2006: A year of public humiliation for the VA

Theft of veterans' data forces the agency to fix lax information security practices.

Department of Veterans Affairs officials say they are on their way toward preventing the recurrence of a humiliating data loss that occurred in May this year. A VA laptop computer and an external hard drive containing the personal information of 26.5 million veterans were stolen from the home of a VA employee. The VA has instituted data security and awareness measures, including new directives on the transmission, transportation and use of data outside its facilities, said Robert Howard, the VA's chief information officer and assistant secretary for information and technology. It also completed mandatory annual security training for all employees and began encrypting all agency laptops that leave VA offices. The May 3 theft, perhaps the single largest security breach in the history of the federal government, was compounded when officials failed to promptly inform senior executives, including VA Secretary Jim Nicholson. The VA then waited nearly three weeks before telling the public about the stolen data, which included veterans' names, birth dates and Social Security numbers. Sen. Larry Craig (R-Idaho), chairman of the Senate Veterans' Affairs Committee, called the time lapse unbelievable. In the several months following the theft, concerned lawmakers held several hearings with Nicholson, Howard and George Opfer the VA's inspector general. Opfer told lawmakers that the IG office's mandatory reviews under the Federal Information Security Management Act had identified significant information security vulnerabilities since fiscal 2001 that placed VA at risk of external attacks, disruptions and unauthorized access to sensitive data. "The vulnerabilities cannot be effectively resolved," Opfer said, as long as the VA's three administrations and other components operate on their own and are not accountable to the CIO.   An IG information security officer learned of the theft during a routine meeting May 10, when another information security officer mentioned that a VA analyst's home had been burglarized. The unnamed data analyst had been taking records home without permission since 2003 to work on a personal project, Opfer said. That VA data analyst was later fired. Nicholson said he was "mad about the loss of veterans' data and the fact that one person had put many at risk." The VA had policy directives to safeguard sensitive information, but many employees viewed them as suggestions rather than as requirements, he said. The IG's investigation concluded that VA officials acted with indifference and little sense of urgency even after the theft was revealed. The VA set up a recorded hot line to inform veterans of what it said was "a random act and not a deliberate attempt to steal information about veterans." The agency also agreed to provide detection, protection and insurance to any veteran who became a victim of fraud as a result of the theft. Nevertheless, the Vietnam Veterans of America and four other veterans groups filed a class-action lawsuit against the VA seeking $1,000 in damages for each veteran who could show that he or she was harmed by the data loss. Two months after the theft, a much-relieved Nicholson told the House Veterans Affairs Committee on June 29 that police had recovered the laptop and external drive. The FBI's preliminary exam indicated that the data most likely had not been compromised, he said. Nicholson also announced a $3.7 million contract with SMS, a service-disabled veteran-owned small business, to upgrade all VA computers with enhanced encryption. Howard, who had been named to lead VA's Office of Information and Technology May 4, was promoted to assistant secretary in late August. Raising the grade of the agency's CIO was one of lawmakers' recommendations for strengthening the VA's IT security. Tom Bennett, vice president of marketing at Oakley Networks, a technology provider, said the loss of laptops is a universal problem. New state and federal laws require agencies and companies to take prompt steps to mitigate data losses. Agencies and businesses could also be held financially responsible, he said. Encryption will help, although whole-disk encryption has not been perfected, Bennett said. "Full agencywide deployments of an encryption solution are still 18 to 24 months away."
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