IC Oversight & Policy — 2026-07-18

HPSCI Hearing: Lawmakers Warn China Expanding Espionage and Cyber Operations Targeting American States

BLUFState-level counterintelligence buildouts will remain fragmented and capability-uneven until Congress mandates a clearance and data-sharing framework that does not yet exist in legislative markup.

The House Permanent Select Committee on Intelligence held an open hearing on states' role in counterintelligence, at which Chairman Rick Crawford said China has adopted "a whole of society strategy" using legal investments, supply chains, research partnerships, cyber intrusions, influence operations and economic coercion, and cited the Volt Typhoon cyber campaign as evidence Beijing has "pre-positioned capabilities inside our critical infrastructure and telecommunications networks" 12. Ranking Member Jim Himes said counterintelligence can no longer remain a purely federal responsibility and called for balancing threat response with civil liberties protections 12. National Fusion Center Association President Mike Sena testified that China, Russia and Iran are increasingly targeting state and local governments, universities and industry, and said more than 3,200 personnel across 80 fusion centers are hampered by classification barriers, disconnected databases and clearance delays, urging a national information-sharing framework 12. State officials from Alabama, Florida and Nebraska described local counterintelligence and telecom-security initiatives, with Florida Representative Daniel Alvarez saying "Florida will not wait for the federal government to defend our people" 12.

Analysis
At HPSCI's hearing, testimony citing Volt Typhoon confirms adversary access inside US critical infrastructure and telecommunications predates detection and remains capable of activation on demand, shifting the threat from espionage collection toward disruption capability. Sena's disclosure that classification barriers and disconnected databases hobble 3,200 fusion center personnel across 80 centers marks the operational bottleneck constraining state-level detection, while Florida's, Alabama's and Nebraska's legislatures are already hardening telecom procurement independently of Washington, pointing toward a decentralized, uneven policy response rather than a unified federal framework. Sourcing rests on a single wire account reproduced verbatim with HPSCI's hearing record as sole corroboration, and the testimony may equally reflect fusion centers and state officials building a public record to justify funding and expanded authority rather than responding to a genuine escalation in adversary activity.

4 sources

US lawmakers warn China expanding espionage, cyber operations targeting American states - IANS
China Espionage Targets US States, Lawmakers Warn - New Kerala
Crawford Announces Open Full Committee Hearing to Examine States on the Frontlines of Counterintelligence - House Permanent Select Committee on Intelligence (HPSCI)
US lawmakers warn China expanding espionage, cyber operations targeting American states - IANS