1. National Security Risk Analysis
Dr. Greg Parnell
Professor of Systems Engineering
Department of Systems Engineering
United States Military Academy at West Point
&
Senior Principal, Innovative Decisions Inc.

2. Disclaimer
The views expressed in this presentation are those of the author and do not reflect the official policy or position of the United States Army, the Department of Defense, Innovative Decisions, Inc., the National Research Council, or the Department of Homeland Security.

3. Agenda What is our U.S. National Security Strategy?
What are the sources of national security risk?
How do natural hazards and intelligent adversaries differ?
Are natural hazard risk analysis techniques appropriate for intelligent adversaries?
Can we model and use terrorist values and objectives?
How should we analyze the risk of attacks from intelligent adversaries?
What knowledge should a national security risk analyst team have?

4. U.S. National Security Strategy

5. Agenda What is our U.S. National Security Strategy?
What are the sources of national security risk?
How do natural hazards and intelligent adversaries differ?
Are natural hazard risk analysis techniques appropriate for intelligent adversaries?
Can we model and use terrorist values and objectives?
How should we analyze the risk of attacks from intelligent adversaries?
What knowledge should a national security risk analyst team have?

6. Risk of WMD in the National Security Strategy.
Protect our enemies from threatening us, our allies, and our friends with WMD.
“the greater the threat, the greater the risk of inaction”
“Biological weapons pose a grave WMD threat because of the risk of contagion that would spread disease across large populations and around the globe”
The National Security Strategy of the United States of America, The White House, March 2006

7. Risk terms (threat, vulnerability, and consequences) are used frequently.
Threats (42)
WMD (Nuclear, Biological, and Chemical)
Global Terrorism
Opportunistic aggression (regional security)
Pandemic
Vulnerability (1)
DHS is “focused on three national security objectives: preventing terrorist attacks within the U.S.; reducing America’s vulnerability to terrorism; and minimizing the damage and facilitating the recovery from attacks that do occur”
Consequences (7)
Proactive counterproliferation efforts and improved protection to mitigate consequences of WMD use
When the consequences of an attack with WMD are potentially so devastating, we cannot afford to stand idly by as grave dangers materialize.
The National Security Strategy of the United States of America, The White House, March 2006

8. Agenda What is our U.S. National Security Strategy?
What are the sources of national security risk?
How do natural hazards and intelligent adversaries differ?
Are natural hazard risk analysis techniques appropriate for intelligent adversaries?
Can we model and use terrorist values and objectives?
How should we analyze the risk of attacks from intelligent adversaries?
What knowledge should a national security risk analyst team have?

9. Intelligent Adversaries Preparedness and Prevention
Intelligent adversary (terrorism) risks are different than natural hazards.
Natural Hazards
Intelligent Adversaries
Terrorism
Information Security
Historical Data
Some historical data:
Record of several extreme events already occurred.
Very limited historical data:
9/11 events were the first foreign terrorist attacks worldwide with such a huge concentration of victims and damages.
Extensive historical data for existing systems
Information systems are under continuous attack. Difficult to predict attacks for new system designs.
Risk of Occurrence
Risk reasonably well-specified: Well-developed models for estimating risks based on historical data and experts’ estimates.
Considerable ambiguity of risk: Terrorists can purposefully adapt their strategy (target, weapons, time) depending on their information on vulnerabilities. Attribution may be difficult (e.g. anthrax attacks)
Ambiguity of risk: Attackers can access data not known to users or information security specialists. Attribution difficult.
Geographic Risk
Specific areas at risk:
Some geographical areas are well known for being at risk (e.g., California for earthquakes or Florida for hurricanes).
All areas at risk: Some cities may be considered riskier than others (e.g., New York City, Washington), but terrorists may attack anywhere, any time.
All areas at risk: Internet provides connectivity for attackers as well as user. Information security only as good as weakest link.
Information
Information sharing:
New scientific knowledge on natural hazards can be shared with all the stakeholders.
Asymmetry of information: Governments sometimes keep secret new information on terrorism for national security reasons.
Some sharing but strong incentives not to share. Organizations have incentives to keep confidential attacks to avoid loss of customer confidence.
Event Type
Natural event:
To date no one can influence the occurrence of an extreme natural event (e.g., an earthquake).
Intelligent adversary events:
Governments may be able to influence terrorism (e.g., foreign policy; international cooperation; national and homeland security measures).
Intelligent adversary events: Governments can influence, some international cooperation and national measures.
Preparedness and Prevention
Government and insureds can invest in well-known mitigation measures.
Weapons types are numerous. Federal agencies may be in a better position to develop more efficient global mitigation programs.
Attacks are numerous and growing in sophistication.
Modified form Kunreuther, H. and Michel-Kerjan, E (2005), “Insuring (Mega)-Terrorism: Challenges and Perspectives”, in OECD, Terrorism Risk Insurance in OECD Countries, July (modified first two columns and added third column).
Parnell, G. S., Dillon-Merrill, R. L., and Bresnick, T. A., 2005, Integrating Risk Management with Homeland Security and Antiterrorism Resource Allocation Decision-Making, The McGraw-Hill Handbook of Homeland Security, David Kamien, Editor, pp

10. Agenda What is our U.S. National Security Strategy?
What are the sources of national security risk?
How do natural hazards and intelligent adversaries differ?
Are natural hazard risk analysis techniques appropriate for intelligent adversaries?
Can we model and use terrorist values and objectives?
How should we analyze the risk of attacks from intelligent adversaries?
What knowledge should a national security risk analyst team have?

11. Some key questions for risk analysis of the threat of WMD.
Purpose
Who uses the risk assessment?
What do they use the risk assessment for?
How does it support risk management?
Data collection
Who are the subject matter experts (SMEs)?
Can we access the SMEs?
What are the terrorist objectives?
What are the agent/weapon threats?
How do we deal with asymmetry of threat information?
Modeling
Are natural hazard techniques (e.g., event trees) appropriate for intelligent adversaries?
What can we learn for information assurance risk analysis?
Are other techniques available?
Should terrorist decisions be model inputs or outputs?
Who provides the probabilities?
How do we assess the probabilities?
What consequences should be considered?
How do we model the consequences?
Presentation
How should we present the risk to decision makers and stakeholders?

12. Decision tree calculations with notional data.
An intelligent adversary trying to maximize consequences would select Attack A.

13. A canonical intelligent adversary problem to compare risk analysis techniques.
Event Tree
Decision Tree
Adversary attack (terrorist)
Select target
Select biological agent, nuclear weapon, chemical agent
Acquire, deploy, and employ agent/weapon
Consequences
Attack success or failure
Detection
Interdiction
Vulnerability
Consequences given attack
Consequence management
Attack
Attack
Consequences
Consequences
Colleagues Howard Kunruether and Tony Cox contributed to this formulation.

14. Event tree calculations with notional data.
Attack B contributes 84% of the risk.

15. Mission Oriented Risk and Decision Analysis (MORDA) supports the information assurance design process.
MORDA PROCESS
Hardware
Adversaries
Adversaries
&
Software
System Lifecycle
User
Develop,
Operations
Mission
Design
Evaluate
Select
Integrate,
&
Support
Options
Design
Design
&
Maintenance
Needs
Deploy
Risk Assessment
Attack trees
Risk Management
Multiple objective decision analysis
Attacker
Mission Support
Service Providers
Optimization and Cost/Benefit Analysis
Countermeasure design options
Mission
Integration
Adversary
Support &
&
Attack
Service Provider
Analysis
Model
Models
Model
SOCRATES Model
Buckshaw, D. L., Parnell, G. S., Unkenholz, W. L., Parks, D. L., Wallner, J. M. and Saydjari, O. S., “Mission Oriented Risk and Design Analysis of Critical Information Systems,” Military Operations Research, 2005,Vol 10, No 2, pp

16. Agenda What is our U.S. National Security Strategy?
What are the sources of national security risk?
How do natural hazards vs. intelligent adversaries differ?
Are natural hazard risk analysis techniques appropriate for intelligent adversaries?
Can we model and use terrorist values and objectives?
How should we analyze the risk of attacks from intelligent adversaries?
What knowledge should a national security risk analyst team have?

17. Terrorist Acts Suspected of or Inspired by al-Qaeda
1993 (Feb.): Bombing of World Trade Center (WTC); 6 killed.
1993 (Oct.): Killing of U.S. soldiers in Somalia.
1996 (June): Truck bombing at Khobar Towers barracks in Dhahran, Saudi Arabia, killed 19 Americans.
1998 (Aug.): Bombing of U.S. embassies in Kenya and Tanzania; 224 killed, including 12 Americans.
1999 (Dec.): Plot to bomb millennium celebrations in Seattle foiled when customs agents arrest an Algerian smuggling explosives into the U.S.
2000 (Oct.): Bombing of the USS Cole in port in Yemen; 17 U.S. sailors killed.
2001 (Sept.): Destruction of WTC; attack on Pentagon. Total dead 2,992.
2001 (Dec.): Man tried to denote shoe bomb on flight from Paris to Miami.
2002 (April): Explosion at historic synagogue in Tunisia left 21 dead, including 11 German tourists.
2002 (May): Car exploded outside hotel in Karachi, Pakistan, killing 14, including 11 French citizens.
2002 (June): Bomb exploded outside American consulate in Karachi, Pakistan, killing 12.
2002 (Oct.): Boat crashed into oil tanker off Yemen coast, killing 1.
2002 (Oct.): Nightclub bombings in Bali, Indonesia, killed 202, mostly Australian citizens.
2002 (Nov.): Suicide attack on a hotel in Mombasa, Kenya, killed 16.
2003 (May): Suicide bombers killed 34, including 8 Americans, at housing compounds for Westerners in Riyadh, Saudi Arabia.
2003 (May): 4 bombs killed 33 people targeting Jewish, Spanish, and Belgian sites in Casablanca, Morocco.
2003 (Aug.): Suicide car-bomb killed 12, injured 150 at Marriott Hotel in Jakarta, Indonesia.
2003 (Nov.): Explosions rocked a Riyadh, Saudi Arabia, housing compound, killing 17.
2003 (Nov.): Suicide car-bombers simultaneously attacked 2 synagogues in Istanbul, Turkey, killing 25 and injuring hundreds.
2003 (Nov.): Truck bombs detonated at London bank and British consulate in Istanbul, Turkey, killing 26.
2004 (March): 10 bombs on 4 trains exploded almost simultaneously during the morning rush hour in Madrid, Spain, killing 191 and injuring more than 1,500.
2004 (May): Terrorists attacked Saudi oil company offices in Khobar, Saudi Arabia, killing 22.
2004 (June): Terrorists kidnapped and executed American Paul Johnson, Jr., in Riyadh, Saudi Arabia.
2004 (Sept.): Car bomb outside the Australian embassy in Jakarta, Indonesia, killed 9.
2004 (Dec.): Terrorists entered the U.S. Consulate in Jeddah, Saudi Arabia, killing 9 (including 4 attackers).
2005 (July): Bombs exploded on 3 trains and a bus in London, England, killing 52.
2005 (Oct.): 22 killed by 3 suicide bombs in Bali, Indonesia.
2005 (Nov.): 57 killed at 3 American hotels in Amman, Jordan.
2006 (Aug.): More than 25 arrested in plot to blow up jetliners between London and U.S
Global Incident Map
Terrorism Knowledge Database

18. Characteristics of Past Al-Qaeda attacks
Focus on strategy
U.S. and our allies
Seek high consequences
Meticulous planning to maximize probability of success
Execute multiple attacks
Suicide attacks

19. “the attacks benefited Islam greatly…"
Expected Outcome: "I was thinking that the fire from the gas in the plane would melt the iron structure of the building and collapse the area where the plane hit and all the floors above it only. This is all that we had hoped for."

20. Can we model terrorism (Al-Qaeda) values and objectives?
Is Al-Qaeda rational?
Al-Qaeda’s objectives (911 Commission)
Elimination of foreign influence in Muslim countries
Eradication of those deemed to be "infidels“
Elimination of Israel
Creation of a new Islamic caliphate
Remove ‘infidels’ from Middle East
Principal stated aims (
Drive Americans and American influence out of all Muslim nations, especially Saudi Arabia
Destroy Israel
Topple pro-Western dictatorships around the Middle East
Unite all Muslims and establish, by force if necessary, an Islamic nation adhering to the rule of the first Caliphs.

21. Al-Qaeda Training Manual focuses on strategy, operations, and tactics.
Page 14
Page 15

22. Agenda What is our U.S. National Security Strategy?
What are the sources of national security risk?
How do natural hazards and intelligent adversaries differ?
Are natural hazard risk analysis techniques appropriate for intelligent adversaries?
Can we model and use terrorist values and objectives?
How should we analyze the risk of attacks from intelligent adversaries?
What knowledge should a national security risk analyst team have?

23. There are many national security risk analysis decision makers and stakeholders.
State
Local
Private
Citizens
Strategic
Our Focus
Operational
Tactical

24. Combining Consequences
Several modeling decisions must be made to provide effective risk analyses that support national homeland security decision-makers.
Run time
Model complexity
Frequency of attacks
Terrorist Decisions
US Decisions
Uncertain Events
Consequences
Combining Consequences
Source: Discussions with colleagues on NRC Committee

25. Several modeling decisions must be made to provide effective risk analyses that support national homeland security decision-makers.
Run time
Model complexity
Frequency of attacks
Terrorist Decisions
US Decisions
Uncertain Events
Consequences
Combining Consequences
Real-time (Minutes)
Transparent,
simple models tailored to available data
Ignore
Scenarios
Not modeled
Mortality
Not combined
Hours
Use meta-models developed for best available national models
Time until first attack
Probability distributions
Deterministic (parameter)
Morbidity
Convert to dollars
Days
Distributed modeling using best available national models
Multiple attacks
Decision made to maximize some objective(s)
Probability distribution
Economic
Combined with value function
Weeks
Black box with unvalidated, unverified, and unaccredited models
Game theory models
Probability distributions on probabilities
Psychological
Combined with utility function
Months
Attacker-Defender models
Environmental
Source: Discussions with colleagues on NRC Committee

26. Red teaming or seminar games can provide very important insights.
Run time
Model complexity
Frequency of attacks
Terrorist Decisions
US Decisions
Uncertain Events
Consequences
Combining Consequences
Real-time (Minutes)
Transparent,
simple models tailored to available data
Ignore
Scenarios
Not modeled
Mortality
Not combined
Hours
Use meta-models developed for best available national models
Time until first attack
Probability distributions
Deterministic (parameter)
Morbidity
Convert to dollars
Days
Distributed modeling using best available national models
Multiple attacks
Decision made to maximize some objective(s)
Probability distribution
Economic
Combined with value function
Weeks
Black box with unvalidated, unverified, and unaccredited models
Game theory models
Probability distributions on probabilities
Psychological
Combined with utility function
Months
Attacker-Defender models
Environmental

27. Red Teaming
~ Structured Qualitative Inquiry ~
Detailed study plan (vignette, data collection plan, clearly identified study issues, elements of analysis)
scenario, moves, counter moves
assessments
World class Red and Blue experts
Expert study director, skilled in facilitation
Transparence: data collection  observations  findings  conclusions
Objective: Is our analysis framework robust enough to capture potential actions of intelligent adversaries?

28. Three adversary risk analysis modeling techniques.
Terrorist decision tree
Game theory
Attacker-Defender models

29. Game theory and risk analysis.
Run time
Model complexity
Frequency of attacks
Terrorist Decisions
US Decisions
Uncertain Events
Consequences
Combining Consequences
Real-time (Minutes)
Transparent,
simple models tailored to available data
Ignore
Scenarios
Not modeled
Mortality
Not combined
Hours
Use meta-models developed for best available national models
Time until first attack
Probability distributions
Deterministic (parameter)
Morbidity
Convert to dollars
Days
Distributed modeling using best available national models
Multiple attacks
Decision made to maximize some objective(s)
Probability distribution
Expected value
Economic
Combined with value function
Weeks
Black box with unvalidated, unverified, and unaccredited models
Game theory models
Probability distributions on probabilities
Psychological
Combined with utility function
Months
Attacker-Defender models
Environmental

30. Combining game theory and risk analysis.
No Attack
Single Attack
Multiple attack
Stockpile
C11
C12
C13
Stockpile + Biosurveillance
C21
C22
C33
Stockpile+ Biosurveillance + Key personnel
C31
C32
Everyone
C41
C42
C43
Banks, D. and Anderson, S. (2006). "Game Theory and Risk Analysis in the Context of the Smallpox Threat," in Statistical Methods in Counterterrorism, ed. A. Wilson, G. Wilson, and D. Olwell, Springer-Verlag, NY, pp
Vicki Bier, “Choosing What to Protect”,

31. Attacker-Defender Models.
Run time
Model complexity
Frequency of attacks
Terrorist Decisions
US Decisions
Uncertain Events
Consequences
Combining Consequences
Real-time (Minutes)
Transparent,
simple models tailored to available data
Ignore
Scenarios
Not modeled
Mortality
Not combined
Hours
Use meta-models developed for best available national models
Time until first attack
Probability distributions
Deterministic (parameter)
Morbidity
Convert to dollars
Days
Distributed modeling using best available national models
Multiple attacks
Decision made to maximize some objective(s)
Probability distribution
Expected value
Economic
Combined with value function
Weeks
Black box with unvalidated, unverified, and unaccredited models
Game theory models
Probability distributions on probabilities
Psychological
Combined with utility function
Months
Attacker-Defender models
Environmental

32. Attacker-Defender is a bi-level program (optimization) and type of Stackelberg game.
Brown, G., Carlyle, M., Salmerón, J. and Wood, K., 2006, "Defending Critical Infrastructure ," Interfaces , 36, pp

33. Multiobjective decision analysis with decision tree/influence diagram.
Run time
Model complexity
Frequency of attacks
Terrorist Decisions
US Decisions
Uncertain Events
Consequences
Combining Consequences
Real-time (Minutes)
Transparent,
simple models tailored to available data
Ignore
Scenarios
Not modeled
Mortality
Not combined
Hours
Use meta-models developed for best available national models
Time until first attack
Probability distributions
Deterministic (parameter)
Morbidity
Convert to dollars
Days
Distributed modeling using best available national models
Multiple attacks
Decision made to maximize some objective(s)
Probability distribution
Economic
Combined with value function
Weeks
Black box with unvalidated, unverified, and unaccredited models
Game theory models
Probability distributions on probabilities
Psychological
Combined with utility function
Months
Attacker-Defender models
Environmental

34. Multiobjective decision analysis with decision tree/influence diagram.
Parnell, G. S., Multi-objective Decision Analysis, Wiley Handbook of Science & Technology For Homeland Security, John G Voeller, Editor, Forthcoming 2007

35. Multiobjective decision analysis with decision tree/influence diagram.
Parnell, G. S., Multi-objective Decision Analysis, Wiley Handbook of Science & Technology For Homeland Security, John G. Voeller, Editor, Forthcoming 2007
Paté-Cornell, M.E. and S.D. Guikema “Probabilistic Modeling or Terrorist Threats: A Systems Analysis Approach to Setting Priorities Among Countermeasures,” Military Operations Research, Vol. 7, No. 4, pp
von Winterfeldt and Terrence M. O’Sullivan, A Decision Analysis to Evaluate the Cost-Effectiveness of MANPADS Countermeasures, Decision Analysis, Vol 3, No 2, June 2006, pp

36. Agenda What is our U.S. National Security Strategy?
What are the sources of national security risk?
How do natural hazards and intelligent adversaries differ?
Are natural hazard risk analysis techniques appropriate for intelligent adversaries?
Can we model and use terrorist values and objectives?
How should we analyze the risk of attacks from intelligent adversaries?
What knowledge should a national security risk analyst team have?

37. What knowledge should a WMD risk analyst team have?
Strategy
Objectives
Tactics
Intelligent adversaries
Decision analysis
Game theory
Attacker-Defender models
Risk analysis
Consequence models
Red teams
Wargaming
Analysis
techniques
Technologies
Threat
Conventional
WMD (CBRN)
Technologies for risk management
Access to “world class” experts is critical.

38. Summary What is our U.S. National Security Strategy?
Protect against WMD, especially bioterrorism.
What are the sources of national security risk?
WMD, especially bioterrorism.
How do natural hazards and intelligent adversaries differ?
Natural hazard data exist; intelligent adversaries are adaptive and dynamic.
Are natural hazard risk analysis techniques appropriate for intelligent adversaries?
But some techniques can be used.
New techniques are needed.
Can we model and use terrorist values and objectives?
Yes.
How should we analyze the risk of attacks from intelligent adversaries?
Will require the design of new approaches.
What knowledge should a national security risk analyst team have?
Will require learning adversary strategies, new techniques, new technologies, and communications will very diverse stakeholders.