Vitol Inc. Agrees to Pay over $135 Million to Resolve Foreign Bribery Case

Vitol Inc. (Vitol), the U.S. affiliate of the Vitol group of companies, which together form one of the largest energy trading firms in the world, has agreed to pay a combined $135 million to resolve the Justice Department’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) and to resolve a parallel investigation in Brazil. 

The resolution arises out of Vitol schemes to pay bribes to officials in Brazil, Ecuador, and Mexico.  Vitol has also agreed to disgorge more than $12.7 million to the Commodity Futures Trading Commission (CFTC) in a related matter and to pay the CFTC a penalty of $16 million related to trading activity not covered by the deferred prosecution agreement with the department. 

“Over a period of 15 years, Vitol paid millions of dollars in bribes to numerous public officials – in three separate countries – to obtain improper competitive advantages that resulted in significant illicit profits for the company,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “Today’s coordinated resolution with Brazil, along with our first coordinated FCPA resolution with the CFTC, underscores the department’s resolve to hold companies accountable for their crimes while, at the same time, avoiding unnecessarily duplicative penalties.”

“Vitol paid bribes to government officials in Brazil, Ecuador and Mexico to win lucrative business contracts and obtain competitive advantages to which they were not fairly entitled,” said Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York.  “The United States Attorney’s Office for the Eastern District of New York will continue to hold accountable companies and individuals that attempt to defy U.S. law to the detriment of honest competitors.” 

“This resolution demonstrates the FBI’s commitment to investigate foreign corruption and hold accountable those who circumvent laws for financial gain at the expense of American consumers,” said Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office. “We’ll continue to work with our partners to root out corruption, whether it occurs domestically or abroad, to ensure trust on the international playing field.”

Vitol entered into a deferred prosecution agreement with the department in connection with a criminal information filed today in the Eastern District of New York charging the company with two counts of conspiracy to violate the anti-bribery provisions of the FCPA.  The case is assigned to Senior U.S. District Judge Eric N. Vitaliano. 

Pursuant to its agreement with the department, Vitol’s total criminal penalty is $135 million.  The department will credit $45 million – approximately one third of the total criminal penalty – against the amount that Vitol will pay to resolve an investigation by the Brazilian Ministério Público Federal for conduct related to the company’s bribery scheme in Brazil.   

As part of the deferred prosecution agreement, Vitol Inc. and Vitol S.A., another company within the Vitol group of companies, have agreed to continue to cooperate with the department in any ongoing investigations and prosecutions relating to the conduct, including of individuals; to enhance their compliance programs; and to report to the department on the implementation of their compliance programs.

According to the company’s admissions and court documents, between 2005 and 2014, Vitol and its co-conspirators paid bribes of more than $8 million to at least four officials at Brazil’s state-owned and controlled oil company Petróleo Brasileiro S.A. – Petrobras (Petrobras).  Vitol paid these bribes in exchange for receiving confidential Petrobras pricing and competitor information.  Vitol concealed the scheme through the use of intermediaries and a fictitious company that facilitated the payments to offshore accounts and, ultimately, to the Petrobras officials.

Vitol also admitted that from 2011 to 2014, it bribed at least five other Petrobras officials in exchange for receiving confidential pricing information that Vitol used to win fuel oil contracts with Petrobras.  During that scheme, a consultant acting on behalf of Vitol engaged in back-channel negotiations with a Houston-based Petrobras official.  The parties would then hold staged negotiations, ultimately settling on the pre-arranged price that allowed for bribes to be paid from Vitol to the Petrobras officials.  Several of the co-conspirators communicated using alias email accounts and code names, including “Batman,” “Tiger,” “Phil Collins,” “Dolphin,” “Popeye,” and “Beb.” 

Vitol also admitted to a second conspiracy to bribe officials in Ecuador and Mexico in order to obtain and retain business in connection with the purchase and sale of oil products.  Between 2015 and July 2020, Vitol agreed to offer and pay more than $2 million in bribes to officials in Ecuador and Mexico.   

In furtherance of this bribery scheme, Vitol and its co-conspirators entered into sham consulting agreements, set up shell companies, created fake invoices for purported consulting services and used alias email accounts to transfer funds to offshore companies involved in the conspiracy – all while knowing that the funds, at least in part, would be used to pay bribes to Ecuadorian and Mexican officials.

In related matters, the department recently unsealed charges against a Houston-based former Petrobras official who received bribes in association with the scheme, and who pleaded guilty to one count of conspiracy to commit money laundering on Feb. 8, 2019, in the Eastern District of New York.  In addition, the department recently unsealed charges against one of the intermediaries involved in the Brazil scheme, who pleaded guilty on Sept. 22, 2017, to one count of conspiracy to violate the FCPA in connection with a related bribery scheme.  Both individuals are awaiting sentencing.  Further, on Sept. 22, 2020, a federal grand jury in the Eastern District of New York returned an indictment against Javier Aguilar, a Vitol trader, for his alleged role in the Ecuador scheme.

The investigation is being conducted by the FBI’s International Corruption Unit.  The government’s case is being handled by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.  Fraud Section Trial Attorneys Derek J. Ettinger, Jonathan P. Robell, and Clayton P. Solomon, and Assistant U.S. Attorneys Mark E. Bini and Andrey Spektor are prosecuting the case.  The U.S. Marshals Service and Justice Department’s Office of International Affairs provided assistance in the investigation.

The Fraud Section is responsible for investigating and prosecuting all FCPA matters.  Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

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    In fiscal year (FY) 2020, GAO's work yielded $77.6 billion in financial benefits, a return of about $114 for every dollar invested in GAO. We also identified 1,332 other benefits that led to improved services to the American people, strengthened public safety, and spurred program and operational improvements across the government. In March 2021, GAO reported on 36 areas designated as high risk due to their vulnerabilities to fraud, waste, abuse, and mismanagement or because they face economy, efficiency, or effectiveness challenges. In FY 2020 GAO's High Risk Series products resulted in 168 reports, 26 testimonies, $54.2 billion in financial benefits, and 606 other benefits. In this year of GAO's centennial, GAO's FY 2022 budget request seeks to lay the foundation for the next 100 years to help Congress improve the performance of government, ensure transparency, and save taxpayer dollars. GAO's fiscal year (FY) 2022 budget requests $744.3 million in appropriated funds and uses $50.0 million in offsets and supplemental appropriations. These resources will support 3,400 full-time equivalents (FTEs). We will continue our hiring focus on boosting our Science and Technology and appropriations law capacity. GAO will also maintain entry-level and intern positions to address succession planning and to fill other skill gaps. These efforts will help ensure that GAO recruits and retains a talented and diverse workforce to meet the priority needs of the Congress. In FY 2022, we will continue to support Congressional oversight across the wide array of government programs and operations. In particular, our science and technology (S&T) experts will continue to expand our focus on rapidly evolving (S&T) issues. Hallmarks of GAO's (S&T) work include: (1) conducting technology assessments at the request of the Congress; (2) providing technical assistance to Congress on science and technology matters; (3) continuing the development and use of technical guides to assess major federal acquisitions and technology programs in areas such as technology readiness, cost estimating, and schedule planning; and (4) supporting Congressional oversight of federal science programs. With our requested funding, GAO will also bolster capacity to review the challenges of complex and growing cyber security developments. In addition, GAO will continue robust analyses of factors behind rising health care costs, including costs associated with the ongoing COVID-19 Pandemic. Internally, the funding requested will make possible priority investments in our information technology that include the ability to execute transformative plans to protect data and systems. In FY 2022 GAO will continue to implement efforts to increase our flexibility to evolve IT services as our mission needs change, strengthen information security, increase IT agility, and maintain compliance. We will increase speed and scalability to deliver capabilities and services to the agency. This request will also help address building infrastructure, security requirements, as well as tackle long deferred maintenance, including installing equipment to help protect occupants from dangerous bacteria, viruses, and mold. As reported in our FY 2020 financial statements, GAO's backlog of deferred maintenance on its Headquarters Building had grown to over $82 million as of fiscal year-end. Background GAO's mission is to support Congress in meeting its constitutional responsibilities and to help improve the performance and ensure the accountability of the federal government for the benefit of the American people. We provide nonpartisan, objective, and reliable information to Congress, federal agencies, and to the public, and recommend improvements across the full breadth and scope of the federal government's responsibilities. In fiscal year 2020. GAO issued 691 products, and 1,459 new recommendations. Congress used our work extensively to inform its decisions on key fiscal year 2020 and 2021 legislation. Since fiscal year 2000, GAO's work has resulted in over: $1.2 trillion dollars in financial benefits; and 25,328 program and operational benefits that helped to change laws, improve public services, and promote sound management throughout government. As GAO recognizes 100 years of non-partisan, fact-based service, we remain committed to providing program and technical expertise to support Congress in overseeing the executive branch; evaluating government programs, operations and spending priorities; and assessing information from outside parties. For more information, contact Gene L. Dodaro at (202) 512-5555 or dodarog@gao.gov.
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  • Japanese Shipping Company Fined $1.5 Million for Concealing Illegal Discharges of Oily Water
    In Crime News
    Misuga Kaiun Co. Ltd. (MISUGA), a Japanese-based company engaged in international shipping, was sentenced yesterday in federal court before U.S. District Court Judge Paul G. Byron in Orlando, Florida.
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  • Remarks of Assistant Attorney General for the National Security Division John C. Demers on the Iran Forfeiture Actions
    In Crime News
    Good morning.  Today, I am joined by Acting U.S. Attorney for the District of Columbia Michael Sherwin and the State Department’s Special Representative for Iran and Venezuela Elliott Abrams to announce two civil seizure court actions that have disrupted malign, and in one instance, potentially deadly, activities undertaken by the Iranian Revolutionary Guard Corps (IRGC)-Quds Force, a Foreign Terrorist Organization.  Special Representative Abrams will also be announcing sanctions that the State Department and the Department of the Treasury have imposed on the responsible individuals and entities.
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  • Singaporean National Sentenced to 14 Months in Prison for Acting in the United States As an Illegal Agent of Chinese Intelligence
    In Crime News
    Jun Wei Yeo, also known as Dickson Yeo, was sentenced today in federal court to 14 months in prison. Yeo pled guilty on July 24, 2020 to acting within the United States as an illegal agent of a foreign power without first notifying the Attorney General, in violation of 18 U.S.C. § 951. The announcement was made by John G. Demers, Assistant Attorney General; Michael R. Sherwin, Acting United States Attorney for the District of Columbia; James A. Dawson, Acting Assistant Director in Charge of FBI Washington Field Office; Alan E. Kohler, Jr., Assistant Director of the FBI's Counterintelligence Division; and Deputy Assistant Secretary Ricardo Colón, Domestic Operations Deputy Assistant Secretary Ricardo Colón, Domestic Operations.
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  • Presentation of the Sherman Award to the Honorable Judge Douglas H. Ginsburg
    In Crime News
    Welcome to the Conference Center of the historic Robert F. Kennedy Department of Justice Building. It is an honor to present the Sherman award to Judge Douglas H. Ginsburg this afternoon. We’re joined today by Judge Ginsburg’s wife Deecy and many of Judge Ginsburg’s colleagues and admirers. We’re particularly honored by the presence of Justice Gorsuch, a champion of liberty, who in his short time on the Supreme Court has reconfirmed his reputation for brilliance, clarity of thought and expression, and for holding the government to its word, whether in the statutes that it enacts or the treaties that it makes. I also welcome the distinguished guests who are with us virtually.
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  • Alabama High School Student Names NASA’s Mars Helicopter
    In Space
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  • Medicare and Medicaid: COVID-19 Program Flexibilities and Considerations for Their Continuation
    In U.S GAO News
    What GAO Found In response to the COVID-19 pandemic, the Centers for Medicare & Medicaid Services (CMS), the federal agency responsible for overseeing Medicare and Medicaid, made widespread use of program waivers and other flexibilities to expand beneficiary access to care. Some preliminary information is available on the effects of these waivers. Specifically: Medicare. CMS issued over 200 waivers and cited some of their benefits in a January 2021 report. For example, CMS reported that: Expansion of hospital capacity. More than 100 new facilities were added through the waivers that permitted hospitals to provide care in non-hospital settings, including beneficiaries' homes. Workforce expansion. Waivers and other flexibilities that relaxed certain provider enrollment requirements and allowed certain nonphysicians, such as nurse practitioners, to provide additional services expanded the provider workforce. Telehealth waivers. Utilization of telehealth services—certain services that are normally provided in-person but can also be provided using audio and audio-video technology—increased sharply. For example, utilization increased from a weekly average of about 325,000 services in mid-March to peak at about 1.9 million in mid-April 2020. Medicaid. CMS approved more than 600 waivers or other flexibilities aimed at addressing obstacles to beneficiary care, provider availability, and program enrollment. GAO has reported certain flexibilities such as telehealth as critical in reducing obstacles to care. Examples of other flexibilities included: Forty-three states suspended fee-for-service prior authorizations, which help ensure compliance with coverage and payment rules before beneficiaries can obtain certain services. Fifty states and the District of Columbia waived certain provider screening and enrollment requirements, such as criminal background checks. While likely benefitting beneficiaries and providers, these program flexibilities also increase certain risks to the Medicare and Medicaid programs and raise considerations for their continuation beyond the pandemic. For example: Increased spending. Telehealth waivers can increase spending in both programs, if telehealth services are furnished in addition to in-person services. Program integrity. The suspension of some program safeguards has increased the risks of fraud, waste, and abuse that GAO previously noted in its High-Risk report series. Beneficiary health and safety. Although telehealth has enabled the safe provision of services, the quality of telehealth services has not been fully analyzed. Why GAO Did This Study Medicare and Medicaid—two federally financed health insurance programs—spent over $1.5 trillion on health care services provided to about 140 million beneficiaries in 2020. Recognizing the critical role of these programs in providing health care services to millions of Americans, the federal government has provided for increased funding and program flexibilities, including waivers of certain federal requirements, in response to the COVID-19 pandemic. The CARES Act includes a provision for GAO to conduct monitoring and oversight of the federal government's response to the COVID-19 pandemic. In response, GAO has issued a series of government-wide reports from June 2020 through March 2021. GAO is continuing to monitor and report on these services. This testimony summarizes GAO's findings from these reports related to Medicare and Medicaid flexibilities during the COVID-19 pandemic, as well as preliminary observations from ongoing work related to telehealth waivers in both programs. Specifically, the statement focuses on what is known about the effects of these waivers and flexibilities on Medicare and Medicaid, and considerations regarding their ongoing use. To conduct this work, GAO reviewed federal laws, CMS documents and guidance, and interviewed federal and state officials. GAO also interviewed six provider and beneficiary groups, selected based on their experience with telehealth services. GAO obtained technical comments from CMS and incorporated them as appropriate. For more information, contact Jessica Farb at (202) 512-7114 or farbj@gao.gov or Carolyn L. Yocom at (202) 512-7114 or yocomc@gao.gov.
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  • Assistant Attorney General Eric Dreiband Announces Departure from Civil Rights Division
    In Crime News
    Assistant Attorney General Eric S. Dreiband of the U.S. Department of Justice’s Civil Rights Division announced his departure from the department, effective Jan. 8, 2021.  Dreiband has served as Assistant Attorney General since Nov. 1, 2018. 
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  • Secretary Pompeo’s Meeting with Japanese Foreign Minister Motegi
    In Crime Control and Security News
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  • Canadian Man Extradited from Spain to Face Charges for Massive Psychic Mail Fraud Scheme
    In Crime News
    A Canadian citizen accused of operating a decades-long psychic mail fraud scheme was extradited to the United States and made his initial appearance today in federal court in Central Islip, New York, the Department of Justice and the U.S. Postal Inspection Service announced.
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  • Justice Department Settles Title VII Lawsuit Against Tallahatchie County, Mississippi, Alleging Intentional Discrimination Based on Race
    In Crime News
    The Department of Justice announced today that it has reached a settlement agreement resolving the United States’ claims that Tallahatchie County, Mississippi, and the Tallahatchie County sheriff in his official capacity (collectively, Tallahatchie County), intentionally discriminated against Black deputy sheriffs based on their race, by paying them less than white deputy sheriffs, in violation of Title VII of the Civil Rights Act of 1964.
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    In Crime Control and Security News
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    In Travel
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  • United States Files False Claims Act Complaint Against Drug Maker Teva Pharmaceuticals Alleging Illegal Kickbacks
    In Crime News
    The United States has filed a False Claims Act complaint against Teva Pharmaceuticals USA Inc. and Teva Neuroscience Inc. (Teva), alleging that they illegally paid the Medicare co-pays for their multiple sclerosis (MS) product, Copaxone, through purportedly independent foundations that the companies used as conduits in violation of the Anti-Kickback Statute, the Department of Justice announced today. 
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  • Secretary Blinken’s Call with the United Arab Emirates Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan
    In Crime Control and Security News
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    In Travel
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  • Environmental Liabilities: NASA’s Reported Financial Liabilities Have Grown, and Several Factors Contribute to Future Uncertainties
    In U.S GAO News
    The National Aeronautics and Space Administration (NASA) estimated cleanup and restoration across the agency would cost $1.9 billion as of fiscal year 2020, up from $1.7 billion in fiscal year 2019. This reflects an increase of $724 million, or 61 percent, from 2014. NASA identified contamination at 14 centers around the country, as of 2019. Five of the 14 centers decreased their environmental liabilities from 2014 to 2019, but liability growth at the other centers offset those decreases and contributed to the net increase in environmental liabilities. Santa Susana Field Laboratory, California, had about $502 million in environmental liabilities growth during this period (see fig.). Nearly all this growth resulted from California soil cleanup requirements that NASA did not anticipate. These NASA Centers Reported Increases or Decreases in Restoration Project Environmental Liabilities Greater Than $10 Million Between Fiscal Years 2014 and 2019 NASA's reported fiscal year 2019 environmental liabilities estimate for restoration projects does not include certain costs, and some factors may affect NASA's future environmental liabilities, potentially increasing or decreasing the federal government's fiscal exposure. Certain costs are not included in the fiscal year 2019 estimate because some projects are in a developing stage where NASA needs to gather more information to fully estimate cleanup costs. Further, NASA limits its restoration project estimates to 30 years, as the agency views anything beyond 30 years as not reasonably estimable. Sixty of NASA's 115 open restoration projects in fiscal year 2019 are expected to last longer than 30 years. With regard to factors that could affect future environmental liabilities, NASA is assessing its centers for contamination of some chemicals it had not previously identified but does not yet know the impact associated cleanup will have on the agency's liabilities in part because standards for cleaning up these chemicals do not yet exist. New cleanup requirements for emerging contaminants could increase NASA's environmental liabilities and create additional fiscal exposure for the federal government. Additionally, NASA is committed, through an agreement with the state of California, to clean soil at Santa Susana Field Laboratory to a certain standard, but the agency issued a decision in September 2020 to pursue a risk-based cleanup standard, which the state of California has opposed. According to NASA, a risk-based cleanup standard at Santa Susana Field Laboratory could decrease NASA's environmental liabilities and reduce the federal government's fiscal exposure by about $355 million. Decades of NASA's research for space exploration relied on some chemicals that can be hazardous to human health and the environment. NASA identified 14 centers around the country with hazardous chemicals that require environmental cleanup and restoration. NASA's Environmental Compliance and Restoration Program oversees the agency's environmental cleanup. NASA's environmental liabilities estimate is reported annually in the agency's financial statement. Federal accounting standards require agencies responsible for contamination to estimate and report their future cleanup costs when they are both probable and reasonably estimable. This report describes (1) NASA's environmental liabilities for restoration projects from fiscal years 2014 to 2019—the most recent data available at the time of our review—and (2) factors that could contribute to uncertainties in NASA's current or future environmental liabilities. GAO reviewed NASA financial statements, guidance, and other relevant reports and interviewed NASA officials from headquarters and three centers, selected because of changes in their reported liabilities. NASA provided technical comments on a draft of this report, which were incorporated as appropriate. For more information, contact Allison Bawden at (202) 512-3841 or bawdena@gao.gov.
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  • Information Technology and Cybersecurity: Significant Attention Is Needed to Address High-Risk Areas
    In U.S GAO News
    What GAO Found In its March 2021 high-risk series update, GAO reported that significant attention was needed to improve the federal government's management of information technology (IT) acquisitions and operations, and ensure the nation's cybersecurity. Regarding management of IT, overall progress in addressing this area has remained unchanged. Since 2019, GAO has emphasized that the Office of Management and Budget (OMB) and covered federal agencies need to continue to fully implement critical requirements of federal IT acquisition reform legislation, known as the Federal Information Technology Acquisition Reform Act (FITARA), to better manage tens of billions of dollars in IT investments. For example: OMB continued to demonstrate leadership commitment by issuing guidance to implement FITARA statutory provisions, but sustained leadership and expanded capacity were needed to improve agencies' management of IT. Agencies continued to make progress with reporting FITARA milestones and plans to modernize or replace obsolete IT investments, but significant work remained to complete these efforts. Agencies improved the involvement of their agency Chief Information Officers in the acquisition process, but greater cost savings could be achieved if IT acquisition shortcomings, such as reducing duplicative IT contracts, were addressed. In March 2021, GAO reiterated the need for agencies to address four major cybersecurity challenges facing the nation: (1) establishing a comprehensive cybersecurity strategy and performing effective oversight, (2) securing federal systems and information, (3) protecting cyber critical infrastructure, and (4) protecting privacy and sensitive data. GAO identified 10 actions for agencies to take to address these challenges. However, since 2019, progress in this area has regressed—GAO's 2021 rating of leadership commitment declined from met to partially met. To help address the leadership vacuum, in January 2021, Congress enacted a statute establishing the Office of the National Cyber Director. Although the director position has not yet been filled, on April 12 the President announced his intended nominee. Overall, the federal government needs to move with a greater sense of urgency to fully address cybersecurity challenges. In particular: Develop and execute a more comprehensive federal strategy for national cybersecurity and global cyberspace. In September 2020, GAO reported that the cyber strategy and implementation plan addressed some, but not all, of the desirable characteristics of national strategies, such as goals and resources needed. Mitigate global supply chain risks. In December 2020, GAO reported that few of the 23 civilian federal agencies it reviewed implemented foundational practices for managing information and communication technology supply chain risks. Enhance the federal response to cyber incidents. In July 2019, GAO reported that most of 16 selected federal agencies had deficiencies in at least one of the activities associated with incident response processes. Why GAO Did This Study The effective management and protection of IT has been a longstanding challenge in the federal government. Each year, the federal government spends more than $100 billion on IT and cyber-related investments; however, many of these investments have failed or performed poorly and often have suffered from ineffective management. Accordingly, GAO added improving the management of IT acquisitions and operations as a high-risk area in February 2015. Information security has been on the high-risk area since 1997. In its March 2021 high-risk update, GAO reported that significant actions were required to address IT acquisitions and operations. Further, GAO noted the urgent need for agencies to take 10 specific actions on four major cybersecurity challenges. GAO was asked to testify on federal agencies' efforts to address the management of IT and cybersecurity. For this testimony, GAO relied primarily on its March 2021 high-risk update and selected prior work across IT and cybersecurity topics.
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