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New Orleans Cyberattack Costs City $7.2M, Recovery Continues

The cyberattack on New Orleans’ computer networks will take months longer to completely fix than previously indicated, as vendor payment issues and a lack of access to email continue to hamper government functions.

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Serbian authorities, working with the FBI, made an arrest this week of a suspected member of The Dark Overlord, a major cybercrime gang that has hacked dozens of U.S. medical offices and schools. (Ivan Kruk/Dreamstime/TNS)
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(TNS) — The cyberattack afflicting New Orleans City Hall's computer networks will take months longer to completely fix than officials have previously indicated, as vendor payment issues and a lack of access to email systems continue to hamper government functions.

Mayor LaToya Cantrell said Wednesday that the city is extending by two weeks the deadline for property tax payments, meaning residents now have until Feb. 14 to pay.

She also announced that the cost of repairing the city's network has soared to more than $7 million so far.

And it could now take as long as eight months to fully restore City Hall computer systems, officials said.

"We are not out of the woods," Cantrell told reporters during an update on the Dec. 13 cyberattack's aftermath.

The update highlighted how the attack has proven much more disruptive and long-lasting than officials initially expected.

Shortly after the attack, Cantrell said that city workers were told they might need to work on pen and paper through the end of the year, but that she wasn't expecting it to take that long. A week later, Louisiana National Guard Lt. Col. Stephen Durel, who was assisting in the recovery, said that restoring such a network would normally take several months, but that the city was moving much faster than that.

Cantrell said Wednesday that internal systems for paying the city's bills and conducting other business have recently come back online, but employees now must reconcile the handwritten documents they've churned out since the attack with the newly accessible online software.

Public email accounts are still down for two-thirds of employees, and emails from before the attack remain inaccessible.

Complaints from residents and businesses about the speed of the city's recovery have mounted in recent weeks.

Some residents have complained that the lack of access to police reports and disruptions to the Municipal and Traffic Court's systems have left them unable to file claims with insurance companies and have delayed certain court cases.

The headaches began in mid-December when the city discovered the presence of ransomware on its internal systems. To halt the attack, the city shut down its computer networks.

Officials then began the process of scrubbing more than 3,400 computers clean of the malicious software, updating most devices with newer operating systems, and replacing devices that could not handle that change. Roughly 800 computers were replaced, at a cost of $1 million.

The city has also purchased new data storage and moved its email system from an internal server to cloud servers hosted by an external company, Chief Administrative Officer Gilbert Montaño said Wednesday.

Officials have also paid for technical help to move and integrate the city's software. All told, the price tag has hit $7.2 million, a figure Cantrell said could grow.

The city's cybersecurity insurance will cover about $3 million of those costs. But the city will have to pull the rest from its emergency fund, which Montaño said totals about $27 million.

"We do anticipate increasing the level of (computer) insurance for the city moving forward, upward of maybe $10 million," Cantrell said.

The city's financial operations have been hurt by the attack in other ways.

City employees have been unable to access their payment software to approve and process payments to city vendors, leading to a backlog that prompted what Cantrell called "a war room" that had to be set up to "eyeball each check" being made out to a vendor.

That software has been restored, but vendors should continue to expect delays as the backlog is remedied, officials said.

Those and other issues mean the city will likely be late in submitting its comprehensive audit to the Legislative Auditor's Office this year, as it was after Hurricane Katrina.

Other systems have begun to come back. New Orleans police recently gained access to their computer systems and have resumed filing reports of traffic accidents, thefts and other crimes electronically. Court employees also now have access to their work stations, clearing the way for court operations to resume as normal in coming days.

The city is still handing out handwritten permits and licenses for businesses and residents, but its online permitting system has been restored internally and should be available publicly by Jan. 27, officials said.

The online tax-payment system, which last week was set up on a temporary basis and with limited functions, has been restored to its full capacity.

Officials said they are currently installing new protections for the city's network and plan to create a dedicated cybersecurity team. Employees will be instructed to frequently change and randomize passwords, along with other precautions.

Still, Montaño said there are no guarantees that New Orleans will be completely rid of future threats. "This isn’t a matter of if this happens again; it’s when it happens again," he said.

Meanwhile, some services were available at Municipal and Traffic Court on Wednesday after a weeks-long blackout, according to its chief judge and attorneys who practice there.

"We're about 95 percent there, barring anything horrible happening to us again. We should be online, fully operational by next week," said Judge Sean Early, who took over as the court's chief judge on Jan. 1.

Traffic-ticket payments are finally back online, the judge said.

John Radziewicz, a lawyer who frequently defends traffic cases, said he was able to enroll on cases and get court minutes for expungements.

The judges are planning a joint meeting on Thursday to discuss their next steps, Early said.

While the court system is lurching back to life, some people were still struggling to reinstate driver's licenses suspended as a result of the shutdown, according to Radziewicz.

Early said that even though the court wasn't transmitting notices of non-payments to the Louisiana Office of Motor Vehicles, some people who already had payment plans set up may have been suspended. The court has not been able to process payments for weeks.

Last week the OMV and the New Orleans court agreed on a workaround that should allow people to make payments to reinstate their licenses, according to OMV administrator Jill Jarreau.

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