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    Cybersecurity: U.S. National Critical Functions Identified

    Tom Butcher
    May 30, 2019

    The U.S. Department of Homeland Security, “viewing risk through a functional lens,” has developed a list of national functions it deems critical. Perhaps cataloging and assessing these vulnerabilities in domestic systems can be done in such a way as to influence, among other things, municipal borrowers to take meaningful action around cybersecurity.


    Only the other day we published a Muni Nation entitled A Quick Cybersecurity and Municipal Bonds Update. In it we had a quick look at what’s been happening in the space over the past year or so, along with very brief glance at a U.S. Government Accountability Office (GAO) report to “Congressional Committees” in its “HIGH-RISK SERIES” (indicative in itself!) entitled “Urgent Actions Are Needed to Address Cybersecurity Challenges Facing the Nation.The GAO “identified four major cybersecurity challenges and 10 critical actions that the federal government and other entities need to take to address them.”

    At the end of our piece, we said: “We so look forward to updating you more positively next time. But we are not holding our breath!” However we certainly did not think we would need to provide a further up-date so soon. But we do.

    Incident Update

    It was with a somewhat pained sense of déjà vu that we read recently of yet another attack on Baltimore. As we mentioned in our last piece, it was only in March 2018 that the city’s 911 dispatch system was victim (subject to?) a hacker attack.

    This time, on May 7, Baltimore’s mayor, Bernard C. Jack Young, tweeted at 1416 hrs: “Baltimore City core essential services (police, fire, EMS and 311) are still operational but it has been determined that the city’s network has been infected with a ransomware virus. City employees are working diligently to determine the source and extent of the infection.”The obvious question was: What has the city been doing about cybersecurity over the last year?

    As cybersecurity expert Hans Holmerpoints out, the majority of breaches are the result of hackers discovering technical vulnerabilities before the owners of those systems themselves do. This leads to the conclusion that if technology owners spent more time and resources enumerating their own vulnerabilities, they would be far less likely to suffer a breach. An organization that suffers a breach through the use of a zero-day vulnerability,a previously unknown attack vector, has an excuse. However, the vast majority of breaches happen to organizations using well-known attack vectorsthat could have been prevented with adequate investment in security processes that focus on preventing breaches facilitated by these attack vectors.

    Developments at the U.S. Department of Homeland Security?

    However, whatever may (or may not) have been happening in Baltimore, it appears that things have been moving along at the U.S. Department of Homeland Security and, in particular, at the Cybersecurity and Infrastructure Security Agency (CISA)—National Risk Management Center.

    On April 30, CISA issued the following release: “National Critical Functions: An Evolved Lens For Critical Infrastructure Security And Resilience.”[i] Therein, National Critical Functions are defined as: “The functions of government and the private sector so vital to the United States that their disruption, corruption, or dysfunction would have a debilitating effect on security, national economic security, national public health or safety, or any combination thereof.”

    The raison d'être is (the hope?) that: “By viewing risk through a functional lens, we can ultimately add resilience and harden systems across the critical infrastructure ecosystem in a more targeted, prioritized, and strategic manner.” And that: “Ultimately, the set of National Critical Functions is a launching pad for executing a more advanced approach to cybersecurity and critical infrastructure security and resilience.”

    In Mr. Holmer’s view: “… this kind of cataloging of critical infrastructure can be useful, but only if it is used to understand our own vulnerabilities rather than external threats.” However, as he points out: “Our infrastructure is so weak that just about any actor can be a threat. Until the average critical infrastructure vulnerability index is so high that only the most capable actors can be a threat, there is no useful way to catalog threats and we must instead fix vulnerabilities.”

    National Critical Functions and Municipal Bonds

    As we continue to assert, the services provided by municipal borrowers have always been, and remain, vital to our everyday life and the need to protect these services from possible disruption becomes ever more important. The “intersection” between the National Critical Functions and the services funded by municipal bonds only goes to illustrate this even more clearly.

    In the chart below, we have taken the list of National Critical Functions and highlighted a number of functions, but by no means all, obviously funded through municipal borrowing

    National Critical Functions Set

    Connect Distribute Manage Supply
    • Operate Core Network
    • Provide Cable Access Network Services
    • Provide Internet Based Content, Information, and Communication Services
    • Provide Internet Routing, Access, and Connection Services
    • Provide Positioning, Navigation, and Timing Services
    • Provide Radio Broadcast Access Network Services
    • Provide Satellite Access Network Services
    • Provide Wireless Access Network Services
    • Provide Wireline Access Network Services
    • Distribute Electricity
    • Maintain Supply Chains
    • Transmit Electricity
    • Transport Cargo and Passengers by Air
    • Transport Cargo and Passengers by Rail
    • Transport Cargo and Passengers by Road
    • Transport Cargo and Passengers by Vessel
    • Transport Materials by Pipeline
    • Transport Passengers by Mass Transit
    • Conduct Elections
    • Develop and Maintain Public Works and Services
    • Educate and Train
    • Enforce Law
    • Maintain Access to Medical Records
    • Manage Hazardous Materials
    • Manage Wastewater
    • Operate Government
    • Perform Cyber Incident Management Capabilities
    • Prepare for and Manage Emergencies
    • Preserve Constitutional Rights
    • Protect Sensitive Information
    • Provide and Maintain Infrastructure
    • Provide Capital Markets and Investment Activities
    • Provide Consumer and Commercial Banking Services
    • Provide Funding and Liquidity Services
    • Provide Identity Management and Associated Trust Support Services
    • Provide Insurance Services
    • Provide Medical Care
    • Provide Payment, Clearing, and Settlement Services
    • Provide Public Safety
    • Provide Wholesale Funding
    • Store Fuel and Maintain Reserves
    • Support Community Health
    • Exploration and Extraction Of Fuels
    • Fuel Refining and Processing Fuels
    • Generate Electricity
    • Manufacture Equipment
    • Produce and Provide Agricultural Products and Services
    • Produce and Provide Human and Animal Food Products and Services
    • Produce Chemicals
    • Provide Metals and Materials
    • Provide Housing
    • Provide Information Technology Products and Services
    • Provide Materiel and Operational Support to Defense
    • Research and Development
    • Supply Water


    As we have already mentioned, the services provided by municipal borrowers remain vital to our everyday life and need to be protected. Cybersecurity can help provide this protection. Unfortunately, the effects of not doing so have become ever more apparent and the costs of remediation commensurately more expensive.

    Now that the U.S. Department of Homeland Security has listed the functions it deems critical, perhaps identifying, cataloging, and assessing these vulnerabilities in domestic systems can be done in a way that influences municipal borrowers, among other people, to take meaningful action.

    In our next series of posts on cybersecurity and municipal bonds we will be discussing both how rating agencies are treating cybersecurity in the municipal space and looking at examples of successful cybersecurity initiatives.

    1U.S. Government Accountability Office: Urgent Actions Are Needed to Address Cybersecurity Challenges Facing the Nation, September 2018,

    2CBS Baltimore: Some Baltimore City Services Still Shut Down Due To Ransomware Attack, May 7, 2019,

    3Hans Holmer is a senior cyber strategist. He has more than 32 years of experience in cybersecurity, human intelligence, and counterintelligence in the United States and overseas. Mr. Holmer served as a case officer for the Central Intelligence Agency (CIA) for over 25 years where he assessed vulnerability and detected threats to internal and external network and infrastructure.

    4“A zero-day vulnerability is a software security flaw that is known to the software vendor but doesn’t have a patch in place to fix the flaw. It has the potential to be exploited by cybercriminals.” Norton,

    5Attack vectors are the means granting access to hackers to a computer, device, or computer network to deliver a payload or malicious outcome.

    6U.S. Department of Homeland Security: National Critical Functions: An Evolved Lens For Critical Infrastructure Security And Resilience, April 30, 2019,


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