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“A Purely Political Operation”: How The Koch Network Exploited The Veterans Affairs Crisis

As the scandal over waiting lists at Veterans Affairs hospitals exploded earlier this year, there was widespread outrage—and justifiably so, as the country learned that more than 100,000 veterans waited over ninety days for care or never received it.

An ever-present force in this debate was a group called Concerned Veterans for America. Its leader, Peter Hegseth, frequently appeared on cable news segments about the scandal, and CVA was often mentioned on the floor of the Senate.

Though the group doesn’t disclose its donors, it has for a long while been clear the group is funded in part, or perhaps even in full, by the Koch brothers. Any remaining doubt can now be erased thanks to audio from the secretive Koch donor retreat this summer, obtained by The Undercurrent and reported here.

Hegseth addressed the crowd and not only confirmed that the Koch network “literally created” CVA but explained giddily “the central role that Concerned Veterans for America played in exposing and driving this crisis from the very beginning.”

Most notably, during his roughly ten-minute speech, Hegseth outlined how the group was turning legitimate grievances over Veterans Affairs care into a political weapon to attack both the Obama administration and the idea of government-provided healthcare.

When Kevin Gentry, vice president of the Charles G. Koch charitable foundation, introduced Hegseth to the assembled donors, he noted that “you all helped build a group called Concerned Veterans for America.”

At various points, Hegseth took pains to express his gratitude to the people funding his operation. “Concerned Veterans for America is an organization this network literally created to empower veterans and military families to fight for the freedom and prosperity here at home that we fought for in uniform on the battlefield,” he noted.

“We utilized the competitive advantage that only this network provides: the long-term vision to invest and the resources to back it up,” he continued.

Hegseth also created a distinct impression for the audience that CVA was responsible for bringing the VA crisis to the forefront:

Now, unless you’ve been living under a rock for the last couple of months, you know about the crisis at the Department of Veterans Affairs. What you probably don’t know is the central role that Concerned Veterans for America played in exposing and driving this crisis from the very beginning.

After years of effort behind the scenes privately and publicly, the scandal eventually made national headlines when initially in Phoenix it was exposed that veterans were waiting on secret lists that were meant to hide the real wait times veterans had at VA facilities of months and months and months.

Indeed, CVA played a key role in bringing the scandal to the national consciousness. In early April of this year, a doctor from the now-infamous Veterans Affairs hospital in Phoenix retired and went to The Arizona Republic with allegations of falsified data about long wait times for patients.

But despite the story, it remained a local issue. One of the things that helped drive it into the national news was a rally organized by CVA in Phoenix with Republican Representative Dave Schweikert. Not long after, CNN reporter Drew Griffin ran a long investigative piece that sent the story viral.

The scandal surely deserves attention. But Hegseth’s speech is striking for the naked political motivations behind CVA’s advocacy, and what he deems most important:

Perhaps most importantly to this effort, we have created a new line of defense against the march towards socialized medicine, educating veterans and Americans in the process. Veterans have had government-run healthcare for decades. We’ve had the preview of Obamacare, and the scandal has exposed the inevitable result of central planning for all Americans: massive wait times, impenetrable bureaucracy, de facto rationing, wasted tax dollars. It goes on and on.

Throughout this effort, Concerned Veterans for America, along with our network partners, have intentionally broadened the debate to include big government dysfunction generally, further fortifying a new skepticism that AFP and others have brought to what government-run healthcare does.

Even before this year’s scandal, CVA was using problems with Veteran’s Affairs healthcare as a political cudgel against both the Affordable Care Act and vulnerable Democrats. This ad taken against Representative Alan Grayson is a good example, in which a veteran explains his troubles getting care and then says “If you want to know what Obamacare’s going to be like, just look at the VA system.”

CVA operates in the expanding world of 501(c)(4) social welfare organizations that, in reality, are pure political operations. The group’s finances are hard to parse, but it appears much of their spending is on ads targeting Democrats in swing states—late this summer, for example, CVA began a $1.6 million advertising campaign against Democratic Senator Kay Hagan in North Carolina. (Notably, the air time was already reserved by the Koch-affiliated Freedom Partners, but they canceled their buy and turned it over to CVA.)

Finally in his speech, Hegseth claims that Republican senators were working hand-in-glove with CVA to pass the Sanders-McCain legislation this summer on veteran’s healthcare, and that the Koch network alone is responsible for the “market-based” reforms included in the bill:

Ten days ago, the Senate struck a historic deal, a deal that Concerned Veterans for America was central to in every aspect literally ensuring that the language stay focused on real market-based reform, and we pushed the ball across the Now usually deals in the Senate include only one thing: billions and billions of dollars in more spending. Not this one.

This deal, as with the legislation in the House, was instead built on two market-based reforms that were injected by Concerned Veterans for America and advanced the entire point, the entire way.

He names the accountability measures that allow quick termination of under-performing VA managers, which was initially advanced by Senator Marco Rubio.

Hegseth then says the “crown jewel” of the bill is the ability for veterans to obtain private healthcare if they are waiting too long in the VA system. “The latter reform, which seems like a no-brainer to everyone in this audience, is a huge development, rocking the core of big government status quo in Washington,” he claims.

Here, Hegseth is engaging in some undue bravado. The option for privatized care is for veterans is significant, though only available to veterans who have to wait thirty days or more for care or live more than forty miles from a VA facility. Hegseth doesn’t mention the provision has a sunset of three years or until funding runs out, whichever comes first.

And speaking of funding, the legislation increases the deficit by $10 billion. That would seem to go against much of the fiscal conservatism trumpeted elsewhere in the donor conference.

Nevertheless, the Hegseth speech is an interesting window into how the Koch network operates: funding an ostensible advocacy group that is, in fact, a relentless political operation—and one that can, with the right situation to exploit, do everything from take out political attack ads to help craft legislation.

 

By: George Zornick, The Nation, September 23, 2014

September 24, 2014 Posted by | Koch Brothers, Politics, Veterans Administration | , , , , , , | Leave a comment

“What A Deal!”: Koch Foundation Proposal To College; Teach Our Curriculum, Get Millions

In 2007, when the Charles Koch Foundation considered giving millions of dollars to Florida State University’s economics department, the offer came with strings attached.

First, the curriculum it funded must align with the libertarian, deregulatory economic philosophy of Charles Koch, the billionaire industrialist and Republican political bankroller.

Second, the Charles Koch Foundation would at least partially control which faculty members Florida State University hired.

And third, Bruce Benson, a prominent libertarian economic theorist and Florida State University economics department chairman, must stay on another three years as department chairman — even though he told his wife he’d step down in 2009 after one three-year term.

The Charles Koch Foundation expressed a willingness to give Florida State an extra $105,000 to keep Benson — a self-described “libertarian anarchist” who asserts that every government function he’s studied “can be, has been, or is being produced better by the private sector” — in place.

“As we all know, there are no free lunches. Everything comes with costs,” Benson at the time wrote to economics department colleagues in an internal memorandum. “They want to expose students to what they believe are vital concepts about the benefits of the market and the dangers of government failure, and they want to support and mentor students who share their views. Therefore, they are trying to convince us to hire faculty who will provide that exposure and mentoring.”

Benson concluded, “If we are not willing to hire such faculty, they are not willing to fund us.”

Such details are contained in 16 pages of previously unpublished emails and memos obtained by the Center for Public Integrity.

While the documents are seven years old — and don’t reflect the Charles Koch Foundation’s current relationship with Florida State University, university officials contend — they offer rare insight into how Koch’s philanthropic operation prods academics to preach a free market gospel in exchange for cash.

In 2012 alone, private foundations controlled by Charles Koch and his brother, David Koch, combined to spread more than $12.7 million among 163 colleges and universities, with grants sometimes coming with strings attached, the Center for Public Integrity reported in March.

Florida State University ranked a distant second behind George Mason University of Virginia as a recipient of Charles Koch Foundation money. In a tax document filed with the Internal Revenue Service, the foundation described its Florida State University funding for 2012 as “general support.”

Some schools’ professors and students were aghast at the funding, arguing that such financial support wasn’t widely known on their campuses and could threaten schools’ academic freedoms and independence. Others argued that colleges and universities — long bastions of liberal academics — would be well served by more libertarian courses of study.

Separately, Charles Koch is the financial force behind a “curriculum hub” for high school teachers and college professors that criticizes government and promotes free-market economic principles. He’s also funded programs for public school students, and this year, his foundation donated $25 million to the United Negro College Fund.

At Florida State University, Benson noted in a November 2007 memorandum that the Charles Koch Foundation would not just “give us money to hire anyone we want and fund any graduate student that we choose. There are constraints.”

Benson later added in the memo: “Koch cannot tell a university who to hire, but they are going to try to make sure, through contractual terms and monitoring, that people hired are [to] be consistent with ‘donor Intent.’”

A separate email from November 2007 indicates that Benson asked Charles Koch Foundation officials to review his correspondence with Florida State associates about potential Koch funding.

Trice Jacobson, a Charles Koch Foundation representative, did not respond to questions, although Benson and Florida State University spokesman Dennis Schnittker each confirmed that the emails and documents are authentic.

But Benson noted that the documents were meant for internal use and reflect the “early stages of discussion” well ahead of a 2008 funding agreement signed by the university and the foundation.

That agreement, initiated in 2009, has earned Florida State $1 million through April, according to the university. Until it was revised in 2013, an advisory board would consult with the Charles Koch Foundation to select faculty members funded by the foundation’s money.

Benson also said that while he continued serving as Florida State’s economics department chairman until 2012, Charles Koch Foundation money wasn’t a factor.

While the foundation initially discussed providing money to help fund Benson’s salary, “that idea was taken off the table very early in negotiations,” he said. “I continued as chair because I felt I could still make a valuable contribution to the department.”

The 2008 agreement between the school and the foundation nevertheless faced harsh criticism from some professors and students who argued it indeed gave the foundation too much power over university hiring decisions.

The school and foundation revised their agreement in 2013 “for clarity” and to emphasize the “fact that faculty hires would be consistent with departmental bylaws and university guidelines,” Schnittker said. “Our work with CKF [Charles Koch Foundation] has always upheld university standards.”

Those guidelines, spelled out in a Florida State University statement about the foundation from May, say the money will not compromise “academic integrity” or infringe on the “academic freedom of our faculty.”

Ralph Wilson, a mathematics doctoral student and member of FSU Progress Coalition, doesn’t buy it.

Florida State University “willfully and knowingly violated the integrity of FSU by accepting funding meant only to further Koch’s free-market agenda,” said Wilson, whose student group works to “combat the corporatization of higher education.”

The Charles Koch Foundation, meanwhile, “is using our universities solely to further their own agenda and plunder the very foundations of academic freedom,” Wilson said.

At the end of 2012, the foundation reported having almost $265.7 million in assets, according to its most recent tax return filed with the Internal Revenue Service.

In his 2007 memo to colleagues, Benson acknowledged the school’s relationship with the foundation would invite blowback.

“I guess I am trying to say that this is not an effort to transform the whole department or our curriculum,” Benson wrote. “It is an effort to add to the department in order to offer some students some options that they may not feel they have now, and to create (or more accurately, expand) a cluster of faculty with overlapping interests.”

Benson also predicted entering into an agreement with the foundation carried some risk.

“There clearly is a danger in this, of course. For instance, we might be tempted to lower our standards in order to hire people they like,” Benson wrote, in advocating that the university not do so. “We cannot expect them to be willing to give us free reign to hire anyone we might want, however, so the question becomes, can we find faculty who meet our own standards but who are also acceptable to the funding sources?”

The Koch brothers are best known not for their educational efforts but for controlling a constellation of conservative, politically active nonprofit corporations.

For example, this election cycle alone, six nonprofits connected to the Kochs have combined to air about 44,000 television ads in U.S. Senate races through late August, with the ads typically promoting Republicans or criticizing Democrats.

 

By: Dave Levinthal, The Center for Public Integrity, September 12, 2014

September 14, 2014 Posted by | Education, Koch Brothers, Libertarians | , , , , , , | Leave a comment

“Selfless Libertarian Activist?”: Charles Koch Personally Founded Group Protecting Oil Industry Hand-Outs, Documents Reveal

“Lifestyles of the Rich Environmentalists,” produced by a group called the Institute for Energy Research, is a slick web video campaign designed to lampoon Leonardo DiCaprio and will.i.am as hypocrites for supporting action on climate change. The claim is that wealthy celebrities who oppose industrial-scale pollution supposedly shouldn’t fly in airplanes that use fossil fuels. The group, along with its subsidiary, the American Energy Alliance, churns out a steady stream of related content, from Facebook memes criticizing the Environmental Protection Agency, to commercials demanding approval of new oil projects like the Keystone XL, to a series of television campaign advertisements this year attacking Democratic candidates in West VirginiaColoradoNorth Carolina and Alaska. On Capitol Hill, IER aggressively opposes any effort to repeal tax breaks afforded to the oil and gas industry.

Documents obtained by Republic Report reveal for the first time that the group was actually founded by none other than Charles Koch, the petrochemical, manufacturing, and oil-refining tycoon worth an estimated $52 billion.

IER has no information about its founding members on its website, and only lists a board composed of seemingly independent conservative scholars and businessmen. Earlier reports revealed that IER/AEA has received grants from Koch-funded foundations, and its leadership includes several individuals who have at times worked for Koch or Koch-related interests. But this is the first time it has been revealed that Charles personally founded the organization.

In October of 1984, Charles, then using a Menlo Park, California address, founded a non-profit called the Institute for Humane Studies of Texas. That organization briefly lost its charter in 1989 for failure to pay the Texas state franchise tax. Four years later, incorporation documents reveal, the group rebranded as the Institute for Energy Research, or IER, which later formed a subsidiary called the American Energy Alliance.

IER/AEA’s advocacy contrasts sharply with Charles’ personal brand as a selfless libertarian activist. The industrialist has argued that he is resolutely against special government handouts, such as tax credits or subsidies that benefit one industry over another. “Far from trying to rig the system, I have spent decades opposing cronyism and all political favors, including mandates, subsidies and protective tariffs—even when we benefit from them,” Charles wrote in a column for The Wall Street Journal this year.

But Charles’ group, IER/AEA, has fought to protect special tax breaks that benefit fossil fuel producers. Along with issuing press releases against various federal efforts to eliminate oil and gas industry tax credits, IER/AEA commissioned a study claiming that such tax reforms would have an adverse effect on jobs and on oil production.

Charles and his brother David are personally responsible for founding and funding much of the modern conservative infrastructure. The popular libertarian think tank, the Cato Institute, was in fact first named the Charles Koch Foundation, Inc before rebranding. The largest political organization in America outside the Democratic and Republican parties is Americans for Prosperity, the Tea Party-organizing foundation also founded by the Kochs.

The latest organs in the Koch political network have carefully guarded the sources of their funding and direction. There is the new youth group, Generation Opportunity, along with the new veterans-related campaign organization, Concerned Veterans for America. But IER/AEA’s true origin casts new light on its motivations.
 

By: Lee Fang, Public Report, September 3, 2014

September 4, 2014 Posted by | Environment, Fossil Fuels, Koch Brothers | , , , , , , | Leave a comment

“The Promise Of So Much Money”: For 2016 GOP Candidates, Does Courting The Kochs Bring More Risk Than Reward?

While most Americans were settling in for a long weekend, many of the potential 2016 GOP presidential candidates — Rick Perry, Rand Paul, Ted Cruz, Ben Carson, Mike Pence — went to Dallas for a convention of Americans for Prosperity, the group through which Charles and David Koch channel much of their political money. If any of the politicians were wary about how it looks to have so many people who want to be the leader of the free world kissing the Kochs’ rings, you couldn’t tell. They’re making a strategic calculation that whatever PR risks are inherent in getting too close to the Kochs, they’re outweighed by the money the brothers bring to the GOP’s table. And if the Kochs plan to intervene in the 2016 primaries — something no one seems sure they’ll do — then every Republican candidate wants to be the one on the receiving end of that fire hose of cash.

At the moment, Republicans couldn’t be happier about the Kochs’ support, because the sums they mobilize are staggering. The Koch network (which includes other like-minded benefactors) spent at least $400 million in 2012 and are expect to drop another $300 million in this year’s midterms. The law of ever-increasing campaign spending suggests that in 2016 they’ll spend even more. It would be a surprise if the total didn’t top a half billion dollars.

So far, the Democrats’ efforts to make voters see the Kochs as a pair of villains have met with only limited success. One poll taken in March found 37 percent of people with an opinion about the Kochs (25 percent negative, 12 percent positive). On the other hand, it might be enough if many voters had only the vaguest sense of who the Kochs are and what they stand for. If people hear the name and say, “Aren’t they those billionaire Republican guys? I don’t quite remember,” then that would make Democrats happy. As Greg has explained before, while Democrats certainly want voters to think of their opponents as heartless robber barons, the strategy is more complex than that; it’s also about establishing a context for attacks on Republican positions on economic issues. When you go after Republicans for not supporting an increase in the minimum wage, an association with billionaire oil magnates tells voters why Republicans believe what they do and why their interests are opposed to those of ordinary people.

Republicans will tell you that it’s foolhardy of Democrats to try to make an issue out of the Kochs’ sway over the GOP, mostly because voters don’t particularly care about the influence of money in politics. But even if the attacks had some effect, it would have to be clear and unambiguous before Republican contenders started shying away from the Kochs and all that money.

I’d be extremely surprised if the Kochs actually chose to back a single candidate in the 2016 primary; not only does that risk alienating whoever wins if it’s not the one they picked, it could also turn them into just one faction in a factional conflict. Even if the brothers aren’t toeing the GOP line on some issues (such as immigration or foreign interventionism), they benefit from having everyone on the right view them as a friend to all Republicans. At the same time, it’s in the Kochs’ interest to have all the candidates believe they might back a primary candidate. That way, those candidates will continue to cater to their concerns and maybe even make some promises about actions that could be taken once a Republican is in the White House.

But the closer we get to the 2016 general election, the more problematic it will be for the eventual nominee to be seen as too close to the Kochs. Democrats aren’t going to stop going after them, and if the Republican candidate himself isn’t a plutocrat (none of the contenders this time around approach Mitt Romney’s level of wealth), the next best thing is to say that he’s in a plutocrat’s pocket. So there will be many more Democratic ads with the brothers’ pictures, and many more Democratic speeches tying that eventual nominee to the oil barons from Kansas.

The longer that goes on, the higher the chances that being seen as too close to the Kochs poses a political risk for Republican presidential candidates. But for the moment, they don’t seem too concerned, especially when gaining the Kochs’ favor comes with the promise of so much money.

 

By: Paul Waldman, Contributing Editor, The American Prospect; The Plum Line, The Washington Post, September 1, 2014

September 2, 2014 Posted by | GOP Presidential Candidates, Koch Brothers | , , , , , | Leave a comment

“Secret Audio Nails Mitch!”: Endangered McConnell Busted Humiliating Himself On Tape

This year Senate Minority Leader Mitch McConnell chose to spend Father’s Day with two GOP political sugar daddies, Charles and David Koch, at their annual retreat, this time at the lovely St. Regis Monarch Bay resort in Orange County, California. As befit the day, McConnell brought the love: “I want to start by thanking you, Charles and David, for the important work you’re doing. I don’t know where we’d be without you.”

It’s a good thing McConnell sucked up to the wealthy right-wing industrialists. He could be looking for a job soon, once Kentuckians (and opponent Alison Lundergan Grimes) hear the audiotape of the session obtained by the Nation. (A transcript can be found here.)

The same weekend ISIL began approaching Baghdad, and Eric Cantor had just lost his primary for, among other reasons, being too cozy with big donors, McConnell took time to schmooze the Kochs and their network of funders and organizers. He wasn’t the only Senate candidate there: the next day, GOP Senate nominees Joni Ernst of Iowa, Tom Cotton of Arkansas and Cory Gardner of Colorado joined the retreat, the Nation’s Lauren Windsor has reported, and all pledged allegiance to the Kochs.

“The exposure to this group and to this network, and the opportunity to meet so many of you, really started my trajectory,” kvelled Ernst, who attended the summit last year. (You can hear audio of her remarks at the Huffington Post).

But only McConnell was devoted enough to spend Father’s Day addressing the Kochs – and only McConnell said anything substantive enough to ensure him home-state trouble.

Kentuckians may find themselves chagrined to learn that McConnell promised the Kochs and their friends that he would intensify gridlock if Republicans win control of the Senate. While legislation requires 60 votes, he noted, budget bills only require a simple majority, and he promised to attach “riders” defunding Obamacare, financial regulation laws and the entire Environmental Protection Agency to any spending bill — riders that President Obama would likely veto, which could trigger another government shutdown.

He also attacked Democrats for wasting time on their “gosh darn proposals” – like raising the minimum wage, which Kentuckians support by almost 2-1, and extending unemployment insurance, likewise backed by his state’s voters.

Here’s what McConnell said on those points, verbatim.

We can pass the spending bill, and I assure you that in the spending bill, we will be pushing back against this bureaucracy by doing what’s called placing riders in the bill: No money can be spent to do this or to do that. We’re going to go after them on healthcare, on financial services, on the Environmental Protection Agency, across the board.

And we’re not going to be debating all these gosh darn proposals. That’s all we do in the Senate is vote on things like raising the minimum wage — cost the country 500,000 new jobs; extending unemployment — that’s a great message for retirees; the student loan package the other day; that’s going to make things worse. These people believe in all the wrong things.

Kentuckians can decide who believes in all the wrong things come November.

In June the Nation first reported on the annual Koch retreat, loftily titled “American Courage: Our Commitment to a Free Society,” and heavily focused on helping the GOP take back the Senate. 2016 contender Sen. Marco Rubio attended along with McConnell, but it was the man the Kochs hope will be the Senate majority leader come January who headlined the crucial session “Free Speech: Defending First Amendment Rights.”

If dollars themselves could vote in Kentucky politics, McConnell would defeat Grimes in a landslide. At the Koch retreat, the Senate veteran depicted himself as a tireless soldier for the freedom of money in politics. He described the right to make unlimited political contributions as “the one freedom, that without which we can’t do anything.” His fealty to the cause of money in politics got embarrassing at times.

According to the Nation, McConnell talked about his many filibusters of campaign finance reform the way other men his age describe war battles. “The worst day of my political life was when President George W. Bush signed McCain-Feingold into law,” McConnell told the Kochs and their friends. Others might say 9/11, or the day President Reagan was shot (or further back, the assassinations of President Kennedy, Bobby Kennedy or Martin Luther King Jr.)  But not Mitch.

The only people he praises more than the Koch brothers are the five-member Supreme Court majority that voted to abolish McCain-Feingold in the Citizens United decision, calling the John Roberts-led bench:

The best Supreme Court in anybody’s memory on the issue of First Amendment political speech…[Now] you can give to the candidate of your choice, You can give to Americans for Prosperity, or something else, a variety of different ways to push back against the party of government…I’m really proud of this Supreme Court…It’s only five to four, and I pray for the health of the five.

But not the other four, obviously. Tough luck, RBG.

When David Koch himself, during the question and answer session, complained about a New York Times editorial lamenting the influence of big Koch money, and asked about Democrats’ attempts to start the process of amending the Constitution to state that Congress may in fact regulate campaign contributions, McConnell was at his feistiest.

“This is an act of true radicalism,” McConnell declared. “It shows how far they’re willing to go to quiet the voices of their critics … The IRS, the SEC and the FEC. They’re on a full-tilt assault to use the power of the government to go after their critics.”

By comparison with the seasoned McConnell, Senate candidates Joni Ernst, Tom Cotton and Cory Gardner were restrained, as Lauren Windsor reports in the Huffington Post. A grateful Gardner, happy about all the Koch-related third-party money flowing into his race, told the crowd that among the people most excited about his run was “the station manager at Channel 9 in Denver because he knew the activity that would be taking place on the airwaves.”

Tom Cotton likewise thanked the group for its role in his success. “[The Koch-funded] Americans for Prosperity in Arkansas has played a critical role in turning our state from a one-party Democratic state … building the kind of constant engagement to get people in the state invested in their communities,” Cotton explained.

But only McConnell went on record endorsing the Koch brothers’ entire big money agenda, while mocking popular “gosh darn” Democratic policies like a minimum wage hike, restoring extended unemployment insurance and easing the student loan burden. McConnell’s role in blocking her student-loan compromise earned him a visit to Kentucky by Sen. Elizabeth Warren, on behalf of Grimes. ”Mitch McConnell says it’s more important to protect the billionaires,” she told the crowd. “And that’s what this race is all about.”

It would be ironic if the Koch brothers won their GOP Senate majority, but McConnell wasn’t around to lead it.

 

By: Joan Walsh, Editor at Large, Salon, August 27, 2014

August 28, 2014 Posted by | Koch Brothers, Mitch Mc Connell | , , , , , , , | Leave a comment

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