October 23, 2017

The Vermont Legislature MUST Understand the EB-5 Disaster

If we don’t know what went wrong within state government, how do we know it won’t happen again?

The EB-5 program promises US green cards to foreign investors who put $500,00 to work to create private sector jobs. In Vermont the state Agency of Commerce was responsible both for promoting and administering the EB-5 program. On the state’s watch hundreds of millions of dollars were apparently diverted by the promoters of various projects. Governor Shumlin assured investors that the state was “auditing” these projects. Vermont’s clean brand was a key part of the sales pitch to investors

 It is by far the largest scandal to surface in the E-5 program nationwide. The investors may lose both their money and the chance of a green card since diverted funds didn’t create jobs. Jay Peak, home to several of the projects, is in receivership. Some Vermont contractors, who have had to wait years for payment, have gone out of business. There’s an empty hole in the ground in downtown Newport, dug in conjunction with a project that was supposed to bring biotech manufacturing to the Northeast Kingdom but, which, accordingtothe feds, was almost a complete fraud.

How could this have happened on the state’s watch? The legislature has not held a single hearing to find out.

Let’s assume that all state officials were completely innocent of any criminal wrongdoing (it may take a special prosecutor to find out if this is true). If that’s the case then something is terribly broken inside state government. The federal government wants to immediately remove the state’s oversight. Well it should since we still haven’t discovered how the oversight was so incredibly deficient. The investors, the contractors, and the state’s brand have been deeply damaged. But the legislature seems incredibly uncurious about how all this could have happened.

Did the conflict between the Commerce Agency’s promotional and supervisory roles make this inevitable? If so, does Commerce have other such conflicts? What about other agencies? Does Agriculture both promote farming and administer various farm programs? Are there conflicts like this in the vast reach of Human Services? How do we know another huge scandal isn’t brewing? Does the Attorney General’s office have an impossibly conflicted role in both defending state government and state employees and enforcing the state’s laws?

Do we need to reorganize parts of state government? Do we need some new laws? These are questions which are best answered through legislative hearings. These hearings should not be a witch hunt. They certainly shouldn’t be partisan. But, before further damage is done by and to the state, these hearings must happen.

See also:

Governor Scott Should Follow his Soul, Not the Advice of the Attorney General

Vermont Should be Investigating Itself

Governor Scott Considering EB-5 Special Prosecutor

October 16, 2017

Governor Scott Should Follow his Soul, Not the Advice of the Attorney General

Last month Governor Phil Scott said that the idea that the state is immune from all litigation “doesn’t give me a good feeling in my soul” and that it undermines trust in government. He said that he would consider appointing a special prosecutor to make sure we understand how Vermont happens to be the locus of the biggest EB-5 scandal in the nation. Last week he said he doesn’t believe now would be the right time for such an action because of the state’s pending lawsuit against the developers. Lawsuits take a long time. “Not now” could well be after unsolved problems which led to the EB-5 scandal further damage the state.

Scott says he is relying on the expertise of Attorney General T.J. Donovan, who’s doing “what he thinks is his best to represent the state of Vermont.” The Attorney General’s office is defending the state against a lawsuit alleging state complicity in the EB-5 fraud and, like any good lawyer would, is trying to have the case dismissed. However, the Attorney General, whose client is the GOVERNMENT of the state of Vermont, not the people of Vermont, is giving very bad advice from a public policy point of view.

Donovan argues that, if the state waived its sovereign immunity, state government would collapse. Without sovereign immunity “you wouldn’t have anybody working in government or anybody willing to make a decision in government exercising their discretion for fear of being sued,” he said. That argument is insulting as well as wrong.

Local governments don’t have sovereign immunity; people still work for them. Those of us in the private sector don’t have sovereign immunity; we make decisions (and get sued) all the time; we still do our jobs. Doctors don’t have sovereign immunity; they make life and death decisions – and put up with being sued. Teachers have no sovereign immunity. State workers won’t resign en masse if the state waives its sovereign immunity in a case which has blemished our reputation and which is, just as Scott feared, undermining trust in government.

Moreover, Donovan’s statements make clear that, since his office does have a responsibility to defend the state government and the state workers named in a lawsuit, the AG’s office has a conflict in fully investigating what went wrong. “The AG”s office is alleging fraud against Quiros and Stenger, that’s where we should focus,” He said. Certainly the AG’s office should be pursuing the case against Stenger and Quiros – one might even ask what took them so long – but what if government officials were criminally involved with these two (something which certainly has NOT been proven), would the AG’s office have to back off from the prosecution because any such allegation would damage the interests of its client, the government of the state of Vermont?

If the AG’s office can’t investigate possible state malfeasance, then there is the need for an investigation separate from the AG’s office. Moreover, even if the actions of state employees were entirely legal (as they may have been), shouldn’t the Governor, whose watch this did NOT occur on, want to know exactly what went wrong? Shouldn’t he want to know what went wrong now in case there are similar scandals brewing? Scott’s soul was right; public trust in government is extremely low. Now is the time for him to take advice from his soul and not from the AG.

All direct quotes in this piece come from a VT Digger article.

See also:

Vermont Should be Investigating Itself

Governor Scott Considering EB-5 Special Prosecutor

October 13, 2017

Trump’s Attacks on First Amendment Rights Are Appalling

Could the Trump Administration shut down NBC?

First Amendment to the US Constitution:

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

President Trump tweeted “Network news has become so partisan, distorted and fake that licenses must be challenged and, if appropriate, revoked. Not fair to public!” He was enraged at what he says was a false story on NBC. Later he doubled down on his anti First Amendment sentiment: “It’s frankly disgusting the way the press is able to write whatever they want to write and people should look into it,” I heard him say on CSPAN.

I’m not a member of the “resistance”; I support some of Trump’s policies and some of his actions; but I am appalled by these statements. Even if the NBC story is 100% wrong (it is thinly and anonymously sourced), the press has a right to be wrong. Reporterrs and editors often are. We can’t have a free press if there is some government agency deciding who is telling the truth and who gets to keep reporting. The whole point is that the press IS able and MUST be able to write whatever they want. We can turn off NBC in our houses but the government can’t do that to us. It’s OUR First Amendment right.

OK; we all agree on that. But could an administration which was so inclined actually take away NBC’s license? It’s unfortunately time to think about that.

On a superficial level, there’s no problem. NBC the network does not have a broadcast license because it doesn’t broadcast; it supplies content. Each of its over-the-air affiliates has its own license from the FCC. NBC owns only eleven stations; there are almost 200 separately owned affiliates. There would be a lot of licenses to take away, many held by rich and powerful people.

Moreover, since the demise of the “fairness doctrine” – needed when there were just a few broadcast licenses available in each area – the FCC has only considered technical and bureaucratic conditions in awarding and renewing broadcast licenses. Stations must stay within their allocated frequencies; can’t sell banned drugs; can’t knowingly abet a fraud (but let’s watch that!); have to pay their fees, file for renewal on time, and tell the truth in the paper work they file with the Federal Communications Commission (FCC). In theory a station could be shut down for pornography; that’s why certain words were banned on TV and radio. But that hasn’t even been threatened lately.

But let’s be paranoid. Broadcast licenses are worth hundreds of millions of dollars even now that most content stays on the Internet and isn’t broadcast at all. Suppose that the affiliates of an obstreperous network were suddenly threatened with license revocation for trivial technical violations – they probably exist and could certainly be alleged. Suppose a routine filing to move an antenna or make some other technical change were suddenly delayed almost indefinitely for “procedural” reasons. Might not the owner of the license pressure the network which supplies it with news to stop pissing off the President. All members of the FCC are appointed by the President with the advice and consent of the Senate. FCC Chairman have been known to follow White House “guidance”. Business people have been known to bury their personal scruples to protect their investors.

It appears that the IRS was weaponized to some extent during the Obama administration. Could that happen with the FCC in the Trump administration? Unfortunately it’s the President himself who suggests the answer may be “yes”.

October 10, 2017

Fear Leads to Fascism

In an emergency, we’re used to giving up some liberties. If you’re in a fire, you do what the firemen say. In general we obey police orders. A city can impose a curfew to protect lives and property. A mandatory evacuation order can be given. In an extreme, marshal law can be declared and most civil liberties suspended (Lincoln did that).

There’s probably something in primate DNA which suspends our usual obstreperousness and makes us take orders in a dangerous situation.

But there’s a dark side to this survival trait: when we’re afraid, we forget that we want to be free. We listen for a strong voice, look for a master who will protect us, and focus on the immediate danger which has frightened us rather than the long-term risk that our protector will become a tyrant.

I saw this danger first hand a long, long time ago in 1968 when I was a National Guardsman mobilized for the Chicago Convention riots. We were stationed in our armory which abutted a park in the then-decayed northwest side of the city. We patrolled the park because that’s what soldiers do and because our helicopters landed there. It was hot, boiling hot. We were heavily armed.

 “I’m so glad you boys are here,” an old lady said. “We haven’t been able to come to the park at night for years.” She was Polish; her children had long since gone to the suburbs. The neighborhood was definitely not Polish anymore. And it wasn’t safe for her. She was happy to have an army on her street. We were no threat to her. We made her safe. She wasn’t worried about a civil society. She was afraid.

Mary and I bought our first handgun the day after the first night we spent in an isolated summer home. All the talk in the neighborhood was about the armed robbery that had just occurred at the drugstore. We weren’t giving up our freedom; but we also weren’t confident that government could protect us from the special danger addicts present. We acted (rationally, I think) but out of fear.

The City of Burlington can’t figure out how to protect its citizens – or even its police – from a group of dangerous miscreants in City Hall Park. Calling a social worker instead of a cop doesn’t work; but the cops are expected to act like social workers. Meanwhile people aren’t as safe as they should be downtown. People who are afraid will vote for drastic solutions (see election 2016).

The US is at danger from a North Korean sociopath armed with nuclear weapons and delivery systems. The North Korean arsenal has grown from test devices to a serious threat during Republican and Democratic administrations alike. It must be dealt with. Americans - afraid of an increasingly dangerous world including ISIS, Iran, North Korea and, of course, homegrown terrorists of the right and left and demented killers - elected Donald Trump. Will he over react? Is over reaction or under reaction more dangerous now?

This is a dangerous time for the country. To survive as the kind of civil society we want to be, we must both avoid over reaction and avoid under reaction to evil, which leaves people afraid. We do have to make our streets safe (yes, that means patrolled by police); we do have to take violent people off the streets no matter what mental illness, addiction, childhood experience made them dangerous; we must confront nations and non-nations which threaten us with harm.

Those of us inclined to vote for leaders who think dialog is always better than confrontation must think of the harm that ducking confrontation may cause. Those inclined to vote for authoritarians because we’re frightened need to realize authoritarians don’t give up power lightly. We all need to work for and find pragmatic candidates who know there are no easy answers; that not acting is itself an act.

A frightened electorate will vote for frightening leaders. Leaders who don’t keep us safe pave the way to despotism.

October 04, 2017

Your Android Phone is Eavesdropping

Are the Russians listening too?

I’m getting paranoid about devices listening to me.

Gotham Gal recently blogged about friends who started to get ads for things they never searched for but had recently talked about (not talked about online, just talked about with a group of friends). Alexa was the first suspect; she was there and she listens. But Alexa somehow would have had to sort out all the different voices and have some way of associating them with people and the computers and phones they use to search the web. Nevertheless, I always switch Alexa’s listening off unless I specifically want to talk to her.

Commenters on Gotham Gal’s post pointed a finger at the Facebook smartphone app. It would recognize its owner’s voice. It would know exactly where in the database to put the possible new interest and how to serve ads which catered to it. I don’t use the Facebook app or Facebook itself much, so I filed my suspicions away for future investigation.

Yesterday I realized that my Android was eavesdropping.


“say OK Google” it said in the search box of the home screen. If I said “OK Google”, I could then give it a voice command like “navigate to the nearest saloon”. Very good for handsfree driving. But, if it’s listening to see whether I say “OK Google”, then it has to be listening to everything I or anyone else says in the car and whatever I listen to on the car’s audio system. Maybe it ignores all that until it hears “OK Google” and maybe it doesn’t. How can I be sure? What if it thinks it heard “OK Google”; then I know it’ll send what it hears next to the Google cloud for interpretation.

What if it’s been hacked? There’s a story in today’s Wall Street Journal saying that Russians are hacking the smartphones of NATO troops. I don’t want to be alarmist but does that mean that if the phones are listening to the troops then the Russians can as well?

No thanks, I don’t want it to listen.

So, of course, I googled how to turn off “OK Google”. The instructions, even from third parties are simple but also misleading. If you go into settings for the Google app, you can turn off “OK Google”. Trouble is that doesn’t turn off listening, If you then say “OK Google”, you get an alert telling you that you turned off the functionality. The only way the phone can give you the alert, obviously, is if it’s till listening. Problem NOT solved.

But you can turn off eavesdropping. You go into settings for the phone, choose apps, choose the Google app, choose permissions, choose microphone, and turn it off. You’ll get the warning below and there are serious consequences for turning this off.


Once you have told the Google app it can’t listen, it won’t. Not even if you tap the microphone option at the right of the search box. It goes into listen mode in this case but never says it is ready for you to speak or even says it won’t listen. You have to type in your request. So you pay a price for stopping the phone from listening. For me the security is worth the price. If I want to talk to Google, I turn its ability to listen back on.

Android ought to support a mode in which the phone only listens AFTER the microphone button is tapped and this ought to be the default. Security is too important to have all new phones in an insecure mode. There is also no good reason, although there are some bad ones, to force a choice between convenience and security in this particular case. The microphone button ought to be an on-off switch for the microphone. Even better, there should be a hardwired mute button for the mike, as there is on Alexa, so it can’t be hacked on.

Note: I have a Moto Z2; it is possible that other Android phones behave differently. If you have an iPhone and you can wake it up by saying “Siri”, then it is always listening to you. You don’t know who else may be.

See also: Alexa – Cover Your Ears

September 28, 2017

Governor Scott Considering EB-5 Special Prosecutor

There is a chance that Vermont will investigate itself and find out how the biggest scandal in the EB-5 program nationwide happened here under state supervision. When asked at a news conference about the idea of appointing a special prosecutor, Scott said “[It’s] the first I’d really contemplated something of that magnitude, but it could be something that could be beneficial. We’ll talk about it.”

“We want to be as transparent as possible,” Scott said of the EB-5 program. “We’ll see what happens in the near future, but I want to make sure that we release all the information we can so that … people have some trust with the government,” he continued.

Scott’s point about releasing all information possible is spot on. So far the attorney general’s office, whose role is to defend the state and state employees, has done everything it can to prevent the release of information needed to understand what happened. On the one hand the AG’s office argued that, because of a doctrine called sovereign immunity, a lawsuit against the state should be dismissed and the legal process called “discovery” can’t be used to compel the state to release its records or former state employees to give testimony. On the other hand, according to VTDigger, the AG’s office also says that 50,000 pages of state documents about Jay Peak are exempt from release under the relevant litigation clause of the Vermont Public Records. These two arguments together are a dangerous catch-22 which comes close to a cover-up: 1) litigation can’t be used to compel disclosure; 2) because there is litigation, the Public Records Act can’t be used to obtain information.

Scott also said, correctly IMO, that arguing the state is immune from lawsuits doesn’t inspire faith or trust in government. “When I read the media reports, when I hear immunity, and that’s the basis for an argument that we won’t know what’s happening — that the state is immune from litigation — that doesn’t give me a good feeling in my soul.”

The EB-5 projects under investigation are not the only EB-5 funded projects in the state. But, even projects without a hint of scandal will have a harder time raising money both because the feds are threatening to and probably will shut down the state’s authority to regulate these projects and because the Vermont brand as a good place to invest has been damaged. Most important, we can’t trust a government which hides its own mistakes and protects possible wrong doing. If you agree that we need to investigate this scandal ourselves, please write or call the Governor’s office and support the idea of a special prosecutor. If you think the legislature should be more aggressive in investigating the executive branch, please write your legislators. Posting on Front Porch Forum is effective as well.

More at Vermont Should be Investigating Itself.

September 27, 2017

Live Discussion of Does Vermont Need a Special Prosecutor for EB-5 Scandal

I'll be on Mike Smith's show "Open Mike" on WDEV at 10:30 this morning to discuss how Vermont government ought to investigate itself to determine state government's role in the EB-5 mess in the Northeast Kingdom. The Attorney General's office is the lawyer FOR the state and is claiming, in that role, that the state is immune from prosecution and discovery in this matter. So hard to see how the AG's office can also investigate state agencies and officials.  Do we need a special prosecutor to determine what went wrong and assign responsibility? I think our brand, which was heavily used to market EB-5 investments. is endangered if we leave all investigation to the feds. At the very least, legitimate EB-5 projects in the state will be unfairly tarnished. At the worst we - and others - lose faith in the honesty of our state government.

The show is live streamed from the WDEV site and you can call in with your opinion.

More at Vermont Should be Investigating Itself.

VTDigger has been key to unearthing facts about this scandal. Their coverage, which has earned national recognition, is at https://vtdigger.org/eb5-an-investigation/.

September 25, 2017

Vermont Should be Investigating Itself

Our brand is becoming “non-sustainable”.

Tiny Vermont has the distinction of biggest EB-5 scandal in the country. EB-5 is a program which grants US residency to foreigners who invest in certified job-creating projects. Jay Peak Resort was built out with EB-5 funds. The same group which developed Jay also raised EB-5 funds for a biomanufacturing plant in Newport, VT, which is now a hole in the ground (really!) with no apparent prospects.

The government of the State of Vermont is impeding investigation of its own involvement in this scandal by withholding key documents and asserting immunity from lawsuits. The Vermont Legislature has yet to investigate this massive scandal and the State’s role in it.

According to VTDigger, which has done Vermont a great service by relentless coverage of this scandal:

“In April 2016, the Securities and Exchange Commission charged [Ariel] Quiros [former owner of Jay Peak] and [Bill] Stenger [former President and CEO of Jay Peak] with 52 counts of securities fraud and with misusing $200 million in immigrant investor funds through the EB-5 visa program, which grants permanent residency to foreigners who invest $500,000 or more in U.S. businesses and create at least 10 full-time jobs. In all, 836 investors from 74 countries were allegedly defrauded by the developers…[Stenger has since reached a settlement with the SEC]

“Many of the investors blame the Vermont EB-5 Regional Center, an arm of state government that was charged with monitoring the EB-5 program in Vermont, for not properly overseeing the Jay Peak projects. Top state politicians, including Gov. Peter Shumlin, U.S. Sen. Patrick Leahy, U.S. Rep. Peter Welch and Gov. Jim Douglas all promoted the developments to investors overseas on behalf of Stenger and Quiros.”

Last month the U.S. Citizenship and Immigration Service, which oversees the EB-5 program for the feds, wrote to Vermont that it is planning to terminate the State’s authorization to oversee the program saying “the Regional Center’s failure to provide adequate oversight and monitoring of its projects allowed the alleged malfeasance by Quiros and Stenger to occur and jeopardize the Regional Center’s ability to promote economic growth within EB-5 program requirements, as well as the EB-5 investors’ investments.”

Some investors have sued the State and former officials for their lack of oversight and active promotion of the projects. According to VTDigger:

“Megan Shafritz, the lead lawyer for the state, has said Vermont officials have 'absolute immunity' in the case, which protects them 'from the burdens of discovery and litigation generally.'

“Shafritz has urged the court to block the release of documents and the deposition of a key witness in the investors’ case until after the court has ruled on a motion to dismiss, which the attorney general’s office has yet to file.”

The former officials and the State are being defended by the attorney general’s office, which is the State’s internal law firm and usually defends actions against the State; the accused officials are certainly entitled to a defense.  However, if the AG’s office’s role is defense and protecting the State, then who represents the citizens of the State if officials are guilty of wrongdoing? Are we totally dependent on the feds and/or private lawsuits to protect us against state government malfeasance?

In the federal government there is a recognized problem with the Justice Department headed by the attorney general, who is a presidential appointee, investigating the president; that’s why we have special prosecutors. But in Vermont the AG is elected independently. Do we still need a special prosecutor because the AG’s office needs to defend instead of investigate and prosecute state officials? Hard to believe but, if so, we should appoint one to look at the state’s role in this fiasco!

Meanwhile where is the legislature on this? Where’s the investigative committee? Don’t we want to know whether the feds are right in calling us incompetent or worse? Don’t we want to know how our brand got tarnished by the biggest EB-5 scandal in the country? Complacency will lead to disaster.

September 20, 2017

Let’s Not Talk about CyberSecurity

Friends have asked me (since I’m an official nerd), whether I blocked credit agencies from reporting on my credit to potential lenders to assure that new accounts are not opened by imposters pretending to be me. Blocking makes it harder for someone to use your ss# for identity theft; but, since you give part of your ss# to request a block, you give the credit agencies even more information about you which might be exposed in a future breach. I’m not telling what I did.

Following the Equifax breach, Facebook is ablaze with security discussions as are other online forums. Here’s some free advice: Don’t post what you decided to do about your credit! Don’t say online whether or not you’ve stopped credit checks at the rating agencies.

Either way you make yourself an easier mark for those who want to steal your identity. If you’ve blocked opening new accounts, they can say that when they pretend to be you and work on getting the unlock pin or convincing someone to give credit without it. If you haven’t stopped new accounts, then they know to go after you directly. Information about you is what hackers need; don’t post it online!

While we’re at it, don’t say online what kind of home security system you use. Don’t helpfully review your home security system on Amazon or your blog. Don’t rate your home security installer any way but anonymously (and how do you know if you’re anonymous?) Why tell hackers or burglars what technology they’re dealing with? I’m not sure the decals like “protected by ADT” are a good idea since they give useful information. Maybe just “Very well-protected. While you were reading this your picture went to the cloud!”. I’m still wrestling with how to blog about my expanded home security system without compromising our security.

For good advice on dealing with the Equifax breach see Wired for Safety: How to deal with the Equifax security breach on VTDigger; it’s part of a weekly column on cybersecurity by the very knowledgeable digital forensics faculty at Champlain College.

September 14, 2017

The Dreamer Dream

It is now squarely up to Congress to assure that Dreamers have a path to stay and work in the United States.  If Congress does its job, some of those who were brought illegally to the US as children will have a much more secure future than they had under DACA (Deferred Action for Childhood Arrivals), President Obama’s executive order.

From a Dreamer’s PoV, there are three problems with DACA:

  1. It provides amnesty and the right to work in the US only two years at a time; there is no path to citizenship or permanent residency.
  2. It is (as we’ve now seen) subject to withdrawal by the same kind of executive action which created it.
  3. The fact that it was promulgated as an executive order makes it vulnerable to the Supreme Court finding it unconstitutional. The Court split 4-4 (after the death of Justice Scalia) and allowed an injunction preventing a DACA expansion to stand.

If Congress were to pass a law which did simply what DACA did, issues 2 and 3 go away. I hope Congress can do better than that and provide a path all the way to citizenship for the Dreamers; but the perfect can’t be the enemy of the good. We actually have many more immigration issues to deal with than just the Dreamers; there are a large number of people who entered the country illegally as adults. We’re not going to just deport all of them either. But let’s take one bipartisan step at a time and make sure we do the right thing by the Dreamers.

According to WikiPedia:

To qualify for DACA, applicants must meet the following major requirements, although meeting them does not guarantee approval:[55]

  • Came to the United States before their 16th birthday
  • Have lived continuously in the United States since June 15, 2007
  • Were under age 31 on June 15, 2012 (i.e., born on June 16, 1981 or after)
  • Were physically present in the United States on June 15, 2012, and at the time of making their request for consideration of deferred action with USCIS
  • Had no lawful status on June 15, 2012
  • Have completed high school or a GED, have been honorably discharged from the armed forces, or are enrolled in school
  • Have not been convicted of a felony or serious misdemeanors, or three or more other misdemeanors, and do not otherwise pose a threat to national security or public safety

(Remember that children born to illegal immigrants IN the US are US citizens already. No one can take their rights away.)

There will be, and should be, debates in Congress over whether these requirements should be made looser or more stringent. A danger will be that the far left and the far right will dig in their heels on some specific issues in hopes of torpedoing a compromise. Trump has already signaled the right that he is willing to do without their votes by saying he will NOT insist that building The Wall be part of the deal. He will want to see some enhancements to border security to be sure that good treatment of the Dreamers doesn’t incent another wave of illegal immigration.

TBD whether the Democratic leadership can or will walk away from their left wing. A bill doesn’t need a majority of Democrats in either house to pass; but it will need a sizable contingent of Democrats to make up for right-wing Republican defections.

The Dreamer issue is now squarely before Congress, where even Obama agreed it should be. This is a time to write your Congressperson and tell her or him to do the job he or she was elected for. Doing that job means compromise.

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