prepare a new version
of the ?national plan for cyberspace security and critical

8 High- Risk Series: An Update (GAO- 01- 263, January 2001).

Page 10 GAO- 01- 1073T

infrastructure protection? and reviewing how the government is organized to
deal with information security issues.

Lastly, the Congress recently enacted legislation to provide a comprehensive
framework for establishing and ensuring the effectiveness of information
security controls over information resources that support federal government
operations and assets. This legislation 9 -known as Government Information
Security Reform (GISR)- requires agencies to implement an agencywide
information security program that is founded on a continuing risk management
cycle. GISR also added an important new requirement by calling for an
independent evaluation of the information security program and practices of
an agency. These evaluations are to be used by OMB as the primary basis for
its summary report to the Congress on governmentwide information security.

In conclusion, the attacks we are dealing with now are smarter and more
threatening than the ones we were dealing with last year and the year
before. But I believe we are still just witnessing warning shots of
potentially much more damaging and devastating attacks on the nation?s
critical infrastructures. To that end, it?s vital that federal agencies and
the government as a whole become proactive rather than reactive in their
efforts to protect sensitive data and assets. In particular, as we have
recommended in many reports and testimonies, 10 agencies need more robust
security planning, training, and oversight. The government as a whole needs
to fully develop the capability to strategically analyze cyber threats and
warn agencies in time for them to avert damage. It also needs to continue
building on private- public partnerships- not just to detect and warn about
attacks- but to prevent them in the first place. Most of all, trust needs to
be established among a broad range of stakeholders, roles and
responsibilities need to be clarified, and technical expertise needs to be
developed. Lastly, becoming truly proactive will require stronger

9 Floyd D. Spence, National Defense Authorization Act for Fiscal Year 2001,
P. L. 106- 398, Title X, Subtitle G, 114 Stat. 1654, 1654A- 265 (2000). 10
See, for example, Information Security: Serious and Widespread Weaknesses
Persist at Federal Agencies (GAO/ AIMD- 00- 295, September 6, 2000);
Critical Infrastructure Protection: Comprehensive Strategy Can Draw on Year
2000 Experiences (GAO/ AIMD00- 1, October 1, 1999); Critical Infrastructure
Protection: Comments on the National Plan for Information Systems Protection
(GAO/ T- AIMD- 00- 72, February 1, 2000) and

Critical Infrastructure Protection: Challenges to Building A Comprehensive
Strategy for Information Sharing and Coordination (GAO/ T- AIMD- 00- 268,
July 26, 2000).

Page 11 GAO- 01- 1073T

leadership by the federal government to develop a comprehensive strategy for
critical infrastructure protection, work through concerns and barriers to
sharing information, and institute the basic management framework needed to
make the federal government a model of critical infrastructure protection.

Mr. Chairman and Members of the Subcommittee, this concludes my statement. I
would be pleased to answer any questions that you or Members of the
Subcommittee may have.

Contacts and Acknowledgment

For further information, please contact Keith Rhodes at (202) 512- 6412.
Individuals making key contributions to this testimony included Cristina
Chaplain, Edward Alexander, Jr., Tracy Pierson, Penny Pickett, and Chris
Martin.

Page 12 GAO- 01- 1073T

Question Answer

What is it? Code Red is a worm, which is a computer attack that propagates
through networks without user intervention. This particular worm makes use
of a vulnerability in Microsoft?s Internet Information Services (IIS) Web
server software- specifically, a buffer overflow. a The worm looks for
systems running IIS (versions 4. 0 and 5. 0) that have not patched the
unchecked vulnerability, and exploits the vulnerability to infect those
systems.

Code Red was initially written to deface the infected computer?s Web site
and to perform a distributed denial of service (DDoS) attack against the
numerical Internet address used by www. whitehouse. gov. Two subsequent
versions of Code Red do not deface Web pages but still launch the DDoS
attack.

Code Red was first reported on July 17, 2001. The worm is believed to have
started at a university in Guangdong, China. How does it spread? The worm
scans the Internet, identifies vulnerable systems, and infects these systems
by

installing itself. Each newly installed worm joins all the others causing
the rate of scanning to grow rapidly.

The first version of Code Red created a randomly generated list of Internet
addresses to infect. However, the algorithm used to generate the list was
flawed, and infected systems ended up reinfecting each other. The subsequent
versions target victims a bit differently, increasing the rate of infection.
Who is at risk? Users with a Microsoft IIS server installed with Windows NT
version 4.0 and Windows 2000. What damage can it do? The original variant of
Code Red (CRv1) can deface the infected computer?s Web site and

used the infected computer to perform a DDoS attack against the Internet
address of the www. whitehouse. gov Web site. Subsequent variants of Code
Red (CRv2a and CRv2b) no longer defaced the infected computer?s Web site
making detection of the worm harder. These subsequent variants continued to
target the www. whitehouse. gov Web site and used smarter methods to target
new computers for infection.

The uncontrolled growth in scanning can also decrease the speed of the
Internet and cause sporadic but widespread outages among all types of
systems.

Specifically, Although the initial version, CRv1, defaces the Web site, the
primary impact to the server is performance degradation as a result of the
scanning activity of this worm. This degradation can become quite severe
since it is possible for a worm to infect the same machine multiple times.
Other entities, even those that are not vulnerable to Code Red, are impacted
because servers infected by Code Red scan their systems and networks.
Depending on the number of servers performing this scan, these entities may
experience network denial of service. This was especially true with the
implementation of CRv1 since a ?flaw? in the random number generator
essentially targeted the same servers. As noted above, this behavior is not
found in the later variants. However, the end result may be the same since
CRv2a and CRv2b use improved randomization techniques that facilitate more
prolific scanning. What can you do if you?re infected? Install a patch made
available by Microsoft and reboot the system. (The patch should also be

installed as a preventative measure).

Attachment I: Details on the Attacks Code Red

Page 13 GAO- 01- 1073T

Question Answer Technical Details on How the Code Red Worm Operates

The Code Red worm has three phases - discovery and propagation, attack, and
dormancy. Execution of these phases is based upon the day of the month.
Phase 1: Discovery and Propagation Between day 1 and day 19 of any month,
Code Red performs its discovery and propagation

function. It does this by generating 100 subprograms on an infected server.
All but one of these subprograms has the task of identifying and infecting
other vulnerable Web servers by scanning a generated list of Internet
addresses. Once a target system is identified, Code Red uses standard Web
server communication to exploit the flaw and send itself to the vulnerable
server. Once a new server is infected, the process continues.

CRv1 created a randomly generated list of Internet addresses to infect.
However, the algorithm used to generate the random number list was ?flawed?,
and infected systems ended up reinfecting each other because the random list
that each computer generated was the same. CRv2a and CRv2b were modified to
generate actual random lists of Internet addresses that were more effective
at identifying potential servers that had not already been attacked.
Therefore, these versions can ultimately infect greater numbers of
unprotected servers.

CRv1 also defaced the target system?s Web site. This was done by replacing
site?s actual Web page with the message, ?HELLO! Welcome to http:// www.
worm. com! Hacked by Chinese!? b This message enabled system administrators
to easily identify when their servers had been infected. CRv2a and CRv2b
modified the functionality so it would no longer deface Web pages, forcing
system administrators to be proactive in determining infection. Descriptions
of the variants are listed below.

 CRv1: Web site defacement and ?random? target selection for additional
attacks.

 CRv2a: No Web defacement and modified random target selection

 CRv2b: No Web defacement and better target selection by optimizing the
random number generation process, i. e., better target addresses are
generated. Due to the target optimization, systems infected with version 2b
are able to infect new systems at a faster rate than version 2a. Phase 2:
Attack Between day 20 and day 27 of any month is Code Red?s attack phase.
Once Code Red

determines the date to be within this designated attack date range, each
infected server participates in a DDoS attack by sending massive amounts of
data to its intended target, the numeric Internet address of the White House
Web site. Since all infected servers are set to attack the same target on
the same set of dates, the large amount of Internet traffic is expected to
flood the Internet with data and bombard a numeric address used by www.
whitehouse. gov with more data than it can handle. This flooding of data
would cause the Web server to stop responding to all Web server requests,
including legitimate users surfing the White House Web site. Phase 3:
Dormancy From day 28 to the end of the month, the Code Red worm lays
dormant, going into an infinite

sleep phase. Although the worm remains in the computer?s memory until the
system is rebooted, Code Red will not propagate or initiate any attacks once
it enters dormancy. According to testing performed by Internet Security
Systems, Carnegie Mellon?s CERT Coordination Center (CERT/ CC), and the
Federal Bureau of Investigation?s (FBI) National Infrastructure Protection
Center (NIPC), the dormant worm cannot be awakened to restart the process.

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Question Answer

What is it? Code Red II is also a worm that makes use of a buffer overflow
vulnerability in Microsoft?s IIS Web server software.

Except for using the buffer overflow injection mechanism, the worm is very
different than the original Code Red and its variants. In fact, it is more
dangerous because it opens backdoors on infected servers that allow any
follow- on remote attackers to execute arbitrary commands.

There is no DDoS attack function in Code Red II. Code Red II was reported on
August 4, 2001, by industry analysts. How does it spread? Like Code Red, the
worm scans the Internet, identifies vulnerable systems, and infects these

systems by installing itself. Each newly installed worm joins all the others
causing the rate of scanning to grow.

Code Red II, however, mostly selects Internet addresses in the same range as
the infected computer to increase the likelihood of finding susceptible
victims. Who is at risk? Users with Microsoft IIS Web server software
(versions 4.0 and 5.0) installed with Windows 2000. What damage can it do?
Like Code Red, Code Red II can decrease the speed of the Internet and
service disruptions.

Unlike Code Red, it also leaves the infected system open to any attacker who
can alter or destroy files and create a denial of service attack.

Specifically,

 Because of the worm?s preference to target its closest neighbors, combined
with the enormous amount of scanning traffic generated by the numerous
subprograms running in parallel, a large amount of broadcast request traffic
is generated on the infected system?s network. If several machines on a
local network segment are infected, then the resulting attempt to propagate
the infection to their neighbors simultaneously can generate broadcast
requests at ?flooding? rates. Systems on the receiving end of an effective
?broadcast flood? may experience the effects of a DoS attack.

 Code Red II allows remote attackers and intruders to execute arbitrary
commands on infected Windows 2000 systems. Compromised systems are then
subject to files being altered or destroyed. This adversely entities that
may be relying on the altered or destroyed files. Furthermore, compromised
systems are also at high risk for being exploited to generate other types of
attacks against other servers. What do you do if you?re infected? Several
anti- virus software vendors have created tools that remove the harmful
effects of the

worm and reverse the changes made by the worm. This fix, however, is useless
if the infected computer had been accessed by an attacker who installed
other backdoors on the system that would be unaffected by the Code Red II
patch tool.

According to FedCIRC (Federal Computer Incident Response Center), due to the
malicious actions of this worm, patching and rebooting an infected server
will not solve the problem. The system?s hard drive should be reformatted
and all software should be reinstalled.

Technical Details of the Code Red II Worm

The Code Red II worm also has three phases - preparation, propagation, and
Trojan insertion. Based upon current analysis, Code Red II only affects Web
servers running on the Microsoft Windows 2000 operating system platform.
Phase 1: Preparation During the preparation phase, the worm checks the
current date to determine whether it will run

at all. If the date is later than October 1, 2001, then the worm will cease
to function and will remain infinitely dormant. If the date is before
October 1, 2001, then all functions will be

Code Red II

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Question Answer

performed. Although this discovery may bring hope that after October 1,
2001, this worm will no longer be a threat, this date constraint can be
easily changed in a variant. The other activities conducted during the
preparation phase include:

 The functionality of Code Red II is dependent on both the system?s
environment and the current date. Code Red II checks the default system?s
language, e. g., English, Chinese, etc., and stores that information.

 The worm also checks if the system has been previously infected, by
searching for the existence of a specific file. If the file exists, then
Code Red II becomes dormant and does not re- infect the system. c If the
file does not exist, Code Red II creates the file and continues the process.

 Preparation is finalized when the worm disables the capability of the
Windows 2000 operating system to repair itself if it discovers that one of
its required system files has been modified in any way. This becomes
important during the Trojan Insertion function.

Once the worm has completed the preparation phase, it immediately starts the
propagation and Trojan insertion phases to complete infection. Phase 2:
Propagation Code Red II creates hundreds of subprograms to propagate itself.
The number of subprograms

created depends upon the default language that the worm identified in the
Preparation phsse. If the system?s default language is Chinese, then 600
subprograms are created. If the default language is not Chinese, then 300
subprograms are generated.

The propagation phase is unique because Code Red II seeks to copy itself to
computers that are mostly near the infected system. The algorithm uses the
infected system?s own Internet address to generate a list of random Internet
addresses. The generated list is comprised of Internet addresses that are
closely related to the infected system. The rationale is that similar
systems should reside in the ?neighborhood? of the infected system,
resulting in an increased chance of infection.

Each of the subprograms is tasked with scanning one of the randomly
generated Internet addresses to identify and infect another vulnerable
system. Like Code Red, this worm uses the buffer overflow vulnerability to
infect its target. Once a new target is infected, the process continues.
Phase 3: Trojan Insertion Code Red II is more malicious than the Code Red
worm discussed earlier, due to the existence

of the Trojan horse backdoor programs that Code Red II leaves behind on the
infected computer. The basic process follows:

 Initially, executable files are copied to specific locations on the Web
server, which by necessity, are accessible by any remote user. These
executable files can run commands sent by a remote attacker to the server
through the use of well- crafted Web commands.

 A Trojan horse program is planted on the server that allows further
exploit of the infected computer. The Trojan horse program is named after a
required system program that executes when the next user logs into the
system. It is also placed in a location that ensures that the Trojan horse
program will be run instead of the required system program. Upon execution,
the Trojan horse changes certain system settings that grant remote attackers
read, write, and execute privileges on the Web server.

 Twenty- four to forty- eight hours after the preparation function is
initiated, Code Red II forces the infected system to reboot itself. Although
the reboot eliminates the memory resident worm, the backdoor and the Trojan
horse programs are left in place since they are stored on the system?s
disks. The reboot also restarts the IIS software, which, in turn, ensures
that the Web server uses the newly compromised system settings.

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Question Answer

Since the Trojan horse will always be executed each time a user logs on,
Code Red II guarantees that remote attackers will always have access to the
infected system. This is important, since even if the executable files
copied at the beginning of the Trojan Insertion phase are deleted, the
excessive privileges the Trojan sets at reboot are still in place.
Therefore, the Trojan enables a remote attacker to perform similar exploits
using these excessive privileges.

Question Answer

What is it? SirCam is a malicious computer virus that spreads through E-
mail and potentially through unprotected Windows network connections. What
makes SirCam stealthy is that it does not rely on the E- mail capabilities
of the infected system to replicate. Other viruses, such as Melissa and
ILOVEYOU, used the host machine?s E- mail program while SirCam contains its
own mailing capability.

Once the malicious code has been executed on a system, it may reveal or
delete sensitive information.

SirCam was first detected on July 17, 2001. How does it spread? This mass-
mailing virus attempts to send itself to E- mail addresses found in the
Windows

Address Book and addresses found in cached files. It may be received in an
E- mail message saying ?Hi! How are you?? and requesting help with an
attached file. The same message could be received in Spanish.

Since the file is sent from a computer whose owner is familiar enough with
the recipient to have their E- mail address in their address book, there is
a high probability that the recipient will trust the attachment as coming
from a known sender. This helps ensure the virus?s success in the wild and
is similar to the social engineering approach used by Melissa and ILOVEYOU.

The E- mail message will contain an attachment that will launch the code
when opened. When installed on a victim machine, SirCam installs a copy of
itself in two files. It then ?steals? one of the target system?s files and
attempts to mail that file with itself as a Trojan, that is, a file with
desirable features, to every recipient in the affected system?s address
book. It can also get E- mail addresses from the Web browser.

SirCam can also spread to other computers on the same Windows network
without the use of Email. If the infected computer has read/ write access to
specific Windows network computers, SirCam copies itself to those computers,
infecting the other computer. Who is at risk? Any E- mail user or any user
of a PC with unprotected Windows network connections that is on

the same Windows network as an infected computer. What damage can it do?
SirCam can publicly release sensitive information and delete files and
folders. It can also

completely fill the hard drive of the infected computer. Furthermore, it can
also lead to a decrease in the speed of the Internet.

Specifically, It can cause security breaches by attaching randomly chosen
documents to itself and then Emailing them to other parties. This allows the
worm to cause unauthorized disclosure of

SirCam

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Question Answer

confidential information. It can also delete files and folders. There is a
one in twenty chance that an infected computer will have its hard drive
erased or a one in fifty chance that the hard drive will be completely
filled with garbage on October 16. It can create a file named C:\ Recycled\
sircam. sys which consumes all free space on the C: drive. A full hard drive
prevents users from saving files to that drive, and in certain
configurations impedes system- level tasks, such as saving files and
printing. It can result in a denial of service attack by flooding E- mail
systems with useless E- mail containing attachments of various sizes. What
do you do if you?re infected? Most anti- virus software vendors have
released updated information, tools, or virus databases to

help detect and partially recover from SirCam.

Technical Details of the SirCam Virus

Actions performed once the user executes the attachment

 SirCam detaches itself from the E- mail attachment and attempts to execute
its program file on the target machine.

 It copies itself to several directories on the target system.

 It then ?steals? one of the target system?s files and attempts to mail
that file with itself as a Trojan to every recipient in the affected
system?s address book. It can also get E- mail addresses from the Web
browser. The subject line and the attachment?s name differ from Email to E-
mail. The attached file is where the virus? malice lies: the infected E-
mail?s attachment has a name that matches the subject line and two
extensions, the second being .exe, .bat, .com, .pif, or .lnk. For example, a
Word file called SAMPLE. DOC could be attached to the E- mail as SAMPLE.
DOC. EXE.

 It can also delete files and folders. There?s a one in twenty chance that
an infected computer will have its hard drive erased and a on in fifty
chance that its hard drive will be completely filled with garbage on October
16.

In addition to E- mail propagation, SirCam can copy itself to other systems
on the Windows network that have write- able access. SirCam will copy itself
to those systems and rename itself to be a system file that will be executed
upon the next system reboot.

a Buffer overflows occur when programs do not adequately check input for
appropriate length. Thus, any unexpected input ?overflows? onto another
portion of the central processing unit?s executions stack. If this input is
chosen judiciously by a rogue programmer, it can be used to launch code of
the programmer?s choice. b http:// www. cert. org/ advisories/ CA- 2001-
19.html.

c A reported variant of Code Red II does reinfect the server.

(460513)
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