[Senate Hearing 116-461] [From the U.S. Government Publishing Office] S. Hrg. 116-461 STATE AND LOCAL CYBERSECURITY: DEFENDING OUR COMMUNITIES FROM CYBER THREATS AMID COVID 19 ======================================================================= HEARING before the SUBCOMMITTEE ON FEDERAL SPENDING OVERSIGHT AND EMERGENCY MANAGEMENT of the COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED SIXTEENTH CONGRESS SECOND SESSION __________ DECEMBER 2, 2020 __________ Available via http://www.govinfo.gov Printed for the use of the Committee on Homeland Security and Governmental Affairs [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] U.S. GOVERNMENT PUBLISHING OFFICE 43-278 PDF WASHINGTON : 2021 COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS RON JOHNSON, Wisconsin, Chairman ROB PORTMAN, Ohio GARY C. PETERS, Michigan RAND PAUL, Kentucky THOMAS R. CARPER, Delaware JAMES LANKFORD, Oklahoma MAGGIE HASSAN, New Hampshire MITT ROMNEY, Utah KAMALA D. HARRIS, California RICK SCOTT, Florida] KYRSTEN SINEMA, Arizona MICHAEL B. ENZI, Wyoming JACKY ROSEN, Nevada JOSH HAWLEY, Missouri Gabrielle D'Adamo Singer, Staff Director David M. Weinberg, Minority Staff Director Laura W. Kilbride, Chief Clerk Thomas J. Spino, Hearing Clerk SUBCOMMITTEE ON FEDERAL SPENDING OVERSIGHT AND EMERGENCY MANAGEMENT RAND PAUL, Kentucky, Chairman RICK SCOTT, Florida MAGGIE HASSAN, New Hampshire MICHAEL B. ENZI, Wyoming KAMALA D. HARRIS, California JOSH HAWLEY, Missouri KRYSTEN SINEMA, Arizona Greg McNeill, Staff Director Harlan Geer, Minority Staff Director Kate Kielceski, Chief Clerk C O N T E N T S ------ Opening statement: Page Senator Paul................................................. 1 Senator Hassan............................................... 2 Senator Rosen................................................ 12 Senator Sinema............................................... 27 Prepared statement: Senator Paul................................................. 31 Senator Hassan............................................... 33 WITNESSES Wednesday, December 2, 2020 Brandon Wales, Acting Director, Cybersecurity and Infrastructure Security Agency, U.S. Department of Homeland Security.......... 3 Denis Goulet, Commissioner, New Hampshire Department of Information Technology......................................... 15 John Riggi, Senior Advisor for Cybersecurity and Risk, American Hospital Association........................................... 17 Leslie Torres-Rodriguez, Ed.D., Superintendent of Schools, Hartford Public Schools........................................ 19 Bill Siegel, Chief Executive Officer and Co-Founder, Coveware, Inc............................................................ 23 Alphabetical List of Witnesses Goulet, Denis.: Testimony.................................................... 15 Prepared statement........................................... 45 Riggi, John: Testimony.................................................... 17 Prepared statement........................................... 51 Siegel, Bill: Testimony.................................................... 23 Prepared statement........................................... 63 Torres-Rodriguez, Leslie Ed.D.: Testimony.................................................... 19 Prepared statement........................................... 61 Wales, Brandon: Testimony.................................................... 3 Prepared statement........................................... 35 Responses to post-hearing questions for the Record: Mr. Wales.................................................... 81 Mr. Goulet................................................... 83 STATE AND LOCAL CYBERSECURITY: DEFENDING OUR COMMUNITIES FROM CYBER THREATS AMID COVID-19 ---------- WEDNESDAY, DECEMBER 2, 2020 U.S. Senate, Subcommittee on Federal Spending, Oversight and Emergency Management, of the Committee on Homeland Security and Governmental Affairs, Washington, DC. The Committee met, pursuant to notice, at 2:31 p.m. in room 342, Dirksen Senate Office Building, Hon. Rand Paul, Chairman of the Subcommittee, presiding. Present: Senators Paul, Scott, Hawley, Hassan, Sinema, and Rosen. OPENING STATEMENT OF SENATOR PAUL\1\ Senator Paul. I now call this hearing of the Senate Homeland Security and Governmental Affairs Subcommittee on Federal Spending Oversight and Emergency Management to order. The title of our discussion today is ``State and Local Cybersecurity: Defending Our Communities from Cyber Threats Amid COVID-19.'' --------------------------------------------------------------------------- \1\ The prepared statement of Senator Paul appears in the Appendix on page 31. --------------------------------------------------------------------------- In preparing for this hearing, it has become clear to me that good cybersecurity practices require a near constant struggle to stay ahead of events, and the real danger lies in getting complacent. Effective cybersecurity is an ongoing, everyday line of effort. The threat landscape is diverse, the best practices are constantly changing, the information you get may not always be reliable, the maintenance tasks can seem overwhelming, and most importantly, the stakes are high. In this context I have often found myself thinking, effective cybersecurity cannot move at, quote, ``the speed of government.'' By that I mean cybersecurity is a 21st century public policy problem, just is not solvable, or really even manageable by 20th century government means. Regulation, mandates, and centralized action, in general, these approaches are inadequate to match the pace of change that we have witnessed in the cybersecurity realm in recent years. Congress needs to make sure that the government's role in detecting and responding to cyberattacks is clearly defined, and that they are focused, first and foremost, on the security of Federal information networks. Today we will hear from the Department of Homeland Security (DHS) about their cybersecurity work--how it is evolving and their approach to this complex range of threats. With respect to individual actors in industries that are at the greatest risk of cyberattack--health care, education, financial services, retail, critical infrastructure--the proliferation of ransomware attacks over the past several months and years have made clear that these entities have to take on this responsibility themselves, on a day-to-day, minute-by-minute basis. Irrespective of what the government is or is not doing, all cybersecurity is essentially local, and so today we will hear from experts in State government, the health care sector, and public education on their experience with cyber threats and incidents, and see the State of cybersecurity in these industries. Fortunately for both government and the private sector, the marketplace for cybersecurity services is continuing to grow and mature. We will hear today from one such firm, Coveware, that consults with private and public entities on cybersecurity and works with them to respond to cyber incidents. I would like to thank Ranking Member Hassan for suggesting this hearing, and I look forward to hearing from our panelists. Senator Hassan. OPENING STATEMENT OF SENATOR HASSAN\1\ Senator Hassan. Thank you very much, Mr. Chairman, for working with me to arrange this hearing and for your opening comments. I deeply appreciate the opportunity to continue working on an issue that I believe is critical to our national security, as well as to the economic security of our Nation. --------------------------------------------------------------------------- \1\ The prepared statement of Senator Hassan appears in the Appendix on page 33. --------------------------------------------------------------------------- State and local governments have been prime targets for cyberattacks for a number of years, but the stakes have only grown as coronavirus disease 2019 (COVID-19) has forced millions of Americans to migrate their everyday activities to the online world. Many students now learn from their teachers on a computer instead of in the classroom. Doctors treat many patients through telemedicine instead of in person. Governments handle many essential services online instead of at City Hall. The massive increase in online activities over these past 9 months means that the targets for cyber criminals have increased commensurately. Unfortunately, cyber criminals have taken advantage. One firm that tracks cyberattacks on schools and school districts reports that 44 attacks have occurred so far this school year and many more likely went unreported. We will hear from the superintendent of one of these schools today. In the spring, Interpol warned that ransomware attacks against hospitals have grown significantly as hackers sensed an opportunity to extort more money in ransoms with hospitals overwhelmed with COVID patients. About a month ago, a cyberattack hit the University of Vermont Medical Center, forcing it to divert patients to other facilities, thereby jeopardizing the care of many patients, especially those in nearby rural areas who do not have the resources to travel to the next closest hospital for treatment. The Federal Government has a responsibility to help protect our communities from these threats. While the Cybersecurity and Infrastructure Security Agency (CISA) has done a commendable job helping our State and local governments, the number and the severity of attacks on our communities continues to increase. This hearing will help us identify ways for Congress and the Federal Government to better assist State and local governments in fending off these cyberattacks on our communities. We have a group of great witnesses who can help us work through these challenges, including CISA Acting Director Brandon Wales, who we are happy to have here today. With that said, we are missing our original Federal witness, CISA Director Chris Krebs, because he was fired abruptly by the President 2 weeks ago. Director Krebs led CISA in a nonpartisan manner, and he approached his agency's most important task, securing the U.S. election infrastructure, with professionalism and tenacity. He was fired for doing his job, and we are less safe because of it. It is imperative that we have strong, independent leadership at CISA going forward. As the Biden administration seeks to fill this position in 2021, I would encourage them to look to Director Krebs' example when considering his successor. To all of our witnesses, I appreciate your willingness to testify, and I want to thank you all for the role you play in keeping us safe. I look forward to learning from your experiences as well as your expertise. Thank you, Mr. Chairman, and I will proceed with introductions if you would like me to. We will start, in this first panel, with our Federal witness. I am pleased today to introduce Brandon Wales, Acting Director for the Cybersecurity and Infrastructure Security Agency, at the United States Department of Homeland Security. Acting Director Wales was the first person to serve as the Executive Director of the agency before being very recently elevated to Acting Director. In this role, Acting Director Wales oversees CISA's efforts to defend civilian networks, manage systemic risk to national critical functions, and work with stakeholders to raise the security baseline of the nation's cyber and physical infrastructure. Acting Director Wales, thank you for coming before the Subcommittee today, and I look forward to hearing your testimony. TESTIMONY OF BRANDON WALES,\1\ ACTING DIRECTOR, CYBERSECURITY AND INFRASTRUCTURE SECURITY AGENCY, U.S. DEPARTMENT OF HOMELAND SECURITY Mr. Wales. Chairman Paul, Ranking Member Hassan, and Members of the Subcommittee, thank you for the opportunity to testify regarding the Cybersecurity and Infrastructure Security Agency's support to State, local, Tribal, and territorial stakeholders in mitigating a broad range of cyber threats facing our Nation. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Wales appears in the Appendix on page 35. --------------------------------------------------------------------------- Whether focused on election security, responding to the digital transformation brought about by COVID-19, or addressing the plague of ransomware, I believe that enhancing and sustaining State and local cybersecurity capacity will be the defining cybersecurity challenge of the next decade. This is my first appearance before the Committee in my new capacity as Acting Director, and I am honored to lead the men and women of our agency as we defend today and secure tomorrow. I want to begin by thanking the CISA workforce and the entire election security community for their tireless work over the last 4 years, culminating in the November 3rd election. Our goal was simple: to make the 2020 election the most secure in modern history. We succeeded in building a robust election security community made up of State and local election officials, key Federal agencies, and private sector election vendors, in surging the technical capacity of CISA to improve cyber defenses nationwide and in harnessing the capabilities of CISA, the Federal Bureau of Investigation (FBI), the National Security Agency (NSA), U.S. intelligence community (IC), and the Department of Defense (DOD) to identify threats, respond to potential incidents, and take decisive action, when necessary. As a result, layers of security and resilience measures are put in place by election officials and the community reacted quickly to disrupt efforts by foreign nations to interfere in the election. For example, we were able to rapidly share information on Russian intrusions into State and local networks, and attempts by Iranian government actors to send spoofed voter intimidation emails were publicly outed within 27 hours. Our election security mission continues, and CISA will remain in an enhanced coordination posture until after election results have been certified in every State. We also stand ready to support States holding runoff elections in the coming months, such as Georgia and Louisiana. This year has not only been focused on elections. Beginning in February, we have been working to support the nation's response to COVID-19, including helping to secure the development and distribution of potential vaccines under Operation Warp Speed (OWS). Since the pandemic's earliest days, we have seen malicious cyber actors targeting vaccine research and development, exploiting the dramatic expansion of remote work, and using COVID to advance criminal schemes. In response, CISA ramped up information-sharing efforts on emerging threats, established a telework resource hub, and surged cybersecurity services to high-risk entities in the health care sector through our Project TAKEN. Now, under the Department of Health and Human Services (HHS) and DOD-led Operation Warp Speed, we are prioritizing services to companies deeper in the pharmaceutical supply chain to protect U.S. vaccine development and distribution. Recently, hospitals across the country were hit with ransomware launched by a cybercriminal organization looking to profit from disruptions of critical health delivery during the pandemic. This was appalling, but not surprising, given the growth of ransomware incidents over the past 6 months. Ransomware is quickly becoming a national emergency. We are doing what we can to raise awareness, share best practices, and assist victims, but improving defenses will only go so far. We must disrupt the ransomware business model and we must take the fight to the criminals. While election security, a pandemic response, and ransomware may all look completely different, the one thing they have in common is a reliance on the networks at the State and local level. These are the networks that keep our communities running despite global challenges. These are the networks that help us respond to emergencies. These are the networks that run local hospitals and schools, and they are in need of urgent assistance. CISA is taking action to help by strengthening operational partnerships, hiring additional cybersecurity coordinators to boost engagement in State capitals across the country, in supporting cyber proposals in the Federal Emergency Management Agency (FEMA) preparedness grantmaking process, and continuing to push CISA resources out from headquarters to where our partners are, in States and communities. In conclusion, I want to thank the Committee for its leadership on legislation that has advanced the authorities of our agency and for your support for legislation still moving through Congress that will push CISA even further. This Committee has been an essential partner in our mission, and I look forward to continuing to work with you to defend today and secure tomorrow. Thank you again for the opportunity to appear before you, and I look forward to your questions. Senator Paul. Thank you. Senator Hassan had to go vote so she will be back in a few minutes. You mentioned, I believe, Russia and Iran, and it went by pretty quickly and I did not catch everything you had to say. You said these were attempts to actually change votes or to interfere in the election somehow? What did you exactly say? Mr. Wales. Sure. The activity was a little different in both cases. In the case of Russia, Russia had launched a fairly broad campaign to target State, local, private sector, and Federal networks, using exposed vulnerabilities. Senator Paul. Using what? Mr. Wales. Exposed vulnerabilities, fairly well-known vulnerabilities. They were looking for those vulnerabilities and trying to get inside of networks. We did discover that---- Senator Paul. You are talking about election networks that count votes? What are you talking about? Mr. Wales. I am talking about general networks. These could be private sector networks in things completely unrelated to elections. It did include, in one case, where they compromised a local county network and downloaded some information that had to do with the election. But this was not an attempt---- Senator Paul. But this was not tabulation of the election. Mr. Wales. No, absolutely no. Senator Paul. And what did you say about Iran? Mr. Wales. Iran sent spoofed voter intimidation emails. Senator Paul. OK. Trying to disincentive people to vote, or something, to trick people into not voting. Mr. Wales. Correct. They are trying to create a narrative that the election was---- Senator Paul. But to your knowledge, there were no votes changed by a foreign actor. In fact, was that true? No votes were changed by a foreign actor, that you know of? Mr. Wales. We have no evidence that votes were changed by an actor. Senator Paul. And no attempts were directly stopped. Is there sort of an existing voting network? You cannot really hack into a voting network, can you, that is just sort of there? Mr. Wales. We have numerous advantages, in part because we have a highly decentralized system. There is not an election network. There are hundreds and thousands of election networks across the country. In addition, the actual vote tabulation systems, those are not networked on the Internet. The places where we see the most activity tends to be those highly centralized, internet-enabled systems, for example, voter registration or election night reporting. But even in those cases we did not see any adversary capable of compromising those systems to---- Senator Paul. But it sounds like, as a general rule of thumb, if we are looking for advice on how to protect ourselves, the whole push of modern technology is to make us more connected, and maybe part of the advice is that we do not need to be too connected, having separate systems or separating. Is some of that advice taken within the Federal Government? You said we are protected in the electoral system because we have States and then we have counties and they are not completely integrated. We probably do not want to completely integrate or Federalize things with elections. Is it true, within the Federal Government, that there is compartmentalization on purpose, to try to protect against hacking? Mr. Wales. Yes. One of the major recommendations to any entity is to be thoughtful about how you network your systems, where you should segment your systems, where you should completely air-gap your systems. There is a reason why the classified networks that are operated by the intelligence community and Department of Defense are not accessible readily through the Internet. You want to keep those things separate. Same thing for industrial control systems that operate the most sensitive, critical infrastructure in the country. You want to build additional barriers to prevent people from easily moving from small compromises onto parts of networks that could have much more significant consequences. Senator Paul. How much of the problem with attacking a network is coming through an email versus another way of attacking a network? Mr. Wales. Frankly, it varies. Coming through an email, that normally includes things like spear phishing, where you get an email that says ``click on this,'' and you click on a link and all of a sudden that malicious payload comes and compromises your computer. I would say right now we are seeing, while that has been traditionally one of the more significant ways we have seen networks compromised, over the last year we have seen dramatic growth in people compromising networks by exploiting vulnerabilities in virtual private network software. In part, this is as a result of the dramatic expansion of people teleworking, remote working, and a dramatic increase in the number of---- Senator Paul. What does that mean? You are not attacking it through an email. You are attacking it through the cloud somehow, through software that communicates with the cloud? Mr. Wales. Not necessarily the cloud but, for example, if you are connecting through a virtual private network, which is the way that maybe you call in to your company's network--I am at home, I am on my laptop, calling in to my company's network--I am connecting through a virtual private network (VPN) software. There are vulnerabilities in some of the more common VPN software, most of which have been patched, but if a company has not patched that vulnerability an actor may be able to exploit that vulnerability, compromise the connection---- Senator Paul. But they are not logging into your computer. They are logging into your network and then bouncing back into your computer once again, if your network---- Mr. Wales. Or, more importantly, they want to get into that network, so they are exploiting that vulnerability to gain access to that network, and then once they are inside, using a variety of other vulnerabilities, they are trying to elevate their privileges. They have administrative capabilities, so they can create new accounts, and they can do whatever they want. Senator Paul. What is a guess on the percentage? How much of this is an email problem? Is half of it email, 75 percent, 25 percent? Just a guess. Mr. Wales. It is a little bit hard to say right now. I would say probably at least half is still kind of spear phishing-related intrusions. Senator Paul. Right. Because it seems like that there would be a technological solution to some of that in really trying to protect email networks from the network, almost as if maybe you have a separate complete network that never communicates. They communicate with each other, so you can talk to each other, but never communicates with--I mean, almost somehow a complete separation of your email network from the rest of your network. Mr. Wales. It is hard today, given the amount of interconnection between the various tools that you use in terms of any business. But most of the ways in which networks are compromised today are exploiting vulnerabilities where patches are available and where the solutions to mitigate these problems are readily available and they are just not being implemented by the information technology (IT) security professionals at companies. Senator Paul. How rapidly does it change? How rapidly does someone have to figure out that there is a brand new phishing or, technology? Mr. Wales. You need to stay on top of it. Every day new patches are released for software. Now it may not be every single day for every piece of software, but on any given day there are new patches that come out for software. IT security professionals need to stay on top of that, understand what the nature of those vulnerabilities are, and prioritize their efforts to close those vulnerabilities. Obviously, the bigger the network you have the more complicated this is. Senator Paul. When you come up with a patch, are you able to keep that somewhat secret from the criminals, or can they immediately see the patch and respond to the patch? Mr. Wales. They can generally see it. These patches are made publicly available, so that as many individuals can protect their networks. It is a cat-and-mouse game. Every change we make on the defensive side, an offensive cyber actor is going to look to see what they need to do to get around that. Senator Paul. Are we able to, when we have a state actor that is going after classified information, and we have creative ways that State actors are using, are we able to share them with the private sector, or are we too worried that getting that knowledge out reveals that we know how to combat certain things? Are we sharing, on a consistent basis, knowledge that you gain with the private sector? Mr. Wales. Absolutely. The partnership that we have with the intelligence community, in particular the National Security Agency, is better than any time in my entire 15-year history with the department. We are getting a significant amount of information from them, of things that they are seeing overseas, activity that they are seeing from foreign nations, getting that information to be declassified so that we can get it out to people, whether that is a specific incident at an individual location or, more importantly, information that could benefit the entire community. A lot of the alerts that we are pushing out, alerting the community to different tactics that our adversary is using, are based upon intelligence sources that we are receiving from the intelligence community. That process is happening quickly. Senator Paul. Does it work both ways? Getting information back from private industry as well? Mr. Wales. There is a vibrant cybersecurity community right now that has grown up over the past decade and a half, and there is a lot of information out there for everyone. We, ourselves, rely upon information provided by private sector cybersecurity firms to help improve our defenses at the dot- gov. There is a benefit to this community sharing as much information as possible, because that is the way we are going to have a more secure and a more defended cyber ecosystem. Senator Paul. As someone like myself who is very concerned with privacy, I have been concerned about having--I am all for telehealth and for allowing the Internet to allow us to see doctors remotely. As a physician, I think it is a good thing. But I am concerned about having a unique patient identifier where all of our data goes into one place and it is stored in one place. It goes back to this idea of compartmentalization. When the Office of Personnel Management (OPM) was hacked, 22 million people's records were released, and I know that was a big mistake and hopefully we have learned from that. But there is a danger, and I think one way, from a patient point of view and from a point of view that there are sensitive things, whether you have an infectious disease that is acquired sexually, whether you have a psychiatric disorder that you do not want the whole world to know about--there are a lot of things that could be very private. Starting with my father 20 years ago and continuing today, we have been trying to get away from a unique patient identifier that the Federal Government has and I think it would be nice if people could equate that not only with privacy but also with the idea of hacking, that the more centralized your health care records are, it may be easier but it also might be easier for bad actors to get into your health community and extort people or damage them publicly with releasing private information. Any thoughts on health care security with regard to unique patient identifier? Mr. Wales. I think that the challenges that you are describing there are the same challenges that we deal with in every cybersecurity challenge, and that is how do you balance the need to create more efficient, more effective systems with the risk that that poses because of the nature of connected systems being potentially vulnerable. We encourage people to be thoughtful and take a really risk-based approach--how much information needs to be centralized, how much information needs to be networked--and be thoughtful. Then once you make that decision, then go to the next step and say, how do I defend the information that needs to be networked to the maximum extent possible? If I am going to have sensitive information that is Internet accessible, I need to make sure that my cybersecurity practices are going to be sufficient to defend that. I need to make sure that my patch management is good. I need to make sure that my configuration management is good. Senator Paul. Right, and I would just conclude by saying that the moral I get from your discussion on elections is there is some advantage to disconnectedness, to compartmentalization, to having counties, States, and the Federal Government be somewhat separate, where you can actually go to a county and verify an election. It does not go into some sort of mass network or computer. We are very lucky, I think, that we have sort of the Federal-State operation with regard to elections. But I think people need to think that through before the efficiency experts say, oh, it would be so easy to have your medical records everywhere. They will be at every doctor, all of the time, anywhere in the United States, and they will be centralized. It is going to be easy until a hacker gets in there and all your private information is all over the Internet. I say be careful what you wish for, as some of those who really the centralization of things, because there is a danger of losing your privacy. Senator Hassan. Senator Hassan. Thank you very much, Mr. Chair, and I thank you for what you just covered in your questions. I want to start with a question really focusing on how we help State and local governments protect against cyber threats. Acting Director Wales, your agency is responsible for securing Federal information technology infrastructure from a wide range of cyber threats. It is widely accepted that your work to secure the Federal space is critical. However, some might argue that it is not the Federal Government's job or responsibility to also try to secure State and local governments from cyber threats. Let me ask you, does the Federal Government have an obligation or responsibility to also protect State and local governments from cyber threats? Mr. Wales. Cybersecurity is a shared responsibility in multiple domains, and CISA takes seriously the responsibility we have to utilize the information, the knowledge, the expertise on cybersecurity to help all aspects of our critical infrastructure, whether those are State and local governments, if those are private companies operating our power grids, if those are hospitals or if those are chemical plants. We have a responsibility to help them. Now, every system owner bears some responsibility for managing the security on their networks, and so I think it is trying to figure out where their responsibilities and our responsibilities intersect. We understand that we have a lot of information, we have a lot of expertise that we can provide. We can make sure that they are armed with all of the information that we have been able to glean from both the intelligence community, from our own visibility into the cyber activity of our adversaries, and the tactics that they are using, and it is our job to provide that as broadly as possible, to make sure that they are prepared. Each of those individual asset owners needs to go through that process that Senator Paul and I just discussed, that risk- based process, to say how much security do I need in what parts of my network and how can I put that in place to be as robust as is required by the risks that I am facing? Senator Hassan. Thank you, and just to follow up, if a State or a community is vulnerable to cyber threats, how does that broadly impact the security of Americans who do not live directly in that State or community? Mr. Wales. The State governments across the country, and local governments, operate some of our most critical infrastructure, whether it is operating water treatment facilities, in some States and communities, municipal power authorities in others. They also, obviously, at the State level, distribute significant amounts of funds through which Federal programs funnel money through. States are a critical part of our fabric for both our economic and our homeland security. It is an important interest of the Federal Government that States have as much of our cybersecurity knowledge and expertise as possible to help safeguard those critical systems. Senator Hassan. Thank you. Various proposals have been introduced in Congress that establish a standalone Federal cybersecurity grant program for State and local governments that would pay for cybersecurity upgrades at the State and local level. Without specifically evaluating each bill, can you please describe for me the elements and considerations that Congress should be thinking about if we authorize a grant program of this nature? Are there any elements of a grant program that CISA views as being must-have items? Mr. Wales. I think we would be happy to work with Congress on what a grant program would be, how a grant program could be structured to serve the maximum value. I would say until that time we have been working closely with FEMA over the past year as FEMA has required, as part of its last round of homeland security grants, that a portion of it go to a certain set of high-priority items, including State cybersecurity. We spent the last year working with States, working with FEMA, to review the proposals that were submitted, and I think this will provide us a good baseline to understand how States are thinking about investing in cybersecurity utilizing Federal grants, how we can provide additional information to them to better shape and focus those grants on the highest-risk aspects of their networks. But grantmaking is obviously a complicated topic, one that CISA does not have direct responsibility for managing, so I would probably refer you to people at FEMA who know more about kind of the grantmaking sausage. But at the more macro level, I think that we have a lot to add to help shape grants so that they actually target those things that we need to protect the most, and that it reflects the true partnership that exists between the Federal Government and our State and local governments on cybersecurity. Senator Hassan. Thank you. Cyber insurance is an important tool that helps companies and entities prepare for, prevent, and respond to cyberattacks. However, an August 2019 report by ProPublica revealed that if an entity has cybersecurity insurance, policyholders will use their cyber insurance policy to pay the ransom during a ransomware event, which, in turns, serves as a further incentive for hackers to launch ransomware attacks. The report also shows that hackers target cyber insurance policyholders because the likelihood of the victim paying the ransom is much higher. During the COVID-19 pandemic, our country's increased dependency on online services may increase the incentive to pay ransoms so that critical services can be restored more quickly. Does CISA or your partner agencies generally know when an insurance company pays out a ransom? Mr. Wales. As a general rule we have recommended against paying ransom, in part because it furthers the business model, as I indicated in my opening remarks. Ransomware is not going to go away as long as the business model is viable, as long as ransomware operators can do it. Senator Hassan. Right. Mr. Wales. CISA generally focuses our efforts on ransomware before an event happens, helping companies prepare themselves, helping State and locals prepare themselves. We are generally not involved in decisions related to whether ransom is paid. That tends to be an individual decision at that company and they do not consult CISA as part of this. Senator Hassan. Generally speaking, you may not know if an insurance payment has been made. Mr. Wales. That is correct. Senator Hassan. OK. Additionally, are cyber insurance companies working with you to tackle any of these negative incentives that seemingly drive more attacks? Mr. Wales. I am not aware of engagement with cyber insurance companies on that issue right now. Senator Hassan. Do you think there is a role for Congress to play to help address this? Mr. Wales. I think that this is an incredibly challenging problem. No one has cracked the code on what the answer is yet, and it is going to take more work between Congress and the executive branch to figure out what are the right tools we have to change the business model and to disrupt the business model on ransomware and make more progress in this space. Senator Hassan. Thank you, and, Mr. Chair, I see I am out of time. If we have a second round on this witness I will have one more question. Senator Paul. Senator Rosen. OPENING STATEMENT OF SENATOR ROSEN Senator Rosen. Thank you, Chairman Paul, Ranking Member Hassan, for holding a hearing on protecting our communities from cyberattacks. During the COVID-19 pandemic the number of cyberattacks has significantly increased, and cyberattacks, of course, they are expensive, they are debilitating, especially for small organizations like schools, hospitals, and local governments. I am glad we are coming together in this bipartisan way to talk about how we can protect vulnerable communities, of course, in this challenging time. But I want to focus on school cybersecurity because elementary schools, secondary schools, they face many challenges as they transition to online learning during the pandemic, including the constrained budgets, bridging the digital divide, ensuring the health and safety of students and faculty, and, of course, continuing to educate and support our students. As schools struggle to meet these challenges they remain particularly vulnerable to hostile cyber actors. Earlier this spring, the FBI warned that K-12 institutions represent an opportunistic target to hackers. As many school districts, they just lack the budget and the expertise to dedicate to network integrity. Last August, the Clark County School district, which is Nevada's largest school district and our country's fifth- largest school district, was the victim of ransomware attack. The hacker published documents online containing sensitive information, including social security numbers, student names, addresses, and grades. This is absolutely unacceptable and the Federal Government must find and help the schools obtain the tools and the resources to protect and combat these kinds of cyber threats, something I have raised with both CISA and the Department of Education. Mr. Wales, can you speak to what steps CISA is taking to prevent cyberattacks, including these ransomware attacks like I had in Clark County School District, against K-12 schools, and how are you ensuring that we are not having more of these in the future? Mr. Wales. Thank you, Senator, and I know that some members of the CISA team, along with the Department of Education, are planning on briefing you in your office later this week on this topic. In the meantime, the first thing I would say is we have expanded our focus on K-12 education since the beginning of the pandemic, putting out additional information on how schools can improve their cybersecurity with their distance learning. In addition, we are encouraging schools to participate through the information-sharing mechanisms that have been created, for example, the Multi-State Information Sharing and Analysis Center (MS-ISAC), which is a free resource available, that we have invested in, from the Department, for State and local governments. Today, 2,000 school districts, schools, and IT service organizations are part of that Multi-State ISAC, and there are additional resources and tools that States and school districts can take part in that can help them ensure their protection against ransomware and other attacks. For example, the MS-ISAC offers malicious domain blocking, so that known malicious domains that are used by ransomware operators would be blocked from activity on those networks. But only about 120 schools are actively using that service that is offered for free today. What I want to see is much like we have done in the past 4 years in the election security context, how do we build a national community with the school districts to get them focused on the security aspects related to their networks that is not going to go away, even after the pandemic is over? We need to arm them with the same information, the same resources, and that is going to start with them taking advantage of the no-cost services that are currently offered across the country to State and local governments and the entities that exist within them. This is obviously a big problem. There are over 13,000 school districts across this country. It is going to take time, attention, and focus. I am confident that if the Executive and Congress work together we can find creative ways of leveraging the capabilities that we have and getting more school districts signed up for these services. Senator Rosen. I appreciate that because I was going to ask you, I know you said 2,000 school districts are using it. In some cases now only hundreds of schools or school districts out of the 13,000. But you talk about malicious ware, ransomware. We have small school districts, rural school districts, that may not have the capacity or any expertise to even take advantage of your free services. Are there grant programs? What kind of support can we give, or that you can give, to be sure that the folks that are really sitting in those administrative offices can take advantage of what you are offering? Then we need to get it out there to 13,000 school districts, for sure, but not all of them have somebody who knows enough to really take advantage of it. What are you doing there? What kind of programs are you offering for training for people who work in schools? Mr. Wales. I think we have long recognized that the small and medium-sized businesses and government entities have unique challenges. What we had put in place earlier this year was something called CISA Cyber Essentials. These are the basic, bare minimum things that you need to put in place to get some baseline level of cybersecurity. It is geared for the small and medium-sized businesses and it is also geared for large companies to send out to their smaller suppliers to get them to a baseline level of security. Over the past several months, we have been issuing monthly modules, toolkits, that could be used, step-by-step guides to take, for how to put in place the baseline level of cybersecurity. What are those things you need to do to make sure that you have challenging passwords, or two-factor authentication, how to set that up on your network, making it a little bit clearer and easier for you to walk through. But if States, if cities, if communities push that kind of information out, even to their smaller school districts, this is the kind of information that is powerful in the hands of those small companies, because the reality is ransomware operators are looking to make money quickly, and so they are going to look for whoever is the most vulnerable. If you have done some of the basics, if you have put in place the bare minimum level of cybersecurity, there is a good chance that that ransomware operator is going to go on to the next victim and they are not going to target you. By investing a small amount of energy in putting in place cybersecurity, at even a bare level, you can have a significant impact and dividend for your overall level of security. Senator Rosen. I appreciate that, and my next question--I know I am out of time--would be we need the same kinds of things for our small businesses around the country as well. I look forward to speaking with you offline about how maybe we can get your message out for this training and the programs and all of the cyber hygiene to as many folks as possible, because we cannot afford not to communicate your hard work and what you have been doing to give people the ability to take advantage of these programs. Thank you. Mr. Wales. Absolutely. I think any help we can get in amplifying the work that is already out there. The tools and resources that Congress has already invested in through CISA are available for all of the country to utilize, and we want more people to take up and use them. Anything you can do to get that message out there and amplify the work that we are doing, our agency is going to be grateful for. Senator Rosen. Wonderful. Thank you. Senator Paul. Thank you, Mr. Wales, and I hope you will be willing to respond to any questions we have in writing, if we have further questions from Members. I want to also thank you for reminding us that decentralization is a part of our defense against hacking of our elections, and as a great fan of the Federalist system that we had set up from the very beginning, even in our modern age, decentralization and compartmentalization are a big part of our defense and can make our elections more reliable. Thank you very much for your testimony. Mr. Wales. Thank you. Senator Hassan. I join the Chairman in thanking you for your testimony and for your service, and please, to all the women and men you work with, please take back our thanks as well. Mr. Wales. I appreciate that and so do they. Thank you, ma'am. [Pause.] Senator Paul. We are ready for our other panelists, whoever is in charge of that. [Pause.] We are doing the whole panel together, this panel, on one panel, if we can. Everybody can come in. [Pause.] OK. I misunderstood. These are virtual, so you can go ahead and do the introductions, Senator Hassan, please. Senator Hassan. Thank you very much, Mr. Chair. To all of our witnesses for this second panel, thank you for being here today, and I will introduce each witness directly before your testimony. I will start with our first witness, Denis Goulet. I am pleased today to introduce Mr. Denis Goulet, who serves as Commissioner of the Department of Information Technology from my home State of New Hampshire. Commissioner Goulet has served admirably since he was appointed in February 2015. Commissioner Goulet also serves as President of the National Association of State Chief Information Officers (NASCIO). Thanks for joining us, Commissioner Denis Goulet, and thank you for your exemplary leadership to strengthen cybersecurity efforts in New Hampshire and across the country. I look forward to your testimony. TESTIMONY OF DENIS GOULET,\1\ COMMISSIONER, NEW HAMPSHIRE DEPARTMENT OF INFORMATION TECHNOLOGY Mr. Goulet. Good afternoon and thank you, Chairman Paul, Ranking Member Hassan, and distinguished Members of the Subcommittee for inviting me to speak today on the cybersecurity challenges facing State government that have been amplified during the COVID-19 pandemic. As Commissioner for the Department of Information Technology in New Hampshire and President of the National Association of State Chief Information Officers, I am grateful for the opportunity to highlight the vital role that State information technology agencies have played in providing critical citizen services and ensuring the continuity of government throughout this public health crisis. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Goulet appears in the Appendix on page 45. --------------------------------------------------------------------------- Cybersecurity has remained the top priority for State CIOs for nearly a decade. There is growing recognition at all levels of government that cybersecurity is no longer an IT issue. It is a business risk that impacts the daily functioning of our society and economy, as well a potential threat to our nation's security. State and local governments continue to be attractive targets for cyberattacks, as evidenced by the many high-profile and debilitating ransomware incidents. Inadequate resources for cybersecurity has been the most significant challenge facing State and local governments. The question of why Federal Government should be contributing to cybersecurity of the States is straightforward. States are the primary agents for the delivery of a vast array of Federal programs and services. According to our recent national survey, State cybersecurity budgets are typically less than 3 percent of their overall IT budgets. Half of the States lack a dedicated cybersecurity budget. As State CIOs are tasked with additional responsibilities, including providing cybersecurity assistance to local governments, they are asked to do so with shortages in both funding and cyber talent. Almost all the CIOs have the authority and are directly responsible for cybersecurity in their States, and have taken multiple initiatives to enhance the status of their cybersecurity programs. These initiatives include creation of cybersecurity strategic plan, adoption of the National Institute of Standards and Technology (NIST) cybersecurity framework, development of a cyber disruption response plan, obtaining cyber insurance, and the implementation of security awareness training programs for employees and contractors. These initiatives are crucial as Congress considers the implementation of a cybersecurity grant program for State and local governments. For the past decade, NASCIO has advocated for a whole-of- state approach to cybersecurity. We define this approach as collaboration among State and Federal agencies, local governments, the National Guard, education, K-12 and higher, critical infrastructure providers, and private sector entities. By approaching cybersecurity as a team sport, information is widely shared, and each stakeholder has a clearly defined role to play when an incident occurs. My written testimony covers legislation that NASCIO has endorsed during the 116th Congress. I would like to reiterate my appreciation to this Subcommittee for its attention to cybersecurity issues impacting State and local governments. If passed, these bills would greatly improve our cybersecurity posture and create new, dedicated funding streams. The pandemic has exacerbated the cybersecurity challenges for State IT. Since March, my colleagues and I have rapidly implemented technologies to allow State employees to telework safely and effectively in this new environment. We have helped our State agencies quickly deliver critical digital government services to citizens, including unemployment insurance. In New Hampshire, I have worked closely with our public health agencies to ensure they have the necessary tools to improve capabilities in the area of testing, contact tracing, case management, data analytics, and personal protective equipment (PPE) inventory. My colleagues and I have been honored to play a role in fighting COVID-19. We have taken on additional responsibilities and incurred new expenses while continuing to face unrelenting cyber threat environments. I am truly concerned about how crucial IT and cybersecurity initiatives will remain funded in the coming months and years. States have seen significant declines in revenue and will be forced to make difficult budgetary decisions. As President of NASCIO, I know I speak for all of my colleagues around the country when I say that a dedicated, federally funded cybersecurity grant program for State and local governments is overdue. Additionally, State governments should follow the lead of the Federal Government and begin providing consistent and dedicated funding for cybersecurity which will also require them to match a portion of Federal grant funds. I look forward to continuing to work with the Members of this Subcommittee in creation of the grant program to improve our cybersecurity posture. This concludes my formal testimony, and I am happy to answer your questions. Senator Hassan. Thank you, and I think we will move on to the next three witnesses, and then we will return for questions. Is Dr. Torres-Rodriguez available now? OK, she is back online. Our next witness is Dr. Leslie Torres-Rodriguez, who joins us today from Connecticut. Dr. Torres-Rodriguez is the Superintendent of Hartford Public Schools, one of the largest urban school districts in the State. Dr. Torres-Rodriguez was raised in Hartford and attended Hartford Public Schools. She has served as an education leader in the greater Hartford area for more than two decades. In September, the Hartford School District was the victim of a cyberattack. Dr. Torres-Rodriguez, thank you for coming before the Committee today, and I look forward to your testimony. Doctor, you might need to unmute yourself. She is having connectivity issues, so why don't I do the other introductions and we will see if she is ready in a minute or two. Our next witness will be John Riggi, Senior Advisor for Cybersecurity and Risk from the American Hospital Association (AHA). Mr. Riggi is the Senior Advisor for Cybersecurity and Risk for the AHA. He brings nearly 30 years of experience with the FBI, including serving as the Senior Executive for the FBI's Cyber Division Program developing mission-critical partnerships for the health care and other critical infrastructure sectors. Mr. Riggi, I look forward to your testimony as well today, and I think we should probably proceed with that. Mr. Riggi, please feel free to proceed. TESTIMONY OF JOHN RIGGI,\1\ SENIOR ADVISOR FOR CYBERSECURITY AND RISK, AMERICAN HOSPITAL ASSOCIATION Mr. Riggi. Thank you, and good afternoon, Chairman Paul and Ranking Member Hassan, and Members of this Subcommittee. On behalf of our nearly 5,000 member hospitals and health systems the American Hospital Association thanks the Subcommittee for the opportunity to testify on this important issue, and we stand by, ready to assist as needed. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Riggi appears in the Appendix on page 51. --------------------------------------------------------------------------- The AHA has a unique national perspective on cyber threats facing health care, stemming from our trusted relationships with the field and government agencies. The ongoing pandemic has resulted in a significantly increased cyber threat environment for health care providers. For example, this past October 28th, CISA, FBI, and HHS issued an urgent warning of an imminent ransomware threat to U.S. hospitals, and advised the field to take immediate defensive action. This threat remains ongoing as of today. This threat also comes as hospitals and health systems were already dealing with what I call a COVID-induced cyber triple threat. The first threat is an expanded attack surface. In preparation and response to COVID-19, the health care sector rapidly deployed and expanded network-connected technologies such as telehealth, telemedicine, and telework. Unfortunately, this also greatly expanded network access points and opportunities for the cyber criminals to attack. The second threat is increased cyberattacks. In conjunction with the expanded attack surface, cyber criminals have launched increased and relentless attacks on hospitals and health systems. HHS Office of Civil Rights (OCR) has reported a significant increase in hospital hacks since September 1, 2020, impacting millions of patients. Foreign intelligence services from China, Russia, and Iran, have launched cyber campaigns targeting health care, to steal COVID-19 related data and vaccine research. Of all the attacks, ransomware attacks are a top concern. These attacks could disrupt patient care, deny access to critical electronic medical records and devices, resulting in canceled surgeries and the diversion of ambulances, thus putting patient lives and the community at risk. The third threat hospitals face is resource constraints, due to reduced revenue as a result of canceled so-called elective surgeries and patients' reluctance to seek medical treatment during the pandemic. This situation leaves limited funds available to bolster network defenses and to recruit and retain scarce cybersecurity professionals. The above factors create a perfect storm of cyber threats for hospitals and health systems. Regarding ransomware attacks, we believe a ransomware attack on a hospital crosses the line, from an economic crime to a threat-to-life crime, and therefore should be aggressively pursued as such by the government. Most often these attacks originate from foreign adversarial safe havens, beyond the reach of U.S. law enforcement. Combined use of military and intelligence capabilities, along with economic sanctions to augment law enforcement efforts, can reduce cyber threats to the Nation. By defending forward, the government can deter and disrupt these foreign-based cyber threats before they attack. We believe a hospital victim of cyberattack is a victim of crime and should be provided assistance, not assigned blame. Despite regulatory compliance in implementing cyber best practices, hospitals and health systems will continue to be the targets of sophisticated attacks, which will inevitably succeed. The government often repeats the phrase, ``It is not a matter of if but when.'' Unfortunately, when a breach occurs, the Federal Government's approach toward the victims of cyberattacks is sometimes inconsistent across agencies and may be counterproductive. For example, Federal law enforcement agencies often request and need the cooperation of victims of breaches to further their investigations and disrupt the threat to the Nation. Subsequently, or concurrently, a hospital or health system may become the subject of an adversarial investigation by the HHS Office of Civil Rights. This can be disruptive and confusing for the victim and stifle cooperation with Federal law enforcement. Given the critical need to defend health care during the pandemic, along with the increased cyber threat environment, and a need to incentivize cooperation from victims, we strongly recommend that additional safe harbor protections from civil and regulatory liability be provided to hospital and health system victims of cyberattacks. In conclusion, hospitals, health systems, and patients are heavily targeted by cyber criminals and sophisticated nation- states. Hospitals have made great strides to defend their networks, secure patient data, and most importantly, protect patients. However, we cannot do it alone. Health care needs more active support from the government, including consistent and automated threat information sharing, to help us defend patients and their data from cyber threats. Conversely, the Federal Government cannot protect our nation from cyberattacks alone either. They need the expertise in exchange of cyber threat information from the field to effectively combat cyber threats. What is needed is an effective and efficient public-private cybersecurity partnership and a truly all-of-nation approach. Thank you. Senator Hassan. Thank you so much. I want to turn now back to Dr. Torres-Rodriguez. If you are able to join us, Doctor, we look forward to your testimony. TESTIMONY OF LESLIE TORRES-RODRIGUEZ, Ed.D.,\1\ SUPERINTENDENT OF SCHOOLS, HARTFORD PUBLIC SCHOOLS Ms. Torres-Rodriguez. Good afternoon, Chairman Paul, Senator Hassan, and Senators of the Committee. I am Dr. Leslie Torres-Rodriguez, Superintendent of Hartford Public Schools. We are the third-largest school district in Connecticut, with approximately 18,000 students. --------------------------------------------------------------------------- \1\ The prepared statement of Ms. Torres-Rodriguez appears in the Appendix on page 61. --------------------------------------------------------------------------- I appreciate your invitation to address the Committee and answers questions regarding the cyberattack on Hartford Public Schools that occurred in September. The cyberattack had extremely disruptive effects on our school system, our students, and our staff. We were forced to postpone our first day of school, on September 8th, following months of intense planning for in-person learning amidst the COVID-19 pandemic. While our students have been attending school, either in person or remotely, for nearly 3 months now, we are still repairing and recovering from lingering effects of the attack. Hartford Public Schools and the city of Hartford were informed by our shared IT department, Metro Hartford Information Services (MHIS), that early in the morning hours on Saturday, September 5th, we experienced a severe cyberattack, specifically a ransomware attack which aims to take control of targeted servers and sell access back to the owner, back to us. The attack was unsuccessful, overall, because Metro Hartford Information Services regained control of its servers without complying with the attacker's demands, thanks to recent cybersecurity investments and quick work by the Metro Hartford Information Services team. Based on initial analysis by the Connecticut National Guard and the FBI, the attack was likely conducted by a highly sophisticated actor, and so in one sense we were fortunate that we avoided the worst case scenario. Our district team, Metro Hartford Information Services, and Mayor Bronin's office worked late into the night on Labor Day, and in the early hours on Tuesday, September 8th, to ensure that Hartford Public Schools' critical systems were restored so that the first day of school could proceed. Our student information system was restored around midnight, but as of 3 a.m. our transportation system was still not accessible. Our transportation company and our schools had no access to the student bus schedules. Around 4 a.m., I did have to make that difficult call to postpone the first day of school. Fortunately, we were able to get our transportation system back online the evening of September 8th, and we opened schools for the first time since March on Wednesday, September 9th. However, 2 weeks later, our systems were still not yet fully operational and the costs to address the problem, financially and in terms of resources and staff time, have been significant. While we have regained control of servers and data, preventative measures are ongoing and present significant challenges to getting operations back to normal. For example, all of our servers needed to be taken offline and reimagined or restored from backups. The total amount of information that needed to be restored was over 70 terabytes across the city and school system, which is a massive amount of information. Additionally, every computer that had connected to the district network before the attack, just before the start of the school year, had to be individually restored to factory settings before reconnecting with the network. This required a very fast deployment of new laptops to hundreds of staff members, which then depleted the stock of laptops that we had to provide to students at a very critical time in the school year. While we had ordered laptops with the intention of ensuring every student had a district device at the start of the school year, that plan was set back as a result of the cyberattack. This was an especially difficult consequence of this attack as many of our students are participating in online learning from home and needed reliable devices to engage in their learning. These preventative measures impeded our ability to operate normally, and for our teachers to provide student instruction and impairing even basic functions like scanning and printing and having access to lesson plans. I am proud of the work that has been done by our IT team, our city officials, and district administration, and thankful for the investigative actions and the support from the Connecticut National Guard and the FBI. However, we do need to protect our critical infrastructure by preventing such attacks in the future. I thank you again, Senator Hassan, for inviting me to testify before this Subcommittee on this important issue. While the attack was unexpected and damaging in many ways, I am grateful for the way that our local, State, and Federal agencies collaborated to address the cyberattack and assisted with the restoration efforts. We are all committed to serving our constituents, our students, in the best way possible. Thank you, and I will be happy to answer any questions that you may have. Senator Hassan. Thank you, Superintendent. I will now turn to the Chairman for an introduction. Senator Paul. Our final witness this afternoon is Bill Siegel, CEO and Co-Founder of Coveware. Mr. Siegel founded Coveware in 2018, to provide services to small and medium-sized businesses threatened by ransomware. They offer a full-spectrum suite of services, from identifying and closing vulnerabilities before an attack happens to decryption and navigation of an attack that has happened, to recovery after an attack. Coveware and other private sector firms provide solutions that keep pace with the criminals. We are excited to hear from Mr. Siegel about the State of cybersecurity marketplace, what to do if your organization is attacked, and about low-cost steps that organizations of all sizes can take to enhance their cybersecurity posture. Mr. Siegel, you are recognized. Is he disconnected? All right. Why do we not begin a round of questions with Senator Hassan, and we will get back to Mr. Siegel's testimony when he gets back on. Senator Hassan. Thank you, Mr. Chair, and I want to start with a question to Commissioner Goulet. Commissioner Goulet, you and I know all too well the challenges of putting together a State budget. Giving more funding to the State's information technology budget might mean giving less funding to emergency services, education, public transportation, or other critical priorities. Moreover, when recessions happen, State revenues decrease, which leaves budget officials with even harder decisions to make. Commissioner Goulet, can you talk about the challenges States face funding cybersecurity upgrades as they deal with reduced State revenues from the recent economic downturn? Do States have the ability to adequately fund their information technology budgets and better protect against cyber threats? Mr. Goulet. Thank you for the question, Senator. We have some really recent data from the 2020 Deloitte NASCIO Cybersecurity Study, and I will share with you the top five barriers to overcoming cybersecurity challenges in State government: (1) lack of sufficient cybersecurity budget; (2) inadequate cybersecurity staffing, which really relates to number one; (3) legacy infrastructure and solutions to support emerging threats. The older systems tend to be much more vulnerable; (4) lack of dedicated cybersecurity budget; and finally, (5) inadequate availability of cybersecurity professionals. I think that pretty well covers the gamut of the answer to that question. Senator Hassan. Thank you. I appreciate that. I will go on and complete this round. Dr. Torres-Rodriguez, I want to turn to you, and I first just want to start by thanking you for participating in this hearing. All educators are facing unprecedented challenges right now, but to suffer a ransomware attack on top of everything else you are contending with means you are busier even than most other educators. I want to start by getting a sense of where cybersecurity falls in the very long list of priorities that a school district like yours has. You mentioned in your testimony that there is a Metro Hartford Information Service. What sort of assistance do you get from them? Do you think that there are enough cybersecurity professionals to help the school district with the system you already have, and what sort of assistance from the Federal Government would be helpful, and did you receive before and after the attack? Ms. Torres-Rodriguez. Yes, and just to give you a little more context, we have about 18,000 students and 3,400 staff members here in the public school system, and the shared IT department, which is managed by the city of Hartford, has six field IT technicians in all. There is one staff member assigned full-time to cybersecurity, and that is across all of the city services. There is an opportunity, if you will, for additional support there. With regard to the assistance from the Federal Government, Hartford Police and the FBI liaison there did investigate the attack and gather additional information. The Connecticut National Guard provided assistance with the recovery effort for about 4 weeks, primarily helping to mitigate and reimage our district devices. That was prioritized, and we are deeply grateful for that. The National Guard has a team that specializes in defensive cyber operations, and their support was critical in assessing the attack and helping the Metro Hartford Information System team recover operations and help ensure security. Overall, it was their assessment that this was a highly sophisticated and complex attack, that the information system team took a wide range of appropriate measures, but nonetheless it impacted school operations. Senator Hassan. Thank you for that. I am going to turn now to Mr. Riggi. Thank you for your work for our nation's hospitals, both in terms of your current position and from your time working for the FBI. As a cybersecurity professional who focuses on preventing cyberattacks to hospitals, can you please lay out for us the type of attack that most worries you? Mr. Riggi. Thank you, Senator. As I mentioned in my testimony, the attacks that I am most concerned about are ransomware attacks, which have the ability to disrupt patient care and risk patient safety. These types of attacks can lead to medical records becoming inaccessible at critical moments in treatment. Even understanding drug allergies for a patient may not be available. In certain instances we have had ambulances being diverted to emergency rooms which were further away from the original intended destination. In the medical field, obviously, any delay in urgent treatment increases the risk of a negative outcome. Ransomware attacks, especially as we have seen the increase recently, is the top concern, certainly the most significant concern, that worries us at the moment. Senator Hassan. Thank you, and if I have a chance I am going to return to you with one more question. But first I do want to turn back to Commissioner Goulet. Over the past decade, cyberattacks have increased in both their frequency and their ability to threaten our national security. Just as we have experienced with terrorism, the impacts of these cyber threats are not confined to far-off battlefield but to our States, our cities, and our communities. However, as the threat has increased, Federal support for State and local governments has not increased commensurately. As you note in your testimony, only 4 percent of Homeland Security grant dollars have gone to support State and local cybersecurity over the past decade. Can you provide your analysis for why you think that Federal funding for State and local cybersecurity efforts has not been commensurate with the threat? What do you recommend that Congress do in order to address this? Mr. Goulet. Thank you. I so wanted to address that question in more detail. Myself and my colleagues around the country have really a queue of initiatives that we would do to help State and local governments, and education, and really all of the State, if we had access to more funds. We have done as much as we could with those Federal Homeland Security grant funds that we were able to access, for example, in New Hampshire we built a nice Federal response program where we did take a whole-of-state approach. But we really could do so much more with dedicated cyber grant funding that flowed in in a separate stream. I think that although we are slowly improving our cyber posture in State we could very much accelerate the improvement of cyber posture with dedicated grant funding. I would also like to reiterate that any such funding should include incentives for States to invest in a continuous manner as well. Senator Hassan. Thank you, and thank you, Mr. Chair. Senator Paul. Thanks. I do believe we see Mr. Siegel back online, and you missed your great introduction and you only get one introduction. But if you are there we would love to hear your testimony. TESTIMONY OF BILL SIEGEL,\1\ CHIEF EXECUTIVE OFFICER AND CO- FOUNDER, COVEWARE, INC. Mr. Siegel. Thank you, Mr. Chairman, Ranking Member Hassan, and Members of the Subcommittee. Thank you for the opportunity to share Coveware's perspective regarding cybersecurity threats to State and local governments and small businesses. My testimony today is derived from Coveware's role in cybersecurity incidents from the perspective that handling thousands of these incidents has given us over the years. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Siegel appears in the Appendix on page 63. --------------------------------------------------------------------------- Before we could try and solve this problem after we founded the company we recognized that something was missing. There was no clean data being collected on these incidents. The analogy that we used is you cannot build safe cars without visiting crash sites, measuring the skid marks and figuring out what happened. Accordingly, when we founded the company we set out to build a large data set on what actually happens during these attacks. Our interactions put us right in the middle of these incidents. We work with forensic investigators, privacy attorneys, restoration firms, cyber insurance companies, and law enforcement branches of all kinds. The data that is exhausted and collected from these incidents, which span thousands of unique incidents, has given us a fresh perspective. We use our data for three principal activities. First, we used it to contextualize these attacks for victims of these crimes, so they can understand how comparable companies have worked their way through these issues. Second, we aggregate these data findings and we try and publish our research, so to raise awareness of the very common attack methods that these actors use. Last, we provide a large subset of our data to law enforcement very readily to augment their active investigations. A typical ransomware attack involves three phases. First is access. Almost all ransomware attacks are manually carried out. That means that the threat actor is physically inside the network of the victim, typically using stolen or harvested credentials. The second is encryption, where the attacker employs an encryption program that locks up computer servers, and delete or encrypt backups as part of that process. The third is extortion. This is where, if the company is not able to restore from backups, they are forced with a difficult decision of either having to pay a ransom or rebuild their network from scratch. While it may seem stark, this is a decision that hundreds of businesses face every single day. Who are these criminals that carry out these attacks and what drives them? After thousands of cases and much study, we have a pretty clear picture of who carries out these attacks and why. By and large, the criminals that carry out ransomware attacks are financially motivated. Cyber extortion is their business, and the manner in which they conduct their business follows economic power laws. They seek profits just like legitimate businesses, and accordingly they follow strategies that maximize the outcome, minimize the costs, and increase the percent of their tax that they are able to monetize. Why is cybercrime proliferating so rapidly? Following the economic theme, we estimate that a given ransomware attack can earn a single cybercriminal tens of thousands of dollars, with almost no risk, and profit margins well in excess of 90 percent. Economics 101 dictates that more activity will occur until the margins are driven down in this economy. It is simply too profitable and too low-risk to be ignored by would-be criminals. Additionally, the cybercrime industry is innovated by an aim to attract new [inaudible] and thus lowering the barrier to entry for new criminals. We have detailed in our written testimony how Ransomware-as-a-Service allows a non-technical criminal the opportunity to participate. This combination of a highly profitable industry with low barriers to entry and a growing population of participants is the reason that these attacks are proliferating so much. There are many ways to apply pressure to the economics of cybercrime. We offer one that we feel would be an effective means of curtailing activity. When we look at our own data, one sector stands out. Quarter after quarter, for the last 2\1/2\ years, a sector called Remote Desktop Protocol (RDP), is consistently the most used by ransomware actors. Properly securing our RDP is free. All it requires is a bit of time and effort. As an example of how effective closing this vulnerability can be, I cite a recently published study that we cited in our written testimony, where a group of set out to proactively reduce the number of RDP-based ransomware attacks that occur. They contacted these companies, after proactively sustaining their networks, advised them of their vulnerability, and worked to patch this issue. The resulting 4 month period showed a 60 percent reduction in ransomware attacks across these organizations. This is a free fix. All it takes is a little bit of elbow grease. While this recommendation is just one example, we feel that there are further ways to attack the economics cybercrime, while proactive security, new policy initiatives, and relentless pursuit of these criminals by law enforcement will never have substitutes in this fight. We think working big to small on reducing the profitability of cybercrime can produce immediate and material results. Thank you to the Chairman, and I look forward to your questions. Senator Paul. Thank you for your testimony, and I am going to turn it over for further questions to Senator Hassan. Senator Hassan [presiding.] Thank you, Mr. Chair. I do want to return to our witnesses with some follow-up questions, and Dr. Torres-Rodriguez, I would like to start with you. You talked about the ransomware attack that the Hartford school system experienced. Now that it has been a few months since the cyberattack, can you please share with us what steps you have taken so far to try to prevent future attacks? What lessons have you learned? Ms. Torres-Rodriguez. Yes. Prior to the attack, the city of Hartford had invested $500,000 upgrading the security system for Hartford Information Services, which is the shared services. That alone, helped us actually not have as significant of an impact as we would have had. Since then, new end-point security software called Carbon Black has also been implemented and installed in approximately 4,000 of our devices. What Carbon Black does is to leverage predictive security and is designed to detect malicious behavior and help prevent malicious files from attacking an organization, and can also assist with rapid restoration, which was one of our lessons learned, of critical infrastructure, should an attack happen again in the future. Senator Hassan. Thank you. I want to talk again to Mr. Riggi as well. You mentioned in your testimony some of the critical need for information sharing. Can you please lay out for us your assessment of cyber threat information sharing between the Federal Government and hospitals across the country, and between hospitals is it adequate or could more be done to improve cyber threat information sharing? Mr. Riggi. Yes. Thank you, Senator. I think I would characterize it as greatly improved compared to--one of the functions that I ran at the FBI was to disseminate information as we were just understanding how vital that information sharing is. I think, one area that has been improved, has been the timely and actionable notices, highlighted October 28th notice I mentioned previously. For that information to be declassified and come out so quickly I think is very commendable, and to come out jointly by all three agencies is very commendable. However, I think there still needs to be more improvement in terms of regular cadence of sharing of cyber threat information, sharing it in a more automated and broad manner, and also the sharing of classified information, where possible, to trusted health care contacts. It has improved but I think we still have a long way to go. Senator Hassan. Thank you. I understand that you work with hospitals across the country to help secure them from cyber threats. Can you give us the typical profile of a hospital cybersecurity staff, and how do small and rural hospitals differ in terms of cybersecurity professionals and resources as compared with major metropolitan hospitals, for example? Mr. Riggi. Yes, there is quite the range and spectrum of resources available, and the profile varies widely, generally, from small to large urban centers. Generally smaller hospitals have less resources in terms of less financial, human and technical resources to devote to cybersecurity. In many instances, these smaller, more financially challenged hospitals add on cybersecurity as a duty to, for instance, the chief information officer or IT director. Larger systems may have the luxury of having a very large staff. Multistate systems may have hundreds of people devoted to cybersecurity. However, they have vastly more complex systems and networks to protect and defend. It varies widely. What I can say is that almost all hospitals now highly prioritize cyber risk as an enterprise risk issue, and are seeking to bolster their defenses. But they do struggle under the reduced revenue that they are facing as a result of COVID-19. Senator Hassan. Is that reduced revenue the major impact that you have seen with COVID-19 on this particular issue, or are there other ways that COVID-19 has affected, for instance, the staffing for hospital cybersecurity? Mr. Riggi. I think the reduced revenue has impacted staffing in the sense that certain hospitals may not have the financial resources to recruit and retain individuals. We have not seen a direct impact on COVID-19 reducing hospital cybersecurity staff, although there have been scattered reports of just general reduction in staff. But ultimately I think that the staffing issue is a challenge for all sectors. Quite frankly, there is a zero unemployment rate for cybersecurity professionals, and hospitals are competing not only with other hospitals to recruit and retain but with other sectors and the government. Senator Hassan. OK. Thank you. I know that the health care sector has an Information Sharing or Analysis Center. Can you provide an assessment of how effective the health ISAC has been in assisting hospitals, and what are its limitations, particularly for small and rural hospitals? Mr. Riggi. The health ISAC, I think, has done a pretty good job of getting information out. I know the folks over there, good folks, and they do, as I said, a pretty good job. Some of the limitations may be in their reach, because they are a member-driven organization and they do require a membership fee. Now that fee is a sliding scale and may be fairly reasonable, depending on the size of the organization. But again, I think that the issue there is the reach and timely dissemination. Often the H-ISAC relies on the government for the threat indicators as well. I think part of the mission of the H-ISAC and the government, going back to the CISA legislation of 2015, is to increase automated sharing of threat indicators, because the ability to share human to human, peer to peer, is just too slow to keep up with the adversaries. I think there still needs to be quite a bit of work done there, from both the government side and on the private sector side, to increase that electronic bridge for cyber threat information sharing. Senator Hassan. Thank you. I have a couple more questions but I understand that one of my colleagues, Senator Sinema, is online and ready to ask her questions. Senator Sinema, I will recognize you for your round of questions. OPENING STATEMENT OF SENATOR SINEMA Senator Sinema. Thank you so much, Senator Hassan, and I want to say thank you to our witnesses for participating today. Even before this pandemic, cybersecurity was a critical issue in Arizona with ransomware attacks on Arizona medical, education, and government organizations. During the coronavirus pandemic, as more people go online for school, work, and social interactions, we have seen an increase in system vulnerabilities and cyber threats across the country and in Arizona. Spending has also gone up as State, local, and Tribal governments work to support their community's information technology needs. As such, Federal cybersecurity support for State, local, and Tribal entities during this pandemic is critical. Today I am going to direct my questions to Mr. Riggi. Medical devices with connectivity features are becoming more common in hospitals. In recent years, ransomware attacks on the medical community impacted not just hospital computers but also storage refrigerators. As coronavirus vaccines are approved, hospitals and health care systems across the country will be asked to accept shipments and store the vaccines under very precise conditions. Has the American Hospital Association and its member hospitals created sound strategies to protect storage refrigerators and other systems that will be part of the vaccine storage and distribution plan? Mr. Riggi. Thank you, Senator. Our general guidance has been in terms of protecting all medical devices, to ensure that when they are, in fact, if they are, in fact, connected to networks that any potential vulnerabilities be identified and that they be network segmented. We will be closely monitoring the vaccine development and distribution, and we will certainly offer guidance to the field on how to protect those refrigerated devices. One of the main ways to protect them is to ensure that they are not network connected, and that if they are network connected to ensure that they are segmented and isolated from main networks and potential threats. Senator Sinema. Thank you. In 2019, as you may or may not be aware, Wickenburg Community Hospital, which is a hospital in rural Arizona, was hit by a ransomware attack. Wickenburg is a small, nonprofit hospital serving a community of about 8,000 residents. The hospital's four-person IT staff did not contact the cyber criminals to hear their demands. Instead, they began rebuilding the hospital's computer systems from scratch, using data the hospital had backed up onto physical tapes. The attack happened on a Friday, and by Monday the systems were almost fully functional again. Now Wickenburg was unique for a small hospital in that it had an IT team with the expertise to rebuild the system. You mentioned constrained resources and shortage of qualified personnel as challenges to hiring qualified health IT security experts. What needs to be done to overcome these challenges, and how can Congress help? Mr. Riggi. Thank you. I think further incentives, perhaps, to recruit and retain cybersecurity professionals to work in health care, perhaps modeling other programs across government offering incentives for health care professionals, for doctors to work in rural areas, perhaps we need something similar to that for cybersecurity professionals. As I said, unfortunately, there is a zero unemployment rate for cybersecurity professionals. Increased training, perhaps, of folks displaced from other services. Increased training, perhaps, or retraining of veterans as cybersecurity professionals may also be another plausible route to staff some of these positions. Senator Sinema. Thank you. The University of Arizona Medical School has studied the vulnerabilities of medical devices, and they have invited doctors, security experts, and government agencies to simulate a cyberattack on an infusion pump, a pacemaker, and an insulin pump, in 2017. As you know, medical devices are regulated by the Food and Drug Administration (FDA) for both safety and effectiveness. What discussions have occurred between your hospital members, government regulators, and device manufacturers to prioritize the medical device security needs? Mr. Riggi. We feel we have been engaged quite a bit with the FDA concerning both their premarket and postmarket guidance on cybersecurity for medical device manufacturers. Although this still remains guidance, our position has been that we would like to see most of that, if not all of it, be made mandatory so that the manufacturers would have to comply with some of the guidance involving such concepts as security by design, making sure those features are built in, that the software bill of materials is provided by the manufacturer to the end user, so the end user can understand what the potential vulnerabilities may be in there, and also to provide lifetime support for the medical device, especially in terms of security upgrades. We are constantly monitoring those issues. One of the things we advise our hospitals and health systems is to ensure that there is adequate communication between clinical engineering staff and the information security staff as well, to keep an accurate inventory of medical devices, identify vulnerabilities which may be present in those devices, and ensure that they are network segmented. Of course, the most precious lifesaving, life support devices like ventilators, are the ones that are most protected and segregated. Thank you. Senator Sinema. Thank you so much. Madam Chair, I yield back the balance of my time, and I want to thank Mr. Riggi for taking the time to talk to me about these concerns in Arizona. Mr. Riggi. My pleasure. Thank you. Senator Hassan. Thank you very much, Senator Sinema. I have a couple more questions, and then assuming we do not have any other Senators join us we will adjourn. I wanted to take the opportunity, Dr. Torres-Rodriguez, to turn back to you to get more of a sense from you about the impact that the recent ransomware attack has had on your community. As you discussed, it delayed the start of the school year, but can you share with us how teachers, support staff, parents, and the rest of the community have been impacted by this cybersecurity attack, and how has the pandemic exacerbated these attacks? Ms. Torres-Rodriguez. Yes. In terms of the ongoing operational effect of the attack, shutting down functions and servers did have debilitating consequences for a number of departments. For example, we did not have access to our financial management software for 17 days, so this caused delays in numerous financial processes, including our supply orders, year-end filing with our State requirements, grant filings, payroll, among other operations. When I think about the broader implications, the disruptions to our school district, including that sudden delay to the first day of school after weeks of preparation, was disruptive to our families, given that already, as part of our mitigation efforts regarding our COVID mitigation, we did have a staggered, phased-in approach to return back to school. It caused disruption and confusion there. The process of restoring well over 10,000 devices--laptops and desktops--for both students, teachers, and support staff, was tremendous. It did require a heavy lift in terms of human capital and time, which is, why the role of our IT department and the Connecticut National Guard, and even a third-party technical support that we have to contract out for, because otherwise we could not have done it. It would have taken additional weeks to start our school year. During this time, our teachers did struggle to deliver quality instruction to both the 10,000 students that were learning online at home, as well as the 8,000 in their classrooms. As part of the planning last spring and into the summer, we did make a decision to become a one-to-one district, meaning one device per each student, meaning that every student would have a district-issued device. There were over 2,000 devices that were no longer available for our students at the beginning of the school year because we had to prioritize getting our teachers to have their devices to deliver the instruction. As I think about those early weeks, some of our students did not have access to learning, and we serve communities that have concentrated levels of need. Every minute, every day matters to us in terms of having access to instruction, and the other social and emotional supports that our students need to have. Senator Hassan. Thank you very much. That is very helpful. Commissioner Goulet, I want to follow up on this issue of K-12 schools with you. Can you give us your thoughts, from the perspective of State governments, on how best to protect K-12 schools and hospitals? What role, if any, should State governments be playing? Mr. Goulet. Thank you, Senator. This really is a great opportunity to highlight some examples of the whole-of-state approach that we advocate. I want to start by going back to a concept that Senator Rosen brought up earlier, which was this concept of making our activities consumable by those folks we want to help. If you have a small-staff school, you cannot throw sophisticated stuff at them, for them to absorb and have to do. I know we have been working with MS-ISAC, on how we scale up some of their programs that were originally designed for State governments but they need to be tweaked to be absorbed by schools in local government. That is one area, but I think it is really being collaborative, involving these entities in planning. For example, in New Hampshire, on the school side, it is really being involved in the rollout of the minimum standards for security and privacy in schools, which was enacted by the State legislature in New Hampshire. On the hospital side, we did involve local hospitals in our cyber disruption planning grant fund, the DHS grant funded cyber disruption planning. When we heard what was going up in Vermont, at the UVM Medical Center, we were able to reach out to cyber professionals and IT professionals in the hospitals in New Hampshire and find out what they were doing and whether they were preparing for or watching carefully to avoid this cyber risk of ransomware in the hospital, which, of course, as you have heard, is tremendous. Those are some small examples there, and I think you really expect a collaborative, whole-of-state approach. What I use when I am speaking to people and trying to bring them into the tent, is there is no I in cyber. Senator Hassan. Thank you very much for that, Mr. Goulet, and thank you for your continued work for the people of New Hampshire. I have a short closing statement and then I am going to go ahead, at the Chairman's request, and adjourn the hearing. First of all, I want to thank Chairman Paul for working with me to organize this hearing, and I particularly want to thank his staff, Adam and Greg, for their work in making this happen. Again, I want to thank all of our witnesses for their testimony today, and for the role that you all play in helping to secure our nation from cyberattacks. Cybersecurity at the State and local level has never been more important, and it is incumbent on all of us to work together to solve the unique challenges posed. It is clear to me that State and local governments, our K-12 schools, and our nation's hospitals all need additional resources and support to be able to achieve their missions in the face of cyberattacks. I look forward to working with our witnesses and Members of the Committee on potential solutions, such as a standalone State and local cyber grant program, and improved information sharing between the Federal Government and schools and hospitals. Thank you all for joining us today, our witnesses. I know how busy you are at this challenging time, and your contributions today make a world of difference, and we are very grateful. Seeing that there are no other Members seeking recognition, I will thank our witnesses today again for their participation in this hearing. The Committee record will remain open until December 17th for Members to submit statements and questions for the record, and with that this Subcommittee stands adjourned. Thank you all very much. [Whereupon, at 4:09 p.m., the Subcommittee was adjourned.] A P P E N D I X ---------- [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]