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+ - WEATHERING THE STORM: THE ROLE OF PRIVATE TECH IN THE SOLARWINDS BREACH AND ONGOING CAMPAIGN
+
+[House Hearing, 117 Congress]
+[From the U.S. Government Publishing Office]
+
+
+
+
+
+ WEATHERING THE STORM:
+ THE ROLE OF PRIVATE TECH
+ IN THE SOLARWINDS BREACH
+ AND ONGOING CAMPAIGN
+
+=======================================================================
+
+ JOINT HEARING
+
+ before the
+
+ COMMITTEE ON OVERSIGHT AND REFORM
+
+ U.S. HOUSE OF REPRESENTATIVES
+
+ [Serial No. 117-5]
+
+ and the
+
+ COMMITTEE ON HOMELAND SECURITY
+
+ U.S. HOUSE OF REPRESENTATIVES
+
+ [Serial No. 117-4]
+
+ ONE HUNDRED SEVENTEENTH CONGRESS
+
+ FIRST SESSION
+
+ __________
+
+ FEBRUARY 26, 2021
+
+ __________
+
+ Printed for the use of the Committee on Oversight and Reform
+
+
+
+
+[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
+
+
+
+
+
+ Available on: govinfo.gov
+ oversight.house.gov
+ docs.house.gov
+
+
+ ______
+
+
+ U.S. GOVERNMENT PUBLISHING OFFICE
+ 43-755 PDF WASHINGTON : 2021
+
+
+
+ COMMITTEE ON OVERSIGHT AND REFORM
+
+ CAROLYN B. MALONEY, New York, Chairwoman
+
+Eleanor Holmes Norton, District of James Comer, Kentucky, Ranking
+ Columbia Minority Member
+Stephen F. Lynch, Massachusetts Jim Jordan, Ohio
+Jim Cooper, Tennessee Paul A. Gosar, Arizona
+Gerald E. Connolly, Virginia Virginia Foxx, North Carolina
+Raja Krishnamoorthi, Illinois Jody B. Hice, Georgia
+Jamie Raskin, Maryland Glenn Grothman, Wisconsin
+Ro Khanna, California Michael Cloud, Texas
+Kweisi Mfume, Maryland Bob Gibbs, Ohio
+Alexandria Ocasio-Cortez, New York Clay Higgins, Louisiana
+Rashida Tlaib, Michigan Ralph Norman, South Carolina
+Katie Porter, California Pete Sessions, Texas
+Cori Bush, Missouri Fred Keller, Pennsylvania
+Danny K. Davis, Illinois Andy Biggs, Arizona
+Debbie Wasserman Schultz, Florida Andrew Clyde, Georgia
+Peter Welch, Vermont Nancy Mace, South Carolina
+Henry C. ``Hank'' Johnson, Jr., Scott Franklin, Florida
+ Georgia Jake LaTurner, Kansas
+John P. Sarbanes, Maryland Pat Fallon, Texas
+Jackie Speier, California Yvette Herrell, New Mexico
+Robin L. Kelly, Illinois Byron Donalds, Florida
+Brenda L. Lawrence, Michigan
+Mark DeSaulnier, California
+Jimmy Gomez, California
+Ayanna Pressley, Massachusetts
+Vacancy
+
+ David Rapallo, Staff Director
+ Peter Kenny, Chief Investigative Counsel
+ Elisa LaNier, Chief Clerk
+
+ Mark Marin, Minority Staff Director
+
+ Contact Number: 202-225-5051
+ ------
+ COMMITTEE ON HOMELAND SECURITY
+
+ Bennie G. Thompson, Mississippi, Chairman
+Sheila Jackson Lee, Texas John Katko, New York Ranking
+James R. Langevin, Rhode Island Minority Member
+Donald M. Payne, Jr., New Jersey Michael T. McCaul, Texas
+J. Luis Correa, California Clay Higgins, Louisiana
+Elissa Slotkin, Michigan Michael Guest, Mississippi
+Emanuel Cleaver, Missouri Dan Bishop, North Carolina
+Al Green, Texas Jefferson Van Drew, New Jersey
+Yvette D. Clarke, New York Ralph Norman, South Carolina
+Eric Swalwell, California Mariannette Miller-Meeks, Iowa
+Dina Titus, Nevada Diana Harshbarger, Tennessee
+Bonnie Watson Coleman, New Jersey Andrew S. Clyde, Georgia
+Kathleen M. Rice, New York Carlos A. Gimenez, Florida
+Val Butler Demings, Florida Jake LaTurner, Kansas
+Nanette Diaz Barragan, California Peter Meijer, Michigan
+Josh Gottheimer, New Jersey Kat Cammack, Florida
+Elaine G. Luria, Virginia August Pfluger, Texas
+Tom Malinowski, New Jersey Andrew R. Garbarino, New York
+Ritchie Torres, New York
+ Hope Goins, Staff Director
+ Daniel Kroese, Minority Staff Director
+ Natalie Nixon, Clerk
+
+ C O N T E N T S
+
+ ----------
+ Page
+Hearing held on February 26, 2021................................ 1
+
+ Witnesses
+
+Sudhakar Ramakrishna, President and Chief Executive Officer,
+ SolarWinds Corporation; accompanied by Kevin B. Thompson,
+ Former Chief Executive Officer, SolarWinds Corporation
+Oral Statement................................................... 8
+
+Kevin Mandia, Chief Executive Officer, FireEye, Inc.
+Oral Statement................................................... 9
+
+Brad Smith, President and Chief Legal Officer, Microsoft
+ Corporation
+Oral Statement................................................... 11
+
+Written opening statements and statements for the witnesses are
+ available in the U.S. House of Representatives Document
+ Repository at: docs.house.gov.
+
+ Index of Documents
+
+ ----------
+
+ * Statement for the Record; submitted by Rep. Connolly.
+
+ * Questions for the Record to: Ramakrishna; submitted by
+ Chairwoman Maloney.
+
+ * Questions for the Record to: Thompson; submitted by
+ Chairwoman Maloney.
+
+ * Questions for the Record to: Mandia; submitted by Chairwoman
+ Maloney.
+
+ * Questions for the Record to: Smith; submitted by Chairwoman
+ Maloney.
+
+ * Questions for the Record to: Ramakrishna; submitted by
+ Committee Chairman Thompson (Homeland), Rep. Titus, and Rep.
+ Guest.
+
+ * Questions for the Record to: Thompson; submitted by Committee
+ Chairman Thompson (Homeland), Rep. Titus, and Rep. Guest.
+
+ * Questions for the Record to: Smith; submitted by Committee
+ Chairman Thompson (Homeland), Rep. Titus, and Rep. Guest.
+
+Documents entered into the record during this hearing, and
+ Questions for the Record (QFR's) with responses are available
+ at: docs.house.gov.
+
+
+ WEATHERING THE STORM:
+
+ THE ROLE OF PRIVATE TECH
+
+ IN THE SOLARWINDS BREACH
+
+ AND ONGOING CAMPAIGN
+
+ ----------
+
+
+ Friday, February 26, 2021
+
+ House of Representatives,
+ Committee on Oversight and Reform
+ Committee on Homeland Security
+ Washington, D.C.
+
+ The committees met, pursuant to notice, at 9:06 a.m., via
+Webex, Hon. Carolyn Maloney [chairwoman of the Committee on
+Oversight and Reform] presiding.
+ Present from Committee on Oversight and Reform:
+Representatives Present: Representatives Maloney, Norton,
+Lynch, Cooper, Connolly, Krishnamoorthi, Khanna, Mfume, Porter,
+Tlaib, Bush, Rice, Wasserman Schultz, Welch, Johnson, Sarbanes,
+Speier, Kelly, DeSaulnier, Comer, Jordan, Hice, Grothman,
+Cloud, Keller, Sessions, Biggs, Donalds, Fallon, and Franklin.
+ Present from Committee on Homeland Security:
+Representatives Thompson, Langevin, Payne, Correa, Slotkin,
+Cleaver, Clarke, Swalwell, Watson Coleman, Rice, Demings,
+Barragan, Gottheimer, Malinowski, Torres, Katko, McCaul,
+Higgins, Guest, Bishop, Van Drew, Norman, Miller-Meeks,
+Harshbarger, Clyde, Gimenez, LaTurner, Meijer, Cammack,
+Pfluger, and Garbarino.
+ Chairwoman Maloney. The committee will come to order.
+ Without objection, the chair is authorized to declare a
+recess of the committee at any time.
+ I now recognize myself for an opening statement.
+ Good morning. I want to welcome everyone to this joint
+hearing of the Committee on Oversight and Reform and the
+Committee on Homeland Security. Welcome to Chairman Thompson,
+Ranking Member Katko, Ranking Member Comer, and all of our
+members. Today's hearing is the first in the House on the
+cyberattack uncovered last year that initially targeted the
+software company, SolarWinds, and its Orion product. The
+details are truly frightening.
+ Here is what we know. A sophisticated attacker, reported to
+be the Russian Government, broke into SolarWinds' system and
+inserted malicious code into its software which customers then
+downloaded. The numbers tell how dangerous an attack like this
+can be. Nearly 18,000 customers downloaded updates containing
+the malicious code. It is not just the number of potential
+victims, as staggering as that is, or even the number of known
+victims of secondary attacks, but the nature of this attack and
+the profiles of victims that should give us all grave concern.
+Among the victims were major technology companies, some of
+which have the best cybersecurity in the world, as well as
+critical infrastructure firms, our Nation's law enforcement and
+government agencies involved in foreign affairs, and national
+security. It has affected approximately 100 private sector
+companies and at least nine Federal agencies, including the
+Department of Homeland Security, Department of Justice, and
+state, and Treasury, and that is just what we know. There is
+much more that we still don't know. We still don't know if they
+are still in the system. In the weeks and months ahead, our
+committee will continue our joint investigation to examine
+other aspects of this massive attack.
+ Today, our focus is on the private sector. The private
+sector plays a key role in our Nation's cyber defenses, they
+own critical infrastructure, and they develop essential
+information, communications, and technology products. They help
+the government and other companies secure and defend their own
+networks. It was the private sector that uncovered this attack,
+not our own government. Specifically, FireEye discovered it,
+reported its findings, and shared it with the world. Had
+FireEye not taken that action, the attack could very well be
+fully up and running today.
+ At the same time, the private sector was targeted as part
+of a campaign to gain access to government networks and other
+entities. All of the companies here today are victims of this
+attack, and all provide products and services to the government
+that puts the government at risk. Additionally, it is the
+private sector to whom the government must turn. In particular,
+the government has turned to Microsoft to learn whether it was
+exposed and how badly due to the widespread adoption of Office
+365 Cloud.
+ The private sector must be held accountable for its role.
+Our committees recently obtained a presentation made by a
+former employee at SolarWinds named Ian Thornton-Trump. The 23-
+page presentation, a portion of which I will put up on the
+screen now, appears to include a proposal from 2017 that
+stated, and I quote, ``The survival of the company depends on
+an internal commitment to security. The survival of our
+customers depends on a commitment to build secure solutions.''
+I look forward to hearing from Mr. Thompson about the steps the
+company took in response.
+ Cybersecurity demands strong leadership, but,
+unfortunately, we have suffered under four years of terrible
+leadership at the very top. On December 18, Secretary of State
+Mike Pompeo stated during a public interview, and I quote,
+``This was a very significant effort, and I think it's the case
+that now we can say pretty clearly that it was the Russians
+that engaged in this activity.'' Yet the very next day,
+President Trump tweeted this, and I quote, ``The cyber hack is
+far greater in the fake news media than in actuality.''
+ So, what can we do now? First, I am pleased the Biden
+Administration has taken early steps to elevate the importance
+of cybersecurity and supply chain risk. Our committee plans to
+focus on Federal procurement. The government pays hundreds of
+billions of dollars for goods and services each year. We must
+demand better cybersecurity practices from our suppliers as
+well as increased information sharing with the private sector
+as a product of the contract agreement. Finally, the Oversight
+Committee plans to closely review agency roles,
+responsibilities, and strategy under the Federal Information
+Security Modernization Act, known as FISMA, to meet the complex
+and dynamic cybersecurity landscape of today. Much work needs
+to be done. Today and in the weeks and months ahead, we will
+focus on the facts with an eye toward legislative solutions in
+how we can improve cyber defenses across both the public and
+private sectors.
+ With that, I now recognize the distinguished ranking
+member, Mr. Comer, for his opening statement.
+ Mr. Comer [continuing]. Thanking the chairwoman for having
+this hearing. Last year, our Federal Government was hacked in
+the largest cyberattack in history. Some of the largest
+technology companies in the country were also hacked. The
+cyberattack took months of planning. It took extreme patience
+to execute. According to all the experts, it was incredibly
+sophisticated. The attackers covered their steps so they would
+not be detected, and it was wildly successful. According to one
+of our witnesses today, over 1,000 people were involved in the
+attack, and the likely culprit of the attack? Russia.
+ Three months after the attack was discovered, there is
+still a lot we don't know, and many government agencies and
+companies were hacked. We don't know what the extent of the
+damage is, whether or not the Russians still have access to the
+systems they hacked, or whether we have been able to
+successfully kick them out. You may not have heard about this
+attack because it hasn't affected your daily life. You still go
+home to a warm house every night, you can still flip on the
+television at night and watch TV, you can still facetime with
+your friends and family, but that is only because the attackers
+chose not to disrupt those activities. As far as we know, this
+attack was an espionage campaign, an intelligence-gathering
+operation only, but what the attackers have shown us is none of
+the software we use in our daily lives is truly safe. The apps
+we download on our phones, laptops, and tablets, any device,
+can be sabotaged.
+ Last week, we all prayed for millions of people in Texas as
+the power grid failed and they froze in their homes. Now,
+imagine if an adversary had the ability to take our electric
+grid offline in the dead of winter or the peak of summer. Now,
+imagine if this took place during a national crisis. Imagine if
+an adversary wanted to toy with our financial markets. Imagine
+if an adversary had the ability to control supply chains and
+manipulate whatever they wanted. It doesn't take much to
+realize the horror that would ensue if an adversary were
+motivated to do any of these things.
+ The attackers did not take down our electric grid, poison
+our water, or cause chaos in our financial system, among other
+necessities or occurrences of our daily lives. At least this
+time they didn't, but that is not to say they couldn't have.
+The truth is this attack is still ongoing even today and has
+not been completely neutralized. This offers the potential for
+unforeseen additional damage. The fact the attackers did not do
+these things that received the attention of Americans going
+about their everyday lives says nothing of their capabilities
+to do so the next time. This isn't the first-ever attack of
+this kind, nor will it be the last. For far too long,
+cybersecurity has been addressed as the mere cost of doing
+business, an add-on, a minor line item to simply check the box.
+This mindset must end.
+ No one, including Congress, the Administration, or the
+private sector can afford to allow this moment pass without
+ensuring we finally adopt effective solutions. I appreciate
+this opportunity to review what happened in this massive
+cyberattack that one of our witnesses referred to as the
+largest ever, and to play a part in developing a game plan for
+deterring and responding to any future event. I am convinced,
+though, that cybersecurity must not be left to the recesses of
+academic debate or half-hearted compliance, but, instead, it
+must become a daily focus for all involved in software
+development, procurement, and operations.
+ Just contemplate for a moment this particular attack.
+Companies, which many expect to secure their systems with
+topnotch cybersecurity, were the very ones who failed to
+identify the attack before damage had already occurred. Some of
+those organizations are here today. The same goes for our
+government agencies who glaringly missed the adversary's nearly
+year-long presence freely roaming about in our most sensitive
+network. I believe the time has come to take concrete action to
+actively defend our Nation from foreign cyberattacks just as
+forcefully and with the same resources as we would if the
+instrument of attack were physical or kinetic. We don't sit
+back when our country is physically breached or our homes and
+places of business are invaded, and neither should our
+responses be to roll over following an attack in cyberspace.
+ It is only a matter of time or chance until we are faced
+with real disruption and destruction. We must do everything in
+our power to defend this digital sphere and forecast to our
+adversaries that we at least are no longer asleep at the wheel.
+I yield back.
+ Chairwoman Maloney. Chairman Thompson. I now recognize
+Chairman Thompson for his opening statement.
+ Mr. Thompson. Thank you very much. Good morning. I would
+like to thank Chairwoman Maloney for holding today's joint
+hearing on the SolarWinds breach and the related malicious
+cybercampaign. Just over two months ago, we learned that a
+state actor, likely Russia, had engaged in a large-scale
+cybercampaign, infiltrating government and private sector
+networks and burrowing inside them. By the time FireEye
+voluntarily shared information about the breach of its network,
+Russian actors had established a presence on victims' network,
+undetected for nearly a year. That is hardly comforting. While
+the campaign is notable for its patience, assistance, scope,
+and scale, the methods and tools used, though sophisticated,
+are not entirely new.
+ NotPetya, a 2017 destructive supply chain attack with a
+global impact, involved Russian actors compromising Ukrainian
+tax preparation software to access victims' network. That same
+year, security researchers published their findings regarding
+an attack vector using forged SAML tokens. Nonetheless, the
+Federal Government and the private sector were caught flat
+footed. I do not mean to diminish the complexity of the attack
+or to suggest we could have prevented it, but I want to make a
+point that our collective failure to make cybersecurity a
+central component of our national security and invest in it
+accordingly contributed to the success of the campaign and the
+difficulty we face in understanding its impact. In short, past
+warnings of what could come failed to trigger a meaningful
+shift in our approach to security.
+ My goal in our joint investigation is to move beyond
+admiring the complexities of this campaign and the challenges
+associated with stopping one like it and start charting a path
+forward. In the 15 years I have served on the Homeland Security
+Committee, one thing has become clear. We can't become so
+consumed by preventing the last attack that we are blind to the
+threats of the future. Instead, we must identify systematic
+opportunities to improve our ability to prevent, defend
+against, mitigate, and raise the cost of all malicious
+cyberactivity. Toward that end, I hope to identify a
+combination of next-term fixes and longer-term structural
+solutions that will improve our ability to better understand
+the adversary, defend our networks, and identify attacks more
+quickly.
+ None of the witnesses here today can have a conversation
+with me or with the Cybersecurity and Infrastructure Security
+Agency about malicious activity occurring on an agency network
+because of restrictions agencies add in their contracts. That
+unnecessarily complicates our oversight work, limits
+situational awareness, and slows recovery. I believe that is a
+problem we can fix quickly. In recent days, I have been
+encouraged to learn of growing interest in enacting a cyber
+incident reporting log. Former chairman of the Cybersecurity
+Subcommittee, Cedric Richmond, authored an amendment included
+in the House-passed National Defense Authorization Act that
+would have established a cyber incident notification
+requirement. Unfortunately, we were unable to reach agreement
+with our Senate counterparts, but we look forward to trying
+again this year and hope we can enact cyber incident
+notification legislation in short order.
+ In the longer term, we must figure out how to make security
+a value proposition, not only for policymakers, but for
+investors in the private sector who are focused on earnings. We
+must address persistent challenges in threat information
+sharing and find more strategic ways to effectively leverage
+the unique capabilities of the government and the private
+sector in our shared goals of better security. In that vein, it
+may be time to reassess the obligation of large, highly-
+resourced companies with outsized footprints in our economy, in
+our government, and evaluate whether more should be expected of
+them. And we need to find ways to change behavior in the
+private sector, particularly those in the government supply
+chain, so executives value security as much as earnings
+statements and fast product rollout. I look forward to candid
+conversations about these issues today.
+ Before I close, I want to thank our witnesses for being
+here today. Since December, I have been impressed by the degree
+of transparency in their conversations with us. It is important
+to have a complete record of what happened, and how, so we can
+have a candid conversation about what needs to change. With
+that, I yield back the balance of my time.
+ Chairwoman Maloney. I now recognize Ranking Member Katko
+for his opening statement.
+ Mr. Katko. Chairwoman Maloney, and Chairman Thompson, and
+Ranking Member Comer, and all my other colleagues that are with
+us today, this is a very important hearing. It is one of the
+most important threats facing our country today, cybersecurity,
+and it is important, I think, that we take a good look at the
+situation and learn from it.
+ As everyone in this hearing knows, we are in the midst of
+arguably the most devastating espionage campaign ever waged
+against our Nation. With each passing day, we learn more about
+the tactics, techniques, procedures, and unprecedented
+sophistication surrounding this campaign. While a number of
+details remain elusive, the overall picture is slowly coming
+together, and much of this incremental clarity is due to what
+we have learned from our private sector partners, so I
+appreciate their steady engagement in the whole-of-society
+response. I also recognize that we need more of this private
+sector sharing. I hope we can spend our time during this
+hearing evaluating the best paths forward. How can the
+cybersecurity community do more than just bounce back, but also
+bounce forward from these events?
+ From my vantage point, we know enough to identify initial
+lanes of policy responses that fall into five categories.
+First, we need to seriously rethink our fragmented approach to
+dot-gov security by centralizing authority with the
+Cybersecurity and Infrastructure Security Agency, known as
+CISA, wherever possible. While CISA's Federal hunt authority
+from the 2021 NDAA is a welcome step in the right direction,
+CISA still does not have the proper authorities, resources, or
+holistic visibility into the Federal networks enterprise to
+effectively defend and nimbly respond to attacks.
+ Second, we need to better understand the nature and extent
+of third-party cyber risks. With no disrespect at all to our
+witness, Mr. Ramakrishna, relatively few people had even heard
+of SolarWinds in early December 2020, yet its products are
+leveraged by most of the Fortune 500's, with a relationship
+between vendor and customer that inherently enables a high
+degree of administrative privilege on the host network. In this
+interconnected web of hardware, software, and services that
+underpin our way of life, there are concentrated sources of
+risk that could result in cascading or systemic impact if we
+assume there is a breach. We need to better illuminate answers
+to these questions.
+ Third, once we identify the potentially concentrated
+sources of cyber risk, we need to ensure that vendor
+certification processes actually reduce that risk, not create
+perfunctory compliance exercises. There are a number of vendor
+certification or risk of judgment regimes in various stages of
+operationalization right now across the Federal Government with
+DOD's Cybersecurity Maturity Model Certification, or CMMC, and
+the Federal Acquisition Security Council, or FASC, garnering
+the most headlines. Let's work together to ensure these regimes
+accomplish our common goal of actually reducing the risk.
+ Fourth, we need to drive better software assurance and
+development life cycle practices across the entire ecosystem.
+Whether software flaws are deliberate or not, the software
+supply chain represents an attack vector that, if exploited,
+leaves the potential for a digital pandemic of sorts, where the
+impact of one bad line of code can be felt across the entire
+country. Last, we must impose real costs on cyber adversaries
+like Russia, China, Iran, and North Korea. While there is no
+silver bullet, deterrence still matters. Naming and shaming,
+indictments, sanctions, offensive measures where appropriate--
+these should all be tools in our toolkit and tools that we
+utilize. From the sophisticated nation-state-led incident to
+the more routine, such as ransomware, the cost-benefit analysis
+of cyber aggression still favors adversaries far too often. In
+short, they are winning the modern-day arms race, and we need
+to step up. I welcome the recent announcement by the
+Administration to begin to hold Russia accountable through
+sanctions. I hope those sanctions are real, I hope they are
+firm, and I hope they are severe.
+ I imagine we will hear a constructive dialog today about
+breach notification and incident reporting. An undeniable gap
+in our country's cybersecurity posture is the fact that there
+is not a consistent, overarching incentive for industry to
+disclose a breach. As a result, our Federal agencies are often
+operating in the dark instead of having access to the critical
+aggregate data regarding the tactics, techniques, and
+procedures of bad actors. As we move forward, we must consider
+approaches to close this gap. Whether that should be
+partnership based or compulsory or hybrid is yet to be seen,
+and I welcome robust private sector feedback on this issue.
+ These are all necessary and worthy policy conversations for
+our homeland security, but we must also not lose sight of the
+immediate needs to put necessary resources toward the Federal
+dot-gov SolarWinds response. I feel strongly that any executive
+branch actions related to SolarWinds must build upon and
+bolster CISA's mission as the lead Federal civilian
+cybersecurity agency, as I recently stated in a letter to
+President Biden.
+ I, again, want to thank our witnesses for testifying today.
+I look forward to hearing from you all on an issue of great
+bipartisan interest for the Nation. I yield back.
+ Chairwoman Maloney. Now I will introduce our witnesses. Our
+first witness today is Sudhakar Ramakrishna, who is the current
+CEO of SolarWinds. Then we will hear from Kevin Thompson, who
+is the former CEO of SolarWinds. Next, we will hear from Kevin
+Mandia, who is the CEO of FireEye. Finally, we will hear from
+Brad Smith, who is the president of Microsoft. The witnesses
+will be unmuted so we can swear them in. Please raise your
+right hands.
+ Do you swear or affirm that the testimony you are about to
+give is the truth, the whole truth, so help you God?
+ [Chorus of ayes.]
+ Chairwoman Maloney. Let the record show the witnesses
+answered in the affirmative. Thank you. And without objection,
+your written statements will be part of the record. With that,
+Mr. Ramakrishna, you are now recognized for your testimony.
+
+ STATEMENT OF SUDHAKAR RAMAKRISHNA, PRESIDENT AND CHIEF
+EXECUTIVE OFFICER, SOLARWINDS CORPORATION; ACCOMPANIED BY KEVIN
+ B. THOMPSON, FORMER CHIEF EXECUTIVE OFFICER, SOLARWINDS
+ CORPORATION
+
+ Mr. Ramakrishna. Chairwoman Maloney, Chairman Thompson,
+Ranking Member Comer, and Ranking Member Katko, and members of
+the committee, on behalf of SolarWinds employees, customers,
+and partners in the U.S. and around the world, I would first
+like to say thank you for inviting us to participate in your
+hearing today. By way of background, my name is Sudhakar
+Ramakrishna, and I joined SolarWinds as president and CEO on
+January 4 of this year. I was previously CEO of Pulse Secure
+and before that held other executive roles at technology
+companies. In these roles, I have had the experience of being
+involved in cyber incidents and seen firsthand the challenges
+they present as well as the opportunities for learnings and
+improvements.
+ Also joining me today is Kevin Thompson, who served as our
+president and CEO for 10 years until his departure on December
+31, 2020, which he had previously announced in August 2020. Mr.
+Thompson cares very much for our customers and employees, and
+we appreciate his long service to the company. To aid in our
+investigation, he has agreed to serve as a special advisor to
+me and the board. He has had the opportunity to meet the staff
+of both of your committees to provide early insight into the
+event. While our products and customers were subject of this
+unfortunate and reckless attack, we take our obligations
+seriously to work tirelessly to understand it better, to help
+our customers, and to be transparent with our learnings.
+ SolarWinds started in 1999 in Oklahoma as a provider of
+network tools, and we have remained true to the mission of
+helping IT professionals solve problems and better manage IT
+environments, now through more than 90 products. Today, we
+remain a U.S.-headquartered company, and our 3,000 dedicated
+employees work hard every day to help customers succeed. When
+we learned of these attacks, our top priority was to ensure
+that our customers were safe and protected. Our teams have been
+working tirelessly to help our many customers first and
+foremost, while also investigating the what, who, and how of
+the attack. We acted quickly to disclose the attacks, provide
+remediations and support to our customers, and share our
+learnings publicly.
+ We believe our Orion platform was specifically targeted in
+this nation-state operation to create a backdoor into IT
+environments of select customers through versions that we
+released between March and June 2020. That is a three-month
+window. SUNBURST has been removed and is not an ongoing threat
+in Orion. Additionally, after extensive investigations, we have
+not found SUNBURST in any of our more than 70 non-Orion
+products. Perhaps the most significant finding of our
+investigations to date was the discovery of what the threat
+actor used to inject SUNBURST into the Orion platform. The
+injected tool, named SUNSPOT, poses a grave risk to automated
+supply chain attacks through many software development
+companies since the software build processes, like ours, are
+very common in the industry.
+ As part of our commitment to transparency, collaboration,
+and timely communications, we immediately informed our
+government partners and published our findings with the
+intention of helping other companies combat current and future
+attacks. We understand the gravity of the situation and are
+applying our learnings from the event and sharing this work
+more broadly. Internally, we are referring to our work as
+Secure by Design, and it is premised on zero-trust principles
+and developing a best-in-class secure software development
+model to ensure our customers can have the utmost confidence in
+our solutions.
+ We have published details regarding our efforts, but, in
+summary, they are focused on three primary areas: first,
+further securing our internal environments; second, enhancing
+our product development environments; and third, ensuring the
+security and integrity of the products we deliver. Given our
+unique experience, we are committed to not only leading the way
+with respect to secure software development, but to share our
+learnings with the industry. While numerous experts have
+commented on the difficulties that these nation-state
+operations present for any company, we're embracing our
+responsibility to be an active participant in helping prevent
+these types of attacks. Everyone at SolarWinds is committed to
+doing so, and we value the trust and confidence our customers
+place in us.
+ Thank you again for your leadership in this very important
+topic. We appreciate the opportunity to share our experience
+and our learnings, and I look forward to addressing your
+questions. Thank you.
+ Mr. Lynch. [Presiding.] Thank you, Mr. Ramakrishna, and
+because Mr. Thompson and Mr. Ramakrishna submitted joint
+testimony, Mr. Thompson is not providing oral testimony at this
+time. Therefore, we are going to move on to Mr. Mandia. Mr.
+Mandia, you are now recognized for your five minutes of
+testimony.
+
+ STATEMENT OF KEVIN MANDIA, CHIEF EXECUTIVE OFFICER, FIREEYE,
+ INC.
+
+ Mr. Mandia. Thank you. I would like to thank Chairwoman
+Maloney, Ranking Member Comer, Chairman Thompson, and Ranking
+Member Katko for this opportunity, and I am excited to share my
+observations with you, a first-hand account of what took place
+at FireEye and at many of these other victims. So, I am going
+to share what happened to most of the victim organizations, and
+I know Mr. Smith's going next. He's going to talk a lot more
+about what to do about it, and though I have opinions about who
+did it and what to do about it, I'll reserve those for the
+moment when we get questions.
+ I want to set a little bit of background first about what
+FireEye does, and it is just to provide context. Responding to
+breaches is what we do for a living. So, when we ourselves were
+breached based on having a SolarWinds implant, we put nearly
+100 people on the job, and the majority of the folks working
+it, figuring out what happened and what to do about it, did
+their proverbial 10,000 hours of computer forensics on
+intrusions. And as I'm sitting here talking to these
+committees, we're responding to over 150 security breaches, and
+in 2020, a tough year for chief information security officers,
+we responded to nearly 1,000 security breaches globally. So,
+we're a company that every time we respond, we're the
+detectives, and we take the trace evidence of every single
+breach that we have firsthand experience of, and we put in a
+data base and track it. So, with that, let me talk about the
+anatomy of this intrusion.
+ First and foremost, everybody's calling it the SolarWinds
+hack. In reality, this is an ongoing saga. The group that did
+the compromise that led to 100 different organizations
+compromised and nine government agencies compromised is not new
+to the game. These are folks that are special operations. And
+think of it as, if you're an organization and you've locked
+your doors and locked your windows, this is the special ops
+robbing the house, not some average criminal just trying to
+shake the doorknobs or trying to crack open the windows. So,
+this was the varsity team on offense, and all the signs, all
+the digital fingerprints that our company cataloged proves
+that, that this was a foreign intelligence service.
+ So, stepping through the anatomy of this intrusion, I look
+at it in two stages. Stage one, the attacker had to break into
+SolarWinds, and when they did that, you already heard the
+details from Mr. Ramakrishna that the attackers did something
+that's pretty darn hard to detect. At the very end of a build
+process, they altered the production environment. So, this
+isn't somebody hacking in and changing source code. They're
+hacking the build process, and when you go to build your
+production code, it is altered at the last minute. In this
+case, to provide the timeline, the attackers that broke into
+SolarWinds for this stage one of this whole campaign, the first
+thing they did, they got the implant in, but the implant was
+innocuous, and there's evidence that in October 2019, the
+threat actors put the innocuous code in simply to test, ``Do we
+have a way to get into the supply chain?'' After the attacker
+proved that they could get their arbitrary code into
+production, then they created, by March 2020, an implant that
+provided surreptitious access to anyone who updated their
+networks with the next SolarWinds update to the Orion platform.
+ So, how did we find this implant at FireEye? We found it
+based on literally exhausting every single other investigative
+lead at FireEye. We had detected some unusual activity on our
+network, and when we investigated that and started pulling the
+thread, the earliest evidence of compromise kept going back to
+a SolarWinds server. And the reason I am sharing this story
+with you is there is no magic wand on finding an implant.
+People trust the third-party software that they buy, rely on,
+and install. In this case, because we do forensics for a
+living, special operations attacked us. It would take special
+operations, people that are in the trenches responding to
+breaches every day, to detect it. We had to reverse over 18,000
+files that were in the SolarWinds platform; 3,500 of those
+files were executables. We de-compiled them into a million
+lines, and with people that can read assembly language and
+understand it, they are the ones that found the implant, and
+that's why this was so hard to detect. So, that's the stage one
+of this breach.
+ Stage two I'll cover very quickly because after stage one,
+the attackers had a menu of over 17,000 companies that had
+downloaded the implant, but that doesn't mean the attacker
+stole anything from 17,000 companies. The stage-two victims are
+where the attacker decided, ``I want something,'' and the
+attackers manually engaged with about 100 different
+organizations. In stage two, the attackers did three things:
+first, steal your keys. They came in through the trap door in
+the basement that you didn't know about. They took your keys,
+and with those keys, they accessed your information the same
+way people and employees do. Second thing they did is they did
+very specific and focused targeting of documents and emails.
+And the third thing these attackers did, I put in the ``other''
+category based on the victim. They stole source code or
+software, and in the case of FireEye, they stole assessment
+tools that we use to assess the security of organizations.
+ So, with that level of detail, I'd like to thank the
+committee for this opportunity. We stand ready to work with you
+and work with the companies in the private sector to defend the
+Nation. Thank you.
+ Mr. Lynch. Thank you very much. That is very helpful
+testimony, Mr. Mandia. We appreciate it. Mr. Smith, you are now
+recognized for your testimony for five minutes. Thank you.
+
+ STATEMENT OF BRAD SMITH, PRESIDENT AND CHIEF LEGAL OFFICER,
+ MICROSOFT CORPORATION
+
+ Mr. Smith. Well, thank you, and I want to thank Chairwoman
+Maloney, Chairman Thompson, Ranking Member Comer, Ranking
+Member Katko, and really all the members of the two committees.
+ I think Sudhakar and Kevin have done an excellent job of
+describing a lot of what happened, and no doubt we'll get into
+more of that. I thought I would, as Kevin suggested, build on
+what the two of them said and talk a little bit about what is
+it that we can do. What is it that the private sector can do?
+What is it that all of us can do by working together? I think
+there are a number of concrete steps, and some of the opening
+comments, I thought, did an excellent job of identifying, as it
+was said, many of the lanes down which we need to travel. As
+Sudhakar said, this was an attack on the software supply chain,
+and by that, he meant it planted malware into a software
+update. I think that points to one of the first things we need
+to focus on securing, more broadly, across the software
+ecosystem.
+ The International Data Corporation has estimated that as
+many as a half a billion software apps will be created in the
+next three years globally. Well, all of these applications will
+be distributed. They'll need to be updated. I think we all have
+work to do. Certainly at Microsoft we look forward to working
+with others on what we can do to help secure the software
+supply chain and avoid this kind of risk, this kind of problem,
+this kind of tampering with software updates. That is a very
+specific activity.
+ I think the second thing we need to do is think much more
+broadly. We need to focus on the modernization of the
+information technology infrastructure, and we need to apply,
+more broadly, cybersecurity best practices. We've looked at the
+customers that use Microsoft software that we were able to
+identify had been hacked in this incident, and what we have
+found repeatedly is that they could've better protected
+themselves simply by applying the many cybersecurity best
+practices the world has recognized already, that we've
+encouraged customers to apply already. And I think this is an
+important day for us to step back and think again about how we
+better help small businesses, as well as large customers, to
+apply these best practices.
+ I think that leads us to a third opportunity for us all to
+do better. When we ask ourselves why the world is not using all
+of the cybersecurity best practices that exist today, I think
+one of the reasons becomes self-evident. It's because in the
+United States and around the world, there is a shortage of
+trained cybersecurity personnel. In the United States today,
+there's a shortage of more than 300,000 trained cybersecurity
+personnel, and this is something that we, a tech company like
+Microsoft, can focus on addressing by helping colleges and
+universities, high schools, and others develop the people we'll
+need in the future. But I think there's an important role for
+government to play as well.
+ The fourth area where I think we can do better, where we
+really need to do better, is to share threat intelligence
+information to ensure that when there is information about this
+kind of hack or attack, it is being shared first with
+customers, something that we do immediately when we detect this
+kind of hack at a Microsoft customer, but something that
+doesn't happen broadly enough across our industry, and we can
+share it with the government. It needs to be, I think, better
+shared across the government and then in appropriate ways back
+with the private sector itself.
+ Fifth, I think the time has come to adopt a national law
+that will impose cyberbreach incident reporting obligations,
+and there are important questions to be considered. To whom
+should it apply? When should it apply? How should it be
+administered? To whom should the information go? How should
+that information be shared? These are all questions for your
+two committees and the Congress as a whole, but 2021, I
+believe, needs to be the year that Congress acts and we use
+this step to strengthen the security of the Nation.
+ Finally, I think we need to strengthen the international
+rules of the road. What happened here is and should be a
+violation of international norms and international law. It is
+the kind of act that was reckless. It is the kind of act that
+needs to have consequences, and those consequences need to be
+based on global standards. This is a combination of six steps
+that we can take, steps that I believe will make us stronger.
+Thank you.
+ Mr. Lynch. Thank you, Mr. Smith. Now I would like to
+recognize my friend, the gentleman from Mississippi, Chairman
+Thompson, for five minutes for questions.
+ Mr. Thompson. Thank you very much, Mr. Chairman. I thank
+the witnesses for their very important testimony. This is to
+Mr. Thompson and Mr. Ramakrishna. A theme emerging this week is
+that the supply chain compromise that exploited the SolarWinds
+Orion platform could have happened to anyone, but since
+December, I have read troubling accounts about the security
+culture at SolarWinds. One report indicated your server
+password was ``SolarWinds123.'' Now, according to another
+report, a former employee raised concerns about the security
+culture at SolarWinds four years ago. As you know, we have
+recently obtained testimony from that employee during a
+presentation. So, Mr. Thompson, did you take any action based
+on the security recommendation that this employee, Mr. Trump,
+made to the company?
+ Mr. Thompson. So, I believe that we have, over the history
+of time at SolarWinds, taken security seriously, security of
+our internal systems and the secure development of our
+products. Mr. Trump arrived in the company April 2017. Shortly
+after that, we actually hired Tim Brown, who is a 30-year
+veteran from Dell who was a fellow at Dell, which is one of
+their highest-ranking engineers, to be in charge of not only
+the internal security of SolarWinds, but also product security
+at SolarWinds. We also actually did hire Mr. Trump back in
+September 2017 as part of some of the initiatives that we were
+working on. So, I believe we have taken security seriously in
+2017, and really beginning in 2016, we enhanced our security
+posture.
+ We hired a CTO in 2016 who had been a CIO at a large global
+Fortune 500 company. We hired a very experienced CIO in 2017.
+As I said, we hired Tim Brown in the middle of 2017, who is a
+very experienced VP of security. We also implemented a----
+ Mr. Thompson. Thank you. Thank you. Thank you very much.
+So, your testimony is that, based on that recommendation, you
+did do things. So, Mr. Smith, you talked about the challenges
+facing companies, like all of the cyber companies that we have
+talked about. One you talked about, the challenge of a work
+force. You know, our committees are constantly being requested
+by many of the companies on the screen to expand the visa
+programs so that we can import labor supply because we don't
+have it here. So, tell me what a company like Microsoft is
+doing with historically black colleges and minority-serving
+institutions to help that labor force be developed right here
+in this country.
+ Mr. Smith. Well, thank you, Chairman Thompson. I think it
+is a very important question. You know, so far, just this year,
+Microsoft has spent more than $2 million to provide grants to
+faculty members at HBCUs to add cybersecurity and other
+information technology curriculum to, you know, the courses
+that are offered at these institutions. We are going to be
+increasing that amount to $3.2 million per year. We are going
+to be spending that each of the next three years.
+ But it is not just, I think, investing in these
+institutions so that they can train the next generation of
+professionals. We are very focused on hiring individuals at
+HBCUs. Our recruiting season is still unfolding this year, but
+already we have had recruiters at 27 HBCUs. We are excited that
+already 136 students at these institutions have accepted jobs
+to work at Microsoft, 73 full time, 63 to be with us as interns
+this coming summer. I do believe that the HBCUs are growing and
+powerful engines for the protection of cybersecurity. We can
+collectively, I think, as an industry add to their strength,
+and we will be the beneficiary of the students that they will
+graduate.
+ Mr. Thompson. Thank you very much. This notion of a cyber
+breach info office, I take from your testimony, as you know, we
+tried to get it passed last year, and it was taken out in the
+Senate. So, your testimony to both committees is that that
+would be an important instrument for us to have to get in-time
+notification of breaches.
+ Mr. Smith. Yes, that's correct. I think we do need to take
+that type of step. There will be important details that need to
+be discussed, but this is the time to take that kind of action.
+ Mr. Thompson. Thank you very much. I yield back, Mr.
+Chairman.
+ Mr. Lynch. The gentleman yields back. The chair now
+recognizes the gentleman from New York, Ranking Member Mr.
+Katko. You are now recognized for five minutes.
+ Mr. Katko. Thank you, Mr. Chairman, and I want to thank all
+the witnesses for their very thoughtful and engaging testimony.
+I am really heartened that your comments are consistent with
+and supportive of the five categories of response that I laid
+out in my opening statement, and I want to explore those a
+little bit more if I can.
+ First of all, with Mr. Mandia, earlier this week, you
+outlined, Mr. Mandia, some of the enormous time and costs that
+go into the threat-hunting and intrusion-remediation services.
+Can you describe briefly for me, just briefly, the magnitude of
+the resources that go into these threat-hunting teams and
+penetration-testing services, how much they cost, the man
+hours, woman hours that go into it, things like that briefly?
+ Mr. Mandia. You know, sir--thank you for the question--I
+don't think it takes a lot of people to test your networks on
+how secure they are, and I do believe that is the best way to
+get unvarnished truth in security. Kind of like you do crash
+test dummies to test the safety of a vehicle, shoot real
+bullets at a bulletproof vest to determine how effective it is,
+in cybersecurity you need to test your security, and that is a
+couple folks. There is a great asymmetry between offense and
+defense. To have somebody perpetrate what would be perceived as
+offense, not a lot of resources.
+ The problem is the 52-card pickup you play on the other
+side because of that asymmetry. One attacker can create work
+for hundreds of thousands of defenders. It is a bad asymmetry
+in cyberspace I think other nations have picked up on where
+they can't beat us with tanks, won't beat us with planes, but
+in the cyber domain, if they train folks, the A-team can create
+work for potentially millions of defenders. So, the bottom
+line, that asymmetry is the problem. It is hard to answer your
+question without cataloging the offense, very few people.
+Defense, you have to pitch a perfect game every day and put a
+lot more people on it.
+ Mr. Katko. Got it. Thank you for that. And to followup on
+that, as you know, CISA was granted authority in the Fiscal
+Year 2021 NDAA to conduct threat hunting on Federal agency
+networks----
+ Mr. Mandia. Mm-hmm.
+ Mr. Katko [continuing]. With or without consent, which is,
+I think, a very positive step forward. Do you have
+recommendations on how CISA can most effectively implement this
+new authority?
+ Mr. Mandia. Well, I am convinced this will work with the
+private sector on that. We all have threat-hunting teams. My
+company does it every single day all the time for thousands of
+customers. Microsoft has a team that does it. There are a lot
+of security folks that do threat hunting, and the reason we
+have to do threat hunting is not every product stops
+everything, period. There is no such thing as perfect security,
+so you have to have the catcher's mitt behind your products.
+And CISA's folks that do threat hunting will be able to tap the
+private sector and be driven by the private sector, so I think
+it is exactly the right thing to do.
+ Mr. Katko. Mr. Smith, I am going to followup on something
+Chairman Thompson said, and I am in complete agreement with him
+that the information sharing is such a critical component. But
+the problem with the information sharing is if a company is
+hacked into and they share the information, are they buying
+themselves more problems and more public scrutiny and perhaps
+more liability if they do the right thing and share that
+information with CISA? So, what role do you see CISA as a hub
+for a Federal focal point to help aggregate all this national
+risk picture across the sectors, right, No. 1? And No. 2, how
+do you do so in a way that protects the industry and
+incentivizes the industry to share this information instead of
+just not sharing it because they are afraid of opening
+Pandora's box and problems for them?
+ Mr. Smith. Well, first of all, I think you make a really
+important point. The White House said a week ago that more than
+100 companies, or roughly 100 companies, in the United States
+had suffered this kind of attack or hack. You have three
+companies here today, and that is because we have chosen to
+speak up, and what you get is an invitation to appear as a
+witness under oath at a House hearing. And so I think a lot of
+companies choose to say as little as possible, and often that
+is nothing.
+ But silence is not going to make this country stronger, and
+so I think we have to encourage and, I think, even mandate that
+certain companies do this kind of reporting. I think we do need
+to identify the right place where the report should go. CISA is
+a very strong candidate, and it deserves serious consideration,
+and we need to think about the process and the type of
+information that should be shared and when it should be shared.
+And we need to be very careful that we don't, in effect, tell
+firefighters to stop fighting the fire so they can fill out
+forms and, you know, meet with government officials instead.
+So, we need to balance all of the work that needs to be done,
+but Kevin really captured well the asymmetry, and we can only
+be effective if we can connect the dots in everything that we
+see. That can only be done with this kind of effective
+information sharing.
+ Mr. Katko. Well, it is not often that you hear the private
+sector saying they need more government mandates, so that, I
+think, highlights the importance and the magnitude of this
+problem. And I think Chairman Thompson, and I, and the others
+are going to work very hard to try and make this a reality
+because information sharing is what made us a much safer nation
+after 9/11 with the Joint Terrorism Task Forces. We need to do
+the same thing in the cyber area, and anything we can do to
+turbocharge that process, we have to do going forward. I have
+so many more questions, but I am out of time and I yield back.
+Thank you.
+ Mr. Lynch. The gentleman yields back. The chair now
+recognizes the gentlewoman from the District of Columbia. Ms.
+Norton, you are now recognized for five minutes.
+ Ms. Norton. I thank the gentleman for yielding. This is an
+important hearing, and we have heard of breaches of both the
+private and the governmental sectors. It is kind of a two-
+fisted breach. My first question is for Mr. Mandia of FireEye.
+Our most recent information from the current White House, I do
+believe these breaches occurred in the last Administration, but
+it is clear that it could occur and may be occurring right now.
+So, let me ask about the breaches or the impact on government
+agencies in particular.
+ For example, the information I have been given is that the
+breaches included the Department of Energy, including a
+component responsible for managing the Nation's nuclear
+weapons. You can see the issue there, Mr. Mandia. Another
+agency was the Department of Justice, of course, which enforces
+our laws, but breached also, but also has to do with countering
+foreign intelligence on the United States. Also breached, of
+course, was the Department of Treasury. Now, that Department
+maintains the Nation's financial infrastructure and imposes
+financial sanctions on our adversaries. You can see, Mr.
+Mandia, what this leaves us open to. Would you agree that
+compromising any one of these agencies would be considered a
+victory for an adversary?
+ Mr. Mandia. Well, I think the first comment I would say is
+this is an ongoing intrusion set. The SolarWinds backdoor was
+just part of a very long saga. I first started responding to
+breaches for the U.S. Government in the 1990's. This group was
+active then. They are going to be active tomorrow. There is
+going to be ongoing targeting of those agencies. This intrusion
+set using the SolarWinds backdoor happened to be successful at
+least for surreptitious access and staying surreptitious and
+clandestine on the networks for a certain period of time. You
+know, we will respond to it, and it will take those agencies
+time, months, to get their arms around the scale and scope of
+what happened. And I think we are in that window where they
+don't know yet, and we got to wait on the final investigation.
+ Ms. Norton. Well, we certainly need the investigation to be
+finalized because we are still in the window and they are still
+being breached. That raises continuing problems for us. And
+continuing with you, Mr. Mandia, in 2015, a foreign actor or
+groups compromised the systems of the Office of Personnel
+Management. They accessed clearance information on 21 million
+people. Now, that was only one agency. Mr. Mandia, would the
+OPM compromise be considered a serious breach?
+ Mr. Mandia. I think you have to consider it a serious
+breach. When you look at these breaches, what generally happens
+is there is a successful breach. We find out about it. We take
+steps and do sprints within the Federal Government to try to
+escalate our security programs. The bottom line, there are
+threat actors out there that attack the U.S. Government on a
+daily basis, and they are feeling no risk or repercussions to
+doing it. So, we are just sitting here playing defense every
+day against an A-team that is going to have successes.
+ Ms. Norton. Yes. This time around, these actors were able
+to compromise up to 3 percent of Microsoft Office email
+accounts at the Department of Justice. Again, that sounds like
+a small number until you put it in perspective. Three percent
+of email accounts at the Department of Justice translates into
+roughly 3,500 accounts. Mr. Mandia, if you were writing up a
+damage assessment for a customer and they had 3,500 accounts
+compromised for months, how would you categorize that? Would it
+be sincere even what seems to be a small number? How would you
+categorize that?
+ Mr. Mandia. Well, this is obviously a group that
+compromised with collection requirements, so the damage
+assessment is going to be based on the content of the emails,
+period. And how that information is intended to be used, we
+don't know. That is the problem. We have to get our arms around
+all the content and all the potential use and misuse of all
+that content. So, the bottom line, we may never know the full
+range and extent of damage, and we may never know the full
+range and extent as to how the stolen information is benefiting
+an adversary.
+ Ms. Norton. Well, we better get our arms around the full
+impact of these breaches, but we know that it has very serious
+implications for both the government--that is why I focused on
+Federal agencies--as well as the bottom sector. You have given
+us a mandate in this committee to get to the bottom of how this
+breach occurred, every entity that was affected, and how to
+protect against this type of incident in the future, and it
+looks like we have a lot of work to do. I yield back.
+ Mr. Lynch. The gentlelady yields back. The chair now
+recognizes the gentleman from Georgia, Mr. Hice, for five
+minutes.
+ Mr. Hice. Thank you very much, Mr. Chairman. I appreciate
+it and appreciate this hearing. As ranking member of Gov Ops,
+it has been honor working with Chairman Connolly on these
+issues over and over in the past trying to improve our
+government-wide information security. And, of course, we both
+know, and I am sure everyone on both of these committees, in
+fact, everyone involved in this hearing right now is keenly
+aware of the importance of cybersecurity, the vital nature that
+it provides for our government, and to make sure, frankly, that
+our government continues to run efficiently and effectively,
+and, most importantly, in this context, securely. I am
+certainly looking forward, in that light, to the upcoming
+FITARA hearing on the FITARA scorecard that Chairman Connolly
+is going to be bringing up, and hopefully we will be able to
+discover the level of preparedness of various agencies within
+our government.
+ But in light of the massive attack, the cyberattack that
+brings us to this hearing today, these efforts around Federal
+information security are obviously extremely important and all
+the more prescient for us. And I understand, I get it, and I
+think it is probably good that our witnesses today are from the
+private sector. They certainly are able to bring some valuable
+insight to us today as to what and how we can best secure our
+IT assets in Federal Government.
+ So, Mr. Mandia, let me begin with you. Beginning with your
+company's focus on cybersecurity services, I am wondering your
+opinion in regard to cloud migration, and, in particular, what
+I am talking about, or what at least I have in mind, is
+Chairman Connolly's bill, FEDRAMP, which both myself and
+Ranking Member Comer have both co-sponsored. But how do you
+view that in terms of is it a step in the right direction for
+improving cybersecurity?
+ Mr. Mandia. Sir, first off, the migration cloud is going to
+happen whether we want it or not. It is rare in history where
+something costs less and is better. Cloud is actually costing
+less and is better. For example, if I wanted a server set up at
+FireEye, I could ask an IT staff to do it, or I can go to an
+infrastructure as a service provider and get it in five
+seconds. So, the cloud is coming. And then you add the pandemic
+to it and the work from home. All the major enterprises, all
+the major organizations are going to the cloud.
+ The upside is it cuts both ways, but you should get better
+visibility and better controls in the cloud, and the reason why
+is you are putting all your decentralized IP and value into one
+place. It is easier to monitor it, easier to safeguard it. You
+don't have distributed security controls at that point. I think
+we are in the middle of the cloud migration, but over time,
+what we will see is organizations recognizing at least the
+infrastructure portion of the cloud will be more secure because
+these companies have to secure it, meaning the providers have
+to secure it.
+ Mr. Hice. OK. OK. So, when you say, ``Whether we like it or
+not, it is going to happen,'' I get that.
+ Mr. Mandia. It is going to happen.
+ Mr. Hice. And you are exactly right. But with it happening
+whether we like it or not, do you feel good that that is indeed
+a safe method? Is that good for us to go there that way?
+ Mr. Mandia. Sir, after 30 years in IT security, I believe
+it will be easier to secure the cloud than the last 30 years of
+us trying to secure everybody's home offices and secure inside
+four different walls all over the place. Yes, it is a good
+move.
+ Mr. Hice. OK. Mr. Chairman, for whatever reason, the clock
+is not showing up on my screen, so I really don't know where I
+am on time, but if there is time, if I could have a brief
+answer from each of our----
+ Mr. Lynch. The gentleman has 45 seconds.
+ Mr. Hice. OK. Well, each of the witnesses real briefly,
+what needs to be done? What does the private sector have that
+we could use? If you can just give a 10-second answer, each of
+you, or whatever, just very briefly. I will start with Mr.
+Smith.
+ Mr. Smith [continuing]. The cloud, but then implement the
+cybersecurity best practices that are needed to use it
+effectively. As a cloud services provider, we can enable all of
+the tools, but ultimately, it is our customers that will have
+to decide how to use them.
+ Mr. Hice. Thank you.
+ Mr. Ramakrishna. Congressman Hice, my recommendation would
+be to share information as fast as possible in as timely a
+manner as possible because speed and agility are key to
+addressing these issues.
+ Mr. Hice. Thank you, sir.
+ Mr. Mandia. And, sir, in the last 12 seconds, I will get to
+what Congressman Katko was referring to. I believe we need to
+separate disclosure of a breach to sharing of threat
+intelligence. If you can share threat intelligence from the
+private sector to the government, or government to the private
+sector confidentially, you can do it quickly without worrying
+about all the liabilities that come with public disclosure of a
+breach. So, we got to think of threat intel sharing and
+disclosure of a breach as two separate things, and threat
+intelligence sharing will defend the Nation.
+ Mr. Hice. Very good. Thanks to each of you, and thank you,
+Mr. Chairman. I yield back.
+ Mr. Lynch. The gentleman yields back. The chair now takes
+great pleasure to recognize someone who has done yeoman's work
+in this area for a long time. The gentleman from Rhode Island,
+Mr. Langevin, is now recognized for five minutes.
+ Mr. Langevin. Thank you, Mr. Chairman, and I thank you for
+your leadership on cyber.
+ Mr. Lynch. I believe the gentleman may have muted himself.
+ Mr. Langevin. Yes, I think----
+ Mr. Lynch. OK. Go ahead.
+ Mr. Langevin. Thank you, Mr. Chairman. Again, I was saying
+I appreciate your leadership on cyber and data, the chairs of
+the two committees that are holding this joint hearing today
+and the ranking members. It is obviously a very important
+topic, and I want to thank our witnesses for being here this
+morning.
+ Let me start with Mr. Smith, if I could. Mr. Smith, you
+have testified that Microsoft is aware of 60 victim
+organizations; that is to say, organizations where at least one
+Office 365 email account hosted in Microsoft's Cloud was
+accessed by the adversary. But how many accounts has Microsoft
+confirmed were accessed?
+ Mr. Smith. I would have to get you the precise number of
+accounts. I will say, in general, the pattern that we saw was
+typically a relatively small or very small number of accounts
+per customer. I think that was indicative of the stealthy
+practices that this actor tends to deploy, namely, to take
+great care to be very discreet. And so I think----
+ Mr. Langevin. OK. Yes, if I could just stop you. Let me
+just say my time is limited. In conversations with staff
+yesterday, Microsoft indicated that about 77 accounts had been
+confirmed to have been accessed. Does that sound about right?
+ Mr. Smith. It certainly sounds like it is in the right
+range. Again, I would want to go check the specifics, but it
+sounds like it is in the right range.
+ Mr. Langevin. All right. That sounds like a just incredibly
+small number to me. All right. If I could, just in CISA's alert
+detecting post-compromised threat activity in Microsoft cloud
+environments, they note that the amount of security log data in
+cloud environments is often significantly less than in on-
+premises environments, which can hamper threat hunting. In
+fact, the same alert notes that in order to detect certain
+accounts that have been compromised, a special, more expensive
+Office 365 account or G5 or E5 license is required. Do you
+believe that security should be an add-on or up charge or baked
+into cloud accounts from the get-go?
+ Mr. Smith. Well, the particular offer that you described,
+what we call as E5, you know, is the service that we offer that
+includes security and other advanced features. We offer a range
+of choices to our customers. E5 is absolutely what we hope and
+expect and recommend that our customers purchase. Some people
+don't want to buy it, and we honor that, but it is absolutely
+what we encourage.
+ Mr. Langevin. All right. Just so that I understand and the
+committee understands, is this a profit center for Microsoft
+for this, or are the services being provided at cost that you
+are charging the customers?
+ Mr. Smith. Well, you know, we are a for-profit company.
+Everything that we do is designed to generate a return other
+than our philanthropic work.
+ Mr. Langevin. OK. Thank you, Mr. Smith. Mr. Ramakrishna, if
+I could turn to you. Can you shed some light on how the
+adversary initially accessed SolarWinds' network? On Tuesday,
+you testified before the Senate Intelligence Committee that
+your partners had narrowed the number of possible vectors to
+three. What are those vectors?
+ Mr. Ramakrishna. Congressman Langevin, thank you for the
+question. Our investigation was segmented as to what exactly
+happened, how did it happen, and who may have done it. As it
+relates to the what, we have made a lot of progress and have
+discovered the specific injector tool that I described could
+affect any supply chain, and we have been able to publish it
+such that other companies can evaluate their security postures
+and supply chains and possibly get help from our efforts.
+ As it relates to your question, we have narrowed it from
+several hypotheses. At one time, we had 15 different threads
+that we were pulling, so to speak, and we have battled it since
+to about three at this point. One is what I call a classic
+password spring type approach that we are investigating. Two is
+some form of credential theft. That can happen through various
+methods. And three is a potential vulnerability in a third-
+party software that we have deployed on premises. Just like
+other companies on this witness stand, we use a lot of third-
+party software as well, and we are looking at it in those three
+dimensions at this point. We are evaluating several terabytes
+of data to be able to sift through this in the hopes that we
+can pinpoint patient zero in this context.
+ Mr. Langevin. OK. Thank you, Mr. Ramakrishna and Mr. Smith,
+to our witnesses. I just wanted to note for the record, Mr.
+Chairman, I know my time has expired, but I want to thank Mr.
+Ramakrishna for briefing me about a week ago, and I appreciate
+how they have been very forthcoming in helping us to get our
+arms around this. And to Mr. Smith, your team had briefed me a
+couple days ago, and I appreciate them taking some detailed
+questions there, too. So, thank our witnesses, and, Mr.
+Chairman, I yield back.
+ Mr. Lynch. The gentleman yields back. The chair now
+recognizes the gentleman from Texas, Mr. McCaul, for five
+minutes.
+ Mr. McCaul. Well, thank you, Mr. Chairman. You know, I have
+worked on cybersecurity for very many years along with Mr.
+Langevin. And back when I was chairman of the Homeland Security
+Committee, we authorized, stood up into law CISA to be the lead
+civilian agency to protect our networks, and then we had the
+cyber incident response teams that were authorized into law.
+You know, 80 percent of this critical infrastructure is done in
+the private sector as is most of the threat information, and
+that is why these private/public partnerships, I believe, are
+so important.
+ I have had the opportunity to visit with Mr. Ramakrishna.
+SolarWinds is actually in my district in Austin, and also with
+Mr. Smith from Microsoft, but I want to just get a couple of
+just factual details on the event itself. And, Mr. Ramakrishna,
+I also want to thank you for being so forthcoming and
+transparent with the Federal Government, but do you think the
+initial intrusion began around, say, March of last year?
+ Mr. Ramakrishna. Congressman McCaul, thank you for the
+question. March of last year is when we first shipped, so to
+speak, the code with the malware injected in it, so three
+releases between March 2020 and June 2020 is when the malware
+was impacting the Orion platform.
+ Mr. McCaul. So, between March and June you have the
+intrusion. It is detected in December 2020. Is that correct?
+ Mr. Ramakrishna. Yes.
+ Mr. McCaul. So, this is very sophisticated malware that
+can, as I understand, can go in and out of your system through
+the in-door and through the backdoor without detection. Is that
+correct?
+ Mr. Ramakrishna. So, that threat actor I would describe,
+Congressman McCaul, as hiding in plain sight.
+ Mr. McCaul. Mm-hmm.
+ Mr. Ramakrishna. They were very, very careful about
+covering their tracks, cleaning up after themselves, and the
+patience with which they worked was not similar to the run-of-
+the-mill virus whose job is to spread as fast as possible and
+create as much damage as possible. This was very sophisticated.
+And, as you heard from Mr. Smith and Mr. Mandia, being in the
+security business, it still took them a long time, and in
+talking to Mr. Mandia, they looked at this as almost a last
+resort in their investigation.
+ Mr. McCaul. I am sorry, but my time is limited. So, when it
+was detected in December, within two days Microsoft developed
+and created the kill switch. Is that correct?
+ Mr. Ramakrishna. That is true, and within a matter of 72
+hours, our teams fixed the malware and delivered remediated
+code. And since then, we have pretty much had a 7 by 24
+operation----
+ Mr. McCaul [continuing]. Report it to CISA and the Federal
+Government? At what time?
+ Mr. Ramakrishna. We reported it as soon as we knew on
+December 12 to CISA and the Federal Government, and we continue
+to do so.
+ Mr. McCaul. We believe that this originated out of Russia.
+Would you agree with that assessment?
+ Mr. Ramakrishna. Congressman, we do not have the internal
+expertise to create attribution, but based on our investigation
+partners, it appears to be true.
+ Mr. McCaul. So, this is for both you and Brad Smith. What
+is the extent of the damage, to your knowledge, and if it came
+from Russia, which I believe it did, by looking at what they
+stole, it didn't seem to be a destructive virus, but more of a
+theft and espionage type of malware. What was their motivation
+and intent here?
+ Mr. Smith. Well, I would say that, based on every
+indication so far, there were probably two or three. One is
+espionage, obviously to obtain information, especially, say,
+from the U.S. Government and other agencies. Second, to learn
+more about technology because obviously technology is the plane
+on which this organization's activities take place. That is why
+50 percent of the victims that we identified are communications
+and technology companies. Third, I think there is an aspect of
+this that you would almost put in the context of
+counterintelligence. They focus on red team tools so that they
+know how to withstand attacks. They look for whether a company
+like Microsoft may be knowing about them so that they are able
+to try to circumvent what we are doing in the future. That is
+true for other tech companies as well.
+ Mr. McCaul. Now, I applaud you for transparency, the kill
+switch, and the notification, but not all companies do this.
+And Mr. Langevin and I are working on a mandatory notifications
+breach of any cyber intrusions. This can be done by taking
+sources and methods and company names out to protect them as
+you have a duty to shareholders. It would just simply send the
+threat information itself to CISA so they could provide both
+industry-wide, and Federal-governmentwide, and state the threat
+information that they would need to address it on a larger
+scale. Is that something you think would be a good solution?
+ Mr. Smith. I think that would be an important step. I think
+the time has come to recognize that it is probably an essential
+step, and I think the precise tailoring, something along the
+lines of what you just described, is exactly the kind of
+conversation we need to have.
+ Mr. McCaul. Well, I appreciate that, and I thank you for
+testifying here today. And with that, Mr. Chairman, I yield
+back.
+ Mr. Lynch. The gentleman yields back. The chair now
+recognizes himself for five minutes.
+ You know, one of the weaknesses in our system is the
+endemic need for us to share information in order for it to be
+applied, and that includes classified information. One of the
+things, Mr. Mandia and Mr. Smith, that I have come across
+during 20 years of these investigations is that the worst is
+always denied. So, in this case, we are being reassured by some
+that that no classified systems were compromised. That is what
+we are being told. But if the previous patterns are followed
+here like they have in other breaches and other investigations
+that we have done, later on down the line we find out that,
+yes, in fact, classified systems were compromised.
+ So, can you, Mr. Mandia and Mr. Smith, can you reassure me?
+I mean, are you willing to guarantee me that no classified
+systems were compromised? These people had at least nine
+months, and it seems to be the general consensus here that
+these were highly professional people. This was a special ops
+deal, and they cleaned up after themselves. They clearly
+intended, with the patience that they exerted, and we are
+talking about thousands of people working on this hack, you
+know. Can you assure me that our classified systems were not
+compromised?
+ Mr. Smith. Well, I would say, first, I think we are
+probably the wrong people to try to answer that question. You
+know, the classified systems are obviously, you know,
+maintained by the government, and, you know, it is the
+government's----
+ Mr. Lynch. That is what worries me.
+ Mr. Smith. But I would say this. I mean, first, there are
+two things that one should think about, and they cut in
+opposite directions. The SolarWinds hack was one vector of
+attack by an agency that, in all probability, is engaged in
+many vectors of attack every single day of the year on a broad
+international basis. So, what we have seen here is one slice of
+activity that is always ongoing, and we should, I think as your
+question suggests, always assume that there are things that we
+don't know, and even assume that there are things that are
+worse than what we do know. That is, I think, a cause for
+concern.
+ Now, I will say, on the other hand, what this actor did in
+many instances, really in all instances, is once they were in a
+network, they were able to take advantage of lapses in basic
+cybersecurity practices. The reason they got into, say, a
+particular number of DOJ email accounts, in all probability,
+was because they were able to steal the password of someone or
+some individuals who had access to those accounts. And by
+definition, I think we can count on the government to have
+higher levels of cybersecurity precautions in place for secret
+and top-secret workloads.
+ You know, as a cloud services provider, Microsoft, you
+know, stands up secret and top-secret workloads for the U.S.
+Government, and, you know, what we consistently find is what
+you would expect. You know, the people in government agencies
+who are working in this space are, by definition, going to be
+more rigorous, so, you know, we should assume that there are
+more vigorous attacks or hacks. We should also count on
+stronger protection for those kinds of workloads.
+ Mr. Lynch. Mr. Mandia?
+ Mr. Mandia. Yes, I think, again, we are not in the purview
+to know the answer to that question. I can tell you this is an
+intruder that has collection requirements, sensitive data lost
+definitely. I did do my stint in the military. I would say it
+is unlikely that classified information was probably accessed,
+meaning classified systems, but I can't answer the question. I
+am not in a position to do so.
+ Mr. Lynch. Yes. Well, thank you for your service. I
+appreciate that. Obviously, it would be valuable to us to know
+right now in designing our response. It is a whole different
+dynamic and the level of urgency if our classified systems have
+been compromised, not only, you know, for the purpose of
+plugging those holes, but also protecting, you know, sources
+and methods and other aspects of that as well, so it would be
+very, very important for us to know that as soon as possible.
+ With that, I see my time has expired, and I will now
+recognize the gentleman from Wisconsin, my colleague and
+ranking member, Mr. Grothman. You are now recognized for five
+minutes.
+ Mr. Grothman. Can you hear me? Can you hear me?
+ Mr. Lynch. Yes, we can hear you. Go ahead.
+ Mr. Grothman. OK. I think Mr. Mandia mentioned that there
+was a problem in that we don't have enough people going into
+this field. Maybe it was him, maybe it was Mr. Ramakrishna. For
+either one of you, first of all, what type of compensation do
+people, say, right out college make if they go into this sort
+of field? Could you give me an idea? I guess it is maybe an
+unfair question.
+ Mr. Mandia. Yes, I think it was Mr. Smith that commented on
+that, but I would comment. I think everybody is seeking to hire
+more cybersecurity professionals. This is something that you
+don't just walk out of college great at this and proficient at
+this. You do come out of college with some background in it,
+but generally you have to do some on-the-job training as well,
+but right now there is a lot of colleges offering programs.
+There is a lot of infusion of talent into those programs, and I
+know the military is actively recruiting people into the
+cybersecurity space. So, it is something where the ranks are
+starting to grow, but right now the biggest challenge is the 1-
+A enterprises are getting the talent because they can afford it
+and they have the resources for it. And I think there is a
+bigger concern for smaller agencies in the government or for
+small to medium businesses that may not have the mission or the
+money to get the talent.
+ Mr. Grothman. OK. I realize people probably pay all over
+the map and that sort of thing, but give me a general idea, and
+two questions. First of all, a general idea of the compensation
+people make, and second, what type of background you look at. I
+think like a lot of jobs, you are telling me you get hired by
+somebody and then they train you, but if that is the case, what
+type of background do you get out of college? Do you want to be
+a communications major? Do you want to be a physics major? What
+type of thing are you looking for when you hire somebody out of
+college as well?
+ Mr. Mandia. For me and then, you know, I would be
+fascinated with the other witnesses' answers, it is a computer
+science background or just an unbelievable passion and desire
+to be in cybersecurity. It has got to be a fit of desire.
+ Mr. Smith. Yes, I would offer a few thoughts. I mean, No.
+1, if somebody wants to go get trained in cybersecurity, they
+are likely to have a good job for the rest of their life. This
+is an area that is going to continue to grow in importance.
+Second, I would just say, you know, if you look at technology
+jobs, if you certainly look at companies like ours, you know,
+even entry-level positions, you know, have compensation at or
+north of $100,000 per year, and, you know, people make more
+money over time.
+ Third, I do think that there is another important aspect of
+this, which is really thinking about the pipeline even more
+broadly than, say, computer science graduates from four-year
+colleges. At one level, I think there is a huge amount that
+community colleges can do to help accelerate the development of
+the cybersecurity work force. People who might have gotten
+their training in something else, if they want to go back, if
+they want to want to spend, say, a year taking a set of
+cybersecurity-related courses in community colleges, they can
+put themselves on a path to quickly enter this field. And then
+finally, I would say we need to keep investing even before we
+get kids to college.
+ Mr. Grothman. Right.
+ Mr. Smith. I grew up in the district next to yours. I grew
+up in Appleton. You know, as a company, we in Microsoft, you
+know, do work to provide computer science in high schools. We
+do it in, say, the two Oshkosh high schools in your district,
+and what we are finding is that there are young people
+everywhere who want to learn this field. They just don't have
+the opportunity that they need and deserve today. So, I think
+with the right kind of action from the Federal Government,
+state governments, private sector, philanthropy, we can move so
+much faster to create more opportunities for people.
+ Mr. Ramakrishna. And, Congressman Grothman, if I may add, I
+agree with both my colleagues here on all the points that they
+made. There are a lot of free online courses and resources that
+students and kids can essentially access and start becoming
+savvy in these fields. The criticality there is that the
+internet is not accessible to everyone in the country. And to
+the degree that we can do that to ensure that, for instance,
+inner-city kids, economically disadvantaged children have
+access to the internet and we give visibility to them for these
+courses, we will have a larger, more effective, more diverse
+work force. And to your question about what can they get paid,
+I would say with a high school degree and some experience
+learning online and putting it to use, depending on where you
+are in the country because cost of living changes, you can make
+anywhere from $70,000 to $120,000 to begin with.
+ Mr. Grothman. OK. Thank you. Next general question. Well, I
+will switch to another question here. This is for Mr. Mandia.
+ Mr. Lynch. The gentleman's time has expired. I am sorry.
+The chair now recognizes the gentleman from New Jersey, Mr.
+Payne, for five minutes.
+ Mr. Payne. Thank you, Mr. Chairman, and I would like to
+thank the chairs of the whole committees, Chairwoman Maloney
+and Chairman Thompson, for holding this hearing today. Just to
+the point my colleague just before me, to all the witnesses,
+that information that you are talking about, the opportunities
+to enter that field and have people learn online and what have
+you, I think if you could take the time to publicize that more
+somehow across your companies, that would be very helpful
+because there are a lot of times where inner-city youth don't
+know that. But if you were able to publicize it more, they
+would be able to find those opportunities, so I just wanted to
+mention that.
+ The Russian Government has backed, either directly or
+indirectly, election meddling and other malicious cyberactivity
+against our interests for quite some time. During his term,
+former President Trump was reluctant to confront Russia for
+these attacks and failed to publicly condemn multiple instances
+of cyber aggression. It is clear that the former President's
+appeasement of Russian cyberattacks emboldened our adversaries
+and is partly to blame for the SolarWinds breach. The question
+is for all the witnesses. Why is it important that our leaders
+present a strong, united front in containing cyberattacks?
+ Mr. Smith. Well, I will say I think this is like any type
+of offense that the world wants to stop. People will only stop
+if they are held accountable for the violations in which they
+engage. You have got to have clear rules. You have got to have
+clear standards. You have to have clear lines so that it is
+apparent to everybody when somebody steps over the line. And
+then you have to have people, especially people in government,
+who are prepared to speak up and hold others accountable. I
+think the best type of attribution takes place when it is not
+just one government, but even by multiple governments together
+when that is what the situation warrants.
+ We did see that twice in 2017. I think it is right to
+acknowledge that. You know, the White House, together with
+other governments, did that vis-`-vis North Korea in the wake
+of the WannaCry attack. It did it again with Russia in the
+NotPetya attack. But we need this on a consistent basis, and I
+am very hopeful that with leadership that Anne Neuberger is
+bringing to the White House as deputy national security
+advisor, with her press conference last week, with the steps
+she's talking about taking, you will see the kind of leadership
+we need.
+ Mr. Payne. OK. Thank you. Next?
+ Mr. Ramakrishna. I agree with Mr. Smith's comments about
+accountability and rules of engagement. It is important to
+recognize that we do not accept attacks without some form of
+reciprocation, so to speak, and holding people to account.
+ Mr. Payne. Thank you. Next?
+ Mr. Mandia. Yes, and I would just agree with the other
+witnesses. It is about risks and repercussions. It is about
+understanding the rules of the road.
+ Mr. Payne. Thank you. And I guess, Mr. Chair, my time is
+dwindling, so I will yield back.
+ Mr. Lynch. The gentleman yields back. The chair now
+recognizes the gentleman from Texas, Mr. Cloud, for five
+minutes.
+ Mr. Cloud. Thank you, Chairman, and thank you to the
+witnesses for being here. I really appreciate you taking the
+time. I want to especially thank Mr. Ramakrishna for being here
+in light of the context of what we are dealing with. Your
+transparency and involvement in this process, we are very
+grateful for that. I want to ask you, have you provided a list
+of your clients to the committee?
+ Mr. Ramakrishna. Mr. Cloud, thanks for the information.
+Thanks for the question. As it relates to providing names of
+clients, we have not.
+ Mr. Cloud. I serve as ranking member, along with Chair Raja
+Krishnamoorthi, on the Economic and Consumer Policy
+Subcommittee of Oversight. Could you provide a list to our
+committee?
+ Mr. Ramakrishna. Congressman Cloud, I will take that for
+the record and consult with my team to see what is possible to
+disclose at this point in time.
+ Mr. Ramakrishna. As you can understand, we take the privacy
+of our customers very seriously, but I will go back and work
+with my team on it.
+ Mr. Cloud. OK. Thank you. Mr. Mandia, you said December of
+last year that this all began as a dry run in October 2019. You
+also indicated in December of last year and in Tuesday's Senate
+hearing that government agencies sensed something wrong in
+their systems but couldn't really connect the dots until they
+were notified by FireEye of the breach. What would have enabled
+us to connect those dots sooner, and would any of these
+proposals of a centralized agency have assisted with that?
+ Mr. Mandia. You don't know. The bottom line, sir, I just
+felt, as soon as we detected our breach, we were in dialog with
+our government customers, period, first, to tell them about it.
+Regardless of laws and legal liabilities, we told our
+government customers about what we were dealing with. My
+reaction was that I didn't see surprise. Like, people were
+shuffling, thinking, and I think that there are a lot of folks
+who have various products that they had little blips on the
+radar, and we had to connect dots for many different vectors.
+This attack, because of the way it was conducted, is just
+harder to piece together. If you centralize the intel, it can
+only improve the speed at which that picture and vision will
+come together.
+ Mr. Cloud. OK. One of the questions that I have is, you
+know, I wholeheartedly agree we need to invest more in making
+sure that we have the capability to defend and also to build in
+some attack capabilities certainly to respond to situations
+like this, the workflow issue being one of the primary
+indicators, so, you know, making sure students have an interest
+in engagement. But we also know from past experience that our
+universities have been a place where, especially notable actors
+like China, which I realize this is attributed to Russia, at
+least to our understanding at the moment. But how do we ensure,
+of course without creating some sort of discriminatory
+environment, that we won't be training our adversaries in this
+regard, you know, especially for something so critical to our
+national security?
+ Mr. Smith. I guess I would suggest here a few things. I
+mean, one, obviously there is always a role for background
+checks in a wide variety of different situations. Two, I think
+the best way for us as a country to ensure that the people that
+we are training at our universities really support our country
+is to bring to the country people that we want to have stay
+here and to make it easier for them to stay here. Right now,
+unfortunately, it is easy to come study, but it is hard to then
+stay afterwards. So we are, almost by definition, focusing on
+training people that we expect to go back to their home
+country, and I don't think that is the right way to conceive of
+the talent strategy for the country. The last thing I would say
+is, if you want to pinpoint the greatest risks, I probably
+myself would not look to universities.
+ Mr. Cloud. Right. Right.
+ Mr. Smith. You know, most of what happens in universities
+gets published anyway.
+ Mr. Cloud. OK. Well, yes, I appreciate that. Those are some
+good thoughts. One final thing, and you probably would be the
+best to comment on this. In Tuesday's Senate hearing, there was
+a discussion about the difference between compliance and
+excellence, especially in critical areas of our government
+cyber structure, to create some standards that ensure that we
+have a high standard of protection. But doing so in such a way,
+a lot of times when government imposes a regulation or
+mandates, it becomes a check box as opposed to continuing to
+foster this innovative spirit. How do we get that balance
+right?
+ Mr. Ramakrishna. Congressman Cloud, I think I was the one
+that mentioned that distinction. There are a couple of ways we
+can do that. One is, CISA has been mentioned a few times in
+this conversation. We are dedicating resources from our team to
+work directly with CISA on sharing information. So, it is not
+just about threat intelligence, but it is also human resource,
+and human intelligence, and actual experience of building
+software that needs to be shared, such that standards bodies,
+like NIST and CMMC, can actually have examples of correct
+behavior that will put us all on a path of excellence versus
+simply checking boxes on have you done this, have you done that
+kind of question and answer. So, that is really where I was
+coming from where real examples from companies, such as the
+ones here today, can be contributed to those standards bodies
+to enrich them.
+ Mr. Lynch. OK. The gentleman's time has expired.
+ Mr. Cloud. Thank you all.
+ Mr. Lynch. I just want to inform the members that there are
+series of five votes on, so after I recognize the next speaker,
+I will turn the gavel over to the gentlelady from District of
+Columbia, Ms. Norton, to preside while I vote. I now recognize
+the gentleman from Tennessee, Mr. Cooper, for five minutes.
+ Mr. Cooper. Thank you, Mr. Chairman. Can you hear me?
+ Mr. Lynch. I can, yes.
+ Mr. Cooper. The testimony so far strikes me as at least
+fatalistic, if not defeatist, because here we have a number of
+prominent tech companies, and they are really not proposing
+tech solutions. They are proposing human re-engineering. So, it
+is as if they are telling us they really can't sell products
+that are completely safe, so we have to have a rule instead of
+``let the buyer beware.'' And I think that tech companies
+should continue to pursue tech solutions to make us all safer.
+ But another interesting thing in the testimony that has
+been completely unmentioned so far is the fact that there is
+already a hidden, private-sector regulator of cyber intrusion,
+and perhaps it is hidden because it is private sector, and here
+I am thinking of insurance companies that sell errors and
+omissions policies. On page 25 of the stock offering that
+SolarWinds engaged in in 2018, they talk about how they have
+incurred and expect to incur significant expenses to prevent
+security breaches. Then they go on to say, ``Our errors and
+omissions insurance coverage, covering certain security and
+privacy damages and claim expenses, may not be sufficient to
+compensate for all liabilities we incur.''
+ So, I would like to find out from each of the companies
+what claims you have already made to your errors and omissions
+insurance companies, how much they have paid. Have your
+premiums increased or do you expect them to increase, because
+this is the primary way insurance companies regulate behavior,
+by increasing their premiums for riskier companies. And what
+percent of the industry do you think has this sort of coverage
+to essentially inoculate yourselves, but not your customers,
+against these errors and omissions, and what are the names of
+these prominent errors and omissions insurance companies? And
+wouldn't you want to suggest to those companies that they
+perhaps have a more polite name for the coverage, because
+``errors and omissions'' seems kind of disrespectful to their
+customers. So, perhaps we can start with SolarWinds and go to
+FireEye and then to Microsoft.
+ Mr. Ramakrishna. Congressman Cooper, thank you for the
+question. Since my coming on board, we have really focused on
+the investigation and addressing the safety and security of our
+customers through remediation. And to your point about the
+private sector taking on more responsibility for tech-based
+solutions, I could not agree more with you, and that is the
+reason why we came up with the notion of Secure by Design,
+which is completely a technical-based approach to enhancing and
+ensuring the safety and security of our supply chain and that
+of our customers.
+ Now, specific to your question, I do recognize that we have
+insurance. However, I would like to take that question on
+record to give you the specifics, which I don't have handy at
+this point in time.
+ Mr. Cooper. Mr. Mandia?
+ Mr. Mandia. Sir, same answer. I would like to take that
+question on record because I am not prepared to speak to it at
+this point.
+ Mr. Cooper. Mr. Smith?
+ Mr. Smith. I would say two things. First, I don't know
+about the specifics here, but generally as a company, Microsoft
+self-insures. We don't rely on policies from insurance
+companies. But second, more broadly, if we have left you with
+the impression that we are defeatist, then that is the error
+and omission that we should be talking about. We are the
+opposite of defeatist. We are looking at this as an enormously
+challenging and important problem the country needs to address.
+These are major nation-states, but technology is moving
+forward. It is getting better. We are offering technology
+solutions to our customers, not just as a company, but as an
+industry. You are right that ultimately, just like an
+automobile, it takes the driver to choose to put on the safety
+belt, but we are making it easier every year. And I think we
+should be embracing this with an enormous amount of self-
+confidence.
+ Mr. Cooper. Well, instead of two-factor authentication, do
+we need three-factor? What is it going to be? Are we stuck with
+passwords? There has got to be a better way to do this, to
+interface with humans.
+ Mr. Smith. Oh, I completely agree, but it is really a
+combination of steps, and I think that is what your question
+points to. You know, it is really some things as simple as
+putting your authentication into the cloud. You know, a lot of
+what happened here was with customers who did not have it
+there. They hadn't secured their devices with a service like
+Intune that we offer. They were not necessarily using what is
+called ``least privileged access'' so that when one person's
+password was stolen, you know, they were able to access more
+accounts than they should have been able to. A lot of the
+steps, when you really understand them, do rely on common sense
+and vigilance. And I do think it is up to us to continue to
+make that easier for our customers in this country and around
+the world.
+ Ms. Norton. [Presiding.] The gentleman's time has expired.
+Next is Mr. Higgins of Louisiana.
+ Mr. Higgins. Thank you, Madam Chairwoman. It is our
+understanding that Russia is responsible for this cyber
+espionage. They utilized some of our own publicly available
+hosting services to orchestrate these illegal actions. In my
+opinion, all server hosting companies, large and small, share a
+responsibility in vetting their clients, and then also play a
+part in preventing foreign interference in their operations.
+There is no daylight between private operations and government
+operations in the cyber realm. We have to work together to
+secure our systems for the citizens we serve. This was a direct
+attack on our Nation's technology infrastructure on a scale
+never seen before. Eighteen thousand SolarWinds customers
+compromised and many more thousands of systems breached in the
+private and government sectors. Russian cyber espionage gained
+full access across thousands of systems for a number of months.
+I think it is important to note that this is not the first time
+that the U.S. Government and private American cyber systems
+have been subject to major cyber espionage from Russia.
+ Many years ago, two Administrations ago, the Kaspersky
+systems were approved on the GSA catalog. That security system
+was brought into Federal cyberinfrastructure. In 2015, it was
+identified as being used to steal NSA tools. In 2017, it was
+finally banned and removed from the GSA list. There are reports
+as recent as 2019 that Kaspersky software lingers in the
+government system, and beyond that, Kaspersky had a deal with
+Best Buy to preload on every computer they sold. Thus, they
+infiltrated the private systems at the same time. So, I have
+been listening to the testimony and the questions from my
+colleagues. None of us should be surprised about this, and I
+believe we should be more prepared than we are right now.
+ Mr. Thompson, I have a question for you, sir. Is it true
+that you received a 23-page PowerPoint presentation from a
+former SolarWinds security advisor that listed potential
+SolarWinds breach vulnerabilities and suggested improvements
+needed to bolster security? Did you receive that briefing in
+2017? And if you did receive that briefing, what did you do
+about that, good sir?
+ Mr. Thompson. Yes. I believe that we have really taken the
+security of our customers and our products seriously over the
+history of the company. We have got a unique relationship with
+our customers where we are very engaged with the individual
+users of our products. And so this----
+ Mr. Higgins. Pardon me, Mr. Thompson, but that sounds like
+an answer prepared by attorneys. It is a simple question,
+respectfully. Did you receive this major briefing in 2017 that
+I am referring to? Did they recommend changes, and did you
+enact those changes?
+ Mr. Thompson. So, it is my understanding, based on our
+investigation, that there was a briefing provided to some of my
+IT leadership team, and that that briefing was about security
+posture in general and about what the company could do to make
+sure that its security posture was enhanced and to make it a
+leader in security. And, yes, not as a result of that
+presentation, but beginning even before that, we began to
+invest in security and enhancing the posture of our security
+environment. In fact, we spent more than the average technology
+company of our size over the last four years on security. So,
+we have taken security very seriously, but not really as a
+reaction to that presentation because we knew security was
+important before that, and we were focused on it.
+ Mr. Higgins. I appreciate your response. My time is winding
+down. Mr. Smith, can you quickly address the cloud hosting
+systems? It has been reported that threat actors in this breach
+leveraged servers from Amazon Web Services. Can you talk about
+what we can do to protect our cloud systems from further
+espionage efforts?
+ Mr. Smith. Well, I am obviously not in a position to speak
+on behalf of Amazon or AWS. I do think we should take more
+steps. We certainly are always taking more steps in Microsoft
+to ensure that our cloud services, to the extent possible,
+cannot be used by a foreign adversary. I actually think it
+should start with transparency. I am here today. I am answering
+all your questions. Microsoft has published 32 blogs since this
+came to light. Amazon has yet to publish its first. So, I think
+we will all benefit if we create a culture where tech companies
+are sharing more information.
+ Mr. Cooper.[Inaudible] for that point, Mr. Smith. Madam
+Chair, my time has expired. I yield.
+ Ms. Norton. Yes, the gentleman's time has expired. I
+recognize Ms. Clarke of New York. Go ahead, Ms. Clarke.
+ Ms. Clarke. Yes. Thank you very much, Madam Chair. I just
+wanted to, first of all, thank our panelists today for
+appearing before us. I currently serve as the chairwoman of the
+Cybersecurity Subcommittee, and I want to be perfectly clear
+that as a Nation, we cannot let this happen again. SolarWinds
+was but the latest malicious cyber campaign against our
+country, and it will not be the last. We certainly must hold
+the perpetrators of these attacks responsible, but we also must
+bolster our defenses so that they can't succeed in the future.
+So, my question is for Mr. Smith and Mr. Ramakrishna.
+ Earlier this week, you both expressed your support for
+requiring critical infrastructure owners and operators to
+report cybersecurity incidents. Again, as the chairwoman of the
+Cybersecurity Subcommittee, this is something my subcommittee
+has been working on for some time. In fact, the House-passed
+version of the Fiscal Year 2021 NDAA included language that
+would require critical infrastructure entities to report cyber
+incidents to CISA. Unfortunately, that language fell out during
+the conference, but I intend to take a close look at this issue
+again, and I am heartened to see that there is so much momentum
+behind this.
+ As anyone that has been working on this issue for a while
+knows, the devil is in the details. We need to figure out who
+would be subject to reporting requirements and what kind of
+incidents would trigger the requirement report. We also need to
+determine who they are reporting incidents to, whether that is
+CISA, a new agency modeled after the NTSB, or someone else. And
+finally, we need to decide what our ultimate goal is, holding
+companies accountable or are we just trying to get a better
+understanding of why our security controls fail. So, to the two
+gentlemen, can you elaborate on the reasons you believe we need
+a cyber incident reporting requirement and some of the benefits
+you expect to flow from such reporting?
+ Mr. Smith. Well, I would say we really appreciate the
+leadership that you have been bringing to this, and I think you
+provided a checklist of some of the most important questions
+that need to be answered. But to address the one that you posed
+at the end, which perhaps is the most important of all, what
+are we trying to accomplish, I think our top priority is to
+make the country more secure. And the reason that we should
+want companies in the private sector, companies that, as you
+mentioned, are in the area of critical infrastructure, it is to
+provide information about threats so that one entity is in a
+position to scan the entire horizon and connect the dots
+between all of the attacks or hacks that are taking place.
+ I think Kevin Mandia who described it really well earlier--
+you know, you really cannot oftentimes determine exactly what
+is going on until you connect all of those dots, and today,
+this information is in separate silos. So, I would say let's
+solve the problem that needs to be solved, which is the
+cybersecurity protection for the country.
+ Ms. Norton. Mr. Ramakrishna?
+ Mr. Ramakrishna. Congresswoman Clarke, thank you again for
+your leadership and for your question. Having a single entity
+to which all of us can refer to will serve the fundamental
+purpose of building speed and agility in this process. Too much
+time is wasted in communicating across agencies where
+information is very fragmented, and oftentimes the dots are not
+connected because they are separate. That is the fundamental
+reason why I think having a singular agency to which all of us
+can communicate to and have two-way communication with them is
+fundamental to improving our speed and agility around these
+topics.
+ Ms. Clarke. We have a few seconds left, but I would be
+interested in your thoughts on how Congress should scope this
+new reporting requirement. Who should it be subject to, who
+should be required to report, and who within the Federal
+Government is best positioned to receive and make use of such
+reports?
+ Mr. Ramakrishna. Congresswoman Clarke, you mentioned CISA a
+few times. We have been engaged with CISA and other government
+agencies. We are also offering our human resources to work with
+CISA as well. That could be an initial starting point, and
+obviously you are more qualified to decide if that is the
+established entity to take this on and going public. So, our
+belief is all private enterprises should be instructed with
+reporting requirements and be made part of this community
+vision where public and private sectors can work together to
+tackle this issue.
+ Ms. Norton. The gentlewoman's time has expired.
+ Ms. Clarke. Very well. I have run out of time. I yield
+back. I look forward to our conversation as we continue to
+address this issue. Madam Chairwoman, I yield back.
+ Ms. Norton. I thank the gentlelady from New York, and I
+call on Mr. Norman of South Carolina.
+ Mr. Norman. Thank you. Two of the most, I guess, disturbing
+things that I have heard this morning during this testimony is,
+one, that it took nine months, that the Russians or whoever was
+involved had access to our most valuable intelligence. And I
+agree with Congressman Lynch: our next hearing ought to be with
+those that can answer the questions, what has been compromised,
+because national security is at risk. The other thing that
+really has shocked me is, Mr. Smith, your testimony that,
+really, we are at a shortage of cyber experts to connect the
+dots. I guess my question, we can't wait to train somebody out
+of high school, college, junior college. What group can we go
+to? Is it those that have been successful at breaking the
+system and are incarcerated, that are street smart, I guess, to
+know how to get to making sure this doesn't happen again? Your
+thoughts.
+ Mr. Smith. Well, I think it is a key question, and I would
+point to two things that I think we can do to move faster as a
+country. No. 1, really harness the power of our community
+colleges. We don't need to send somebody back for four years of
+education. You know, there is a set of eight or ten courses
+that an individual can take over, say, a year or a bit more if
+they want to go full time, or they can, you know, take some
+courses while they are holding a full-time job. And I think
+that is probably the fastest way for us to expand the
+cybersecurity work force.
+ I think the second thing is really for us in the tech
+sector ourselves. You know, we are doing more, we are investing
+more, but I think we can and should do more, and, you know,
+that is a good point of learning for somebody like me and for a
+company like Microsoft. You know, we have LinkedIn. That is
+part of Microsoft. And so, you know, it is an opportunity for
+us to harness the power of, say, LinkedIn Learning and the
+connections not just with community colleges, but with
+employers. We are also focused on, you know, how we can add
+cybersecurity curriculum to, you know, the training programs of
+employers of all sizes so that if there is somebody who needs
+to learn, you know, six extra things, they don't need to go
+back to school. They don't even need to take a course to do it.
+We can take the training to where they are, and we can build it
+into their workflow on the job. That is something that we are
+using our own technology to do.
+ So, I think this is a lot like anything. Once you
+understand the importance of the problem, you can really
+harness all of the available resources to address it. And I
+think it is right that we make this one of the priorities that
+comes out of this.
+ Mr. Norman. So, as a Member of Congress, what should we do
+to get the Amazons on board? You know, you are one company. You
+are a big company in Microsoft. But what can we do to get
+private sector, the other large companies that, you know,
+basically have monopolies, how do we get them activated, or
+what is your advice to us?
+ Mr. Smith. Well, look, I am not the best person to give you
+advice on how to get Amazon to do something. There will be
+others who will be more insightful than me. What I would say is
+if I were in your shoes and I really wanted to have the
+broadest impact as quickly as possible, you know, I would look
+at opportunities to provide, you know, incentives for
+individuals who want to go study at community colleges so they
+can do so. And I would look at, say, tax credits for smaller
+businesses so that if they want to invest in the training of
+their people, they can do that as well, so that you would
+target, you know, the limited budget, the limited taxpayer
+dollars to the places where they would have the greatest impact
+in the shortest possible time.
+ Mr. Norman. Well, that is just what we need to hear, and a
+lot of times in politics, we don't know what we don't know. We
+are going to have to depend on y'all to give us a roadmap on
+how we can do it. We simply cannot take another nine months to
+let countries that don't have our best interests at heart
+damage us, and I would be interested in anybody else, any other
+comments any of the other panelists have, I would be interested
+in.
+ Mr. Ramakrishna. Congressman Norman, if I may suggest one
+area where the Congress may be able to help us also is by
+encouraging us and incentivizing us to come forward with more
+of these intelligence aspects and share them more broadly. In
+addition to litigation risk, some of us may be worried about
+reputational risk that it causes where the victim is victimized
+for coming forward, and those should stop so that we can all
+come together and really build our efforts to thwart these
+major issues going forward.
+ Ms. Norton. The gentleman's time has expired. I will call
+on Mr. Connolly of Virginia next.
+ [No response.]
+ Ms. Norton. Is Mr. Connolly there?
+ [No response.]
+ Ms. Norton. If Mr. Connolly isn't there, I am looking for
+the next Democrat. Please give me the name of the next
+Democrat. I think you are the next Democrat, sir.
+ Mr. Krishnamoorthi. Were you talking to me, Chairwoman?
+ Ms. Norton. Yes. Yes.
+ Mr. Krishnamoorthi. OK.
+ Ms. Norton. I am moving to you, yes.
+ Mr. Krishnamoorthi. OK. OK. Very good. Thank you so much
+for all of you testifying today, and thank you for your
+transparency and for giving us some very insightful
+information. So, my first question is to Mr. Smith. Mr. Smith,
+you gave an interview with ``60 Minutes'' recently, and in that
+interview, you said that essentially the supply chain tech
+attack was ongoing currently. One question I have right out of
+the box is, are you aware of whether that malware and that
+attack is potentially present on computers in the U.S. House of
+Representatives?
+ Mr. Smith. We are not aware of this being focused on the
+U.S. House of Representatives, so no. The answer is, no, I am
+not aware of that.
+ Mr. Krishnamoorthi. How about the U.S. Senate?
+ Mr. Smith. I am not aware of any use of this tactic on the
+U.S. Senate either. We have seen cyberattacks, you know, in the
+past on members of the House and members of the Senate, and
+whenever we have detected them, we have let either the
+Sergeant-at-Arms or the Speaker or members know.
+ Mr. Krishnamoorthi. Sorry. My time is limited, Mr. Smith,
+so I am just to ask you to respond briefly.
+ Mr. Smith. OK.
+ Mr. Krishnamoorthi. How about the Office of the President?
+ Mr. Smith. I am not aware of any attack using this vector
+on the Office of the President.
+ Mr. Krishnamoorthi. Now, in that ``60 Minutes'' interview,
+you also mentioned that perhaps the only way--because you have
+to understand this. The way I kind of picture this is that it
+is almost like the burglar is in the home while we are all
+here. And one of the things that you said that really struck me
+in your ``60 Minutes'' interview is that you said that perhaps
+the only way to make sure that we get rid of this attack or
+this intruder is to ``rip and replace every single piece of
+network equipment and computer that may have been affected.''
+Do you still stand by that quote that you gave to ``60
+Minutes''?
+ Mr. Smith. Yes, I don't believe that I am the one who said
+that. If I did, I referred to the thought that some have that
+that may need to be done. I don't----
+ Mr. Krishnamoorthi. OK. Let me stop you there for a second.
+Have you done an assessment of what that might require?
+Because, at the end of the day, we need a foolproof way to
+eject the intruder from our homes. We cannot be in a situation
+where the intruder has carte blanche espionage capability on
+us. So, talk to me a little bit about that. What type of, you
+know, effort would be required if we were to undertake that?
+ Mr. Smith. Well, we have not been asked to do it. To the
+best of my knowledge, we have not undertaken an analysis of
+what it would take to rip and replace all of the, say,
+technology infrastructure of a particular agency or part of
+government. It is actually not what I believe needs to be done.
+I think that efforts are better focused on other approaches.
+ Mr. Krishnamoorthi. Well, here's my concern, which is, what
+is the foolproof way to get rid of the intruder from our
+collective home at this point, because we are tired of hearing
+that the intruder is here. We have no idea what that person,
+that intruder is doing, but we should just kind of move on to
+the next subject. We need to eject the intruder from our
+computers right now, whether it is in the private sector or in
+the public sector. So, what is the foolproof way that would
+come short of ripping and replacing all this network
+infrastructure?
+ Mr. Smith. Well, I would say two things. No. 1, one always
+needs to identify how someone got in or is getting in in order
+to get them back out. So, you know, that is in the realm of the
+kind of cybersecurity sort of forensic investigation that, you
+know, a company like Microsoft can help with, a company like
+FireEye does, you know, every day. You know, among the best, we
+are the best in the world. That is one part. The second thing
+is, there are five really straightforward cybersecurity steps
+that we believe, put together, will strengthen protection
+across the board: move authentication into the cloud, secure
+each of your devices, ensure that you are using anti-malware
+software across the board, use multi-factor authentication,
+apply privileged access. If you do those five things following
+a review by a company like FireEye, you should be in a much,
+much stronger position.
+ Mr. Krishnamoorthi. I guess my final question is to Mr.
+Ramakrishna. You know, you are the new CEO and you are coming
+into a pretty bad situation. The NSA is not allowed to surveil
+private networks. It is only allowed to surveil foreign
+networks. Is the FBI and current agencies capable of doing what
+is necessary to surveil private sector networks in the U.S.?
+ Mr. Ramakrishna. Congressman Krishnamoorthi, I wish I were
+an expert in being able to give you a yes or no answer on that,
+but I am not particularly qualified to address that. Does some
+level of surveillance and sharing of information between
+private and public sector need to happen at a level that is not
+happening today? My belief is absolutely yes, but with regards
+to surveillance, I am not the expert to address it.
+ Mr. Krishnamoorthi. Fair enough. Thank you.
+ Ms. Norton. I thank the gentleman for his questions. His
+time has expired, and I call on Mr. Biggs of Arizona next.
+ Ms. Biggs. Thank you, Madam Chair. Because of the scope of
+this attack, I am concerned. It looks like it may take years
+before we fully understand its impact. Mr. Smith, my first
+question is for you. How likely is it that these attacks are
+continued, and, if so, how can we best determine who is still
+being attacked?
+ Mr. Smith. Well, the first thing I would say is this
+agency's attacks or hacks did not start with the use of
+SolarWinds software, and it did not and will not end there. I
+think we should assume that this is an agency, and this is one
+of a relatively small number of very well-resourced governments
+that are focused on these kinds of threats against the country
+every single day, and they will be for the rest of our lives.
+And so I think what we need to do is just continue to
+strengthen the cybersecurity defense of the country, and we
+need, in part, to couple that with the better sharing of threat
+intelligence so that we are better able to spot the attacks or
+hacks as early as possible after they begin.
+ Ms. Biggs. So, one of the concerns I have is that Congress
+is going to say, well, let's just create another layer of
+bureaucracy in there and then call it good. We will have done
+something until the next time we have an episode like this that
+we need to deal with. And I am wondering, and I will just turn
+to all the panelists, real briefly if you would. Would you tell
+us whether you see the solutions to prevent future attacks
+coming from government, or are they going to come from the
+private sector? So, let's start with Mr. Smith and then just
+move on down the panel.
+ Mr. Smith. Well, I think we each need to play our role and
+do it well. I think that the public sector, the government has
+a unique role to play in establishing rules of the road, strong
+laws and holding foreign governments accountable. I think the
+government has a unique role to play, both in and securing the
+government's own infrastructure and in collecting threat
+intelligence in a centralized way and putting it to good use. I
+think those of us in the private sector have an enormous role
+as well. We need to continue to strengthen the technology. We
+need to continue to make it easier for people to use the
+technology. We need to share the information we have, something
+that is not yet happening nearly to the extent that it needs to
+happen across the tech sector.
+ Ms. Biggs. Thank you. Mr. Ramakrishna, if you would go next
+please.
+ Mr. Ramakrishna. Congressman Biggs, I agree with my
+colleague, Brad Smith's, comments here and the work that he,
+and Kevin Mandia, and our colleagues at CrowdStrike and others
+are doing. As it relates to your question, the picture I would
+like to paint is, we are dealing with intruders, not an
+intruder, in this case. They behave like Transformer toys in
+many ways where they are constantly morphing and changing their
+tactics and procedures on us. So, to that end, we have to be
+nimble as well in working between the private and public
+sectors, and shaping our policies and shaping our information
+practices to adapt to this changing set of intruders and go on
+the offensive.
+ Ms. Biggs. Thank you. Mr. Mandia?
+ Mr. Mandia. Yes, I agree with both witnesses, both Sudhakar
+and Brad, on this one. It comes down to the government exists
+to have a proportional response and deterrence. The private
+sector will most likely be building the technology to safeguard
+in cyberspace working with the government, and you meet in the
+middle with the threat intelligence sharing.
+ Ms. Biggs. So, all of you at one point, either in answering
+this question or other times today, have talked about
+information sharing. I just want to know, are there any legal
+or regulatory barriers to information sharing that you see that
+currently exists? Back to you, Mr. Smith.
+ Mr. Smith. Well, I would say there are two barriers today.
+The first is, it is not always entirely clear to whom we should
+be sharing the information or sharing it with. But then second
+is, the one thing that we have noticed that we have mentioned
+publicly that is a legal barrier, is today, it is a fairly
+standard aspect of Federal contracting practices that agencies
+restrict a company, like Microsoft, from sharing with others in
+the Federal Government when a particular agency has been hacked
+in this way. So, one of the specific things that we had to do
+in December was go to each agency, tell them that we had
+identified that they were a victim of this. And then we had to
+say, you need to go over to this person in this other part of
+the government to let them know. Please do that. We cannot do
+that for you. And the good news is that people did that. They
+did it quickly. But I think it is a barrier that is an
+impediment.
+ Ms. Biggs. In what little time I have left, I would urge
+the chairs of these two committees to take us into a classified
+hearing because I think there are some things, like, I would
+like to know, how do we know it was Russia. I would like to
+know what China's involvement was. A classified hearing would
+allow us to get more of that information, and I would look
+forward to that. And I thank all the panelists, I thank the
+chair, and I yield back.
+ Ms. Norton. Well, that, I think, is certainly an idea. The
+gentleman's time has now expired, and I call on Mrs. Watson
+Coleman of New Jersey now. Mrs. Watson Coleman, you are
+recognized for five minutes.
+ [No response.]
+ Ms. Norton. Mrs. Watson Coleman appears to have stepped
+out. Mrs. Demings of Florida, you are recognized for five
+minutes.
+ Mrs. Demings. Thank you so much, Madam Chair, and thank you
+so much to those who are with us today. It has been a very good
+discussion. As I listened to the line of questioning from Mr.
+McCaul from Texas, those were particularly some areas that I
+certainly was interested in. I believe during that line of
+questioning, there was an indication that the malware was
+hiding in plain sight, and I've also heard that in order to
+keep up, that we have to constantly change and adapt and
+improve, I guess, our capabilities. What I am particularly
+interested in is a better understanding of how the transition
+to iCloud services, like Microsoft, affects a customer's
+visibility related to network activity. Although the cloud
+environment was not the initial entry point for malicious
+actors in this campaign, it is where they were able to access
+data and proliferate through iCloud assets undetected for the
+better part of the year.
+ So, Mr. Smith, have any of Microsoft's cloud customers
+informed Microsoft that their cloud environment was accessed as
+part of this campaign, or has Microsoft had to inform its
+customers?
+ Mr. Smith. Yes, it is an excellent question. The first
+thing I would say is the right way to think about what happened
+here is that each and every one of these attacks, hacks, that
+we have seen happened on premise, meaning it was on a server,
+say, that was in the server room or onsite. Now, once the
+attacker was in the network, one of the things it did was it
+looked for the keys or the passwords to get into cloud
+services, like email or documents, or other things. Once they
+did that, then they were able to go up into the cloud and
+access those kinds of cloud services.
+ Once they did that, we were able to see them because we
+scan the services that we run every day with a specific eye
+toward some particular threats. We have a Threat Intelligence
+Center that does that. So, in each of the 60 instances where
+there were Microsoft customers that were victims, we identified
+that they were the victim and we notified them. We have a team
+called the Detection and Response Team, DART. It is their
+mission to every day take this kind of information and let
+customers know if they are being victimized in this way. And,
+yes, it is one thing that we do. I think it is something that
+the tech sector more broadly needs to do.
+ Mrs. Demings. OK. Thank you so very much for that. And for
+my kind of breaking it down as a former law enforcement
+officer, I kind of liken what you just said as to a burglar
+going around trying the doors. You are looking for that
+unlocked door or the key, and then they are able to access, as
+you just indicated. Can a cloud customer identify unauthorized
+access to their Office 365 accounts with their own logs? Can
+they do it themselves, the customers?
+ Mr. Smith. I think the short answer is, yes, they can do it
+in a variety of ways. They can do it either by themselves or,
+you know, some customers may want to rely on the help of a
+third-party service provider, a cloud service provider and the
+like, you know, that is working with them. So, yes, they don't
+need to rely exclusively on the infrastructure or, you know, a
+company like Microsoft to do that, but it is an added service
+that we do provide both in terms of detection and letting
+people know.
+ And then I will also say we also try to offer advice. In
+some ways, what happened here was, you know, for example, it is
+like leaving your keys on the kitchen table, and when you do
+that, somebody can go steal your car, you know. The cloud may
+be, in this case, you know, your email that they access.
+ Mrs. Demings. Right. And, you know, Mr. Smith, what bothers
+me so much about that is we are talking about nine governmental
+agencies, right?
+ Mr. Smith. Well, that is why we say don't leave your keys
+on the kitchen table.
+ Mrs. Demings. Yes. Yes. Yes.
+ Mr. Smith. We give people advice and secure ways to store
+their keys.
+ Mrs. Demings. What steps have been taken, finally? I have
+14 seconds. What steps have been taken or discussions that have
+taken place to really review the cloud environment logs and
+prepare for the next breach?
+ Mr. Smith. Well, I think that work is ongoing. Any time
+something like this happens, it should cause all of us to step
+back and say what have we learned and how can we get better
+because we continually must. We are definitely working through
+an effort like that here at Microsoft, and, yes, I would hope
+it is taking place at other companies in the cloud services
+business as well.
+ Mrs. Demings. Mr. Smith, and to all of our witnesses----
+ Ms. Norton. The gentlelady's time has expired. The
+gentlelady's time has expired. I call on for five minutes Mr.
+Van Drew of New Jersey.
+ Mr. Van Drew. Thank you, and I want to thank the chairs and
+ranking members for doing this. This is good work. You know,
+America is under constant attack from adversaries looking to
+damage our businesses, our hospitals, our municipalities, and
+critical infrastructure using cyber warfare. Like the witnesses
+have already stated, we face serious threats from Iran, China,
+Russia, North Korea, and other bad actors in the global
+landscape. The SolarWinds campaign was a devastating attack
+that showed how vulnerable we are to those types of attacks.
+The integrity of our critical infrastructure is not as robust
+as we thought it was.
+ The Federal Government needs to do better and so does the
+tech industry. With close to 80 percent of Fortune 500
+companies utilizing SolarWinds technology, there needs to be
+collaboration obviously between public and private entities to
+protect America. We owe it to our constituents, our
+municipalities, and our country to ensure that we are
+adequately prepared for these harmful actions.
+ In my district, two years ago, the Atlantic County
+Utilities Authority, located in Egg Harbor Township, New
+Jersey, was the victim of a cyberattack. The Utilities
+Authority reported an incident in which perpetrators gained
+unauthorized access to sensitive data of customers.
+Additionally, operational information was withheld as the
+criminals demanded ransom. Fortunately, the overall function of
+the Authority was minimally impacted, but the fallout could
+have been far, far worse. I applaud the previous
+Administration's efforts to increase our Nation's cyber
+defenses and improve gaps in our framework, and I implore the
+Biden Administration to take this issue seriously and
+prioritize the safety and well-being of Americans.
+ For Mr. Smith, in your written testimony, you discuss
+Microsoft's relationship with other technology companies and
+their role in Microsoft's response to the attacks. How is
+Microsoft's relationship with the Cybersecurity and
+Infrastructure Security Agency, CISA, and do you feel we are
+safe from future cyberattacks of this nature?
+ Mr. Smith. Well, I think it is an excellent question. We
+feel very good about the progress that CISA has been making. It
+is a young agency. It has moved far, and it has moved fast. It
+is going to need, I think, to move farther and faster in the
+future, and that will require additional resources as we
+continue to build the role of CISA in protecting the country. I
+also think it is just worth noting, your examples, I thought,
+were so important because so often we see two things. We see
+the most sophisticated cyberattacks begin with nation-states,
+and then we see their tactics copied by cybercriminal
+organizations, and then they go to the weakest point. And the
+kind of ransomware attacks that you have experienced in your
+district, they were experienced in Baltimore, in New Orleans,
+by hospitals across the country.
+ And if there is one thing I consistently find today, it is
+that many of the public sector computers and information
+systems software, especially at the state and local level, are
+not as modern as they should be. Just to give you one example,
+one department of health at the state level that we are working
+with on the distribution of vaccines, we went to help them
+strengthen their work. And when our consultants looked at the
+manual for the software program they were using, it was for a
+company that Microsoft acquired more than 20 years ago, so the
+software was more than two decades old. So, part of what I
+think we need to do is strengthen CISA, but I think part of
+what we need to do is really, across the country at the state
+and local level, embrace the modernization of our IT
+infrastructure, and, in so doing, embrace the modernization of
+our cybersecurity protection.
+ Mr. Van Drew. So, thank you for a very good answer. Do you
+know what they are doing with localities? Are they specifically
+working? Like, I know, for example, in our utility, there was
+ransom, the ransom was paid, it went through insurance, and
+then they still didn't have a key to get them out. They
+actually had to figure it out on their own.
+ Mr. Smith. Yes. No, that is often a problem. We oftentimes
+work with hospitals and municipalities that have been the
+victims of these kinds of ransomware attacks. There are times
+when consultants like ours can go in and solve the problem, and
+there are times when it is not possible because of the
+effectiveness of the attack. I do think CISA does an important
+job in providing advice, but this also comes down to really
+state and local government budgeting for modernization, and, I
+would say, decisionmaking so that you integrate the decisions
+of the IT team with the needs of, say, in vaccines, the
+epidemiologist, for example, that need the technology to help
+them do their jobs. You know, we need to just think anew about
+how we manage technology across the public sector.
+ Mr. Van Drew. Real quick. Are we going in the right
+direction?
+ Mr. Smith. We are going in the right direction. We need to
+move much faster.
+ Mr. Krishnamoorthi.[Presiding.] Thank you, Mr. Van Drew. I
+would like to now recognize the distinguished gentleman from
+Virginia, Mr. Gerry Connolly.
+ Mr. Connolly. Thank you, Mr. Chairman. Can I be heard?
+ Mr. Krishnamoorthi. Yes.
+ Mr. Connolly. Thank you. I want to talk about threat
+hunting and cyberdefense, and I am going to ask all the
+witnesses when I pose a question to be as succinct as you can
+because I have a lot of them. Last month, Mr. Ramakrishna
+announced SolarWinds intends to increase threat hunting
+capabilities to bolster the company's security. Mr. Thompson,
+did SolarWinds routinely employ threat hunting before the
+discovery of the attack in December?
+ Mr. Thompson. We had a number of security defenses at the
+company before the discovery of the SUNBURST malicious code.
+So, we leveraged a lot of the technologies that other companies
+leverage, and I think that we were doing more than the average
+software company to protect our environment.
+ Mr. Connolly. The question was threat hunting capabilities
+specifically.
+ Mr. Thompson. And I don't recall whether we were doing
+threat hunting specifically.
+ Mr. Connolly. Mr. Smith, Microsoft provides threat hunting
+as part of its cybersecurity services. Why did Microsoft's
+threat hunters fail to discover the SolarWinds compromise?
+ Mr. Smith. We do have a large number of threat hunters. I
+would say we did not detect this intrusion as quickly as we
+might because, first, it was very limited on Microsoft's own
+network, and second, until we heard from someone else, like
+FireEye, you know, we didn't have the specific threat to hunt
+for. You know, it is definitely a capability that we are
+continuing to invest in to expand at Microsoft.
+ Mr. Connolly. Has Microsoft learned any lessons from its
+investigation of the compromise that could improve hunting for
+this type of threat in the future?
+ Mr. Smith. Absolutely. I mean, I think whenever something
+like this happens, we need to learn a lot, and you need to take
+a little bit of time and let the dust settle. You know, there
+is the kind of threat hunting that needs to take place every
+day, and that includes the work of our Threat Intelligence
+Center to scan the horizon. I think one of the things that we
+learned is when you have an adversary that is this focused,
+this determined, and this well-resourced, there will be major
+cyber incidents that require you to expand overnight the number
+of individuals who are engaged on response or threat hunting.
+ We did that in this instance. We expanded to more than 500
+engineers who were pretty much on this 24 by 7, but we are
+asking ourselves how we build the capability in the future to
+grow to even a larger number if that is what we need to do.
+ Mr. Connolly. OK. I am sorry. I am going to run out of
+time, but let me ask one more question in this series. How can
+the government support private companies that have been engaged
+to threat hunt on Federal networks?
+ Mr. Smith. Well, I think the single most important thing
+the government can do is create a centralized point of intake
+so the threat intelligence, the information that is found from
+threat hunting, can go to a central place, but there is a
+second step that is needed as well. The government then needs
+to decide when and how to share information it is finding back
+with companies, like FireEye or Microsoft, so that we can act
+using that information in an appropriate way.
+ Mr. Connolly. The National Defense Authorization Act
+provided cybersecurity agencies with increased authorities to
+do threat hunting across the Federal civilian networks. Do you
+believe those provisions in the National Defense Authorization
+Act would do what you just suggested?
+ Mr. Smith. I think the NDAA that was just passed goes far
+in adding additional tools and layers of protection. I think
+there is more that we need to do to add to what was passed last
+year. In this area of, you know, information about threat
+intelligence, I think, you know, this is a specific topic that
+it is good we are talking about here. I think it is an area
+where additional legislation would be helpful.
+ Mr. Connolly. Mr. Ramakrishna, you indicated, in response
+to Mr. Langevin, three theories you have about the attack, but
+the third one intrigued me, that you were a victim of supply
+chain attack. What is the evidence to support that?
+ Mr. Ramakrishna. Congressman Connolly, my point on the
+third hypothesis that we laid out was a potential vulnerability
+in a third-party software that we are deploying at our company.
+So, I wasn't referring to necessarily a supply chain attack on
+a third party as much as a vulnerability that we are yet to
+discover.
+ Mr. Connolly. And my final question is to Mr. Mandia. Based
+on your experience in the Air Force and the Pentagon, what are
+the limitations from your perspective about threat hunting when
+used by the Federal Government, and then I will yield back, Mr.
+Chairman.
+ Mr. Mandia. First, I think threat hunting is something that
+is probably a decade old. Not every company does it. We are
+talking about an attack that impacted 17,000-plus
+organizations, and nobody detected it until we reversed the
+whole thing. So, you are going to see threat hunting gain in
+popularity, but it is a high-skill-set thing. Government
+agencies that we have worked with are well trained, can conduct
+threat hunting, and I think it is all about authority. Do they
+have the authority to do it or not?
+ Mr. Connolly. Does the NDAA give broader authority?
+ Mr. Mandia. I am not prepared today to speak to that. I
+haven't read the whole document.
+ Mr. Connolly. Maybe you could get back to us with that for
+the record.
+ Mr. Krishnamoorthi. The gentleman's time has expired.
+ Mr. Connolly. Thank you, Mr. Chairman. I yield back.
+ Mr. Krishnamoorthi. Thank you, Mr. Connolly. Now I would
+like to recognize Mr. LaTurner from Kansas. Mr. LaTurner, you
+are on the clock.
+ Mr. LaTurner. Thank you. My question is for Mr. Smith, and
+I would like to discuss cyber deterrence as it relates to the
+private sector. This is a discussion that you had some on
+Tuesday, but I want to talk about the frustration that does or
+does not exist in the private sector that the U.S. Government
+just isn't doing enough to deter these attacks. Could you speak
+to that?
+ Mr. Smith. I think that there is a need for additional
+deterrence or accountability measures, and I think it probably
+needs to fall into three categories. First, in certain areas,
+there is an opportunity to strengthen the rules of the road
+and, in particular, with respect to three issues: something
+that puts this kind of software supply chain or hardware supply
+chain disruption off limits, especially for these kinds of
+disproportionate and indiscriminate attacks; second, something
+should put attacks on hospitals and the public health service
+off limits; and third, it should put attacks on the electoral
+system off limits. That is step one.
+ Step two, I think we then need a consistent government
+policy that says that when these lines are crossed, the
+government, whenever it finds sufficient information, is going
+to have public attribution, and that public attribution, where
+possible, should be with our allies as well so it has
+multinational effect. And third, the government needs a set of
+tools so that there are consequences for when these lines are
+crossed.
+ Attribution is the first step, but there may be instances
+where there are sanctions. There may be instances where there
+are other steps. I think this is fundamentally a question for
+the government itself, but it is like anything. If you catch
+somebody who is engaged in an offense, you need to hold them
+accountable, and you need a variety of ways to do that.
+ Mr. LaTurner. I appreciate that, and I want to talk about
+information sharing and how that can enhance the ability to
+address some of these threats. And specifically, does Microsoft
+contracts prevent you from sharing threat intelligence with the
+government? What kind of restrictions does that put on you?
+ Mr. Smith. Well, the government's contracts impose
+restrictions on Microsoft and other government contractors in
+this kind of situation. So, that was the specific limitation
+that we encountered when we wanted to notify different parts of
+the U.S. Government of what we were seeing. And we found that
+we could only inform the agency that was the victim itself, and
+we had to ask them to go talk to another person, or individual,
+or part of the government, which they did. But it struck us as
+a barrier that is not serving the government itself very well.
+ Mr. LaTurner. But no issues with private sector contracts.
+Is that what you are saying?
+ Mr. Smith. No. I mean, it is very interesting to me how
+varied the practice is across the tech sector. At Microsoft,
+when we see one of our customers that are attacked, I think it
+is our first responsibility to let the customer know. We have
+done this more than 13,000 times in the last two-and-a-half
+years with nation-state attacks, and yet there are other
+companies that, to the best of my knowledge, have not even
+alerted their customers or others that they were a victim of
+the SolarWinds-based attack. These are companies where their
+own infrastructure was used to launch the attack, and somehow
+they don't think it is part of their responsibility to let
+these victims know that they are victims. And that needs to
+change, and it needs to start in the tech sector. I think we
+need to come to terms with this.
+ Mr. LaTurner. Thank you for your testimony today. Mr.
+Chairman, I yield back.
+ Mr. Krishnamoorthi. Thank you very much, Mr. LaTurner.
+Congresswoman Kelly?
+ [No response.]
+ Mr. Krishnamoorthi. Congresswoman Kelly?
+ [No response.]
+ Mr. Krishnamoorthi. Congresswoman Kelly, can you hear me?
+ [No response.]
+ Mr. Krishnamoorthi. Robin? She just responded.
+Congresswoman Kelly, you are recognized for five minutes.
+ Ms. Kelly. Oh my goodness. I can't believe it. OK. Let me
+get the thing up. Thank you so much, Mr. Chair, and thank you
+to the witnesses. Can you hear me?
+ Mr. Krishnamoorthi. Yes.
+ Ms. Kelly. OK. The SolarWinds hack reflects a disturbing
+new paradox for the security of U.S. computer and information
+technology systems. Regular software updates and patches are
+often critical for correcting known vulnerabilities and
+preventing cyberattacks. Many of my colleagues will recall the
+March 2017 Equifax data breach that resulted in the loss of
+massive amounts of personal and sensitive data. In that case,
+the hackers exploited a widely known vulnerability that should
+have been patched several months earlier. Mr. Mandia, can you
+tell us why regular software updates and patching is important
+for protecting an individual or a business's systems and
+networks?
+ Mr. Mandia. Absolutely. When you are patching, what you are
+trying to do is close the window of vulnerability, period. You
+know, software, there is always first-to-market versus secure-
+to-market, and a lot of times it is hard to find security
+imperfections in software ahead of time because it is hard to
+predict the thousands of different ways people may use your
+software. So, I have heard people say building software is like
+building a bridge. It is not. Bridges follow the laws of
+physics. Software does not. But the bottom line is this: there
+is always a gap between what attackers can do and the
+capability and the safeguards that we have. When you get a
+patch, the faster you patch it, you are reducing your window of
+vulnerability.
+ Ms. Kelly. Thank you. In the case of SolarWinds, a software
+update itself, a trojan horse, ended up installing malware on
+the victims' computer networks. I am concerned that at a time
+when regular software updates are as important as ever, the
+SolarWinds attack might deter individual customers and systems
+administrators alike from installing needed software updates.
+Mr. Mandia, what would you say to customers or systems
+administrators who may be concerned or reluctant to download
+updates or patches for software for fear that updates might
+contain malware?
+ Mr. Mandia. Well, I can tell you even in the SolarWinds
+breach, we have to remember the funnel. Over 17,000 companies
+were stage 1 victims, but the attacker only accessed 100. This
+was a manual attack, not an automated virus. There is a human
+on a keyboard. This is a threat group that doesn't target
+everybody all the time, so the risk is far less based on the
+constraints that the hacker had or the attack group had based
+on manual labor. The bottom line is everybody is now
+recognizing the rules of the road are that foreign intelligence
+services are hacking the supply chain, and everybody is
+wondering is there another implant in some other software. So,
+I think that there is going to be more inspection, where the
+capability to inspect exists, for all updates on a go-forward
+basis, and the industry is going to change both how software is
+created and how software is vetted.
+ Ms. Kelly. Thank you so much. Mr. Ramakrishna, SolarWinds
+has reported that the company has 33,000 Orion users. You later
+identified that 18,000 had downloaded an effective version of
+Orion during a three-month period. My question is, customers
+have to manually download updates from you, correct?
+ Mr. Ramakrishna. Congressman Kelly, that is true, yes.
+ Ms. Kelly. This would suggest that just over half of your
+customers downloaded an update during three months, to say
+nothing of whether or not they actually installed it, correct?
+ Mr. Ramakrishna. That is correct.
+ Ms. Kelly. And then at the same time, the customers that
+did download the update exposed their systems to this malware.
+ Mr. Ramakrishna. That is a potential, yes, Congresswoman.
+As Mr. Mandia described it, once the patch with the affected
+code is installed at a customer site, in certain installations,
+not everywhere, not in every place, they try to connect back to
+essentially their home server to see if they can actually get
+connectivity and then potentially start doing some things
+manually to break through the defenses once they have gotten
+in, which is----
+ Ms. Kelly. OK. I got you. Mr. Smith, let me turn to you
+quickly. Does it concern you that users may think twice about
+downloading an update, and can you explain?
+ Mr. Smith. I think it should concern us all. I think Kevin
+Mandia put it well. I mean, I do think that this will
+strengthen the process that is used to build and vet software,
+but I would still say the message to the consumers of America
+should be clear: you are far safer if you update your software.
+It is a little bit like thinking----
+ Ms. Kelly. And what----
+ Mr. Smith. Well, one seat belt may have a defect, but you
+should still put on your seatbelt. You are going to be far
+safer every day if you update your software.
+ Ms. Kelly. Thank you so much, and thank you to all the
+witnesses. And I yield back the balance of my time.
+ Mr. Krishnamoorthi. Thank you, Congresswoman Kelly. Next, I
+would like to recognize the gentlelady from Tennessee,
+Congresswoman Harshbarger. You are on the clock.
+ Mrs. Harshbarger. Thank you, Mr. Chairman. I guess I just
+have a statement first, and then I will go into a question.
+Since we don't know how the malicious code was inserted into
+the software updates, which is unbelievable, and several of you
+have said that the U.S. Government needs a national strategy to
+strengthen how we share threat intelligence between the U.S.
+Government and the private sector, you know, we are constantly
+patching and adopting continuous updates, and it has been a
+standard of cybersecurity best practices measures for years. I
+guess I was looking at testimony from Tuesday, and, Mr. Mandia,
+in your testimony, you mentioned that the adversary was able to
+disarm some of your sensors as part of the intrusion. Can you
+tell us what you mean by that?
+ Mr. Mandia. Absolutely. When the implant in the SolarWinds
+software ran, one of the first things it did, 11 days after it
+installed--mind you, it slept for the first 11 days--is it
+looked at the system it was running on, and it looked for
+common safeguards, like Windows Defender, like CrowdStrike,
+like FireEye's Endpoint, and it shut them off. And, again, the
+implant ran at system level. It had the permissions to do
+whatever it needed to do, so it just said, ``What security is
+running? Kill it,'' and that is why we couldn't detect it in
+the first stage of the attack.
+ Mrs. Harshbarger. Thank you for that. Also, Mr. Smith, in
+your testimony on Tuesday, you said that while the adversaries
+had gained access to your source code, you don't consider the
+code to be particularly sensitive. And I guess from media
+reporting, it has been suggested that this effort by the
+adversary allowed it to exploit the identity and authentication
+features of Microsoft in other breaches of entities. Can you
+tell me a little bit about that?
+ Mr. Smith. Yes, there are two different concepts in your
+question. I mean, first, you know, we share our source code
+broadly. We share it with all of our employees, and the secrecy
+and the security protection of our technology is not based on
+the secrecy of the code itself. We live in a world where, you
+know, much code is published, you know, to the world on the
+internet in open source form. The second part of your question
+then goes to, you know, our services overall, and I would say a
+couple of things. In no instance did we identify any action or
+case where anyone was able to use Microsoft's services as a
+vector of attack, as a means to attack any other customer.
+There are, you know, discussions that, you know, have ensued,
+rightly so, about the use of some industry-standard approaches
+for the authentication of accounts. Microsoft, like everybody
+in this business, supports these industry-wide standards. One
+of the standards, in particular, is 13 years old. It is called
+SAML.
+ It has been superseded, in our view, by something we have
+been encouraging customers and developers to move to since, but
+there was a vulnerability, so to speak, in SAML that was
+exploited in a small percentage--and I think that is important
+to underscore as well--a small percentage of the instances that
+we saw. And it was only exploited after someone had already
+basically gotten elevated privileges, for example, by stealing
+a key or breaking a password. But nonetheless, I think this is
+quite rightly raising questions, how do we address this issue
+in the future. We are focused on that. Others are focused on
+it. I do think it is something that we will want to continue to
+work to address.
+ Mrs. Harshbarger. You know, honestly, coming from the
+private sector to the government sector, you know, we trust
+that those apps that we are installing, those updates on our
+Apple phone, on our watch, on anything that we do in a business
+environment or the government environment, we assume that it is
+safe because it has been vetted. I guess my question is, how
+can we be assured in the future that these software updates are
+going to be safe, and, in your best estimate, you know, how
+soon are we going to be attacked again, I guess is my question.
+We update every day something, and that makes me a little
+fearful going into the future.
+ Mr. Smith. Well, I think there are two things that we need
+to do to better secure this kind of software updating. The
+first, as Kevin Mandia was saying before, is we are going to
+need to work with everyone who creates software to secure what
+is called their build process and to vet the software that is
+built. You know, at a company like Microsoft, we have an
+extraordinary range of controls to address that, but, you know,
+software is being built by companies and other organizations,
+large and small. And second, I think this is why it is so
+important for the government itself to send a message to the
+world that this type of indiscriminate and disproportionate
+tampering with the software supply chain is a violation of
+international norms and rules, and there will be accountability
+when foreign governments do this.
+ Mr. Krishnamoorthi. Thank you. The gentlewoman's time is
+up.
+ Mrs. Harshbarger. Thank you, Mr. Chairman.
+ Mr. Krishnamoorthi. Let me now turn to Congressman Eric
+Swalwell, the distinguished member from California. You are on
+the clock. You are muted.
+ Mr. Swalwell. Thank you, Mr. Chairman. Thank you,
+panelists. This attack, I think it is pretty clear, was done by
+Russia, likely its intelligence services. That is what public
+reporting has shown. So, Mr. Smith, we know that Russia does
+not have much use for economic espionage. They are just not a
+country that is stood up in a way that they can benefit like
+our other adversary, China, who commits economic espionage
+every single day. However, this attack does touch not only on
+public-sector networks, but also private-sector networks. How
+much worse could this have been if an adversary, like China,
+had gone as far down the stack as Russia?
+ Mr. Smith. I don't know that I have the best answer to that
+question. I guess I would say we need to recognize that we live
+in a world where there are multiple governments that are
+investing in these kinds of cyber intrusion capabilities. They
+may act based on different motives, and they may use what they
+obtain for different purposes, and we do see that in a somewhat
+diversified way around the world. I guess you could say, you
+know, it can always be worse. It could have been worse, and
+obviously it could have been much better. I think the most
+important thing is that we learn from this, recognize that it
+is a dangerous world in which we live, and we are going to have
+to strengthen our defenses.
+ Mr. Swalwell. Mr. Smith, earlier my colleague, Mr.
+Krishnamoorthi, who is also on the Intelligence Committee with
+me, asked you whether the House of Representatives, Senate, or
+Office of the President's systems had been penetrated that had
+Microsoft platforms, and I believe you said no. How about in
+the last election cycle, in the current cycle we are in?
+Microsoft was quite helpful in actually being the first to
+report that, I think, some campaigns had been breached even
+before the U.S. Government had told Congress. Have you seen any
+recent attacks against members of the House or the Senate and
+against their campaigns?
+ Mr. Smith. I am not aware of anything since the last
+election ended. That doesn't mean that there hasn't been
+anything, but nothing has crossed my desk. You know, we
+certainly did see a series of intrusions, hacks, attacks, if
+you will, during the last electoral cycle, as you mentioned.
+You know, we did bring that information forward. You know, we
+have created an offering called AccountGuard that we provide
+free of charge to every Member of Congress, every political
+campaign, to think tanks, to the political parties, if they are
+using Office 365. We provide this at no additional cost, and
+what we do is employ our Threat Intelligence Center to
+constantly look for these kinds of attacks and then let people
+know if we find something, and we do that immediately.
+ Mr. Swalwell. Thank you, Mr. Smith. Mr. Ramakrishna, you
+alluded earlier that you believe that having some sort of, not
+incentive, but safe harbor to disclose breaches would likely
+result in more cyber companies or companies writ large
+disclosing breaches. Can you elaborate on that? How could we
+make sure that, one, consumers are able to hold companies
+accountable if there is a breach that the company was
+responsible for, but that we would still be able to see
+companies disclose breaches early to protect consumers? And I
+think in tort law, for example, you know, if your restaurant is
+being sued because a deck collapsed and the restaurant took
+measures to fix the deck, they could still be sued for the
+injuries of the deck collapse, but it could not be used against
+them if they sought to fix the deck collapse. Can you just talk
+about how can you make sure consumers are protected, but
+industry is still disclosing and has an incentive to do so?
+ Mr. Ramakrishna. Congressman, thanks for that question.
+Where we are coming from on this topic is that, as companies
+discover malware and other vulnerabilities, the fact of the
+matter is no matter how many resources any one of our companies
+have, no matter what level of controls we have, all of our
+software has some form of vulnerabilities or another. When we
+discover those, we should be able to not only fix them, but
+also share them with others such that each one of us are not
+discovering the same issues over and over again and, in that
+process, losing time. So, where we are coming from is the early
+disclosure so that we don't have to repeat the same situation
+over and over again, both at the customer level as well as at a
+software supplier level, must be eliminated.
+ So, the challenge here is one of potential litigation and
+one of, as I described it, victimizing the victim itself for
+coming out. And those are things that need to be eliminated or
+those stigmas need to be eliminated for more of us to come out
+and speak openly. Obviously, today, three of us have come and
+spoken about it. We should get more vendors and more customers
+to speak up so that we can together solve this problem. It is
+not purely one of resources. It is one of how resources use
+information and share it for our collective benefit.
+ Mr. Swalwell. Thank you. I yield back.
+ Mr. Krishnamoorthi. Thank you so much, Mr. Swalwell. Next,
+I would like to recognize the gentlewoman from Iowa, Mrs.
+Marionette Miller-Meeks.
+ Mrs. Miller-Meeks. Thank you so much, Mr. Chair. I want to
+also thank the extraordinary knowledge of our witnesses'
+testimony. And also, as a former Army veteran, or as an Army
+veteran, I want to thank Mr. Mandia specifically for his
+service. This is a tremendously important hearing, and as I
+have listened to the testimony of our witnesses and both the
+insightful questions from my colleagues and the answers
+provided by our expert witnesses, I am reminded of pulling a
+single thread which then unravels an entire garment. You know,
+we are all a weak link in this system.
+ So, like many people, I am a doctor. I interface with a
+hospital system and have protected health information that I am
+concerned about and concerned about my own financial
+information. But when I have to change my password every two
+months and when I have to do my security training every year, I
+perceive it as a nuisance, and I don't think I am alone in
+that. However, what you all have brought to our acute awareness
+and alarm, we are all each individually a weak link as we
+interface and interact both in our private lives and with state
+and Federal Governments.
+ So, Mr. Ramakrishna, as the CEO of SolarWinds, and,
+granted, only a very brief time, and I can only imagine coming
+into an organization as the CEO with this overhanging your new
+tenure, you have been very forthright about some of SolarWinds'
+security culture challenges from the past and how you have
+leaned into improvements to the security culture, particularly
+around software development practices. We need to use events
+like these as collective learning moments to raise the overall
+tide level for everyone. The stakes are just too high to stand
+idly by. What role do you think companies like SolarWinds have
+to use their experiences and past challenges to promote better
+practices ecosystem-wide?
+ Mr. Ramakrishna. Congresswoman, thank you for your
+question. We take our obligation to be a very active
+participant in this. While we were subject to this attack, we
+have learned a lot as well, and I will elaborate on one
+specific thing. I am happy to elaborate further as you please.
+As it relates to supply chain, one of the key challenges that
+we have uncovered as part of this attack is, typically all of
+us as software vendors use our certificate to sign the product
+that we deliver as the mark of integrity of the software that
+we deliver. Obviously, in this particular unique supply chain
+attack, that mechanism is not sufficient.
+ So, one of the improvements that we are making, which we
+are also publishing both to CISA and others as well as our
+industry colleagues, is a different way and an enhanced way of
+building software that gives more confidence and trust to
+customers as to how it needs to be done that does not only rely
+on age-old ways of signing with our certificates, and instead,
+having parallel build environments that are managed and
+accessed by different sets of engineers. And that is an
+investment that we are making in that process to ensure that,
+across parallel build environments, the integrity of what we
+deliver is assessed and not compromised. So, that is a unique
+way of doing things and an extended way of doing things based
+on this very specific learning that we intend to publish
+externally as well.
+ Mrs. Miller-Meeks. Thank you so much for that. And, Mr.
+Smith, before my time expires, you alluded to this earlier when
+you spoke about training your customers. And so do we need to
+have more broad-based security training for all of us as
+individuals, again, as we interact and interface with both
+local, state, and Federal Government entities? As I mentioned,
+it has been raised to my alarm that we are all a weak link, and
+I am going to have better security measures going forward.
+ Mr. Smith. Well, I first want to say we really appreciate
+the leadership you have provided in focusing on state and local
+needs, and, you know, highlighting some of the kinds of
+ransomware attacks in a place like Iowa, because I do think
+that that really highlights that this happens in, you know,
+every part of the country. I hope we don't need to ask every
+individual as a consumer to, you know, suddenly spend a lot
+more time than they do today. Our goal is to make it easy and
+simple for individual consumers to simply, you know, turn on
+something like Microsoft Defender and let it go to work. But I
+think when we get to organizations--a hospital, a school, a
+municipality, a state agency--you know, that is where we need
+more personnel. We do need more training, and we are going to
+need more tools, which we are absolutely committed to
+providing.
+ Mrs. Miller-Meeks. Thank you so much. I yield back my time.
+ Ms. Norton. [Presiding.] We will take a recess at this
+time. We are not through. Excuse me. There is somebody there
+ready to go, so excuse me. I understand that Miss Rice of New
+York is prepared to come forward at this time. Miss Rice, you
+are recognized for five minutes.
+ Miss Rice. Thank you so much, and I want to thank our
+witnesses today. This is incredibly enlightening at a critical
+time. But I also want to thank my colleagues on both sides of
+the aisle because the one message that I am getting loud and
+clear is that we can be doing better. It is one thing to have
+all of our witnesses here talking about what they are doing,
+but we need to actually act as well.
+ So, Mr. Smith, a consistent theme in today's conversation
+has been that the U.S. Government needs to improve and
+incentivize intelligence sharing between Federal agencies and
+the private sector. I believe that you have called for the
+Federal Government, and forgive me, I had to
+ [inaudible] so I left for a little while. I don't know if
+you addressed this. But you have called for the Federal
+Government to impose clear cyberattack reporting requirements
+on the private sector, and you have pointed to the EU's law
+requiring digital service providers to notify authorities of
+incidents as a model to follow. Would you consider the EU the
+gold standard around the globe, and are there any other
+countries we can look at to emulate what they are doing and
+recreate it here?
+ Mr. Smith. Well, I definitely think we should learn from
+what the European Union is doing. I don't know if I would call
+them the gold standard, and there are others worth looking at
+as well, and I should do some more homework and get you some
+more examples. I think we need something that works for the
+United States, and I think we can put something like that
+together. Yes, I think we have had good conversation here on
+some of the specifics. You know, it is not something that needs
+to apply to everyone in the country, but it definitely should
+apply, at a minimum, to, you know, those entities like my own
+that are part of the critical infrastructure for the country
+and that are obtaining this kind of information. I think we can
+put together a gold standard ourselves as a Nation in terms of
+reporting the right information to the right people as rapidly
+as possible, and then I think, critically, sharing back the
+right information in an appropriate way as well so that we are
+better informed about what to look for.
+ Miss Rice. Well, I hesitate to speak for every one of my
+colleagues on this hearing, but I, of course, stand ready to
+work on that with you. Mr. Mandia, in a similar vein, you have
+argued that the U.S. should establish a confidential
+information sharing solution to encourage public/private
+communication after breaches. And I believe you pointed to the
+FAA's Aviation Safety Reporting System, which uses non-punitive
+anonymous reporting to encourage the private sector to
+communicate about threats. To your knowledge, do any countries
+take a similar approach to encouraging the private sector to
+identify and address threats?
+ Mr. Mandia. I think nobody does it exactly right. I have
+seen a lot of nations go through a lot of different evolutions,
+you know. I look at the U.K. They do a better job, in my
+opinion, of private and public partnership. They have more
+centralization of how they respond to incidents such as this.
+You look at Israel, much smaller scale, but, you know, they
+have their Iron Dome in how they approach threat intelligence
+sharing there.
+ But my remarks were basically about if the threat
+intelligence sharing is not confidential, then as a reporter of
+threat intel, you have to get your arms around all the
+liabilities first, and it just creates too much delay, too much
+time, and the intel won't be actionable. So, I believe threat
+intelligence needs to be shared quickly, and I think you can
+define first responders in the industry, folks who respond to
+unauthorized, unlawful, or unacceptable behavior. If you do
+that for a living or provide those services and you see
+something, you can report that very confidentially. You can
+defend the Nation. You can get it to the right government
+entities, and, quite frankly, let the company get their arms
+around, ``So, what did we lose?''
+ And realize this: a lot of disclosure creates fear,
+uncertainty, and doubt that is unnecessary. Most organizations,
+when they have a breach, lack the expertise to get a full scope
+of what did we lose and what should we do about it. They can't
+do it, and they are just going to scare the heck out of
+everybody by saying, ``Hey, we had a breach,'' and everybody
+goes, ``Well, what does that mean? What does it mean to me?''
+And it could just be a small thing, a small matter that doesn't
+impact the consumers. So, every organization will need some
+time.
+ Miss Rice. So, let me just ask you, Mr. Smith and Mr.
+Mandia, you know, what we are talking about today shows a level
+of human weakness and bad cyber hygiene. What steps could we
+take here in Congress? I mean, I am calling for all of the
+members to be required to have cyber education, which we are
+not required to do. How can we improve our cyber hygiene at the
+Federal level?
+ Mr. Smith. Kevin, do you want to go, or do you want me to
+go first?
+ Mr. Mandia. Brad, you can go first.
+ Mr. Smith. OK. Well, I would say, first of all, I think
+your question is very important in the sense that everybody
+talks about technology, but, ultimately, it is always about
+people. And I think what it really connects with is the need to
+have, you know, consistent training, consistent implementation
+of what we all recognize today, our best practices, and
+ultimately an expansion of the work force in the cybersecurity
+field so that we have more trained people who can support all
+of the organizations and customers across the country.
+ Ms. Norton. The gentlewoman's time has expired. The
+witnesses have asked for a 10-minute recess. They are really
+entitled to that. This is a long hearing because there are two
+committees meeting and asking questions, but we don't want it
+to go on forever, so we will take a 10-minute recess at this
+time.
+ [Recess.]
+ Ms. Norton. The committee will reconvene. We have a very
+large set of members because there are two committees. This is
+a joint hearing. That is why this is going on for so long. I
+want to call on the next member on my list. It is Mr. Clyde of
+Georgia. You are recognized for five minutes.
+ Mr. Clyde. Thank you, Madam Chairwoman. As a Navy officer,
+a Navy combat veteran, I am quite aware that our military is
+tasked with protecting our Nation, and we take that very
+seriously and have been very successful in doing that for over
+a century. But cyberattacks on our country are something that
+literally can go right through whatever military protections we
+have, and can affect especially our civilian population in ways
+that can be devastating for medium businesses, large
+businesses, and even small businesses. So, several of you have
+said that the U.S. Government needs a national strategy to
+strengthen how we share threat intelligence between the
+government and the private sector. So, would each of you give
+me an idea of how you would see this playing out? What role do
+you see CISA playing to help support this, especially when it
+concerns the private sector? And I guess we could start with
+the CEO of SolarWinds.
+ Mr. Ramakrishna. Congressman Clyde, thank you again for the
+question. In terms of CISA, there are a few things that we can
+work with CISA on as part of a private sector entity. One is
+CISA can essentially be the clearinghouse of all threat
+information that is given to it by the public sector. That is
+No. 1, and the converse is true from a private sector
+information gathering standpoint as well. Once it has got a
+coordinated set of information, it can take the responsibility
+to disseminate it to all impacted and potentially impacted
+parties as well. That will ensure that we are all coordinated,
+that we are fast and agile in learning and responding. The
+other major area that I would suggest is CISA can be a big
+influencer in establishing best practices and disseminating
+best practices across the entire value chain, not just in the
+threat aspect of it, but in the standardization of it, such
+that as things become more standard and more of us in the
+private sector follow, then potential for leakage across
+private sector entities is significantly reduced and
+diminished.
+ Mr. Clyde. Thank you. I appreciate that. Mr. Thompson, any
+comments from you, sir?
+ Mr. Thompson. Yes. The only thing I would add to what
+Sudhakar said is I do believe that CISA has an opportunity,
+based on where it sits in the government, to really coordinate
+resources from both the private and public sector. I think as
+private sector software companies, we would be willing to
+dedicate some amount of resources to work with CISA in coming
+up with cybersecurity strategies for both the private and
+public sector. But someone is going to have to be the
+coordinator of that, and I think CISA might be, if resourced
+appropriately, be in the right position to be able to do that.
+ Mr. Clyde. Thank you very much. Mr. Mandia?
+ Mr. Mandia. Yes, not too much to add to that other than
+when I think about intel sharing, if there is intel in, it
+makes sense that it goes to a single entity and the government.
+If there is intel out, that has got to be communicable to all
+the technology companies that safeguard the Nation in the
+private sector, public sector. And then there has got to be a
+prioritization, that there is probably different industries--
+healthcare, utilities, telecom--that rise above some of the
+others that you got to make sure abide by certain legislation
+standards or regulations, and most of those are regulated
+industries. But that is how I think about it: intel in, then
+intel has got to get out, and then we get a Nation that can put
+shields up a lot faster than it can today.
+ Mr. Clyde. Thank you. Thank you. And last, Mr. Smith.
+ Mr. Smith. Yes, I think these provided good perspectives.
+The one thing I would add is, obviously this is a paradigm
+where CISA would be responsible for the assessment of threat
+data that is being reported domestically from companies inside
+the United States. You know, at the same time, you still have
+the NSA, which has this critical responsibility and role with
+respect to data, that it is able to identify from outside the
+United States. And then for the government as a whole, you need
+to have, you know, both of these sources to get the full
+picture of the threats to the country.
+ Mr. Clyde. OK. Thank you very much. We had quite a serious
+ransomware attack in my district to a private company that
+basically shut them down for five weeks and cost them almost
+$10 million, so this is very, very important what we are doing
+here. Thank you, Madam Chairwoman, and I yield back.
+ Ms. Norton. I thank the gentleman for his questions, and
+his time has expired. I call on Ms. Tlaib of Michigan now. Ms.
+Tlaib, you are recognized for five minutes.
+ Ms. Tlaib. Thank you so much, Chairwoman. Mr. Thompson, you
+served at SolarWinds for 14 years, including 10 as its CEO, so
+I just want to make sure it is fair to say that you know this
+company better than anyone. I think Bloomberg News said two
+former employees viewed your company's security lapses as so
+significant that they said they viewed a major breach as
+inevitable. So, one of those employees, Mr. Ian Thornton-Trump,
+said that he warned the company in 2017 of security risks, but
+found the company's executives were, and I quote, ``unwilling
+to make the corrections.'' So, Mr. Thompson, I am sure you were
+expecting this question, but, you know, did you all take
+immediate action when these concerns were raised?
+ Mr. Thompson. So, I believe we have taken this security of
+our customers, of our company, of our products seriously my
+entire tenure at SolarWinds. I believe we have invested at the
+appropriate level. In fact, over the last four years, we were
+spending at a level meaningfully higher than the industry
+average.
+ Ms. Tlaib. When did you all start investing in security?
+ Mr. Thompson. We have been investing in security since we
+got here, but obviously that security investment has grown as
+the company has grown. But if you look back to 2016, in 2016,
+we really looked at the business. We looked at where it was,
+and we began to invest at a higher level. We brought in a CTO
+who had been a CIO for many years. In early 2017, we brought in
+a very experienced CIO. We then added a VP of security who
+deals with product security----
+ Ms. Tlaib. And this all happened in 2016?
+ Mr. Thompson. In 2016 and 2017.
+ Ms. Tlaib. So, Mr. Thompson, is it true, and this is
+something when the committee told me, I was kind of in
+disbelief. If all that was going on, then why in 2019 it was
+said that you could easily access your server by simply using
+the password ``SolarWinds123?''
+ Mr. Thompson. So, that related to a mistake that an intern
+made, and they violated our password policies, and they posted
+that password on their own private GitHub account. As soon as
+it was identified and brought to the attention of my security
+team, they took that down.
+ Ms. Tlaib. Yes. You know, it just doesn't, you know, invoke
+a lot of confidence when many of us when we hear it is an
+intern could have done that, and, again, that same password was
+used to access your server. The other one, is it true that
+SolarWinds did not create a role of a vice president of
+security until 2017?
+ Mr. Thompson. So, we did not have a role for vice president
+of security, but as I have said, we had a very sophisticated
+CIO and a CTO who had been a CIO at a very large Fortune 500
+company, and we had a security team, and we had a security
+process. We just didn't have a VP of security prior to that
+day.
+ Ms. Tlaib. So, with all those people, two years later,
+2019--I don't know if they were in place--you know, how fast
+did you fix the issue with the ``SolarWinds123'' password to
+access your servers?
+ Mr. Thompson. As soon as it was identified to us, it was
+fixed almost----
+ Ms. Tlaib. Days, weeks, months? How long?
+ Mr. Thompson. Faster than days once we found out about it.
+ Ms. Tlaib. Well, it also has been reported that back in
+October, another security company, Palo Alto Networks, raised
+concerns with SolarWinds about--am I saying it right, Orion
+product--based on behavior that they had observed, which is now
+believed to be related to the cyberattack. What steps did you
+all take to ensure that this issue was investigated, Mr.
+Thompson?
+ Mr. Thompson. So, I will pass that to Sudhakar because I
+have not been the CEO since December 31 of 2020, and there have
+been a lot of investigation work done since then. So, I will
+let Sudhakar respond to that.
+ Mr. Ramakrishna. Thank you, Kevin.
+ Ms. Tlaib. You got any interns messing up, Mr. new CEO? So,
+I would love to hear about what you all are doing about these
+concerns raised in October.
+ Mr. Ramakrishna. We heard about it from Palo Alto as a
+possible victim of the malware that was delivered as part of
+the Orion code and related issues. It wasn't about the security
+hygiene or security posture of SolarWinds itself. In fact, we
+are a customer of Palo Alto's, and we have 44 pairs of Palo
+Alto infrastructure protecting us, not just from a firewall
+standpoint, but also doing some threat hunting within our
+environments today.
+ Ms. Tlaib. Well, I appreciate all of that. I just want my
+colleagues to understand it is not only that we need to find
+out what they were able to access, but the fact that, you know,
+SolarWinds did have a weak security culture that, you know, ran
+right up against this attack. And we need to acknowledge that
+because, I mean, I understand that there was just a recent post
+on LinkedIn for different security positions you guys may have
+posted recently. And so I just really want to make sure that,
+again, my colleagues, that we are all doing our due diligence
+in regards to some of these companies that we contract out to,
+to protect the privacy and protect our country from these kinds
+of attacks. With that, I yield. Thank you so much.
+ Ms. Norton. The gentlewoman's time has expired, and I thank
+her for yielding. Mr. Fallon of Texas is next.
+ [No response.]
+ Ms. Norton. Mr. Fallon, are you there?
+ Mr. Fallon. Yes, ma'am. Can you hear me?
+ Ms. Norton. I can hear you. You can proceed.
+ Mr. Fallon. Well, thank you very much, and I want to thank
+the witnesses for bearing with us in a joint committee. I know
+it has been a long day thus far. You know, what alarmed me when
+I was reading through sourcing material was the fact that, and
+it really got my attention, was the fact that the Secretary of
+Homeland Security's own email had been compromised. Mr. Mandia,
+thank you for your service to our country. I wanted to ask, in
+your opinion, what would have happened and how much more damage
+would or could have been done if your company hadn't discovered
+this breach in December 2020?
+ Mr. Mandia. Well, you know, I think over time, people would
+have come across enough smoke to find the fire, so it would
+have been discovered in time and people would have connected
+the dots. We just happen to be a forensic firm and, you know,
+special ops met special ops. We responded appropriately with
+the right skill sets, found the implant. In regard to what
+could have happened, the attacker had unfettered access to over
+17,000 different organizations and nobody saw it. So, this
+attacker stayed laser focused on stealing specific information.
+They showed, arguably, constraint, and they didn't do anything
+destructive, but in reality, sir, it would have been easier for
+this attacker to destroy data than do the operations that they
+did. So, I think there was a range of options for the threat
+actor to behave like, and they behaved in a manner to steal
+emails and documents that they were targeted in collecting.
+ Mr. Fallon. Just to followup on that, if they chose to
+start destroying data, would that have, in and of itself, kind
+of raised red flags, and would they have discovered it then? Is
+that the reason why they wanted to do that?
+ Mr. Mandia. I think there is a line of, you know, you are
+going to start noticing if machines get shut down or if data
+starts getting deleted. My observation on the rules of the
+playground in cyber, maybe we don't have written rules that
+everybody follows all the time, and maybe it is hard to get
+people to agree as to what is fair game for espionage, but here
+is one thing I do know. I don't think any modern nation wants
+to see modern nations' A-teams break in and start changing
+data, deleting data, putting industrial control system malware
+in place, and doing certain things that I still haven't seen
+done by those threat actors that are representing a foreign
+intelligence service. So, there are still another couple levels
+of escalation that have not, at least I haven't witnessed yet
+in cyberspace.
+ Mr. Fallon. OK. Thank you. Mr. Thompson, in retrospect, was
+this breach, in your opinion, preventable, and if so, what
+should SolarWinds have done differently?
+ Mr. Thompson. So, I will answer part of that question, and
+I will let Sudhakar answer some of it because, as I said, I
+have been gone since December 31. But this attacker designed
+this attack to be very, very difficult to find. They were
+incredibly patient. They moved very slowly. And the software
+was of tremendous complexity, and so it was designed in a way
+that made it very difficult for anyone to detect whether it was
+us or whether it was FireEye or Microsoft, which is why it took
+as long as it did. And I will let Sudhakar add what we have
+learned since December.
+ Mr. Fallon. Thank you.
+ Mr. Ramakrishna. Congressman Fallon, in addition to Mr.
+Thompson's comments, the way we looked at it is, given the
+novelty of the supply chain attack and, as I described it, the
+attacker hiding in plain sight, the fundamental things that we
+are looking at is what do we learn from this. How do we protect
+supply chains of companies like SolarWinds and our industry
+peers going forward? That led us to build the initiative that
+we call Secure by Design internally, which provides specific
+guidelines and execution tactics of how to protect internal
+environments, how to make build systems a lot more robust,
+including access to the build systems, and then how to evolve
+software development life cycles to be much more secure
+development life cycles where you are not testing security
+after something is delivered, but designed as you build it. And
+I believe that is the responsibility of the industry to take
+more ownership of and share that not just amongst us, but also
+with our government colleagues who also build software.
+ Mr. Fallon. Thank you. And I have one quick last question
+for Mr. Mandia. While the experts seem to think that this was a
+nation-state-sponsored attack, I am guessing because of the
+complexity of it all, but I am a lay person. I just look at it
+in layperson's terms. Why are we so sure that it was nation-
+state-sponsored attack and not just a group of highly talented,
+albeit nefarious, cybercriminals?
+ Mr. Mandia. So, I started responding to breaches in the
+United States Air Force by 1995. Back then, most of the
+breaches we responded to were not attractive nuisances. It was
+dot-gov against dot-gov, dot-mil against dot-mil. I have got
+about seven reasons why I believe it is a foreign intelligence
+service. I will give you two. FireEye was attacked by over 20
+different IP addresses, and we were a Stage 2 victim of this
+attack after we did a SolarWinds update. The systems used to
+attack us were used in exactly zero other breaches. That is
+very uncommon, sir. What normally happens, if I am a threat
+actor and I am doing ransomware, I have the same infrastructure
+for every attack I do. We went through our partners Microsoft,
+our partners in the intel community. None of the systems are
+used to attack anybody but FireEye. I have got six other
+technical reasons. I am happy to take them offline with you.
+ Mr. Fallon. Thank you.
+ Mr. Mandia. I have virtually no doubt, 10 minutes into the
+first briefing I got on our incident, this was a foreign
+intelligence hack, and I had a good idea which one.
+ Mr. Fallon. Thank you very much. Thank you, Madam Chair. I
+yield back.
+ Ms. Norton. Yes, the gentleman's time has expired. Mr.
+Correa of California.
+ [No response.]
+ Ms. Norton. Mr. Correa of California, are you----
+ Mr. Correa. Can you hear me OK, Madam Chair?
+ Ms. Norton. I can hear you now, sir.
+ Mr. Correa. Thank you, ma'am. I want to thank all of our
+chairs and ranking members for this most important hearing. I
+wanted to ask a question of all our guests, Mr. Ramakrishna,
+Mr. Smith, Mr. Mandia. The question is as follows: Is this a
+political diplomatic issue, or is this a technical issue? And I
+ask this question because, Mr. Smith, during your presentation
+you said that we needed to strengthen international law and the
+consequences for violation of international law. Yet I recently
+read a report that talked about the Chinese intelligence, that
+they had stolen our espionage code and essentially customized
+it and were using it against us. So, those folks overseas, are
+they better than we are now? Are Russia, China, and others
+better than we are in this cyber battlefield, and if they are,
+how do we stop them? So, again, my question is, is this an
+international law consequences issue, or is this a technical
+issue? To all our guests, please.
+ Mr. Smith. Well, I am happy to field that first. You know,
+I think you framed the question well. Is it a diplomatic issue
+or is it a technical issue? Yes. That is a way of saying it is
+both, and we need to deal with it on both levels. And I don't
+believe for a moment that we live in a world where our
+adversaries are more capable than our own government, but we do
+live in a world where there is an asymmetry. It is easier to
+play offense than it is to play defense. When you play offense,
+you can scan the horizon and look for the weakest point, and
+then that is where you direct your energy. And when you are on
+the defensive, that means you need to scan and secure the
+entire horizon.
+ So, on the technical side, that means that there this
+enormously important work to strengthen all of our cyber
+defenses, and it equally makes it a critical diplomatic and
+international legal issue because it simply must be the case
+that there are certain acts that are put off limits and for
+which there are international and diplomatic consequences. And
+this kind of indiscriminate and disproportionate attack on the
+software supply chain is and should be one of them.
+ Mr. Correa. Mr. Ramakrishna, Mr. Mandia, go ahead.
+ Mr. Ramakrishna. Congressman Correa, I agree with my
+colleague, Brad Smith, that it is a technology as well as a
+political diplomatic issue. Especially as it relates to the
+private sector, we have to learn and anticipate issues like
+this and collaborate together on coming up with best practices
+similar to the ones that we are trying to do at SolarWinds with
+our Secure by Design and some new things that our colleagues at
+Microsoft and FireEye, CrowdStrike, KPMG are doing.
+Additionally, I think internally within the United States, we
+need to look at our disclosure rules and, as we have all been
+saying, encourage more of us to come forward and disclose
+without fear of being punished either in the public or legally.
+So, that is as it relates to us in the U.S.
+ And then diplomatically, setting some ground rules, holding
+people accountable, and driving consequences is, I would say,
+the help that we can get from the government. And last but not
+least, the point I have highlighted a couple of times today
+with regards to the need for speed and agility in terms of
+information sharing and information dissemination might require
+some help from lawmakers such as yourself.
+ Mr. Correa. Thank you. Mr. Mandia?
+ Mr. Mandia. Yes, I think everything both the witnesses have
+said is exactly right. It is a diplomatic issue. It is a
+technical issue. What I have learned over 20 years-plus in
+responding to security breaches, sir, is that all the threats
+we respond to literally mimic real-world geopolitical
+conditions and really economic alliances as well. So, when you
+look at what the threat is to the United States in cyber, it is
+North Korea, it is Iran, China cyberespionage, it is Russia,
+and then it is just folks who are safe harbors for ransomware,
+so it is going to take diplomacy. It is going to take
+technology. It will be both.
+ Mr. Correa. In my last seconds I have, Mr. Smith, you
+talked about a community college being enough to get cyber
+education. Do you have a list of community colleges that offer
+that education now?
+ Mr. Smith. I will see what we have.
+ Mr. Correa. Do you know of any? Do you know of any?
+ Mr. Smith. Oh yes.
+ Mr. Correa. It is not a ``gotcha'' question. Are you
+showing us how far we have got to go?
+ Mr. Smith. No, actually the community colleges of the
+country have created the kinds of courses that we need. They
+have become a much more common part of the curriculum. You
+know, we have a robust cybersecurity profession in the United
+States. We just need to make it larger. And so I think we can
+harness what exists and expand the capacity and basically make
+it financially easier for people to go get these courses and
+education.
+ Ms. Norton. The gentleman's time has expired, and I thank
+the gentleman for his questions. Mr. Gimenez of Florida?
+ [No response.]
+ Ms. Norton. Mr. Gimenez of Florida, are you there?
+ [No response.]
+ Ms. Norton. You are recognized for five minutes.
+ [No response.]
+ Ms. Norton. You are recognized for five minutes. I see you,
+but I don't hear you.
+ [No response.]
+ Ms. Norton. I will go to the next person. Mr. Donalds of
+Florida.
+ [No response.]
+ Ms. Norton. Mr. Donalds, are you there?
+ [No response.]
+ Ms. Norton. Let us then go to Ms. Porter of where?
+ Ms. Porter. I am from California, ma'am.
+ Ms. Norton. All right. Ms. Porter of California. Sorry.
+ Ms. Porter. Thank you so much. Mr. Ramakrishna, we are here
+today to talk about a major security breach. Why are security
+breaches a problem? Very briefly just in a few words, what are
+we worried about?
+ Mr. Ramakrishna. They could impact people at a personal
+level through theft of credentials. They could impact companies
+with regards to breach of sensitive information and data, and
+they could impact----
+ Ms. Porter. Wonderful. Mr. Ramakrishna, do you want to
+please provide your home address for the committee today and
+the American public?
+ Mr. Ramakrishna. I am happy to provide it, Representative.
+I would like take down record and provide it offline.
+ Ms. Porter. So, you don't want to share it with the whole
+world, like with Russia.
+ Mr. Ramakrishna. Yes.
+ Ms. Porter. So, you would agree that the information that
+got hacked is national security information that is damaging to
+national security implications. It could literally put lives at
+risk. You don't want to even give out your address, much less
+personal security information. What kind of legal liability is
+SolarWinds facing for this hack?
+ Mr. Ramakrishna. Congresswoman Porter, we have our standard
+end user licensing agreements that we signed with every one of
+our customers, including our Federal customers, and we are
+bound by those.
+ Ms. Porter. So, your customers can sue you? There is a law
+that makes you legally liable for this data breach.
+ Mr. Ramakrishna. I do not have the details of it,
+Congresswoman. I am happy to find out those specifics from our
+teams and furnish them to you.
+ Ms. Porter. OK. Mr. Ramakrishna, does this look familiar to
+you?
+ Mr. Ramakrishna. Yes.
+ Ms. Porter. ``SolarWinds123.'' Is it true that some servers
+at your company were secured with this Cracker Jack password,
+``SolarWinds123?
+ Mr. Ramakrishna. Congresswoman, I believe that was a
+password that an intern used on one of his GitHub servers back
+in 2017, which was reported to our security team and it was
+immediately removed. And that particular----
+ Ms. Porter. Mr. Ramakrishna, reclaiming my time, I have got
+a stronger password than ``SolarWinds123'' to stop my kids from
+watching too much YouTube on their iPad. You and your company
+were supposed to be preventing the Russians from reading
+Defense Department emails. Do you agree that companies like
+yours should be held liable when they don't follow best
+practices? Yes or no.
+ Mr. Ramakrishna. Congresswoman----
+ Ms. Porter. Should there a national breach law?
+ Mr. Ramakrishna. We believe we take our security as well as
+the security of our customers very, very----
+ Ms. Porter. Reclaiming my time, Mr. Ramakrishna. I am sure
+you take everything seriously. You seem like a very serious
+person. But I am asking you, should there be a breach law.
+Let's move on. Mr. Smith, should there be a law requiring
+companies to notify Federal law enforcement when they have had
+a cybersecurity breach, yes or no?
+ Mr. Smith. Yes, I believe there should be a law that
+applies to some, and then we should decide who they notify. I
+am not sure it should be law enforcement. It could be an
+organization like CISA.
+ Ms. Porter. Excellent. Mr. Smith, thank you for that.
+Earlier this week, you told the Senate Intelligence Committee
+that it took ``courage'' for FireEye and SolarWinds to reveal
+this hack to authorities. What did you mean by that?
+ Mr. Smith. What I mean is you have three companies here
+today because we have chosen to share information. At
+Microsoft, we have published 32 blogs about what we observed
+and what we have seen. If I take my colleagues at Google and
+Amazon and put them together, they have published one blog.
+They didn't get an invitation here as a result.
+ Ms. Porter. OK. So, Mr. Smith, I appreciate that, but you
+are not really saying we should give you some kind of Scout
+badge for telling the Federal Government that the Russians are
+waist deep in your source code. I mean----
+ Mr. Smith. No, I did not ask for any kind of badge.
+ Ms. Porter. Well, that is good because I am not going to
+give you one, so we are in agreement.
+ Mr. Smith. I didn't think you would.
+ Ms. Porter. Do engineers or people at Microsoft, to come
+forward and reveal these kinds of breaches, do they have
+protection? Can they do so without fear of retaliation?
+ Mr. Smith. Within our company? It is their job to bring
+this kind of information----
+ Ms. Porter. Is that true at every company, Mr. Smith?
+Should it be true at every company?
+ Mr. Smith. I think it should be true at every company. Yes,
+I believe that.
+ Ms. Porter. There should be whistleblower protection so
+that companies don't have to rely on corporate courage.
+ Mr. Smith. Well, I think that you need whistleblower
+protection, but, more important than that, we need to pay more
+people to make it their mission in life, their job, to do this
+kind of threat hunting, find these kinds of problems, surface
+them so then companies can solve them.
+ Ms. Porter. Thank you very much. My time has expired.
+ Mr. Smith. Thank you.
+ Ms. Norton. I thank the gentlewoman for her questions. I
+recognize Mr. Meijer of Michigan for five minutes.
+ Mr. Meijer. Thank you, Madam Chair, and ranking member, and
+to our witnesses who are here today, and I just want to kind of
+echo my gratitude for actually stepping forward. I am not sure
+it is within our congressional prerogative to offer merit
+badges, but I just want to thank you. You know, on February 17,
+Deputy National Security Advisor for Cyber and Emerging
+Technology Anne Neuberger announced that hackers had launched
+the attack from obviously inside the United States using our
+own infrastructure. This is a question for the panel. Can you
+explain the unique challenges that are presented when we are
+having to mitigate the efforts of a foreign actor, but one that
+is using our own internal systems or domestic-based systems?
+ Mr. Smith. Well, I will offer a couple of thoughts. We are
+in, like, hour five now, so we are sort of taking turns. You
+know, we have a well-established ability as a government, as a
+country through the National Security Agency to look at what is
+going on beyond our borders. You know, the question is, how do
+we take stock of what is going on inside the United States,
+especially when a foreign government can basically use a credit
+card and a false ID to get access to a server, you know, in the
+U.S. data center. It is not an easy problem to solve. I think
+we all would recognize we don't want to live in a country where
+there is, you know, extraordinary domestic surveillance, so we
+have to ask ourselves, well, how do we collect the information
+when there are these kinds of threats. And I think the first
+thing we should do is call on what I would hope would be, you
+know, sort of the loyalty of companies in the country to step
+forward voluntarily and share information.
+ But clearly that is not sufficient. It is not doing the
+job. And so I think we should put in place a legal obligation
+that certainly applies to, you know, companies that are in the
+critical infrastructure business, people that are the first
+responders. At Microsoft, we are a first responder. That is why
+we would say we would recognize that it is reasonable for this
+kind of law to apply to us. That creates the data that goes to
+the government. There needs to be careful thought to how it is
+used, with whom it is shared, when it is shared back with
+others in the private sector.
+ Mr. Meijer. Thank you, Mr. Smith. I would hope that, you
+know, that sense of shared collective self-interest, not
+necessarily originating from a patriotic impulse, but at least
+just an awareness and understanding that when we are dealing
+with cybersecurity, the contagion component of it is essential.
+I mean, we are obviously referring to this as the ``SolarWinds
+hack,'' and I know many have referred to it and are looking to
+kind of change that to ``Holiday Bear,'' you know, the shift of
+the name. The tainting of the reputation all too often goes
+toward those who are willing to acknowledge what had occurred
+and to share it rather than not. And I guess on that point, Mr.
+Ramakrishna, I guess if you can just put it simply, I mean, why
+did you come forward to testify today?
+ Mr. Ramakrishna. Congressman, we believe it is our
+obligation to learn from incidents such as this and be an
+active participant in the recovery and the remediation. As we
+heard earlier today, we need to bounce forward from this, not
+so much bounce back only. So, we have taken our learnings very
+seriously and have created an initiative within our company
+that we are sharing very publicly, and so I considered it my
+obligation to be very active in the bouncing forward aspect of
+this.
+ Mr. Meijer. Thank you. And then just one kind of, I guess,
+more specific question, Mr. Ramakrishna. You know, I think it
+was determined by analysts that 30 percent of the victims had
+no direct connection to SolarWinds, but were still targets of
+the broader campaign. Can you share, you know, what methods
+were used to arrive at this understanding and, I guess, why
+they weren't targeted in a separate effort, why they were
+targeted using the SolarWinds access?
+ Mr. Ramakrishna. That is not a study that we conducted, so
+I don't really have the specifics as it relates to the numbers.
+But the way I would describe this is, as I engage with national
+defenders across the world--for instance, we have spoken to the
+U.K. Cybersecurity Center--and as we were discussing other
+matters with them, they said they are actively investigating
+other supply chain attacks within the U.K. and other places. A
+few days ago, a French company reported a supply chain attack
+as well, so the point here being, multiple different vectors
+are being used. SolarWinds was one of them, but there are many
+different ways that threat actors are coming into various
+systems.
+ Earlier in the conversation today, I described the
+intruders as behaving like Transformer toys where they are
+changing their personalities and personas constantly, and that
+is the reason why I am urging all of us to share information as
+quickly as possible so we can together thwart these attacks.
+ Mr. Meijer. Thank you, Madam Chairwoman. My time has
+expired.
+ Ms. Norton. The gentleman's time has expired. I thank him
+for his questions. Mr. Gimenez of Florida.
+ Mr. Gimenez. Thank you. I hope everybody can hear me now.
+Thank you so much. I have got a couple of questions. Mr.
+Ramakrishna, you said that you are an American-based company
+and you talk about the supply chain. When you are developing
+software, especially
+ [inaudible], is it a bunch of people in a room developing
+the software, or do you, you know, sub that out to other parts
+of your supply chain, many of which could be offshore?
+ Mr. Ramakrishna. Congressman, in this particular context,
+when we refer to supply chain, these are employees of ours that
+may be globally deployed. So, like many American companies, we
+have a global work force, and we have employees all over the
+world that contribute to the development of our software, which
+essentially is part of a supply chain that we deliver.
+ Mr. Gimenez. Where in the supply chain was this malware
+embedded?
+ Mr. Ramakrishna. It was on a platform which we call the
+Orion platform. That is a product of ours.
+ Mr. Gimenez. No, I understand that, but where exactly? You
+said this software is developed from all around the world.
+Where was this malware embedded? Where did it come from?
+ Mr. Ramakrishna. It is difficult for me to pinpoint a
+location, Congressman. This particular software is built in a
+combination of our various development centers, including in
+the U.S. and in non-U.S. locations.
+ Mr. Gimenez. So, somebody got access to your software
+development platform?
+ Mr. Ramakrishna. Basically, what has happened is somebody
+got access to one of our build servers and hid a piece of
+malware on it that was observing when products were being
+built. And as products were being built, in one particular
+file, they were able to replace that and keep it in the
+building process.
+ Mr. Gimenez. Did you run the software through security
+checks before you introduced it into the general public?
+ Mr. Ramakrishna. There are secured development practices
+that we had been adopting that were part of our standard
+software development processes, Congressman, which we have
+since learned on what else we can do. So, that is the
+initiative that I was describing earlier called Secure by
+Design.
+ Mr. Gimenez. Mr. Smith, you said that everybody should
+adhere to best practices. Are you saying that those Federal
+agencies that were infected do not adhere to best practices?
+ Mr. Smith. I don't want to speak to any specific Federal
+agency. I will say that across 60 customers, you know, we saw
+typically a failure in one area or another to adhere to best
+practices. You know, we saw, for example, that, you know,
+passwords or keys were not kept in a secure location. We saw
+that there wasn't a practice called-least privileged access
+where you really try to give an individual access to only a
+limited part of the network. We saw instances, you know, for
+example, where there might not have been the use of multi-
+factor authentication. We definitely saw lapses which could
+have prevented the impact among certain customers of what
+happened.
+ Mr. Gimenez. Thank you. I appreciate that. Would it be fair
+to say that China, Russia, North Korea, Iran are the major
+players in this cyberwar that we are engaged in?
+ Mr. Smith. Well, at Microsoft, we publish what we call a
+security defense report--I am forgetting the precise name; it
+came out in September--and we catalogued all the nation-states,
+and all, except one nation-state actor, was from those four
+countries.
+ Mr. Gimenez. From those four countries, right?
+ Mr. Smith. Yes, that is right.
+ Mr. Gimenez. OK. How would you gauge our United States
+offensive capabilities in cyberwarfare?
+ Mr. Smith. I am definitely not the expert on that.
+ Mr. Gimenez. Fair enough. OK. And, sir, at Microsoft, are
+you in China? Are you in Russia?
+ Mr. Smith. We do have personnel in both countries, yes.
+ Mr. Gimenez. In the Chinese subsidiary, are there Chinese
+interests that have an ownership stake in Microsoft?
+ Mr. Smith. Not that I am aware of. We do certain work with
+joint ventures, but we operate through Microsoft Corporation
+and we operate through wholly owned subsidiaries. I am not
+aware of any other kind of structure.
+ Mr. Gimenez. Because, I mean, I have been made aware that
+if you are doing business in China, they need to have 51
+percent ownership to do business in China. That doesn't apply
+to you?
+ Mr. Smith. It certainly doesn't apply to Microsoft. I would
+want to go back. You know, it is a big company, and there are
+other companies we have acquired in recent years, and I would
+want to go back and look specifically at the ownership
+structure for each of those. We run through our own company.
+ Ms. Norton. The gentleman----
+ Mr. Gimenez. Thank you, Madam Chair. I know my time is up,
+and I yield my time.
+ Ms. Norton. I thank the gentleman for his questions. Next
+would be Mr. Johnson of Georgia.
+ Mr. Johnson. Thank you, Madam Chair.
+ Ms. Norton. You may be muted, Mr. Johnson.
+ [No response.]
+ Ms. Norton. Mr. Johnson, can you hear me?
+ [No response.]
+ Ms. Norton. He may be having bandwidth problems. We may
+have to go on to another member while we wait for Mr. Johnson
+of Georgia, but just a moment, please, until I see who is next.
+Witnesses are in and out with votes, so it is difficult to know
+who is available. Just a moment, please.
+ [Pause.]
+ Ms. Norton. Let us take a five-minute recess to see if
+there are members available. I apologize to our witnesses, but
+with the rolling votes, we are having this difficulty seeing
+who is available, but we will back in five minutes. Thank you.
+ [Recess.]
+ Ms. Norton. I believe Ms. Porter of California is
+available. Ms. Porter, you are recognized for five minutes.
+ Ms. Porter. Thank you so much, Ms. Norton, but I don't see
+Mr. Smith in the hearing. Is he available?
+ Ms. Norton. There he is.
+ Ms. Porter. Thank you so much, Mr. Smith. I see you now. It
+seems like one of the takeaways from this hearing is that
+successful cyberattacks are really a matter of when, not if.
+When investigating a cyber breach, it is helpful for companies
+to have comprehensive logs to review so that they know who
+accessed what, what settings were changed, and so on. Is that
+right? Those logs can be helpful.
+ Mr. Smith. Generally, logs can be helpful. That is correct.
+ Ms. Porter. And it is the cloud companies like Microsoft
+who keep those logs. The attacker who first got into
+SolarWinds' network did so in September 2019. How long does
+Microsoft keep network logs for?
+ Mr. Smith. Well, logs are kept in a variety of
+circumstances, and they are kept by all kinds of companies, and
+they are kept by IT administrators, so I cannot give you a
+specific----
+ Ms. Porter. Mr. Smith, how long do you keep logs for at
+Microsoft?
+ Mr. Smith. I don't know. I would have to go ask, you know,
+and it would depend on which service and the like.
+ Ms. Porter. So, based on my information, what I understand
+is that the range is fairly short, something between seven days
+and 60 days, and it depends, as you just said yourself, on what
+services the client has purchased, they can purchase to keep
+the logs more as part of a package. Everyone on this panel has
+said that successful attacks are basically inevitable, but you
+didn't sell the DOD the logs that they would need to be able to
+fully assess the damage?
+ Mr. Smith. Well, I think the premise of that question is a
+little bit off, to be honest. First of all, there was no
+indication, to my knowledge, that the DOD was attacked. Second,
+I don't know what the DOD has purchased, you know, from us.
+Third, I don't know how long the logs would go back, you know,
+for services that we do provide to the DOD.
+ Ms. Porter. Mr. Smith, do you own a toaster?
+ Mr. Smith. I sure do. I own one.
+ Ms. Porter. When you use that toaster, do you expect it to
+catch fire?
+ Mr. Smith. I sure as heck don't. No, I do not.
+ Ms. Porter. So, imagine you were selling toasters, Mr.
+Smith, and you knew that toasters you were selling were going
+to explode 1 day. It was a matter of when, not if, but you sold
+those toasters anyway. What would happen to the company that
+you were running that sold those toasters?
+ Mr. Smith. Well, look, we are not in the toaster business
+and we are not talking about toasters, but I would not want to
+work at a toaster company that had toasters that they knew were
+going to explode 1 day.
+ Ms. Porter. Toaster companies are held--You are lawyers.
+You know the standard of strict liability. They are legally
+liable if they sell a product knowing that there is a
+likelihood that it will become defective or not work, if it
+doesn't have all the necessary safety features, for example.
+Why should Microsoft, or should Microsoft, let me ask you, be
+held to a similar liability standard, maybe not strict
+liability, but at least negligence, if you are selling server
+services and not selling sufficient logs as part of that in
+order to really do the work of stopping and identifying
+cyberbreaches?
+ Mr. Smith. Well, let's separate two things. One, the
+specific, what logs are we providing, et cetera, that is a
+factual question that neither you nor I right now have the
+information about. I do take your broader question, and I think
+it is basically this: should companies be held to a duty of
+care? Should they be obliged to follow reasonable cybersecurity
+practices? Yes, we do, and I think it is important to recognize
+that every one of these hacks didn't take place in the cloud.
+They took place on premise, on the networks, in the server
+rooms of these customers. They were the ones that had the logs,
+not us, for those intrusions.
+ Ms. Porter. OK. So, you would agree that we need a national
+breach law, some kind of standard that sets out what the
+standard of care is, and that if you don't follow the standard
+of care, you could be held liable.
+ Mr. Smith. Well, I would separate that from what I actually
+think is the most important issue in this hearing, which is,
+for certain companies, first responders, critical
+infrastructure providers, to let the government know whenever
+there is an attack. This is more like letting 9-1-1 know that
+someone has broken into a house. It doesn't matter whether a
+duty of care was followed or not. There is a burglar in the
+house. We need to go, you know, send the police to get them
+out.
+ Ms. Porter. So, but, Mr. Smith, reclaiming my time. If we
+want people to do that notification, to make that 9-1-1 call,
+do you support whistleblower protection for employees who make
+those disclosures?
+ Mr. Smith. Look, I haven't thought about that. I would be
+happy to think about it. I don't think you need whistleblower
+protection. We just need to create a system that puts the
+obligation on the companies themselves that have this
+information, and I think if that obligation is in place, other
+companies will follow. Look, we at Microsoft have been
+reporting this kind of information sharing. We have been
+publishing blogs without any legal duty to do so.
+ Ms. Norton. The gentlelady's time has expired. I believe
+she was able to speak again because somebody yielded her time
+to speak again. I want people to understand that. I call on Mr.
+Garbarino of New York. You have five minutes, Mr. Garbarino.
+ Mr. Garbarino. Thank you very much, Madam Chairwoman. To
+the two witnesses from SolarWinds, the committee is concerned
+that many of the current governmental procurement certification
+regimes are only check-the-box exercises and don't actually buy
+down risk. Can you discuss the various certification regimes
+that SolarWinds products were required to meet in order to be
+to be put on the GSA scale and made available to government
+agencies? Either Mr. Thompson or Mr. Ramakrishna.
+ Mr. Ramakrishna. Sorry. Go ahead----
+ Mr. Thompson. No, go ahead, Sudhakar.
+ Mr. Ramakrishna. Congressman, we comply to the standards
+that we have to comply to to ensure that the Federal Government
+can deploy our products. For instance, the FIPS certifications
+are required by the government and we comply to those. So, as
+it relates to Federal agencies, their compliance requirements,
+we have conformance working with our partners and directly with
+our customers themselves across the board. If you would like a
+full list of our compliance certificates, I am happy to furnish
+them to you as well.
+ Mr. Garbarino. Well, what were you required to do? What was
+SolarWinds required to go through in order to be put on the
+list? What is GSA requiring? You know, is it enough? Should
+they require more before something can be made available to
+government agencies?
+ Mr. Ramakrishna. To the best of my understanding, it is not
+so much a set of requirements that need to be added. Coming
+back to the issue at hand, I would doubt if more specification
+may have helped this particular case as much as an
+understanding of how these supply chain attacks are evolving,
+and for us as the private sector to take corrective steps and
+learnings from this experience and implement them and obviously
+pass that on from a software development and a secure
+development standpoint as well. To me, it does not appear to be
+a requirements thing at this point.
+ Mr. Garbarino. OK. Mr. Thompson, anything additional?
+ Mr. Thompson. The only thing I would add is that different
+areas of the Federal Government require different levels of
+certification, and in every area of the Federal Government
+where we were allowed to sell, we had the required
+certifications. Whether that was COE, whether that was APL,
+Common Criteria, we had the required certifications. But I
+would agree with Sudhakar. Some of those certifications, while
+they do have security testing requirements that our products
+went through, and I think that that helps to ensure the
+security of the products, I think as you think about this
+particular breach and what happened, I don't think those
+certification requirements are designed to capture something
+like this.
+ Mr. Garbarino. OK. So, is it fair to say we should now
+update to try to address it so this doesn't again or so other
+things don't happen again?
+ Mr. Thompson. Yes, I think that is a good question for CISA
+to ask them in terms of what could be done because I don't
+really have all the answers there. But I do think we have to
+think about together, private and public sector, how we do we
+work together more closely to make sure products are secure.
+And a lot of the panelists have talked about how do we share
+information very, very quickly so we can address issues as they
+occur, because nation-states will come up with new vectors of
+attack. They will come up with a new one tomorrow, and they
+will come up with a new one the day after, and the only way to
+protect ourselves is to let everyone know what those vectors
+are so that we can respond to them.
+ Mr. Garbarino. I appreciate that. Thank you. Mr. Smith, a
+question for you. Can you help the committee understand
+Microsoft's statement: ``We found no evidence of access to
+production services or customer data. The investigation also
+found no indications that our systems at Microsoft were used to
+attack others.'' What exactly are you saying here? Can you help
+us understand what did and didn't happen in your view? In your
+testimony on Tuesday, you mentioned that some Office 365
+accounts were compromised through simple password guesses and
+sprays. How were the other accounts compromised?
+ Mr. Smith. Sure. Well, what that statement says is three
+things. It says that our build systems were secure and they
+were not penetrated in any way, that we had no customer data
+that was touched in any way, and that we found no evidence that
+any of our services or products were used as a vector of attack
+to launch an attack against anyone else. What we did find in
+certain instances was once this intruder was inside a network
+of, say, a customer, you know, say a Federal agency, one of the
+things it was able to do was get access to an account that had
+what we call elevated privileges, like an IT administrator. It
+was able to find the password or get the key to get into that
+account. When it was in that account, they found that that
+individual had access, say, to the Office 365 email of a
+portion or all of several customers. And so once they were
+there, then they went into the Office 365 cloud service and
+that is when we identified their presence.
+ Ms. Norton. The gentleman----
+ Mr. Garbarino. Thank you very much. I yield back.
+ Ms. Norton. The gentleman's time has expired. I thank him
+for his questions. I recognize Mr. Johnson of Georgia.
+ Mr. Johnson. Thank you. Can you hear me now, Madam Chair?
+ Ms. Norton. I can, and you are recognized for five minutes.
+ Mr. Johnson. Thank you. Technology advancements have
+created a world that looks unrecognizable compared to our lives
+just 30 short years ago, but Americans have grown accustomed to
+these changes. They have adapted. The average person not only
+may not understand the nuts and bolts of technology, but they
+do understand the risk of not being careful with it. Many of us
+use two-point authentication for our email, a third of
+Americans change their passwords annually, and we all know
+better than to make our passwords ``JohnSmith123.'' Companies
+that work with millions of individuals' personally identifiable
+information should be held to a high standard that at least
+reflects what ordinary people employ in their day-to-day
+affairs using technology.
+ The SolarWinds preparedness and response to this hack were,
+at best, incredibly negligent and, at worst, criminal. And
+unfortunately we have seen a lot of data breaches that have
+dealt with the lack of protection for sensitive data.
+Hospitals, governments, county and local governments have been
+held hostage, hospitals, even government agencies. I believe
+eight or nine government agencies using SolarWinds software
+were able to be hacked into. Mr. Mandia, why was the SolarWinds
+breach so dangerous to our national security?
+ Mr. Mandia. Well, that is a great question. First, I would
+like to comment that even if you are compliant, and almost
+every one of the 1,000 victims we respond to every year are, I
+am not convinced compliance in any standard regulation or
+legislation is going to stop a Russian foreign intelligence
+service from successfully breaching an organization, which is
+what happened here. The reason that the breach that we are
+describing was so entrenched is the fact that it was
+surreptitious and clandestine for nine months, and the threat
+actor behind it looks to be a foreign intelligence service.
+That is why. I don't think it impacts the general consumer that
+goes home every day. They are not thinking about this, but the
+government agencies that were impacted and the companies
+impacted are thinking about it. So, I think----
+ Mr. Johnson. Well, what can our enemies who hacked into our
+national data base, what can they do with the information that
+they obtained, or what is possible that they could do with that
+information?
+ Mr. Mandia. That is going to be one of the most complex
+questions to answer in this, sir, is that emails and documents
+were taken, and, quite frankly, the people targeted, all that
+information that was taken, I believe the threat actor is still
+learning how they can use that information. It is going to
+emerge over years, and it is going to take months and months
+for organizations to get their arms around all the possible
+uses of the stolen documents. You know, this breach, to me,
+from what I can observe, and I was a first-hand victim of it,
+wasn't about stealing the information of consumers' PII. This
+is about stealing documents that were relevant to the
+collection requirements of another nation.
+ Mr. Johnson. Well, it is national security secrets that can
+affect the lives and indeed the freedom of Americans and the
+safety of Americans, the physical well-being of Americans.
+Isn't that correct?
+ Mr. Mandia. What can happen from this breach is yet to be
+told. Each victim had a different----
+ Mr. Johnson. A lot of damage to our national security could
+have been done and probably was done as a result of this
+breach. What standard should we build for our most precious
+infrastructure, like our voting systems, our hospitals, our
+electricity grids, our government secrets? What kind of
+national standards should there be in place to protect those
+secrets and guard against successful attacks like this one that
+are bound to occur in the future?
+ Mr. Mandia. That is the question for me. You know, when you
+think about modern cyberdefense, first and foremost, every
+airplane has a data flight recorder. Overall, if you capture
+everything all the time, which is very hard to do, mind you,
+with encryption and other things, but it is always good to have
+something there that recorded everything in case something gets
+missed. Modern cyberdefense is going to take learning systems--
+AI--and it is going to take machine learning, and it is going
+to take expertise on the frontlines constantly being automated
+by systems. We are going through that transformation, sir, now
+in the industry. The bottom line is we can't have stagnant
+defense. We have to have defense that evolves at computer
+speed, not the signatures of yesterday, but the AI of tomorrow.
+ Mr. Johnson. Thank you. I yield back.
+ Ms. Norton. The gentleman's time has expired. I thank him
+for his questions. Mrs. Cammack of Florida.
+ Mrs. Cammack. Thank you so much, Madam Chair. Good
+afternoon. Thank you to our witnesses for hanging in there. I
+know it has been a lengthy day, but I do appreciate your candid
+comments and your patience as we work through this. Just a few
+weeks ago, the Homeland Security hearing that we had, we looked
+at cybersecurity threats facing our Nation today and how we
+must improve our resilience in this area. The SolarWinds attack
+was one of the issues discussed in that hearing, so I am very
+glad that you are all with us here today to discuss this again.
+ As you all know, cybersecurity is only growing in
+importance for our national security as more of our everyday
+lives move into a cyber world, such as committee hearings.
+Normal operations for areas ranging from critical
+infrastructure to consumer products are all moving to
+cyberspace, especially in the wake of the COVID-19 pandemic.
+This shift simultaneously exposes all of these operations to
+greater cybersecurity threats. So, I want to focus now on the
+relationship between the Federal Government and the private
+sector with regards to cybersecurity. In this area,
+cybersecurity is a unique landscape for private/public
+partnerships in information sharing and collaboration, which
+depends on mutual coordination. All levels of government and
+the private sector are targets now for our adversaries, non-
+state actors, and several of you have touched on the need for a
+national strategy to share intelligence between government and
+U.S. businesses.
+ So, I want to open this up to the panel. You all have
+touched on the importance of intelligence sharing between the
+public and private sector moving forward and the barriers in
+this area. So, in short, how can we make this information
+sharing easier for businesses, but also for government? What
+concrete steps can we take as legislators to facilitate this
+process? And I will start with Mr. Brad Smith with Microsoft.
+ Mr. Smith. No, it is a really important question, and I
+think, to some degree, it starts with identifying who needs to
+report, what they need to report, to whom they need to report
+it, and how. I do think one thing that is worth touching upon
+that we really haven't perhaps talked about at this hearing is
+the critical need to enable people who have this information to
+report it easily and in a streamlined manner, because we are
+acting as the first responders. And, in a sense, when an
+incident is unfolding, you know, we are fighting a fire, and
+you don't want to take people away from the fire so they are
+filling out a lot of forms and doing things that are going to
+detract from their ability to respond. So, I would hope that
+one design principle that would be built into this would be the
+need to do it simply, efficiently, and in a manner that is
+sensitive to the work that is needed while an incident is
+unfolding.
+ Mrs. Cammack. Excellent. Thank you, Mr. Smith. And as you
+know, government is not known for their efficiency or their
+ability for data bases across agencies to talk to one another,
+so I appreciate your comments and actually would love to
+followup with you at a later time, but I am short on time. So,
+Kevin, can you elaborate on that a bit?
+ Mr. Mandia. Yes, I think Mr. Smith got it right. I would
+add to it the confidentiality of it. If it is not confidential
+threat intelligence sharing, people are going to be worried
+about the liabilities to it, period. And, by the way, whether
+you did everything right on security or everything wrong,
+everybody's security program, to some extent, is a Maginot
+Line, period. And what we have learned with this one is hacking
+the supply chain was the blitzkrieg around the Maginot Line in
+the United States, so we will widen the line. We will broaden
+it. We will create our learning systems. Tech is getting better
+every single day. But whether somebody deserves to be
+compromised or not, however people interpret that, it takes
+time to figure out what you lost, so that confidentiality of
+the threat intelligence data sharing is critical.
+ Mrs. Cammack. Excellent. Thank you. I have got about a
+minute remaining, so really quickly, and again, I will open
+this up to the panel. What specific supply chain
+vulnerabilities should be addressed to limit exposure to these
+threats that we are seeing in cyberspace? Total free-for-all.
+Go for it.
+ Mr. Ramakrishna. I would be happy to start on this one
+because we are in a unique position to apply our learnings to
+the broader industry here. And we have defined some very
+specific things that need to be done in the context of secure
+software development as it relates to the supply chain issues
+that we discussed in this hearing, and we plan to publish those
+as well. It is not one specific thing that may impact the
+supply chain, and we need to look at it holistically across the
+build environments, and also stress test our methodologies to
+date of delivering integrity in software and improve those. I
+am happy to share the details of those. We have published
+those, but we will share more details with you offline.
+ Mrs. Cammack. I appreciate that. Thank you so much. And I
+know I am out of time, so with that, I yield back. Thank you.
+ Ms. Norton. I thank the gentlelady for her questions. Ms.
+Barragan of California.
+ Ms. Barragan. Thank you, Madam Chairwoman, for holding this
+very important hearing. Mr. Smith, Microsoft has stated that it
+has spent over $1 billion in security investments annually, but
+you recently also stated in an interview with the New York
+Times that you first learned of the attack when you were
+contacted by FireEye. How did Microsoft miss this attack, and
+how can customers like the U.S. Government trust Microsoft to
+uncover future vulnerabilities when Microsoft missed the worst
+intrusion of U.S. Government agencies, as quoted by Reuters?
+ Mr. Smith. Well, I think to put it in its simplest terms,
+all 60 of the Microsoft customers who were attacked had their
+networks penetrated on premise, meaning in their server room in
+their building. It was not in our cloud services. It is like,
+you know, if someone broke into your house, but not my house, I
+would not know until you told me, or, in this case, what they
+did was they went into your house, they found the keys, the
+passwords, so that they could go into the service in the cloud.
+Once they got that, once they stole your keys, once they
+entered our cloud service, we saw them, and then we called you,
+and we said, ``Did you know that they are in your house? Did
+you know that they have stolen your keys? Did you know that
+they have now entered the service that we can see, and did you
+know that, unlike AWS, unlike even, I think, Google, at
+Microsoft we let you know as soon as we find out that someone
+has penetrated your network?'' And it doesn't matter whether it
+had anything to do with our service.
+ Ms. Barragan. Well then, Mr. Smith, if it had nothing to do
+with Microsoft, what did the billion dollars that you spent go
+to?
+ Mr. Smith. Oh, it goes to better technology to protect the
+Microsoft products that you use. It goes to the Microsoft
+Threat Intelligence Center so that we can find these kinds of
+services. It goes to the Microsoft Detection and Response Team.
+It goes to the Microsoft Digital Crimes Unit. It goes to all
+the work that we do to protect the cybersecurity of our
+customers, of this country, and of the other countries that we
+support. And believe me, the billion dollars a year, that is
+just scratching the surface. We spend more than that every
+year.
+ Ms. Barragan. Thank you, Mr. Smith. You know, I represent
+the Port of Los Angeles, and cybersecurity is very important,
+and one disturbing fact from this breach is that Microsoft and
+FireEye products and services exist in most organizations. This
+breach and security could happen to the many thousands of other
+entities that utilize the software. Mr. Smith, you are now
+saying, ``It wasn't us, it was somebody else,'' and so it kind
+of begs the question, you know, what have Microsoft and FireEye
+done to ensure that source codes are not compromised?
+ Mr. Smith. Well, we do work every day to protect every
+aspect of cybersecurity. The first thing I would say is,
+fundamentally, cybersecurity today does not turn on the secrecy
+of source code. Most source code is published. It is in open-
+source form, and even when a company like ours uses source code
+that isn't published publicly, we make it widely available, so
+there are a wide variety of other practices that are critical
+for cybersecurity. And I think the message for the Port of Los
+Angeles----
+ Ms. Barragan. OK. Mr. Smith, I don't want to interrupt you.
+I do want to give a chance for Mr. Mandia to chime in here. Has
+FireEye done any anything to ensure that the source codes are
+not compromised? Given Mr. Smith's answer, I don't think I got
+one to the source code question. Do you have anything to add on
+this?
+ Mr. Mandia. Yes, in our intrusion, the primary focus from
+this attacker was all about the documents and the
+communications of folks that did work for the U.S. Government,
+and our red team tools, which do proactive security
+assessments. We, like many companies, do everything we can to
+safeguard all our information, not just our source code, but
+our email and everything else.
+ And I would like to remind folks that this was a foreign
+intelligence service that hacked into 17,000 different
+organizations. I would ask the Members of Congress to think, is
+it reasonable for our companies to defend themselves from a
+foreign intelligence services, is that the bar that we want to
+set for this Nation's private sector?
+ Ms. Barragan. Well, thank you. It is important that we find
+out what happened, and where the issue is, and what we can do
+because, as Congress, we need to ensure that we are finding out
+that information to say, hey, something needs to be fixed,
+something needs to be done better. Sure, we are going to have
+those outside threats, but we also need to look to see where it
+went wrong. And I appreciate the discussion today and look
+forward to working with everybody to make sure we are able to
+secure, you know, the software and our agency data. With that,
+Madam Chairwoman, I yield back.
+ Ms. Norton. The gentlelady's time has expired. Ms. Pfluger
+of Texas. I recognize Ms. Pfluger of Texas for five minutes.
+ Mr. Pfluger. Thank you, Madam Chairwoman. Thanks for the--
+--
+ Ms. Norton. I am sorry. Mr. Pfluger.
+ Mr. Pfluger. That is OK. I don't take offense to that right
+at this second. Thank you very much. You know, thank you all
+for a good discussion on this. As a military officer for two
+decades, you know, protecting every single piece of your
+architecture obviously is very, very difficult. I do want to
+talk a little bit, however, about our national strategy, and
+specifically I want to take it back to my own home district
+where we have a Cyber Center of Excellence that is in
+development at one of the universities, Angelo State
+University, led by a former general officer in the Air Force,
+Ronnie Hawkins, who is doing amazing things in a Hispanic-
+serving institution, minority-serving institution in a very
+rural part of our country. So, I would like you from the
+corporate side to comment on what role education plays in our
+national strategy to make sure that we have the right people
+that are learning the skills that they need to learn to enter
+the work force and be a part of cybersecurity. So, we will just
+go down the line and start with Mr. Smith.
+ Mr. Smith. Well, I would say two things. First, I think the
+kind of initiative that you have recently pursued at Angelo
+State points the way for the role that a number of colleges and
+universities and community colleges can play, you know. So,
+what you have been doing there around the cybersecurity
+intelligence program, I think it can be built and expanded and
+help us get the cybersecurity work force the Nation needs. The
+other thing I would point to is this extraordinary resource
+that we have as a Nation in terms of veterans coming out of the
+military every year. You know, every year there are about
+200,000 people who leave the military. They enter the private
+work force.
+ One of the things that we have done at Microsoft is create,
+in partnership with the Department of Defense, what we call the
+Microsoft Software and Systems Academy. And so it has already
+worked with more than 2,000 individuals leaving the military.
+We have worked with partners across the industry. We provide
+education in the last couple of months, say, of somebody's tour
+of duty, and it guarantees an individual a job interview, a job
+interview with one of 600 partners that we have brought
+together. So, that is another way, I think, to add to the
+cybersecurity work force of the country.
+ Mr. Pfluger. Thank you very much. Mr. Ramakrishna, do you
+have any thoughts on whether or not you believe that our
+college graduates, are we resource limited right now on the
+number of graduates who have the requisite skills?
+ Mr. Ramakrishna. Congressman Pfluger, first of all, I hope
+everyone in your family and your community is safe given the
+events in Texas. Related to your question, I would say that
+looking at only college grads in this context is restrictive. I
+was mentioning earlier that the internet has to be made more
+available to every child, every person that is interested in
+learning and accessing, especially focused on inner-city kids
+and socioeconomically backward populations, because there is a
+lot of talent in those circles that need to be unleashed and
+exposed to these types of topics so that we can have a more
+aware and a more diverse work force and a set of people that
+can be brought into society at a higher level from a capability
+and contribution perspective. I think that is our contribution
+or our responsibility as private sectors as well.
+ One specific thing that I would like to offer up there is
+that as the government facilitates those, as part of the
+private sector, we could have a buddy system that we could
+provide to some of those young children to give them better
+exposure to these technologies and techniques, get them into
+internships and potentially into employment as well, and not
+hold the degree requirements on them because not everybody may
+be able to, or be able to afford afford, to go to colleges.
+ Mr. Pfluger. Thank you very much. I appreciate that, and I
+also want to make sure that we acknowledge the fact that access
+to internet in the form of rural broadband is extremely
+important in communities like mine that may not have that
+ability. Very quickly, 30 seconds, Mr. Thompson, your thoughts
+on this issue?
+ Mr. Thompson. One of the challenges that we have had in the
+past, we have tried to work with colleges and universities on
+different programs to provide skill sets that we are in
+shortage of in the technology field in the United States. I
+think one of the challenges we had is just the speed at which
+colleges and universities can move. Getting them to add a new
+program because of the bureaucracy they have to go through is
+quite a lengthy process. So, I think if we can find a way to
+accelerate that and let them develop a cybersecurity training
+program or a data intelligence program, we need to do that
+quickly to be able to get more sophisticated workers in the
+work force to help solve these problems.
+ Mr. Pfluger. Thank you very much, and with that, I yield
+back. Thank you.
+ Ms. Norton. The gentleman's time has expired. I thank him
+for his questions. Next would be Ms. Bush of Missouri.
+ Ms. Bush. Thank you, Chairs Maloney and Thompson, for
+convening this hearing, and I want to start off. So, the number
+of SolarWinds customers who were potentially affected in this
+attack, it is extremely concerning. At least 18,000 customers
+downloaded this malicious update to the SolarWinds product that
+infiltrated their devices. One concern coming out of the
+SolarWinds hack is that the attackers could use the foothold
+that they gained inside these companies and these agencies to
+then access other companies and, in turn, people. As we have
+been discussing, the risk is not theoretical. Mr. Mandia, as I
+understand it, FireEye first disclosed the breach. Chairman
+Thompson and others have mentioned that cyberbreach
+notification legislation is urgently needed, and we see that,
+but I want to be sure I understand. Were you required by law to
+do so, to disclose?
+ Mr. Mandia. Right now, ma'am, most of the disclosure laws
+protect the personal identifiable information of American
+citizens, which is not something that we lost. So by law, we
+weren't, but I just want folks to know that literally within
+the first 36 to 48 hours, we were telling our government
+customers we have got a challenge here. We call it Ring Zero.
+Who do you go to first when you know there is something? As I
+was first briefed on the intrusion into FireEye, I recognized I
+doubt we were the first pick. And, in fact, the number in my
+head was we are probably the 40th organization compromised by
+this group, so who else is at risk. We did go to the intel
+communities. We did go to the DOD. We did go to CISA. Long
+before we went public with public disclosure, we were working
+with the U.S. Government.
+ Ms. Bush. So, do you think that you should be required by
+law to do so?
+ Mr. Mandia. I think if you are a first responder, like we
+are, to intrusions, because we recognized right away, you know,
+we are set up for this sort of thing, and it happened to us.
+You know, I took the oath to defend the Constitution of United
+States, you know, I think 30 years ago. It just hits you. I
+didn't even want the government to communicate with me at that
+point. I didn't know the scope and scale of this. But I think
+for first responders, absolutely getting the threat
+intelligence, because at the time we were telling people about
+it, ma'am, we really didn't know what had happened other than
+something had happened. But that was enough that we had to tell
+the government entities that we work with.
+ Ms. Bush. So, the answer is no basically. So, would you
+say----
+ Mr. Mandia. Yes, we didn't have a legal disclosure to, but
+we felt an obligation to.
+ Ms. Bush. OK. So now, would you say anything has changed
+since the hack that would make us trust private companies like
+SolarWinds more now?
+ Mr. Mandia. Well, I think when you see a breach like this,
+you don't want the attacker to win twice once they broke in.
+Well, actually, it would be three times. They broke into
+SolarWinds. They had what looks to be a very successful deep
+blast zone type of cyberespionage campaign, and then they
+harmed American companies both in shareholder lawsuits,
+liabilities, and investigations. It is like a trifecta for the
+adversary against us.
+ Ms. Bush. Yes.
+ Mr. Mandia. So, we got to think of a way where we play team
+ball as a Nation where we all come together. And I do believe
+the fastest thing we can do, we have been talking about a lot
+today, ma'am, get the threat intelligence into an agency in the
+government, and then from there it gets pushed out to the
+security community so we can go shields-up a lot faster. Best
+we can do, ma'am, is maybe somebody is a victim, but we are all
+as secure as the very last victim in cybercrime.
+ Ms. Bush. Thank you. Given that this hack has been traced
+back from many months, it may be possible that other companies
+knew about this and didn't tell anyone because they didn't have
+to. So, Mr. Smith, are you aware of any other companies that
+may have known about this breach and did not report it?
+ Mr. Smith. We notified 60 Microsoft customers, and we have
+said that 50 percent of those, so call it 30, are
+communications and technology firms. And we provided that
+information first to them, so we told them, and we have shared
+that information to the government. But most of those companies
+have not disclosed publicly that they were attacked in this
+way. And, in fact, you have other companies, some of the
+largest companies in our industry, that are well known to have
+been involved in this that still have not spoken publicly about
+what they know. There is no indication that they even informed
+customers, and I am worried that, to some degree, some other
+customers or some other companies, some of our competitors even
+just didn't look very hard. If you don't look, you won't find,
+and you will go to bed every night being blissfully ignorant
+thinking you don't have a problem when, in fact, you do.
+ Ms. Bush. Thank you, and I yield back.
+ Ms. Norton. The gentlewoman's time has expired. I am
+passing it over now to Ms. Porter to continue to chair the
+committee.
+ Ms. Porter. Thank you, Ms. Norton. I am going to hand it
+back to you. I believe we have no more members to recognize.
+Does anyone else wish to be recognized?
+ Ms. Norton. Well, we have been here for a long time, and
+unless someone speaks up with this double hearing, of this
+hearing involving two committees, I am about to sign off and
+thank our witnesses for testifying. I find members who had to
+come back and forth, but it looks like we have reached the
+limit of members who wish to testify. I want to thank the
+witnesses again, and at this point----
+ Ms. Porter. Ms. Norton?
+ Ms. Norton. Yes? Yes, indeed, Ms. Porter.
+ Ms. Porter. I see that my colleague, Mr. Torres, has
+joined.
+ Ms. Norton. Ms. Porter, will you take over the hearing from
+here?
+ Ms. Porter. Yes, ma'am.
+ Ms. Norton. All right.
+ Ms. Porter. [Presiding.] Mr. Torres, the gentleman from New
+York, is now recognized.
+ Mr. Torres. Thank you, Madam Chair. I have a question for
+the new CEO of SolarWinds. Has your company conducted a post-
+mortem of what went wrong, the mistakes that your company might
+have made, and the lessons learned from those mistakes?
+ Mr. Ramakrishna. Congressman, thank you for the questions.
+As I came into the company, given my cybersecurity experience
+from previous companies and having had to deal with cyber
+incidents in the past, I had to first look at our cyber hygiene
+and cybersecurity posture as well as our cybersecurity
+investments. As Mr. Thompson highlighted previously, this did
+not appear to be or does not appear to be an investment issue.
+We spent enough on cybersecurity, in fact, more than the
+average company----
+ Mr. Torres. Just in the interest of time constraints, so
+you have done a post-mortem, but in your judgments, do you
+believe your company made mistakes? Yes or no.
+ Mr. Ramakrishna. I think there are opportunities to
+improve, Congressman.
+ Mr. Torres. It is a straightforward question. I am a
+straightforward person. It is a straightforward question. Did
+you make mistakes? Yes or no. You can say no, but----
+ Mr. Ramakrishna. We all make mistakes and----
+ Mr. Torres. OK. You made mistakes. Tell me, what mistakes
+did you make?
+ Mr. Ramakrishna. As I look at what we have done in the
+past, and I am looking at it from the standpoint of where we go
+from here. I haven't looked at specifically----
+ Mr. Torres. We have to learn from past mistakes in order to
+know how to move forward so----
+ Mr. Ramakrishna. Yes.
+ Mr. Torres. We want to concrete examples. Is it true that
+SolarWinds had no chief information security officer in the
+lead-up to the SolarWinds breach?
+ Mr. Ramakrishna. So, the way we have organized ourselves is
+that instead of calling the person a chief information security
+officer, we call him a VP of security for a very specific
+reason. Instead of looking at only infrastructure security,
+that person is also responsible for looking at product
+security. That way we are able to get the best of both worlds
+and help us all build products as well as take care of our
+infrastructure. So, it is a----
+ Mr. Torres. So, I just want to be clear, you had a VP for
+security in the lead-up to the SolarWinds breach?
+ Mr. Ramakrishna. Absolutely, and we have had it since 2017.
+ Mr. Torres. You know, so here is the concern I have. The
+cybersecurity failure of SolarWinds led to a supply chain
+breach that compromised nine Federal agencies. It is arguably
+the greatest cybersecurity failure in the history of the United
+States, and your company is at the heart of it. Given the
+seismic nature of that cybersecurity failure, can your company
+be trusted to ever do business with the Federal Government?
+ Mr. Ramakrishna. Congressman, we take the security and
+protection of our customers very, very seriously. This
+particular issue was much more than just SolarWinds. It was a
+very sophisticated nation-state attack, as we have been
+discussing here. It has got very little relevance to a security
+hygiene of a particular company or the security investments of
+a particular company. It was a coordinated, patient, persistent
+attack that neither one company, no matter large it is or how
+many resources it is deploying, or one Federal Government
+agency is able to coordinate it, which is the subject of
+today's hearing that we came here to apply our learnings and
+contribute our learning.
+ Mr. Torres. I am going to move on. So, I have a question
+for FireEye. FireEye managed to do something that the entire
+cybersecurity apparatus of the Federal Government failed to do.
+You detected SolarWinds. So, my question for the CEO of
+FireEye, what does the Federal Government need to do to be more
+effective at detecting breaches like SolarWinds?
+ Mr. Mandia. Well, I think, first, it is team ball. You
+know, we had talked about the area of responsibility for some
+of the best capabilities we have, like the NSA's, outside of
+the Nation. All the fingerprints of this attack actually were
+inside the Nation. So, you have to expect that the government
+is going to detect some things, the private sector is going to
+detect some things, hence, all the dialog, sir, to bring it to
+one entity that has got purview into both sides of the fence.
+ I think the government was catching a whiff of it. They
+were seeing streams of smoke because when I started talking to
+government agencies, no one was surprised. They were starting
+to go, oh, I get it. We were all piecing together the same
+crime scene, but we all had different pieces of evidence. It
+took us finding the SolarWinds implant and Microsoft's help
+from the top down, cloud down, looking to start scoping this
+thing.
+ Mr. Torres. I just want to squeeze this in because we have
+the EINSTEIN system, which operates on a data base of known
+cyber threats, right?
+ Mr. Mandia. Yes, right.
+ Mr. Torres. Do you have technology that is effective at
+detecting anomalous threats that could benefit the Federal
+Government----
+ Mr. Mandia. We do, and there is a lot of other technologies
+that do as well, but the problem was, you have to have a little
+bit more visibility than that. So, there were blips on the
+radar sir, but nobody could tell what they meant without more
+context. The implant, when we found that, that was kind of the
+homerun for context and everybody went ``aha.'' That was the
+eureka moment.
+ Mr. Torres. Thank you. Thank you, Madam Chair.
+ Ms. Porter. Thank you, sir. With that, I want to thank our
+panelists for their remarks, and I want to commend my
+colleagues for participating in this important hearing.
+ With that, without objection, all members will have five
+legislative days within which to submit additional written
+questions for the witnesses to the chair, which will be
+forwarded to the witnesses for their response. I ask our
+witnesses to please respond as promptly as you are able.
+ Ms. Porter. This hearing is adjourned.
+ [Whereupon, at 2:01 p.m., the committee was adjourned.]
+
+
+