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Posts Tagged ‘corruption’

A possible solution to Party campaign funding rorts

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1. Party donations

As the law currently stands with regards to party donations, there are set limits to election spending. According to the Electoral Commission;

Expenditure limit

A registered party’s election expenses during the regulated period for the 2017 general election (23 June to 22 September) must not exceed $1,115,000 (including GST) plus $26,200 (including GST) per electorate contested by the party.

If a registered party does not contest the party vote, its total election expenses cannot exceed $26,200 (including GST) for each electorate candidate nominated by the party.

The candidate election expenses regime does not apply to people who are list candidates only. Any spending by those candidates promoting the party is an election expense of the party and must be authorised by the party secretary.

Party limits are separate from the expense limits applying to electorate candidates.

The issue of donations is more complicated;

Party donations and contributions to donations of more than $15,000 (including GST) are required to be declared in the party’s annual return of donations. A series of donations, or contributions of more than $1,500 to donations, made by one person that adds up to more than $15,000 must also be declared.

Fundraising activities are also covered;

Raffles, stalls and other fundraisers

A supporter providing a party with free cakes or other goods or services to use for fundraising is not making a donation for the purposes of the Electoral Act if the value of the items given is worth $1,500 or less. Purchasers of raffle tickets and cakes from a cake stall are not ‘donors’ as they are not making a donation to anyone. The total proceeds of a raffle or a cake stall for a party’s campaign are treated as a donation. The person who runs the raffle or cake stall will normally be the donor.

If the total funds from the raffle or cake stall are over $15,000, then the party’s donation return must include the name and address of the person who ran the fundraiser and subsequently donated the proceeds, along with the total amount given and the date that the donation was received by the party secretary.

It would be a fairly profitable “chook raffle” or “cake stall” to raise $15,000. That’s a very expensive chook. And a truck-load lot of cupcakes.

2. Dodgy dealings

Fundraisers such as National’s $5,000/plate dinner event at ‘Antoine’s’ restaurant in Parnell, Auckland in 2014 raised eyebrows, forcing then-PM John Key to defend  his Party’s activities;

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Fundraising events using fronts such as ‘Antoine’s‘ restaurant are nominally legitimate – if dubious – methods to avoid identifying donors to political parties. Donation returns for National in 2010 and 2011 showed tens of thousands of dollars being funnelled through the restaurant;

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There is currently little protection from circumventing disclosure requirements by using ‘fronts’ such as Trusts and private companies.

Only direct donations are monitored.

Only where non-disclosure or false information is provided is the law is unequivocal regarding a donation;

If the party secretary knows, or has reasonable grounds to believe, that the donor has failed to supply information about contributions, the whole donation must be returned to the donor.

And,

Parties are not allowed to retain anonymous donations exceeding $1,500. An anonymous donation is a donation made in such a way that the party secretary who receives the donation does not know the identity of the donor and could not, in the circumstances, reasonably be expected to know the identity of the donor. [See section 207 of the Electoral Act]

If you receive an anonymous donation greater than $1,500 you may retain $1,500 of that donation. The balance of the donation must, within 20 working days of receipt, be paid to the Electoral Commission for payment into a Crown bank account.

NZ First was forced to return a portion of one such donation in 2008 when it received a donation of $3,690.02 from an unknown donor who was obviously providing bogus details;

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The possibility of a deliberate set-up by a political opponent should make all Party Secretaries highly cautious when dealing with donations where the donor’s details are dubious. The Donghua Liu Affair showed vividly what can happen when a Party is accused (falsely in this case) of rorting the Electoral Act.

But where a donor providing larger donation is known to Party leaders it becomes easier to circumvent legal requirements for disclosure. Recent allegations from Jami Lee Ross that businessman Zhang Yikun donated $100,000 to National, via the Botany Electorate of that Party, and was broken up at some point into smaller portions below the $15,000 threshold for mandatory declaration, are being investigated by the Police.

The apparent ease by which the Electoral Act’s requirements for disclosure can be flouted is disturbing. It opens up dangerous vulnerabilities for corruption; undue influence by big business and the wealthy, and candidates-for-money.

The US shows us where Big Money buying influence leads us – and it is not a good place.

Problems surrounding rorting the party donation system need to be urgently addressed. It is harder to cut out rot once it has set in; corruption is hard to dislodge once it has taken hold.

3. Solutions

Suggestions for tightening up legislation has ranged from lowering the limit for mandatory disclosure to $1,000 to full public funding of political parties by taxpayers.

As Green Party co-leader, Marama Davidson warned;

“The fact of the matter is, as long as political parties are accepting donations from powerful vested interests, there is a constant risk of corruption.

It is clear that those vested interests have a tangible influence on the decision making of political parties. This is a threat to democracy and should change.

Political parties are an important component of our democracy and if increasing state money for electioneering removes the influence of powerful vested interests, then it should be considered.”

Writing for Interest.co.nz, David Hargreaves has gone further, calling for a total end of private donations to political parties;

But there’s no question also that these ‘donations’ can be used by those making the donation to seek influence. If a donation ‘buys’ the people giving the money access to the political party concerned (such as dinner at someone’s house) then the opportunity is there to carry influence.

So, you get the situation in which the person making the donation wants to be able to influence proceedings – without the public at large knowing that – while the party receiving the donations doesn’t want the public at large to know that they are getting money from places that might suggest they are being subjected to particular influence.

There has to be obvious concern if particular vested interests are pumping money into political parties in order to seek influence. Now that could be say religious groups. It could be people from other countries – and what if other countries are seeking to assert their so-called ‘soft power’?

This all has to be taken very seriously.

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It’s the lack of transparency about the current system that’s the real problem.

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I increasingly think ‘donations’ should be banned. I think it should be illegal for anybody to contribute money to a political party.

Activist group, Action Stations has called for three significant reforms for Party donations:

  • All donations over $1500 should be declared and the donors named.
  • Loopholes that allow fundraising through trusts, dinners, and charity auctions to remain anonymous should be closed.
  • Donations should be publicly disclosed in real time, to allow greater and immediate scrutiny.

4. There is a further option to tighten up controls on donation.

This blogger proposes that all donations above a certain amount (whether $1,000 or $1,500) be made directly to the Electoral Commission, using internet banking. For those not au fait with internet banking, donations could be available by other means – NZPost, etc – but still made directly to the Electoral Commission.

Each donation would be made to a  nominated Party or Electorate Candidate using drop-down menus on the Commission’s website.

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Donor’s details can be matched with their bank account details. Once verified, the donated amount is lodged in a holding-account and the donor’s name  made public in real-time.

Donations through dinners, auctions, etc, can be lodged directly during the event, into the Commission’s account, disclosing the details of the donor at the dinner or auction. (Again, if the donor’s details do not match their bank account details, the donation is automatically rejected.)

As per Action Station’s demand, donations through Trusts would be banned. Any method that does not provide transparency would not be permitted through the Commission.

Parties would be banned from handling funds greater than $1,000 or $1,500.

This still allows for low-level fund-raising such as sausage sizzles, cake stalls, and chook raffles. (Cake stalls raising $15,000 would be scrutinised to see what the hell those ‘cakes’ were made from.)

Once verified, funds would be disbursed to relevent Parties to meet campaign expenses.

Any funds over the Party and Electorate cap (see above) would be held in escrow for the following election.

Interest gained from holding these funds in the Electoral Commission’s account would self-fund the system.

The obvious primary benefit would be that it makes it harder – though not impossible* – for political Parties to rort the system.

(* A wealthy donor could still, theoretically give smaller amounts to friends and family, who then make said donations to a Party or Electorate Candidate via the Commission’s account. A bank would have to implement protocols to detect suspicious payments. Any police investigation; subsequent prosecution and conviction, would have to have financial penalties so severe that anyone contemplating such a scheme would think very carefully before proceeding.)

The above proposal does not cover every aspect of donations (such as goods and services) to political parties – but it’s a start.

If Jami Lee Ross has achieved anything, it is casting the full glare of public scrutiny over Party donations. His methods may have been unorthodox – but he’s got our attention. We can no longer feign lack of awareness of this dark shadow over our democracy.

The rest is up to us, as a nation, what we do now.

Otherwise, we end up with more-of-the-same;

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For sale: one parliament.

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References

Electoral Commission: Part 3 – Election expenses, donations and loans

Mediaworks: Key not talking about fundraising dinner

Electoral Commission: National_Party_donations_2010.pdf

Electoral Commission:  New Zealand National Party donations 2011.pdf

Electoral Commission: NZ First Party Donations Returns 2008

Fairfax media: Show us the money: Donors bankrolling Greens lead way in fronting up to public

Interest.co.nz: We should urgently consider changes to the way our political parties are funded

Action Stations: Fix Political Donations

Scoop media: Stop powerful vested interests and preserve democracy

NZ Herald: Bryce Edwards – Should taxpayers fund political parties?

Fairfax media: Secret donors – Buck stops here

Additional

The Good Society: Max Rashbrooke – Donations to political parties 2011-16

Electoral Commission: Party Donations by Year

Fairfax media: Over half of major political cash comes from donations of over $15,000

NBR:  Key under fire for Antoine’s donations

Other blogs

The Standard: Ross saga quiescent, but donations scandal needs addressing

Previous related blogposts

National’s fund-raising at Antoine’s – was GST paid?

Some troubling questions about the Ross Affair

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With acknowledgement to Sharon Murdoch

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This blogpost was first published on The Daily Blog on 31 October 2018.

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National – Party 4 Sale?

27 April 2016 1 comment

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Men in Dark Shadows 2

 

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Niue

Recent revelations that the National Party may have benefitted from a deal involving a resort hotel in Niue, by receiving a $101,000 donation has been in the headlines since 18 April, when Radio NZ’s political reporter, Benedict Collins, broke the story;

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Call for inquiry into Niue resort contract

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In October 2014, New Zealand’s Scenic Hotel Group announced it had “secured” the Matavai Resort in Niue.

The Niue Tourism Property Trust, whose trustees are appointed by Mr McCully, carried out what the minister said was a fully commercial process to find a company to run the resort.

The month before, Mr Hagaman, Scenic Hotel Group’s founder, had donated $101,000 to the National Party, making him National’s biggest living financial donor in 2014. Only a man who had died and left his estate to National gave more.

Foreign Affairs Minister Murray McCully Photo: RNZ

But Mr McCully said there was no link between the contract and the donation.

Radio NZ further reported;

Scenic Hotel managing director Brendan Taylor said Mr Hagaman didn’t know the company was in the running for the Matavai Resort contract.

“Earl wasn’t actually even aware that we were negotiating in Niue, because basically that was me and I had it all in-house until such time that we knew we had been awarded the contract.

I did get [Earl’s wife] Lani Hagaman to sign the contract because I wasn’t actually available to do it, but apart from that Earl really had no involvement in Niue whatsoever.

His donation is something he did purely from a personal situation, and basically the hotel company and what Earl does from a personal point of view we kind of keep separate.”

It simply defies credulity that the two events are not somehow connected – especially when, as Radio NZ discovered that “RNZ News could find no record of Mr Hagaman having ever made a large donation to the National Party before“.

It also beggars belief that Scenic Hotel managing director, Brendan Taylor, is asserting that “Earl wasn’t actually even aware that we were negotiating in Niue” when Brendan Taylor got “Lani Hagaman [Earl’s wife] to sign the contract”?!

As the story began to gain traction elsewhere in the msm, National Party president, Peter Goodfellow, said he  “ would be making no further comment about the donation“.

Three days later, on 21 April, our esteemed Dear Leader, John Key, attempted to close down the growing scandal;

Mr Key, speaking in China, said today that, while he hasn’t followed the issue closely, he’s not at all concerned.

“People make political donations and that’s well and truly disclosed.

“But actually Scenic Hotels have been operators for a very long period of time, that’s a management contract from what I can see in Niue – there’s nothing untoward there.”

It is intriguing that even though Key says “he hasn’t followed the issue closely, he’s not at all concerned“.

How can he be “not at all concerned” if “he hasn’t followed the issue closely“?

This is not the first time that National has been revealed to have benefitted from donations made by businessmen  who have been closely involved in commercial activites with this  government.

BMWs

In early 2011, National was roundly criticised for spending millions on thirtyfour new BMW limousines at a time when the country was experiencing recession after the Global Financial Crisis.

At first, Key denied all knowledge of the purchase, claiming he had been “kept in the dark” over the multi-million dollar upgrade;

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Ministers knew of BMW buy-up last year

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But our esteemed Dear Leader, John Key,  did know, as was revealed four days later in late February, 2011;

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pm-signed-papers-relating-to-bmws

 

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However, the BMW scandal becomes more serious than Key merely ducking responsibility and patently lying when he denied all prior knowledge of the limousine upgrade.

In May 2011, it was revealed that the suppliers of the BMWs had made a $50,000 donation to National prior to the vehicle-purchase. As reported in the NZ Herald at the time;

A private BMW dealer has rubbished the suggestion that a $50,000 donation from his company to the National Party had anything to do with the Government’s new fleet of BMW cars.

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Labour’s internal affairs spokesman, Chris Hipkins, revealed that the BMW dealer’s donation came two days after a July 2010 meeting between Mr Key’s chief-of-staff, Wayne Eagleson, and the Department of Internal Affairs, which approved the BMW upgrade.

It was a month after a function that Mr Key attended at Auckland BMW dealership Team McMillan.

Radio NZ reported;

Prime Minister John Key says he has no responsibility for a $50,000 donation made to the National Party by a BMW dealership the day after the Government renewed its VIP transport contract.

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Bob McMillan, the owner of BMW Team McMillan, says the claim he donated money to National the day after the party agreed to a contract for ministerial cars is ridiculous.

As senior Labour MP, Trevor Mallard said at the time;

“They sat down with Ministerial Services and agreed to a renewal of [the BMW] contract, and two days later $50,000 went to the National Party. If that was overseas, we would say it was corruption…”

Mr McMillan’s denial of any link between his donation of $50,000 to National, in return for the contract for the limousine up-grade sounds remarkably similar to Scenic Hotels managing director, Brendan Taylor, denying any link between Earl Hagaman’s  $101,000 donation  to the National Party and his company securing the contract with Matavai Resort.

To compound matters, the BMW dealership at the center of the donations scandal then expressed an interest in acquiring the soon-to-be-replaced government limousines (to re-sell, at a profit);

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dealer-who-gave-nats-50k-eyes-govt-bmws

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Whether or not the purchase went ahead is unclear.

Farms

In 2010 and late 2011, another apparent conflict of interest was reported when Shanghai Pengxin put in a bid for the Crafar dairy farms.  Shanghai Pengxin, under various guises, gave hundreds of thousands of dollars to the National Party;

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china-link-to-nats-200000

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A full analysis of the links between Oravida, Crafar Farm purchase, and the National Party was reported in a previous blogpost here; Doing ‘the business’ with John Key – Here’s How (Part # Rua).

Conclusion

Whilst details are hard to confirm by the very nature of these highly secretive deals – many made informally – the questions arising from these (and other) murky ‘arrangements’ is sufficient to underscore a recent downgrading of our Transparency International Corruption Perception Index;

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corruption free - NZ drops again - transparency international

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We have had sufficient number of glimpses into dubious activities that hint at corrupt practices. Even fourth place on the Transparency International Corruption Perception Index may be wildly optimistic.

As the Saudi farm-bribe and use of GCSB to spy on behalf of Tim Groser has shown, National is not averse to employing dodgy practices and dirty deals to enrich itself or what it perceives may “benefit” the country (and consequently it’s re-election chances).

There are simply too many coincidences to ignore the inescapable conclusion: it is my considered opinion that National has benefitted financially from several commercial/government transactions.

Our political system has been tainted with corruption.

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Addendum1

As at 21  April, the so-called “Taxpayers Union” – a self-appointed group of “watchdogs” to protect public interest from political corruption and waste of taxpayers’ money, had made no comment on the Niue Scandal;

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taxpayers union home page

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The “Taxpayers Union” had condemned the Universal Basic Income; had a ‘go’ at Maori Iwi; lambasted Labour; criticised MoBIE; and several other attacks on perceived “wrong-doing”.

But not a peep on the Niue scandal.

But considering that the “Taxpayers Union” is made up of National Party apparatchiks and supporters, that is hardly surprising.

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References

Radio NZ: Call for inquiry into Niue resort contract

Radio NZ:  Contract not linked to donation – Scenic Hotel

NZ Herald: Labour questions $101,000 National donation and Niue resort management contract links

Radio NZ: PM not worried about Niue resort deal

Fairfax media: Ministers knew of BMW buy-up last year

Fairfax media: PM signed papers relating to BMWs

NZ Herald: Dealer denies donation link

Radio NZ: PM rejects claim donation linked to BMW upgrade

Transparency International (NZ): Corruption Free? NZ drops again

Fairfax media: Auditor-General had doubts Saudi sheep deal was legal

NZ Herald: GCSB spies monitored diplomats in line for World Trade Organisation job

Additional

Scoop media: BSA decision – One News on Sale of BMWs

Newzealandinc: McMillan family sells half stake in Team McMillan to Tim Cook’s Collins Asset

Previous related blogposts

Know your Tory fellow travellers and ideologues: John Bishop, Taxpayers Union, and the NZ Herald

Doing ‘the business’ with John Key – Here’s How (Part # Toru)

Doing ‘the business’ with John Key – Here’s How (Part # Rua)

Farms, politicians, and emails

A Query to the Taxpayers Union – ***UP DATE ***

User Pays: the eventual conclusion

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guy body editorial cartoon april 11 2016 panama papers tax haven

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This blogpost was first published on The Daily Blog on 22 April 2016.

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If this isn’t corrupt – what the f**k is?!

7 August 2013 3 comments

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Peters slams National's house buy

Source: Fairfax media – Peters slams National’s house buy

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The National Government selling a  state-owned property to itself?!

This is the kind of practice  that is best synonymous with Third World or ex Soviet republics, where corruption is rampant.

Now we are witnessing  corruption by National ministers, Party officials, and their equally culpable apparatchiks.

Who would have thought that we would see this kind of thing here in New Zealand? And how do National Party members and supporters justify this kind of corrupt behaviour?

Perhaps it is time for Transparency International – the global corruption monitoring organisation – to reconsider our rating.

A message to Mr Peters;

Post the 2014 election, if you hold the balance of power, will you align yourself with a self-serving, discredited Party that has no compunction to act corruptly?

Will you cosy up to a Party that has engaged in unpopular legislation; ignoring public opinion; attacked critics; extended State surveillance power; and is now stealing public property for their own purposes?

Do you want yourself and your Party associated with this kind of corruption?

You have some deep thinking to do after next year’s election.  Choose wisely.

 

 

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“He will be a very good friend for you when he is in Parliament”

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Frank Macskasy Blog Frankly Speaking

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“He will be a very good friend for you when he is in Parliament” – according to Kim Dotcom’s bodyguard, Wayne Tempero, just after taking a call from John  Banks, in July last year .

Banks had phoned on 30 July asking for another campaign donation – this time for his ACT candidacy for last year’s election.

Kim Dotcom replied in somewhat colourful terms, declining Bank’s request,

I do recall raising the issue of donating to the Act Party with Mr Dotcom’s staff … I was subsequently advised by one of his staff that Mr Dotcom said ‘to go get f****d as your Government has caused me too much trouble’ or something along those lines.” – John Banks, NZ Herald

What followed next is disputed by Banks – though his recall is at least somewhat more certain than previous allegations. Wayne Tempero wrote in an email to Dotcom,

I just had a call from John Banks about asking you for a small donation for the Act Party which he is standing for government this year…  he will be a very good friend for you when he is in Parliament“. – Ibid

“…he will be a very good friend for you when he is in Parliament.

Banks rejected Tempero’s claims,

Mr Tempero’s recollection of events is different to mine. I will not be responding to any further allegations made by Mr Tempero.”

At least Bank’s memory seems to be improving.

Though one wonders how he can recall this event, but not others?

John Banks may deny wrongdoing, but thus far,

  • Kim Dotcom’s story has held up to scrutiny
  • John Bank’s account has been less than credible and has changed with time
  • Kim Dotcom has provided witnesses and evidence to his claims
  • John Banks has only a dodgy “memory”

It seems that money can buy you “friends”? Especially in high places?

If this is not an indication of a hint of corruption in politics – then what is? Is this how ‘business’ is done in ACT – and National?

It certainly seems like it. Especially when we recall this questionable event,

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Full Story

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Frank Macskasy blog Frankly Speaking

Full Story

The upshot of  the BMW story is that National received a $50,000 donation from BMW Team McMillan after National decided to go ahead and replace their ministerial limousine fleet.

It’s nice to have friends in high places.

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Previous blogposts

Doing ‘the business’ with John Key – Here’s How (Part # Rua)

Crony Watch!

Money in the Banks (Part #Wha)

That was Then, this is Now #11

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