Corporate Intelligence

Businesses operating critical infrastructure, such as the energy and banking sectors, want to join a new government program that would give them access to classified intelligence on cyber threats. The program, which is currently restricted to certain defense contractors, is aimed at strengthening commercial networks serving the military.

The thinking at the Pentagon is that power companies and other businesses vital to troops should be privy to malware surveillance collected by the National Security Agency, the military's spy branch. The Defense Department does not have the authority to guard civilian systems. That responsibility falls to the Homeland Security Department, which would be a key player in any such initiative.

The Pentagon expects to extend the classified program to all military contractors this year, and "there is also

active discussion about expanding the pilot, through DHS, to other sectors beyond defense," Defense spokeswoman Lt. Col. April Cunningham says. Homeland Security officials say they have not come to an agreement on whether rolling out the program in the civilian space would be beneficial. A 90-day trial run with select military vendors recently ended, "and we are now evaluating its effectiveness and potential before deciding whether or not to expand its scope," DHS spokesman Chris Ortman says.

Critical industries say they would welcome the knowledge that Defense is providing to contractors--reports of lurking malicious code and the technical means to pre-empt intrusions. Through various reconnaissance missions, the government gathers virus "signatures," the unique fingerprints of worms that can bolster network immunity if loaded into antivirus software.

"In any kind of a business where you are dependent on intelligence, the better you can prepare and the more you can share with your constituents," says Mark Weatherford, outgoing chief security officer at the North American Electric Reliability Corporation, a standards-making group of power grid operators. In October, he was named deputy undersecretary for cybersecurity at DHS' National Protection and Programs Directorate.

DHS' U.S. Computer Emergency Readiness Team responds to corporate cyber incidents at companies' request, and offers a diagnosis of the breach and advice on service restoration. The department's Protected Critical Infrastructure Information Program assures banking, energy and other vital sectors that if they choose to report confidential security information, the data will not be publicly disclosed. %C2%A0

But industries are wary of any strings attached to gaining access to classifiedinformation. The electricity sector could take issue "if part of that information sharing involved installing a device, or appliance, within our environment," Weatherford says, "or anything that could impact the reliability of the grid." In addition, power companies question whether government will have access to customers' personal information and fear losing control of proprietary information. The Defense program is voluntary, however, and officials stress that NSA is not monitoring, intercepting or storing any private communications.

Another matter that would have to be worked out, perhaps in Congress, is which agency would run the program. Homeland Security has limited license to exchange sensitive information with private networks. In May, the White House proposed sweeping cyber legislation that would authorize companies to disclose threat data to DHS, with full immunity and confidentiality. DHS, in turn, would be able to share such information, minus any identifying data, with other firms for their own protection. But the measure hasn't been passed yet.

Some critical sector companies say they would prefer Homeland Security as the single point of contact for the classified program. "DHS is really focused on protecting the critical infrastructure of the United States. The DoD is interested in the defense of the United States and the defense industrial base," Weatherford says. "Private industry is just a little bit nervous about working with the Defense Department on these kinds of things."

James P. Fama, a vice president at the Edison Electric Institute, says, "It's better for us if we work with one agency, not a multiple bunch of agencies where we're not certain who to deal with."

Homeland Security, however, has been reluctant to endorse a classified program for nondefense firms. Some cybersecurity experts say they sense DHS is in a quandary over how to help businesses that do not have the necessary security clearances to receive Top Secret data. Most Pentagon contractors have the required credentials already. Enrolling nondefense companies could mean handing out more clearances at a time when Congress already is afraid the 4 million clearances held nationwide will spawn more WikiLeaks-like breaches.

Under current rules, DHS can tell a power company there is intelligence suggesting its networks are in danger. But DHS can't offer it the information it would need to take action, says Alan Paller, research director at the SANS Institute. "Once you tell people that they have a vulnerability the concern is how do you tell them how to fix it without giving out sensitive information?" he says.

The question of which agency should lead a commercial program goes back to the debate over who is running cybersecurity for the country. In October 2010, DHS Secretary Janet Napolitano and then-Defense Secretary Robert Gates signed an agreement to co-locate a team of cyber sleuths from both departments at NSA to better coordinate protection of U.S. civilian and defense networks.

Some executives say they have not seen much tension between the two departments, while dealing with both on corporate cyber issues. "I think [Defense officials] are working very closely with DHS, which would be a front door to the program," says Greg Rattray, a senior vice president at BITS, part of the Financial Services Roundtable, a Wall Street advocacy group. "At the leadership level they don't see it as a competition, if only because that makes the private sector more comfortable working with them." As long as the two departments are cooperating, and synchronizing with the Treasury Department and other regulators, it really doesn't matter who is at the helm, he says. "The key is that they've got their collaboration and roles well-defined," he adds.

Many big banks would like classified insights into vulnerabilities if participation remains optional and no fees are attached, according to Rattray. "The top-tier institutions do want to be able to have a dialogue about implementing this and whether it makes sense for them," he says. "I think we probably have to consider it [differently] if this came down as a mandatory requirement." Smaller financial firms might not have the staff for the undertaking. "There is the cost of just staff time," Rattray explains. "It's just a choice when you do risk management. Are you going to have some of the effort of your team collaborating with the government on this program?"

The verdict is out on whether the program is actually working. "Does this discover things beyond what the private sector would be able to discover on its own?" Rattray asks. NSA officials declined to comment on the mechanisms they are using to circulate the cyber intelligence. Tim McKnight, chief information security officer at Northrop Grumman Corp., said in a statement that the firm supports the effort. "We believe it will be helpful in providing an additional level of protection for the supply chain," he said.