[inaudible conversations] good afternoon everyone and welcome. E. This is a joint hearing of two subcommittees a committee on oversight and accountability. The subcommittee i chair the subcommittee on Cybersecurity Information Technology and government innovation at the others a subcommittee on Economic Growth and Energy Policy and regulatoryh, affairs. Its chaired by my esteemed colleague from texas. We will have Opening Statements from the chairng and Ranking Member of both subcommittees. Thats a total of four Opening Statements so ill keep mine brief. Cybersecurity has beenor a major focus of power since i became the subcommittee chair and im concerned that we are not prepared for the increased sophisticated cyberattacks that will be fueled by ai. Businesses and Government Entities in my district and across the country cafe cyberattacks and were forced to pay a huge sum of money and ransom for the federal government itself sets of data tens of millions of dollars its decades older than myself and we have a shortage across the country of 700,000 cybersecurity professionals at Job Vacancies across the public and privatesector. We need all hands on deck to fill the gap and if i sponsored legislation to eliminate the unnecessary to bring degree hurdles and separates a child for the government cant turn away people with mys kids cyberaxios because they up for a degree. Cyberattacks come in different forms for today weac are focusig on Ransomware Attacks. These are thes pledge to restore access to the ransom is paid and charge an additional ransom for not disclosing sensitive stolen data. These sorts of attacks are nothing new. They have existed for decades. Back then they were unsophisticated and often unsuccessful in locking down systems. Amateur hackers would try to get small francis for individual users. The field is that the came clear and made 2020 onto hackers likely based in russia were used in the brought a pipeline to stands up at the corner pipeline went offline briefly causing the federal department of transportation to declare an emergency in 17 states and here in d. C. To keep lines open and in fact when that hack happened was when we saw my home state of South Carolina, thats when gas prices started to increase and they never went back down. The problem shows no sign of going away and we are costly searching for areas of vulnerabilities. The highdef covid they were targets like hospitals and schools and even the ransomware supplychain was expanded. Hackers offer ransomware as a service for other criminal enterprises. The bottom line is malicious actors can do too much damage and make too much money with too few consequences. We need to engage in this fight at all levels. The camp by the battle against adversaries launching attacks from m a enemy states like china and russia and elsewhere. It will take partnerships including federal Law Enforcement andaw that includes findingw out how to better collect and share information about these attacks and the attackers. Ac as youll hear today the institutions victimized by ransomware has options and all of them are bad. They either declare ransom or they are unable restore their normal t operations. In the case of schoolsn and hospitals School ChildrensSchool Records and medical records. Well hear from the cybersecurity expert his current works includes Counseling Companies that are targets and victims of these attacks. I hope this hearing today will help educate us onod the problem and will service a step toward better testing it and with that i get to the Ranking Member of the subcommittee mr. Connolly. Nick thank you madam chairwoman and thank you for having us here thank you to witnesses. In discussing the threats of ransomware we cant ignore it costs by some a Government Shutdown for the Cybersecurity Agency for temple will be forced to furlough more than 80 of its workforce. We are concerned about that cyber trend. Without funding our cyber defenses will be reduced and yet still hold responsibility to respond to attacks on her networks and Critical Infrastructure. We cant allow this to happen when we are to know the innumerable Malware Attacks constantly threatening our economy and schools, Public Health, Critical Infrastructure and National Security. Ransomware is a multimillion dollar criminal enterprise. And 2020 went the estimated cost of ransomware examined globally covered around 20 billion. This year that number is 30 billion to 50 increase in just two years. The United States is a major target. Between january and december of 2022 known Ransomware Attacks on private networks United States increased by 27 and more troubling these include only those incidences that the counterpart to the recent received considerable public attention these kinds of Ransomware Attacks targeted Critical Infrastructure. And 2020 when the United States government had to declareto regional emergency as you noted madam chairwoman after the Colonial Pipeline was taken down. The largest pipeline of a system in the country. That was just one frightening reminder of what is at stake. State and local governments are particularly vulnerable because they are storing much of our personally identifiable information that they the protections as billiondollar conglomerate to criminals also do not discriminate between large areas and small towns. Communities of all sizes have been victims including dallas, texas g oakland, california and lowell massachusetts. In 2023 a ransomware report found that nearly 70 of the surveyed i. T. Leaders in and state and local governments reported Ransomware Attacks. Just as troubling report on educational systems are the most likely. I ask unanimous consent madam chair to submit this report into the record. Up without objection. I think the chair. Of this firsthand from the ransomware that detect the Public School systemnt the 10th largest in america. Members of this committee are well aware about a coronavirus pandemic abruptly revealing how illprepared for state and local governments were at delivering Vital Public Services securing the i. T. Platforms. Direct check payments to families and Small Business loans and on and on. We held hearings on the i. T. Infrastructure and rising cybertaxes to state and localn governments. We need to accelerate i. T. Modernization. In response of hearing we introduced house companion toom the senate state and local Digital Service act. This import legislation provided guidance andis critically fundig to state and local governments to perform Digital Service teams focusing on secure Public Services. I certainly hope this congress will continue that work and furthermore we hope to champion the bipartisan infrastructure bill providing more than a billion dollars in public and private employees who fall victim to Cyber Attacks every year. Earlier this year that Biden Harris Administration published its National Cybersecurityec strategy which addresses these among other issues headon by laying out plan to disrupt ransomware criminals that lays out four key pillars to disrupt them. One Leverage International corporations ecosystem of their ransomware ecosystem benefits and isolate safe havens and investigating ransomware crimes by using Law Enforcement and other authorities a to disrupt t and them and third bolstering Critical Infrastructure resilience to withstand such acts and forth addressing the use of to launder ransom ware. Apartment justice continues to hold criminals accountable and most recently the quack. Network seizing more than 8. 000000 in cryptocurrency. While these are important first steps much more has begun and i know we will hear that from our witnesses today. I look forward to hearing your testimony working with you madam chairwoman and others in trying to crack into terror and prevent Ransomware Attacks and i back. Thankhi you. I recognize chairman fallon. I want to thank everyone for being here and grateful to the subcommittee and subcommittee on cybersecurity teaming up to talk about this very important problem. America relies on everything than you rely on something and when it goes down it has a farreaching consequence when its jeopardized. While Ransomware Attacks are digital files and held an ransom until the ransom is paid the true cost of cyberattacks go well beyond them money surrendered. He havoc on normal operating receipt jars of a company, a school, a hospital in and forcing reallocation of staff, lost revenue and damage to reputations. Following an attack they may have two bury out that their entire i. T. Infrastructure. Scary costly in scrambling to redirect funds earmarked for other investments. Mountain dew could get a cyber attack and where would our colleague from tennessee beat . You might be making investments in teachers and personnel are most valuable natural resource. Congress should be very concerned about these attacks and where they originate. The vast majority are coming from russia country that clearly doesnt have her best interest atwh heart and with these attacs target essential sectors like the electric grid or Hospital System or the pipeline are jvs a couple of years ago they endanger Public Health quite frankly putting american lives p at risk. We saw they can have an impact well beyond the original attack into the larger economy again with Colonial Pipeline that reverberated and was very dangerous and very chilling. As our world becomes more reliant on technology unfortunately the opportunities for bad actors to use that technology for their own monetary and political gain becomes more often but we must prevent hackers from being able to use ransomwaree to up and american institutions at risk our nations prosperity and health and safety. Im grateful for our witnesses who are here today to share their story and help us examine the ongoing threat of Ransomware Attacks. During this hearing i hope to help prevent further attacks and punishing those that would go after our Critical Infrastructure. With the government provides resourcess for better protecting our own system i look forward to discussing how the Security Agency the fbi and other federal agencies can better protect the American People enter data. Thank you madam chair night back. I now recognizeorre congressn thank you chair and Ranking Member connolly and thank you to the witnesses for joining us today. Her hearing today addresses an issue threatening american far too frequently Ransomware Attacks. Criminals both foreign and domestic use ransomware to target everything and everyone, private businesses, state and local governments, hospitals, School Districts and Critical Infrastructure. Care and Safety Net Services for our nations most vulnerable. But before i go any further we cannot sit at this hearing without addressing terrible dangers we face with the Government Shutdown. A Government Shutdown, much like a ransom or attack would be dangerous, destructive, and disastrous. The cybersecurity and infrastructure Security Agency, the agency, that leads federal cybersecurity efforts as the National Coordinator for National Coordinator for Critical Infrastructure security and resilience, would have to i furlough 80 of its employees as a result of the republican shutdown. We are talking thousands of critical workers, people with families and that is just one agency. The department of justice, the Agency Responsible for investigating and taking down criminal ransom were networks would also be forced to furlough thousands of employees. With a shut down extreme republican members would undercut organizations and state and local governments relying on federal funds to prevent the crippling ransom or attacks we are a discussing in this very hearing. All over the country ransom or attacks directly affect peoples lives. Hospitals have to turn away patients. 911 calls are unable to dispatch ambulances and fire trucks. Small businesses have to slow down. In some instances people are unable to pay their water bills because the city website have been paralyzed by a hacker demanding ransom and those late fees add up. And my home state ransom or is targeted to ohio unemployment system in julym preventing and n march the Lakeland Community college in ohio in my district was the victim of a cyber attack that compromise the personal data of nearly 3000 individuals. Now the Bidenharris Administration has made defending against these kind of attacks a top priority. Thanks to the state, local and territorial governments with Cyber Capabilities they need. But on sunday at 12 01 a. M. These dollars are at risk of not making it out at all. It is just one more reason the maga shutdown is harmful to everyday people, our National Security and our standing in the world. And with that madam chair i yield back. Thank you please introduce our witnesses for todays hearing our first witnesses mr. Grant schneider senior director Cybersecurity Services art second witness is doctor lacey gosch superintendent of technology at Judson Independent School district our third witness dr. Stephen leffler president chief operating officer university of Vermont Medical Center our last witness today mr. Sam rubin Vice President will head of operations that Networks Unit 42. Welcome everyone were pleased to have you this afternoon. Pursuant to Committee Rule 90 the witnesses will please us to stand and raise the right hand. All right do you solemnly swear or affirm the testimony you are about to give g is the truth, te whole truth and nothing but the truth so help you god . Let the record showed the witnesses all answered in the affirmative. Thank you. We appreciate all of you for being here today look forward to your testimony. Let me remind the witnesses we have read your written statements they will hear in full in the hearing record please limit your oral introductory statements to five minutes as a reminder please press the button on the microphone in front of you so it is on and o members can hear yo. When you begin to speak the light in front of you will turn green but after four minutes the light will turn yellow when the red light comes on your five minutes have expired will ask you to please wrap it up. First recognize mr. Schneider to please begin your Opening Statement. Thank you very much. Chairwoman mace, chairman found Ranking Member bush, members of the committee and your staff. Thank you for the privilege to appear before you today. Ive spent my entire 30 year career focus our nation security. This includes over 20 years Defense Agency seven of which i served as a chief Information Officer in six years the executive office of the president serving as a senior director for cybersecurity policy on the National SecurityCouncil Staff most recently as a federal chief Information Security officer. For the past three years ive been senior director Cybersecurity Services at a law firm i hurt our clients both large and small from all sectors e