The Office of the National Cyber Director has rolled out its second regional cyber pilot program, this one focused on rural hospitals.

National Cyber Director Sean Cairncross visited South Carolina on Monday to debut the six-month program, Project Lifeline 250, which connects industry with rural hospitals. The concept is similar to the first pilot program in Texas that connected industry with the water sector.

“Project Lifeline 250 connects the world-leading American industry with rural hospitals and uses the greatest American tools and capabilities to defend hospital networks; deploy physical back up devices after an initial incident to ensure an impacted hospital can still provide critical care; and identify high-risk and legacy devices and replace them,” Cairncross said in a statement.

The health care sector had a record year for breaches last year, with 804 large breaches reported to the Health and Human Services Department’s Office for Civil Rights that affected more than 140 million people. The FBI identified the sector as the top target for ransomware and other hackers in 2025.

Rural hospitals, like the water sector, lack resources compared to other kinds of critical infrastructure.

Besides industry and the ONCD, the effort is a project that draws in the South Carolina Critical Infrastructure Cybersecurity program, the South Carolina Law Enforcement Division and local governments in the state.

“Cyber threats are a rising challenge to our nation’s security, and we must remain vigilant to protect the systems our communities depend on,” said South Carolina Gov. Henry McMaster. “Project Lifeline 250 is another important step toward ensuring South Carolina’s rural hospitals have the resources they need to defend against cyberattacks and continue providing critical care.”

Some of the same companies involved in providing free services in the Texas pilot are involved in the South Carolina pilot, too, along with some new participants. Among the participating firms: Abnormal AI, Cisco, Cyera, Microsoft, Rilian Partners, Trellix and Zscaler.

“The stakes for critical infrastructure are getting higher and higher,” said Yotam Segev, cofounder and CEO of Cyera. “There’s real urgency in bringing cyber expertise from some of the world’s largest and most complex enterprises to rural hospitals through Project Lifeline 250. When a hospital knows where its patient data lives and who can reach it, it can reduce the leverage behind ransomware. Every community should have that clarity, no matter the size of the hospital or its IT team.”

Members of Congress also have introduced legislation designed to aid rural hospital cybersecurity.

The ONCD hasn’t said what will happen at the end of the six-month pilots. And so far it has only partnered, or publicly discussed partnering with, GOP-led states.

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A coalition of cyber firms and critical infrastructure operators on Tuesday spelled out its views on the tasks that the Cybersecurity and Infrastructure Security Agency should assign federal agencies to protect operational technology systems after this summer’s attacks on water utilities.

The Operational Technology Cybersecurity Coalition said a CISA binding operational directive (BOD) for OT should specify who is responsible for protecting these systems at each agency,, draw on existing federal guidelines and set minimum cybersecurity practices.

The coalition said the BOD would address a need to act based on CISA’s lack of visibility into the spectrum of OT devices in federal agencies, a lack of consistent across-the-board OT security policies and the severity of the consequences that an attack on federal OT could produce.

Just last month, the Government Accountability Office published a report which concluded that most federal civilian executive branch agencies (FCEBs) haven’t enacted Office of Management and Budget requirements released in 2023 for networked Internet of Things and OT devices.

Putting forward recommendations for a CISA directive has two goals, said Michael Garcia, policy director of the coalition.

“One, it does make sure that the government is taking its own medicine,” said Garcia, who until recently worked at the agency. “You should practice what you preach. … Second, it sends a very strong signal to the private sector that, ‘This is what we think is important: As an OT partner, owner or operator or critical infrastructure owner or operator, [this is what] you should ask other providers to do.’”

There are 8,000 General Services Administration-owned and -leased properties, many of which would have OT involved in everything from power supply to heating, ventilation and air conditioning systems. Some of those OT systems might be “trivial,” Garcia acknowledged, but the coalition paper notes that CISA “does not currently have a holistic view of the assets managed by the FCEB and the potential risks, such as connected programmable logic controllers, to which the government may be exposed.”

With OT falling into a “government gray zone” between chief information officers and facilities managers, CISA should tell agencies to formally designate an officer in charge of cybersecurity for OT, the coalition recommends.

The directive should examine past OT guidelines the National Security Agency issued to see if they should apply to federal civilian agencies, and align any requirements in the hypothetical BOD with cybersecurity performance goals that CISA first issued in 2022, according to the coalition.

The coalition doesn’t assert that such a BOD would have headed off the attacks this summer on the water sector, and is focused on federal OT, something where CISA has done some work.

“To be fair, CISA has incorporated OT security requirements into prior directives (such as BODs 23-01, 23-02, and 26-04) alongside a host of technical guidance,” the paper reads. “But as AI reduces the technical barriers to sophisticated cyber operations, enabling adversaries to identify weaknesses, accelerate reconnaissance, and move laterally through poorly segmented operational environments with greater speed and scale, it is time for an encompassing BOD solely focused on OT security.”

CISA didn’t respond to a request for comment Monday in advance of the coalition publishing its paper.

But Garcia said that in discussions with CISA, “increasingly, I think they understand that there might be a need” for an OT BOD.

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The summer’s cyberattacks by Iranian hackers on water systems in 12 states underscored how vulnerable U.S. water systems are to foreign adversaries. A broad attack on water infrastructure could have consequences comparable to a public health crisis that impacts the country’s entire population.

The threat to water has long been clear. As the 2026 Annual Threat Assessment from the U.S. intelligence community states “Cyber actors from China, Russia, Iran, North Korea, and ransomware groups . . .  pose critical threats to U.S. networks and critical infrastructure.”

Advances in artificial intelligence have heightened those vulnerabilities. Advanced AI models, such as Anthropic’s Claude Mythos, have demonstrated the ability to identify thousands of zero-day vulnerabilities in critical software systems, including major operating systems and browsers. Other systems, including some developed in China, are demonstrating similar capabilities. AI systems can now “plan, test, and execute attacks in rapid cycles,” ranging from minutes down to seconds.

U.S. water systems are vulnerable to cyberattacks for technical, legal and practical reasons.

Technical: About 80% of U.S. water systems lack even basic cyber hygiene, a weakness exploited in the summer attacks. Even systems that serve most of the population (approximately 450 large and 4500 medium-sized water systems) have not adopted advanced cybersecurity capabilities used in other sectors where failure can have catastrophic consequences, including aviation, rail, mass transit, medical devices, finance, and nuclear power.

Legal: The Environmental Protection Agency lacks clear statutory authority to impose broad cybersecurity requirements on water systems. In 2023, EPA issued a memo interpreting existing regulations to strengthen the cybersecurity of water systems. The action met widespread opposition from the water sector as well as formal legal challenges, and the EPA ultimately withdrew the memo. The agency retains limited authority. It can require water systems to complete  risk and resilience assessments, maintain emergency response plans and, in emergencies, address critical cybersecurity flaws.  

Practical: Most U.S. water systems are small.  Some 45,000 serve 3,300 persons or fewer. Because of their size, many fall outside the EPA’s regulatory authority and below the “cyber poverty line,” lacking the funding, staff and expertise necessary for effective cybersecurity.

Not surprisingly, the summer attacks drew attention from the administration and Congress. The EPA ,in partnership with the FBI, and CISA each issued guidance on remedial actions, including disconnecting operational technology, from the internet where feasible and adopting robust password practices.

Sens. Amy Klobuchar, D-Minn., and Adam Schiff (D-Calif., introduced the Water Safety Shield Act, a bill that would require tiered cybersecurity standards for the water sector and dedicate a proposed $600 million annually to water cybersecurity. It would go beyond earlier, less prescriptive efforts to improve resilience in the sector.  

The administration has also established a pilot program with Texas and private-sector cybersecurity companies to identify and address water-system vulnerabilities at no cost to utilities. These efforts are well intentioned, but they do not address the underlying causes of the problem.

Large and midsize U.S. water systems have long been targets of sophisticated adversaries. China’s Volt Typhoon revealed deep Chinese penetration of critical infrastructure, including water systems, that support national security, economic security, and civil society. Those systems remain vulnerable because many have not adopted well-known protections, such as zero-trust architecture. More fundamentally, the software on which they depend remains vulnerable to exploitation.

Policymakers have struggled to respond for two reasons: the cost and complexity of adopting stronger technical defenses, and the highly fragmented nature of the water sector. A relatively small number of large systems serve about half the U.S. population. Roughly 49,000 systems serve the rest, including the 80% of the systems serving 3,300 people or fewer. Those smaller systems serve about 7% of the population.

Despite these challenges, the capabilities needed to significantly strengthen U.S. water-system security are well known and widely used in other sectors where failure can be devastating, including those listed above.

A five-part federal program could provide high-level cybersecurity for U.S. water systems.

Establish stronger technical capabilities. Water systems should adopt zero-trust architecture, which permits only authenticated, minimum-necessary access to resources and segments networks so that a breach in one area does not compromise the entire system. Such architecture could have blocked the unauthorized intrusions used in the summer attacks. Zero-trust systems are already widely used across multiple sectors, and commercial providers can support their adoption. The Department of Defense has certified several companies to provide zero-trust architecture for department components.

Water systems should also use formal methods to reduce or eliminate vulnerabilities in software that cannot safely fail.  Although the summer attackers did not appear to exploit flaws in the water systems’ code, a high-level adversary such as China would be likely to do so.

Formal methods range from “memory-safe” programming languages, which prevent coding errors that leave computer memory open to attack, to rigorous mathematical proofs that verify that software behaves as intended. They also support secure “microkernels,” which strictly separate software functions and make it far more difficult for an attacker to move laterally through a system.

Safe code development draws on the principles of formal methods but is a more practical, semi-formal approach. AI tools developed by companies including Google and CrowdStrike can identify and help repair software vulnerabilities, a process sometimes called “code mending.” Water systems should use such tools to defend against advanced adversaries.

Developing formally verified code for water systems would not be simple. But much of the software that directs the mechanical operations of water utilities comes from a small group of companies, including Siemens, Schneider, and Rockwell Automation. Those companies have the technical expertise to develop more secure code where it is necessary. Secure microkernels are also commercially available.

Support large water systems.  Congress should require large water systems to adopt zero-trust architecture, code-mending tools, and formal methods for critical software. The requirements should be phased in over time.  The legislation should also provide tax credits to help cover the costs of developing, implementing, and maintaining these protections.

Assist midsize water systems. The federal government should establish a program that provides technical expertise and financial support to midsize water systems, including municipal utilities. The program should help them adopt zero-trust architecture, code-mending tools, and formal methods for software development.

Midsize systems will likely need a longer phase-in period than large utilities.  A federally funded cohort of experts drawn from government and the private sector could provide the necessary support. Regional teams, organized by geography or technical specialty, could address the different needs of different water systems.

Create a safe operations posture for small water systems. Few, if any, systems serving 3,300 people or fewer are run by organization with substantial cybersecurity resources. Many cash-strapped systems rely on remote monitoring because on-site service is beyond their budgets. But remote monitoring can create serious risk when industrial devices are exposed directly to the public internet without proper firewalls or virtual private networks. 

The summer attacks primarily exploited such exposed devices. The EPA, FBI, and CISA guidance said the affected systems could be protected by locking them into “run” mode, which prevents remote reprogramming. That step may reduce immediate risk, but it also requires systems to be operated in person.

Small utilities therefore need either the staff and funding for manual operations or secure remote-access systems operated by trained personnel.

A voluntary cybersecurity corps could help address the budget and staffing challenges facing small water systems.  One model would follow the National Guard approach: State governors would oversee the effort, while the federal government would provide funding. A state-led program could begin with water systems and later expand to other vulnerable critical-infrastructure sectors.

The Texas pilot, which brings together the state, the federal government and private-sector companies, could serve as a model. It could also serve as a test for a regional approach, something we suggested in a prior op-ed.  

Build an AI-capable cybersecurity cohort. The proposed cohort should include specialists in artificial intelligence, including experts from leading AI companies. They could use AI tools to develop and deploy cybersecurity programs, including zero-trust architectures and code-mending systems, for utilities of all sizes. AI is advancing rapidly and applying it to protect water systems should be a national priority. The AI specialists should work with major industrial-technology companies, including Siemens, Schneider, and Rockwell, as well as directly with the water systems, both larger and smaller.

U.S. water systems face a significant and growing threat. The Trump administration, Congress, states and private sector should work together urgently to ensure that every American can rely on safe, clean water.

Franklin D. Kramer is a former assistant secretary of defense for international security affairs.

Robert J. Butler is the co-founder and managing director of Cyber Strategies LLC, served as the first deputy assistant secretary of defense for space and cyber policy, and served as the Chief Security Officer for IO Data Centers, a global data center enterprise, among other cybersecurity-related roles in both corporate and government organizations.

Melanie J. Teplinsky is an adjunct professor and senior fellow in the Technology, Law and Security Program at American University (AU), Washington College of Law.  She previously practiced technology law at Steptoe & Jonson LLP and served on the pre-IPO advisory board for CrowdStrike.

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The computers that automate water treatment systems across the country were built for durability, not for an internet-connected world. Many still accomplish their fundamental function, but as cyberattacks on the sector mounted this summer, water industry officials say those aging systems, especially internet-exposed operational technology and programmable logic controllers, remain among the easiest ways for adversaries to break in.

Tom Dobbins, executive director of the Water Information Sharing and Analysis Center or WaterISAC, told CyberScoop the sector’s biggest ongoing weaknesses include exposed OT, vulnerable PLCs, insecure connections through integrators and poor cyber hygiene at smaller utilities, which have pushed the center to make threat sharing faster across the sector.

“We have been under attack, and our enemies, the threat actors, are stepping up their activity as the U.S. is involved in a number of conflicts around the world,” Dobbins said.

That includes not only threats from Iran, the nation the U.S. government reportedly believes is behind this summer’s water facility attacks, but also China and Russia, he said.

WaterISAC is announcing a partnership with Cyware Wednesday to use its threat intelligence platform, selecting the company in part because of its existing relationships with other industry ISACs, Dobbins said. The ISAC already has a partnership with the National Rural Water Association to serve 20,000 of the water sector’s smallest utilities, and Dobbins said Cyware would help its analysts further.

It’s a sector that faces myriad challenges, seen by many as further behind on protecting its systems due to financial and technological constraints.

“OT systems that are exposed to the internet are a major challenge, and many of these systems that are older generation need to be not accessible to the internet,” Dobbins said.

Furthermore, programmable logic controllers (PLCs) are “obviously” a “vulnerability point,” he said. 

Those two vulnerabilities were the ones most commonly linked to this summer’s attacks.

Across the sector, PLCs have been the “main point of entry” for hackers, in part because they date back to a “simpler, gentler time,” Dobbins said.

“A lot of the equipment was developed pre-cyber threats and activities,” he said. “The equipment, it’s still valuable, it still is operational, so there’s not a huge reason for or incentive for utilities to upgrade it.”

President Donald Trump has disputed the notion that Iran was behind this summer’s attacks, despite alerts from the Cybersecurity and Infrastructure Security Agency.

“Let’s put it this way: I saw a recent CISA release that pointed to Iran as threat actors, and I know that the president kind of implied that it was not Iran, but I’ll say that CISA maybe is more expert in this area than maybe the president,” Dobbins said. “The president may not have been fully briefed when he made that comment.”

But CISA has also warned of potential threats from Russia and China, he said.

Two other sources of vulnerability for the sector are external — integrators — and internal — employees.

“If those integrators are working and they have a connection into an OT system that’s not managed discretely, then a threat actor can come in through an integrator and get into a system,” he said. 

Then there’s someone “who’s actually a good employee who’s tried to do the right thing and opens an email that has a malicious link in it, so they become subject to a phishing attack,” Dobbins said.

At smaller utilities, it can be difficult to keep up with basic cyber hygiene as well, he said: changing passwords, implementing multifactor authentication.

One way that Cyware might be able to help is by leveraging its relationships with other ISACs, said Tom Stockmeyer, managing director of government and critical infrastructure at Cyware.

“We’re thrilled to add water to the portfolio and start enabling cross-sector sharing,” he said.

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A House Democrat tapped to lead his party’s efforts on artificial intelligence has introduced legislation that would establish a test program within the Cybersecurity and Infrastructure Security Agency to give critical infrastructure operators free access to frontier AI models to protect their systems.

Rep. Josh Gottheimer, D-N.J., introduced the AI Cyber Defense Act Monday, inspired by the series of cyberattacks on water facilities in recent months. “If we don’t get ahead of it, it can mean a disaster for our families,” he said at a news conference when he first announced the measure and others tackling water cybersecurity.

Gottheimer holds a couple of posts relevant to the legislation: He’s one of three co-chairs of the House Democratic Commission on Artificial Intelligence, and the top Democrat on the House Intelligence Committee’s cyber subcommittee. He also has bipartisan support for the bill, with co-sponsors Reps. Don Bacon, R-Neb., Zach Nunn, R-Iowa, Hillary Scholten, D-Mich., and Greg Landsman, D-Ohio.

The bill directs the Department of Homeland Security, through CISA, to create a program “through which owners and operators of critical infrastructure that participate in the Program are able to securely utilize artificial intelligence procured through the Secretary and technical assistance provided by the Secretary to protect against, detect, test for, and remediate vulnerabilities in the cybersecurity of such critical infrastructure.”

AI-tinged, water-focused cybersecurity pilot programs are all the rage lately. The introduction of Gottheimer’s legislation is adjacent to, but different from, a test program that the Office of the National Cyber Director recently announced in Texas.

One criticism of that program is that private sector companies offered their cyber and AI services through it on a purely voluntary basis, with no significant budget to bolster the pilot. Gottheimer’s bill would authorize $100 million for the pilot program from 2027 to 2031 before it ends, although appropriators would have to follow through on providing the actual dollars. The Trump administration has significantly cut CISA funding in its second term.

“Right now federal funding for critical infrastructure has an uncertain future and many of our local communities just don’t have the resources they need to pay for AI tokens to do the patching they need,” Gottheimer said when he introduced the bill. “It’s expensive to bring the AI in to analyze your system and find those vulnerabilities.”

Critical infrastructure owners and operators could apply for the pilot program, which the bill directs to give priority to nonprofit, publicly owned, rural and small-sized organizations.

“The same technology that can help a small town’s IT guy find and patch a gap in cybersecurity can also help a hostile government find a hundred more it hasn’t even discovered yet,” Gottheimer said when he announced the bill. “AI didn’t create this threat, but it’s accelerated it, and our defenses have to keep up.”

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Nearly two of every 10 U.S. water and wastewater organizations have identity data actively exposed from infostealers harvesting their credentials, according to research published Tuesday.

The study from identity risk firm SpyCloud follows months of reports about a wave of cyberattacks hitting targets in the sector, which U.S. government officials suspect are tied to Iran.

The company built a database of 66,845 Environmental Protection Agency-registered systems, examined internet domains and ultimately analyzed 10,000 organizations, finding that 1,787 showed active infostealer exposure.

In one case, a single infected device at a smart meter technology provider that SpyCloud didn’t name contained saved logins linked to roughly 167 different U.S. utility metering tenants — meaning that one exposure opened the door to many more. 

That “cascading supply chain exposure” was one of the biggest findings of the report that SpyCloud shared exclusively with CyberScoop, said Jason Lancaster, chief investigations officer at the cyber firm, along with the quantitative approach” to measure exposure overall.

“We talk about it a lot,” Lancaster said of the exponential risk that one exposure can present. “There’s examples here and there, but that was a standout example of, here’s a tangible thing that is an exposure right now.”

Generally, “Infostealer exposure means the attacker isn’t guessing anymore, they’ve got legitimate points of entry,” Lancaster said. “In the investigations I’ve worked, that log data usually contains stolen session cookies, credentials, and autofill info pulled straight off the infected device. That’s enough to walk right past [multifactor authentication] by hijacking an already-authenticated session, log into corporate email or VPNs without raising a single alert, and sit there quietly for weeks while they map out the network.”

Still, the study had limitations. It doesn’t address what apparently led to the cyberattacks that unfolded in Minnesota and elsewhere this summer: internet-exposed programmable logic controllers.

It’s “important to note that our research did not focus on OT devices which run the most critical processes within these utilities, and any exposure we cite herein should not be interpreted as exposure of specific OT devices,” the report said. It did, however, find that 258 of the 1,787 organizations with active infostealer exposure carried credentials to operational technology or remote-access systems.

Some of the report’s conclusions were about the limitations of the data itself.

“Exposure concentrated in larger operators and in the vendor supply chain; small utilities were largely underrepresented,” SpyCloud said. “That’s a pattern in the data, not a claim that every water system nationwide carries this risk — and it measures identity exposure, not confirmed intrusion.”

It’s the first study of its kind that SpyCloud has done for a specific industry, so the company doesn’t have comparisons to other industries, Lancaster said. SpyCloud has begun a responsible disclosure process for those affected within its report, he said, beginning with a briefing for the Cybersecurity and Infrastructure Security Agency.

“It’s important to remember, infostealer logs aren’t the end of an incident — they are often the beginning,” Lancaster said. “Access brokers sell these logs specifically because ransomware crews and other fraudsters want exactly this kind of entry point. So, the real question isn’t whether the exposure is dangerous. It’s how much time you have before someone weaponizes that stolen data against you.”

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Editor’s note: Waco bought the network segmentation technology described here from Elisity while Mike Searight was the city’s chief information officer. He is now a senior adviser to Elisity, a cybersecurity company.

I stood in front of a network cabinet at one of Waco’s water treatment plants, tracing what systems could reach which. The plant’s controls were on that network. So was the branch library. So was the register at the municipal golf course. During my time as chief information officer of a city with 145,000 residents, nobody had ever been asked to inventory what was on that network.

In July, intruders compromised water and wastewater treatment equipment.  Most of that equipment was reachable over public cellular networks, which means they were outside the boundary most utilities thought they were defending. None of the asset lists I have reviewed would have caught it.

Two decisions stand between a small utility and that equipment: who is accountable for the whole network, and where the funding comes from. Neither is technical. Both rest with city manager and councils. Both can be resolved this fiscal year with money already in a budget request.

What the July reports actually say

Three accounts tell different stories. CISA identified over 100 compromised systems in the water and wastewater sector during July, typically through controllers connected directly to cellular modems. The FBI and the EPA reported on July 30 that utilities in at least seven states had reported incidents to the FBI since July 27. Press accounts citing unnamed officials put the number of affected states at a dozen or more.

No federal agency has attributed the late-July water incidents to anyone, and neither will I. A joint advisory does name Iranian-affiliated actors, but for the broader campaign, which is linked to a separate set of intrusions. The advisory was revised July 22, five days before utilities began reporting. That revision expanded the known targeting from Rockwell Allen-Bradley to Schneider Electric, Siemens and potentially others., So the controller brand on the panel no longer settles anything.

The reported effects were operational: a loss of visibility and, in some cases, function. In Clayton County, Georgia, a pump station failed around 1 a.m. on July 27. The boil-water advisory lifted the next day. In early August, the authority serving more than260,000 people said unauthorized cyber activity may have caused or contributed to the disruption. That hedge is deliberate.

The exposure nobody scanned for

The standard answer: they separated the plant network years ago. That’s legitimate work. But it doesn’t matter. The vulnerable controllers never were on the city network—they ran on public cellular links. A modem installed years ago exists nowhere in the asset list and nowhere on network scans. But every carrier invoice lists every SIM the city pays for. Only accounts payable tracks them. Matching those invoices to actual devices costs nothing and can start Monday. The FBI and the EPA also tell utilities to consider isolated architectures for that equipment, and a private access point name tops their list.

Nobody owns the whole network

Most of these systems sit outside the IT department on the org chart, each with its own budget, vendors, and boss. The plant answers to public works. Cameras and card readers arrived with a building project, and most cities treat them like light fixtures. In every city I’ve worked in, exactly one person in IT understands the whole picture. When that engineer leaves, the security posture leaves with them. And nobody owns accountability for the network they all share.

Reporting rules also miss the point. Texas—my example—requires local governments to report security incidents within 48 hours, but only if they involve personal-information breaches or ransomware. An intrusion that seizes control of a controller while touching either sits outside that trigger., That’s exactly what happened in July.

The federal rule requiring a covered cyber incident to be reported within 72 hours was supposed to be finalized in October 2025; CISA is now targeting this month. But nothing determines who owns the network.

Money the utility already applies for

The second answer is there is no budget. Wrong. The fund mechanics matter more than the size of the check.

For State Fiscal Year 2026, the Texas Water Development Board added cybersecurity to the scoring criteria in its Intended Use Plan for the Drinking Water State Revolving Fund. Two questions on the Project Information Form now carry five priority points between them: Oone asks if the governing body adopted a cybersecurity awareness plan in the last five years; the other asks if a project fixes a deficiency found in a cybersecurity assessment. Five points is modest– I won’t oversell it– but this fund is a ranked competition decided at the margins.

Waco segmented five treatment plants—four drinking water and one wastewater—in 43 days against the 90 I’d promised City Council. No bond. No capital request. The utility director funded it from operating accounts using a contract already on the city’s books, rather than an RFP. They carried it to Council because the network was theirs to own.

Those were budget choices ahead of anything else. An operating line competes with a maintenance contract and can be approved this quarter, while the same money in the capital plan waits for a bond cycle. A smaller city without a CIO will not repeat that schedule. The funding mechanics are the same ones.

Every CIO knows how to segment a network. Almost nobody does it, because they are afraid of taking a plant down. Simulate before you enforce. One operating rule came out of it: being on the network allows a device nothing. Plant controls talk only to their SCADA server. Everything else is denied unless explicitly allowed.

City managers, university presidents, superintendents and chief executives are willing to invest in cybersecurity when they trust the investment will make a measurable difference. These leaders spend taxpayer dollars in public view, and the public’s trust rides on every line item as much as the money does. What earns their approval is transparency: a complete picture of what they are protecting, and evidence that critical infrastructure is defended against threats from the open internet and from inside their own network. That standard—full visibility, provable protection—is what every organization should be working toward.

Microsegmentation protects critical systems without the need for rip-and-replace. It isolates water treatment plants, 911 dispatch, public safety alerts, and traffic management from internal and external threats—all on networks cities already own. Modern platforms deploy in weeks rather than budget cycles, making this control finally achievable. Every CIO and CISO should evaluate it now. Microsegmentation is zero-trust’s foundation and the most direct defense of infrastructure residents depend on.

Somebody to call

None of this reaches a two-person utility that can’t write competitive applications. That’s where states must lean in. New York adopted what it calls the first-in-the-nation water cybersecurity rules in March with grants and free technical support. Texas has stood up a Cyber Command with an explicit water and wastewater mandate. A small city needs a number to call and people who answer.

That number now exists. On Monday, Texas Gov. Greg Abbott and National Cyber Director Sean Cairncross launched Project Watershed 250 in San Antonio — a six-month pilot that puts Texas Cyber Command, the National Cyber Director’s office, the EPA and CISA, and a dozen private cybersecurity and technology companies behind Texas water utilities. Participating systems get red-team testing, vulnerability assessments and help hardening what the assessments find, at no cost, with plans to take the model nationwide after the pilot. If you run a Texas water system, you should be reaching out immediately.

For the smallest systems, DEF CON Franklin and the National Rural Water Association have put volunteers and five managed detection providers behind them.

Where to start

Here are three things CIOs and CISO can do that do not have to wait for a grant or a budget cycle: Name one position accountable for every device on the utility network and put it in writing. Match twelve months of carrier invoices to actual devices and sites. Read your state’s Intended Use Plan scoring criteria before the next application.

Nothing in Waco moved until the first of those was settled. The other two cost nothing more than somebody’s afternoon. Most cities haven’t even put someone in the that position.

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The Trump administration rolled out a six-month test program in Texas on Monday that will draw on volunteer expertise and technology from cyber and artificial intelligence companies to protect the water sector.

“Project Watershed 250” is the first of the state-based, industry-centric pilot projects to cross the finish line that the Office of the National Cyber Director has previewed since the publication of its national cybersecurity strategy earlier this year. Water systems have long been viewed as among the most vulnerable and neediest critical infrastructure sectors, and in recent months the sector has been the victim of a spree of attacks.

“Project Watershed 250 is a commitment from the states, industry and federal government that we will continue to prioritize our nation’s safety and deliver on America-first policies for the American people,” National Cyber Director Sean Cairncross said at a rollout event in San Antonio Monday.

“U.S. companies are providing world-class cyber capabilities, red teaming that tests utilities’ current defenses, system hardening using the latest private sector cyber tools and AI tooling that helps utilities’ frontier cyber defenders to protect Texas water systems and scale proven solutions across the country,” he said. “This six-month pilot program is designed to make our water and wastewater critical infrastructure more resilient and resistant to cyber attacks by proactively finding and fixing system weaknesses.”

The pilot program, featuring collaboration between federal and state governments, stands in contrast to how the Biden administration tried to tackle the issue, with audit requirements that some GOP states challenged in court, forcing Biden’s Environmental Protection Agency to withdraw its rule.

“For too long, at least on the federal level, the government has admired the problem of cybersecurity in water systems,” Cairncross said. “We are going to find out what works. We’re going to target that, and we are going to scale off of this and learn lessons.”

A dozen companies — Parsons, Microsoft, Fortinet, Google Cloud, Palo Alto Networks, Amazon Web Services, Reflection AI, Cloudflare, Zscaler, Forescout, Abnormal AI and Dragos — appeared at the rollout Monday to praise the initiative and tout their contributions to it.

Not everyone praised the initiative elsewhere, however. One cyber professional who works on water security issues, speaking on condition of anonymity, said the program was “all smoke” and that “there’s no real money behind it.”

“The White House did what it always does — reached out to industry with their hands out asking for industry to pay for things the government should be doing, at least in part,” the person said.

Texas Gov. Greg Abbott said the program would be overseen by Cairncross’s office and Texas Cyber Command, which was established just last year. Abbott cited the need for the program by mentioning “an Iranian-backed cyberattack” on 30 water systems across 12 states and a 2024 attack on the water system in Muleshoe, Texas, suspected to be the work of Russian hackers.

“The need for cyber resilience is overwhelming,” Abbott said. “Many rural providers simply don’t have the resources they need to be able to protect themselves.”

Watershed 250 isn’t the only federal effort to bolster water cybersecurity, with lawmakers introducing legislation in the aftermath of the recent attacks. Past legislation that Congress has enacted also sought to tackle the problem.

Updated 8/31/26: with comment from cyber professional.

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When the Cybersecurity and Infrastructure Security Agency tested defenses for two targets — one in the government sector and the other in the water sector — red teamers were able to get into both of their systems, but the water organization discovered the simulated attack and acted to defend itself, whereas the government organization did neither.

CISA published the breakdown Tuesday in a rare public report on its red-team activities, at a time when attacks on the water sector have a higher profile after revelations of targeting of water facilities across the United States over the past month and numerous government warnings.

The agency didn’t name the organizations it tested through a process that is voluntary and by-request.

“In one organization (Organization A), the team gained initial access to multiple workstations, gained elevated privileges over the domain, and moved laterally to [sensitive business systems] and cloud resources undetected,” CISA’s analysis reads. “In the second organization (Organization B), network defenders quickly detected the initial compromise and quarantined the affected systems.”

For “Organization A,” the government organization, CISA used an internal email address to send phishing emails to gain access to the workstations, probed further to gain elevated privileges, then moved around and compromised targeted sensitive business systems. The red teamers observed that the organization “did not respond effectively to red team activity” by accessing personnel emails at its security operations center, where they saw them receive low- and medium-severity endpoint detection and response alerts, but didn’t respond to them.

False positives by the thousands, including some with higher severity, “obscured the alerts triggered by red team activity,” CISA said. The agency also faulted “organizational silos.”

Meanwhile, at “Organization B,” the water organization, CISA got access via a spearphishing campaign, convincing three users to click on a malicious link to gain access to workstations. This time, the security operations center triaged the alerts and quarantined the work stations in 2, 10 and 20 minutes, respectively.

The red teamers tried another approach with the help of the organization’s IT contacts who were aware of the activity, but were foiled in their follow-ups.

“Because Organization B detected the initial compromise, the red team moved to an ‘assume breach’ model, where Organization B trusted agents (TAs) provided access to a host that replicated the level of access the red team would have had if defenders had not detected their activity,” CISA wrote. “From there, the red team escalated privileges and moved laterally to [sensitive business systems], cloud resources, and a bastion host in the OT [operational technology] demilitarized zone (DMZ), where defenders again detected activity and isolated the system.”

Still, CISA said both organizations had flaws in their defenses: They underestimated cloud risks; they lacked Conditional Access — a Microsoft security tool — for workload identities; and they didn’t have processes in place to revoke compromised access/refresh tokens.

CISA first published an advisory on its red team activity in 2023, but such advisories have been few and far between since. The agency said last year that it had not “laid off” its red team, after stories revealed the exit of contractors that included red-team members.

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As part of its “economic D-Day” against Iran, the Treasury Department designated four Iranians for sanctions Monday stemming from their alleged role in hacking critical infrastructure targets and waging cybertheft against the United States.

It’s the second time in as many weeks that the Trump administration has taken aim at the same group of alleged hackers, following on an indictment recently unsealed against cybercriminals that federal law enforcement authorities say are affiliated with the Tehran-based Mabna Institute.

A Treasury Department release points the finger at three people — Keyvan Fayyaz Ghareh Blagh, Saber Shahbazi Balujeh, Mohammad Reza Kadkhoda’i and Mojtaba Ghal’eh-Kuhi — as specifically conducting the hacks.

“Since at least late 2023, these three individuals have successfully compromised and exfiltrated data from multiple U.S. companies in various critical infrastructure sectors, including energy companies, defense contractors, healthcare institutions, information technology companies, and financial institutions,” the release states.

A fourth individual included in Monday’s sanctions, Mojtaba Ghal’eh-Kuhi, is listed as one of the leaders of the gang carrying out the Ministry of Intelligence and Security (MOIS)-directed attacks. Another listed leader, Behzad Mesri, first faced sanctions in 2018, as part of another round of sanctions focused on the Mabna Institute.

Finally, the Treasury Department designated one additional person Monday over related activity, Arman Kahzadian, for his alleged role in receiving or using business information stolen via cyber-enabled means.

The department said the Iranian hackers sometimes turn their gaze to domestic targets.

“The members of this group are also heavily motivated by personal enrichment and greed, leading some members to prioritize their own profits over operations that benefit the MOIS,” it said. “This has driven some of the group to target Iranian companies.“

Hackers that the U.S. government has identified as Iranian have been behind a spate of attacks on U.S. water facilities, despite denials from President Donald Trump himself about Iranian culpability.  The Treasury Department did not immediately respond to a request for comment Monday about whether the sanctions designees were involved in those attacks, nor has the National Security Agency responded to requests for comment on whether Iran was responsible for attacks at the center of an alert about attacks on water facilities.

Treasury Secretary Scott Bessent announced a fuller list of sanctions Monday as the war with Iran nears its five-month anniversary with no end in apparent sight.

“In the Second World War, D-Day marked the historic beginning of a campaign with our allies to target and drive the enemy from its positions, including those in third countries,” he said. “Today, in that same spirit, we are launching an economic onslaught against Iran’s financial connections around the globe. Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone.”

There are questions about whether the sanctions themselves are likely to change any behavior, particularly based on how they will be enforced. Iran has vowed “consequences” for the United States.

As part of the sanctions announced Monday, according to the department, “Treasury is expanding the categories of Iran-related conduct that may be subject to secondary sanctions in the future, making it easier to take action against those facilitating the regime. Treasury has issued determinations against five critical sectors –– digital assets, technology, gold, aviation, and shipping––  that the Iranian regime uses to try to prop up its failing economy.”

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Hackers are targeting water, food, energy, chemical, manufacturing and commercial facilities by taking aim at Siemens S7 Series programmable logic controllers (PLCs) and making use of artificial intelligence in the attacks, U.S. government agencies warned Wednesday.

It’s the latest government warning about attacks on critical infrastructure as the United States wages war against Iran, which the government blamed for a recent campaign against water and wastewater systems— but doesn’t mention in Wednesday’s alert. 

The National Security Agency didn’t immediately respond to a request for comment about who was behind the attacks on the PLCs, which are used to control manufacturing processes.

The agencies said the attacks were an “active threat,” rather than a theoretical one. The attacks could disrupt critical industrial processes, cause safety incidents or lead to the compromise of sensitive data.

Wednesday’s alert from the NSA, Cybersecurity and Infrastructure Security Agency, FBI, Energy Department and Environmental Protection Agency makes special note of the hackers using AI-generated exploitation scripts in the attacks.

“Using AI to generate exploitation scripts represents an evolution in threat actor capabilities, dramatically reducing the technical expertise and time required to develop working ICS exploitation scripts and malicious tools,” the alert states. “In addition, AI enables adversaries to rapidly leverage additional attack vectors and adapt to defensive measures. Threat actors can easily collect public information about vulnerabilities and weaknesses, find exposed and exploitable PLCs, and use AI-generated scripts to act on that information.”

A former top CISA official, Michael Garcia, thought that it was a first for the agency in one of its cybersecurity advisories (CSAs) about operational technology (OT).

“It is the first alert I have seen where CISA is saying in a CSA that a malicious actor is using AI scripts to target OT systems,” Garcia, now vice president of the cybersecurity practice at Monument Policy Advocacy, said on LinkedIn. But the advisory doesn’t recommend using AI in response, instead focusing on well-known, traditional defensive measures, he added.

Frenos, an OT penetration testing company, found another element of the alert troubling: The method by which the attackers could use the approach beyond Siemens-made PLCs.

“Siemens S7 is the subject here, but the exposure pattern is not brand specific,” Brian Proctor, CEO of the company, said in an email. “An adversary who has mapped your data blocks understands your process. They know what normal looks like, which means they know what an operator would fail to notice.”

The AI-generated scripts are disguised as legitimate monitoring tools, the advisory said of the hackers behind them.

“The actors leverage Internet scanning services to find Internet-exposed PLCs running outdated software or that are otherwise poorly protected,” the advisory reads.

Siemens said it was “aware” of the alert and “is coordinating closely with CISA.”

“This advisory does not describe new vulnerabilities within the S7 Series programmable logic controllers (PLC). Instead, this reflects threat actors employing new techniques to exploit potential misconfigurations,” the company continued, noting a security bulletin it issued last month.

“Siemens will provide updates around this issue to potentially affected customers through our ProductCERT team,” it said. “At this point in time, we have not identified increased attack levels or unknown vulnerabilities in Siemens ICS products.”

Updated 8/20/2026: to include Siemens comment.

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President Donald Trump blamed Minnesota Friday for the cyberattacks its water systems have suffered in recent days, saying the state was “behind it.”

Trump said the state being “incompetent” was the issue, but it wasn’t clear whom he thought actually conducted cyberattacks that U.S. investigators have attributed to Iran — if, perhaps, somehow Minnesota incompetently cyberattacked itself. The White House referred a request for clarification back to Trump’s remarks.

“I think that Minnesota is behind it,” Trump told reporters Friday. “Because they’re grossly incompetent. I don’t think there was an Iranian cyberattack. I think Minnesota ought to get its act together.”

The White House also didn’t clarify whom the president believed was behind similar attacks in other states, when asked for comment. Trump has repeatedly used federal power aggressively in Minnesota, a state led by Gov. Tim Walz, a Democrat who was on the ticket that ran against him in 2024 as the vice presidential nominee. Trump also has downplayed Iranian attacks amid the war he launched against the nation with Israel in February.

A number of cyber experts quickly pushed back on Trump’s comments after he made them.

“Victim blaming in cyber is so 2000 and late,” cybersecurity pioneer Chris Wysopal, Veracode co-founder and chief security evangelist, said on the Bluesky social media platform. Said Jake Williams, a member of the IANS faculty: “His own intelligence services are attributing this to Iran.”

Andy Jabbour — founder and CEO of Gate 15, a cybersecurity firm which provides support to the water sector — told CyberScoop that, “speaking candidly, I’m not even sure what he was actually saying or suggesting Minnesota’s government did or didn’t do.”

“Attribution is tricky business,” he continued, referencing recent alerts from the Cybersecurity and Infrastructure Security Agency and others. “But logically, given an ongoing war with Iran, recent statements made by Iran-aligned threat groups, with assessments that the recent activity is aligned with recent CISA warnings, given yesterday’s statements from CISA and the FBI, random unsubstantiated allegations aimed at political opponents seem reckless and are a disservice to the American people.”

Walz struck back at Trump in a Facebook post, noting steps from his Department of Government Efficiency to slash federal funding. CISA has shrunken considerably under Trump, and his administration has pushed states to defend against cyberattacks that feds once countered.

“Trump knows exactly who is responsible for this attack, and knows that other states were hit too,” Walz said. “This is what modern warfare looks like, and it further illustrates there’s no plan to win a war with Iran.”

“DOGE took an axe to CISA and left the U.S. exposed to cyber attacks,” he continued. “Thankfully, our experts in Minnesota were able to identify the vulnerability quickly and work with local communities to stop it.”

A spokesperson for Minnesota IT Services, a state agency that has been responding to the water cyberattacks, declined to address Trump’s remarks.

“We remain focused on supporting affected communities, securing critical infrastructure and coordinating with local partners and federal officials as the investigation continues,” the spokesperson, Emily Zimmer, told CyberScoop. “We will not comment on political statements or speculate about attribution.”

Other cyber professionals declined to comment directly on Trump’s remarks, but offered thoughts on who was behind the attacks and their motives.

Bryson Bort, CEO and founder of Scythe said the evidence supports the attribution with Iran, and that it looks like hackers there found something they could exploit on the internet and seized the chance.

“This was a target of opportunity,” said Bort, co-founder of the ICS Village, a non-profit advancing awareness of industrial control system security; such systems are common in the water sector. “It wasn’t that Minnesota did something as a state to raise Iran’s ire.”

Cynthia Kaiser, a former top FBI cyber official, said that when the bureau conducts attributions, it looks at technical indicators but also who has the capability, who has conducted similar attacks in the past and what the purpose of the attacks is.

“Iran ticks all these kinds of things,” Kaiser, now senior vice president at cybersecurity firm Halcyon, told CyberScoop. “My view is, if it walks like a duck, if it talks like a duck, I strongly suspect it’s a duck. I’d be shocked if we found out it wasn’t Iran.”

Just last week, CISA updated an advisory about how Iranian hackers were targeting programmable logic controllers in the water sector and other sectors, a warning that the water industry’s information sharing and analysis center said it believed.

“WaterISAC is confident in our government partners’ assessment that the confirmed activity is aligned with the joint Cybersecurity Advisory (CSA) AA26-097A ‘Iranian-Affiliated Cyber Actors Exploit Programmable Logic Controllers Across U.S. Critical Infrastructure’ published and recently updated by CISA,” Tom Dobbins, executive director, WaterISAC, told CyberScoop. “We have evidence of earlier attacks from Iran even before this current conflict. Cyber attacks are the most viable way that Iran can directly attack our homeland, and it is logical that they would do so, especially given the challenges of absolute attribution.”

The water sector is often viewed as one of the most vulnerable critical infrastructure sectors, and Dobbins called on Congress to provide funding to provide funding for the ISAC.

Sen. Tina Smith, D-Minn., also took issue with Trump’s comments.

“The President provided an unserious response that is beneath the dignity of the office he holds. Iran’s purported cyberattack on Minnesota’s water infrastructure must be taken as a serious threat to our national security.  Smith said in a statement, adding that she’s been in touch with CISA and the FBI and was grateful to Minnesota’s IT experts. “The entire situation serves as a stark reminder of the danger this war puts us in the longer it drags on.”

Fellow Minnesota Democratic Sen. Amy Klobuchar had earlier been in touch with Sean Cairncross, the national cyber director and a Minnesota native, about the incident.

Trump has previously displayed a laissez-faire view toward other cyberattacks on the United States, such as when he’s been asked about Chinese and Russian cyberattacks and Trump shrugs them off as something America does, too.

He also has cast doubt before on his government officials’ assessments of who’s responsible for cyberattacks on the United States, such as when he asserted China rather than Russia was behind the landmark SolarWinds breach.

Updated 8/3/2026: with comments from Minnesota’s senators.

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