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The Veterans Affairs Department has suspended use of employee-owned computers for official agency business and has limited telework at one of three major divisions, in an effort to prevent security breaches.

The agency also is issuing a directive reminding employees that failure to comply with department policy regarding the protection of personal data could result in administrative, civil or criminal penalties, VA Secretary James Nicholson testified Thursday at a House Government Reform Committee hearing. The panel called the hearing to discuss the department's response to the early May theft of sensitive records from the home of a VA employee.

A June 6 directive to the Veterans Benefits Administration bars employees from removing claim files from their offices to work on them from alternative locations, such as their homes. From June 26 until June 30, all VA facilities will observe a Security Awareness Week.

Nicholson said about 35,000 employees have some level of access to the department's servers through a virtual private network, also known as a VPN, for the purpose of off-site access such as at an employee's home.

Under recently issued policies, employees no longer will be allowed to access the agency's VPN from personal computers. Every 30 days the VPN settings will change, forcing laptop users to return to the agency for updates and security screening, Nicholson testified.

But several outside observers have said that the data breach could have been prevented if the VA employee had accessed the information he needed over a network, rather than bringing it home on computer disks.

The GS-14 employee, who had worked at the department for 34 years, was not authorized to telework, according to Nicholson, but he had been taking data to his Aspen Hill, Md., home for the last three years. A laptop computer owned by the employee and an external hard drive containing the personal information of 26.5 million people was stolen May 3 in what authorities say was a routine break-in.

VA officials took steps late last month to initiate the employee's firing.

Nicholson said law enforcement authorities have apprehended a few people who have committed burglaries similar to the one at the employee's home, but the equipment did not match that containing the data.

While the extent of the breach expanded this week to affect the records of 2.2 million military personnel in addition to many of the nation's veterans, Nicholson said the agency has its hands "around the four corners" of the hard drive's contents.

"I am outraged at the theft of this data and the fact an employee would put it at risk by taking it home in violation of VA policies," Nicholson said in his testimony. "We remain hopeful that this was a common theft, and that no use will be made of the VA data."

Nicholson said the VA's chief information officer currently lacks enough authority to guard against data breaches, but as of last October, the department started centralizing its information technology functions around the CIO office.

At the hearing, David M. Walker, chief of the Government Accountability Office, proposed that all federal agencies conduct a privacy impact assessment to determine how personal information is collected, accessed and stored. He also recommended that agencies ensure they are in compliance with the 2002 Federal Information Security Management Act.

Walker urged lawmakers to consider legislation that would require agencies to disclose breaches involving personal data, and create additional requirements for accessing such information.

"There is a gap here when it comes to sensitive personal information," Walker said.

Clay Johnson, deputy director for management in the Office of Management and Budget, testified that he believes the administration has enough authority to prevent future breaches across the government, but a review will be conducted to see if "extra teeth" are needed.

"I'm told that there are dozens of security breaches involving laptops [each year]," Johnson said. "None of these involved 26 million names. This is the 100-year storm of security breaches."

Johnson said it is the administration's policy that all sensitive data on laptops be encrypted, but it's not always enforced. In the VA case, the information on the employee's stolen laptop and external hard drive was not encrypted, leaving it vulnerable to identity thieves.

COMMENTS

• To Un-Civil Servant, Your dad is one of the ones I really worry about. Luckily he has you to watch out for him. How many of these older, or otherwise not in full control of their lives, vets are out there with no one to watch out for them? (And this is the second time I've had my info stolen, TRICARE and now VA.) About spending your money though, slight correction. Call the 800 number for one of the big three, and tell them you are a potential victim. They freeze your account for 90 days -- not long but long enough for immediate damage control. They will also pass the info to the other two credit reporting companies, who will do the same. So far no cost to you -- however, they will try to sell you their version of an identify theft protection program, just be firm and say no. The credit reporting companies will send you a follow-up letter on how to obtain your copy of your free annual credit report (so far I have gotten two of the follow up letters, and I did this last week). Freezing your account does some things you should be aware of. It will be harder to get instant credit, and you will probably be turned down when you try (for instance, I was turned down when I tried to buy a TV at Best Buy and sign up for their credit card at the same time, and then I had to figure out why because the person on the other end of the line could only read the computer response that said "disapproved"). This can also be good, it blocks your name from companies shopping for names and addresses of people with credit scores in the range they want to market to, high or low, so it cuts down junk mail. Now, Congress wants to pass a law that would prevent us from freezing our account until you become an actual victim of someone using your identity. I think someone should publish, on the internet, all the names, addresses, Social Security numbers, of every member of the legislative branch, and all of their principal staff. Then we'll see how much they think that is a good idea. Ted Posted June 15, 2006 8:27 AM
• It’s a terrible shame what happened and many vets, to include me, will be restless for the rest of their lives due to this breach of security. But firing the perpetrator who took the data home is just plain stupid! Talk about a major lawsuit against the VA and the taxpayers. I can already feel too much our tax dollars being sucked up in a drawn out lawsuit. Don’t know the person, but to take work home to get the job done was most certainly known and condoned by management. I do it all the time and get thanked for it! Management let this person do this for more than three years and now because of a robbery he is the sacrificial lamb. Both he and management were wrong because of the type of data he had, but he was most likely performing in good faith with knowing approval from his superiors. However, management allowed him, and who knows how many others, (they will be witnesses) to continue with his after hour work to meet the goals of the mission. Now, after three years and an incident that exposed this type of practice, he gets fired! If they fire him they had better fire every manager from him on up! Ever heard of the term “past practice”? Dave Posted June 8, 2006 11:31 PM
• Do you suppose that, just maybe, if the VA and congressional officials had not turned this security breach into a such a big issue, the odds of recovering the stolen computer would have been much greater? It seems to me that the thief would have just sold the thing somewhere for a few bucks to buy some dope. It would not have been all that difficult to locate it. The feds made the laptop computer much more valuable if the thief had a means to sell the data. Chances are, he didn't and the computer has been hidden or destroyed because it is to hot to hock. Robert M. Posted June 9, 2006 6:58 AM