Michael F. Cannon
Secretary of Health and Human Services Kathleen Sebelius’ latest abuse of power has strengthened the case for her removal from office. Before discussing her latest misconduct, let’s review some of Sebelius’ past abuses of power.
- In 2010, Sebelius described anonymous political speech as “dangerous.” (The IRS’s recent targeting of tea-party groups is a good argument for protecting anonymous speech.)
- So too is Sebelius’ 2010 threat to put health insurance companies out of business. Shortly after ObamaCare became law, insurers began telling their customers how much it was going to increase their premiums. In a September 2010 letter to insurers, Sebelius shot back that premiums would rise no more than 2 percent, even as her department predicted increases as high as 7 percent. Insurers that didn’t toe the party line “may be excluded from health insurance Exchanges in 2014.” That was no idle threat, I wrote at the time. Since “Medicare’s chief actuary predicts that in the future, ‘essentially all‘ Americans will get their health insurance through those exchanges,” Sebelius was essentially threatening to put insurers out of business if they disagreed with her.
- In 2011, Sebelius has approved her department issuing hundreds of billions of dollars in subsidies to private health insurance companies under the rubric of ObamaCare that the statute expressly forbids HHS to issue.
- In 2012, the U.S. Office of Special Counsel concluded that Sebelius violated the Hatch Act by campaigning for President Obama and other political candidates while traveling on official business, an offense for which other federal workers are fired.
- In a July 2012 letter to the nation’s governors, Sebelius arbitrarily rewrote and narrowed the Supreme Court’s ruling in NFIB v. Sebelius to allow HHS to continue coercing states into implementing parts of ObamaCare’s Medicaid expansion.
- When it became apparent that two-thirds of states would not implement one of ObamaCare’s health insurance “exchanges,” Sebelius dismissed the idea that a lack of congressionally authorized funding for federal Exchanges would stop her department from implementing them. “We are going to get it done,” she said. Now we learn she substituted her own judgment for Congress’ by raiding ObamaCare’s Prevention and Public Health Fund to the tune of $454 million to fund federal Exchanges. But even that wasn’t enough.
Now we learn, from the Washington Post’s Sara Kliff, “Sebelius has, over the past three months, made multiple phone calls to health industry executives, community organizations and church groups and directly asked that they contribute to non-profits that are working to enroll uninsured Americans and increase awareness of the law.”
This too appears to be unlawful:
Federal regulations do not allow department officials to fundraise in their professional capacity. They do, however, allow cabinet members to solicit donations as private citizens “if you do not solicit funds from a subordinate or from someone who has or seeks business with the Department, and you do not use your official title,” according to Justice department regulations.
[A] Health and Human Services official, who requested anonymity because he was not authorized to discuss the secretary’s private discussions, described her work as well within the bounds of her authority.
Riiight. Kathleen Sebelius runs the Department of Health and Human Services. At nearly $1 trillion per year, HHS is the largest department in the U.S. government, spending 43 percent more than the Defense Department. Most of those subsidies go to the health care sector. Those subsidies will increase dramatically when ObamaCare takes full effect next year. Sebelius has been calling executives from the industry she regulates, including “multiple insurance executives,” and asking them to donate money to Enroll America – a private organization, headed by a former White House official, whose purpose is to help make ObamaCare a success. Sebelius has a history of threatening uncooperative companies with retaliation. But we are to believe it’s all on the up and up because…what? She never told these executives whether she is the Kathleen Sebelius who runs HHS, or some other Kathleen Sebelius?
Even if her activities are not illegal, they are definitely unethical:
“It sounds like the people she’s going to are people that are being regulated by her agency, I think that is definitely problematic,” said Meredith McGehee, policy director for the Campaign Legal Center. “That’s not a statement about the value of the law, but it’s a statement about using the power of government to compel giving or insinuate that giving is going to be looked at favorably by the government.”
Given this much misconduct, you might think President Obama would ask for Sebelius’ resignation. A spokesman for the president commented:
The President believes that the American people expect and deserve to have the very best public servants with the highest levels of integrity working in government agencies on their behalf…If the Inspector General finds that there were any rules broken or that conduct of government officials did not meet the standards required of them, the President expects that swift and appropriate steps will be taken to address any misconduct.
I’m kidding, of course. That’s what White House press secretary Jay Carney said about the IRS targeting tea-party groups. Sebelius is all aces with the president, for two reasons. First, her misconduct came in the service of universal coverage. To the Church of Universal Coverage, there is no higher law. Second, the president needs Sebelius because she is the only person in the universe who can wield the considerable powers of ObamaCare’s Independent Payment Advisory Board without needing a Senate confirmation hearing.
As I wrote on the eve of ObamaCare’s passage, “Abandoning ethics to serve one’s partisan agenda is an ugly yet bipartisan tradition. But there’s an added irony when supporters of ObamaCare do it: at the same time they demonstrate what scant regard politicians have for honesty, propriety, fair play, and even public opinion, they are demanding that we trust politicians with our health care.”
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QE has left companies with a £90bn pension bill, MPs told
The Bank of England’s £375bn policy of quantitative easing has left companies having to find £90bn to fill pension fund deficits, MPs were told.
The warning came after the Treasury decided to transfer the £35bn built up at the Bank through its quantitative easing (QE) programme Photo: Alamy
1:27PM GMT 29 Jan 2013
Mark Hyde-Harrison, chairman of the National Association of Pension Funds, said inflexible pension regulations meant companies had to pay down these deficits, leaving them unable to use the funds to strengthen their balance sheets.
This had the knock-on effect of limiting growth in the economy, he told members of the House of Commons Treasury Select Committee looking at the Bank’s plans to buy government bonds, or QE, to stimulate the economy.
"A strong economy and strong companies produce good pension funds," he said.
QE has raised the price of gilts, lowered yields and reduced the returns on pension investments, helping push final-salary schemes into large deficits.
Government bonds are used by pension fund to ensure they have the necessary funds to payout members in future. Low gilt yields, along with low interest rates, has meant that pension schemes have had to hold more assets to meet those obligations.
Mr Hyde Harrison said schemes needed to find £9bn a year over the next ten years to fill the gap.
He was also concerned that when the time came to unwind QE that the Bank fulfilled its promise to buy back the bonds and not cancel them.
Pensions expert Ros Altman told the committee that QE had been a "tax on pensions" and "savers". She said the policy was meant to be expansionary but not for pensioners.
"Asset purchase have raised the cost of annuities," she said, adding that the consequences of QE on pensions had been "overlooked".
While the benefits of asset purchases may have had short-term benefits for the whole economy, it had distorted long-term savings schemes, she said.
The Bank of England has said that without QE the subsequent financial fall-out would have left pension funds and savers worse off. It argues that its "money printing" programme staved off a much deeper recession than the one experienced
Statistics: Posted by DIGGER DAN — Tue Jan 29, 2013 1:52 pm
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If you want to live, best not to work for a company headed by a former Chinese government official.
(From The Harvard Business Review)
Our results showed that on average, the rate of worker deaths is five times greater at connected companies than at similar companies that lack political connections. The finding that connected companies have much worse records was remarkably consistent from year to year. Moreover, deaths per 10,000 workers rose by almost 10, on average, during the year following the arrival of a connected executive at a previously unconnected firm, and fell by 6.4 during the year following a connected executive’s departure.
The post Chinese Workers More Likely to Die While Working for Crony Capitalist Companies appeared first on AgainstCronyCapitalism.org.
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Fiscal Cliff Deal A “Crony Capitalist Blowout.” Taxes go up for average Americans, but these companies will get paid instead.
The gall of the lobbyists is astounding. Here we are, teetering we are told on the edge of a “fiscal cliff.” Below us is the abyss of renewed acute recession (depression). We must do something! Anything! Just don’t let us go off the cliff!
That “something” apparently means millions of dollars in gifts to Nascar, and Starkist Tuna, and GE, and Captain Morgan’s Rum, and Whirlpool, and Hollywood, and who knows who else. Not you though—sorry.
Good thing we acted. Boy, we didn’t have a dime to spare. We needed to raise taxes on those successful small business owners so that we could subsidize the big corporations. Oh, and payroll taxes are going up for everyone else. Fairness I tell ya.
And this package of corporate welfare was constructed in the summer and put into the fiscal cliff bill at the insistence for the Obama Administration. They had it ready to go. They were just waiting for the right opportunity. Anyone who supported this president and in the same breath talked about government working for the 99%, I’m not going to say it. I won’t but boy do I want to.
At this point its just looting. It’s theft. Like the guys who break into liquor stores when the power goes out. It’s the same thing only on a colossally larger scale. It’s completely dishonorable. And the former head of the Senate, Republican Trent Lott, helped make all of it happen to boot. See bipartisanship isn’t a thing of the past. Who cares if the country is supposedly staring at economic disaster—again. Make sure our donors get their subsidies, their taxpayer funded subsidies.
Take all that you can, when you can. That is the Washington DC ethic these days. Crony capitalism central.
How are we going to turn this around people?
(From The Wall Street Journal)
In praising Congress’s huge new tax increase, President Obama said Tuesday that “millionaires and billionaires” will finally “pay their fair share.” That is, unless you are a Nascar track owner, a wind-energy company or the owners of StarKist Tuna, among many others who managed to get their taxes reduced in Congress’s New Year celebration.
There’s plenty to lament about the capital and income tax hikes, but the bill’s seedier underside is the $40 billion or so in tax payoffs to every crony capitalist and special pleader with a lobbyist worth his million-dollar salary. Congress and the White House want everyone to ignore this corporate-welfare blowout, so allow us to shine a light on the merriment.
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Even as Greece desperately tries to avoid defaulting on its debt, American companies are preparing for what was once unthinkable: that Greece could soon be forced to leave the euro zone.
Aris Messinis | AFP
Bank of America Merrill Lynch [BAC 7.99 0.08 (+1.01%) ] has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable. Ford [F 9.34 0.03 (+0.32%) ] has configured its computer systems so they will be able to immediately handle a new Greek currency.
No one knows just how broad the shock waves from a Greek exit would be, but big American banks and consulting firms have also been doing a brisk business advising their corporate clients on how to prepare for a splintering of the euro zone. That is a striking contrast to the assurances from European politicians that the crisis is manageable and that the currency union can be held together. On Thursday, the European Central Bank will consider measures that would ease pressure on Europe’s cash-starved countries.
JPMorgan Chase [JPM 37.14 0.24 (+0.65%) ], though, is taking no chances. It has already created new accounts for a handful of American giants that are reserved for a new drachma in Greece or whatever currency might succeed the euro in other countries.
Stock markets around the world have rallied this summer on hopes that European leaders will solve the Continent’s debt problems, but the quickening tempo of preparations by big business for a potential Greece exit this summer suggests that investors may be unduly optimistic. Many executives are deeply skeptical that Greece will accede to the austere fiscal policies being demanded by Europe in return for financial assistance.
Greece’s abandonment of the euro would most likely create turmoil in global markets, which have experienced periodic sell-offs whenever Europe’s debt problems have flared up over the last two and a half years. It would also increase the pressure on Italy and Spain, much larger economic powers that are struggling with debt problems of their own. “It’s safe to say most companies are preparing,” said Paul Dennis, a program manager with Corporate Executive Board, a private advisory firm.
In a survey this summer, the firm found that 80 percent of clients polled expected Greece to leave the euro zone, and a fifth of those expected more countries to follow.
“Fifteen months ago when we started looking at this, we said it was unthinkable,” said Heiner Leisten, a partner with the Boston Consulting Group in Cologne, Germany, who heads up its global insurance practice. “It’s not impossible or unthinkable now.”
Mr. Leisten’s firm, as well as PricewaterhouseCoopers, has already considered the timing of a Greek withdrawal — for example, the news might hit on a Friday night, when global markets are closed. A bank holiday could quickly follow, with the stock market and most local financial institutions shutting down, while new capital controls make it hard to move money in and out of the country.
No Country Should Leave the Euro Zone: OECD’s GurriaCan Spain Avoid Greece’s Vicious Circle?Greece Will Get ‘Back on Track’: IMF’s Lipton
“We’ve had conversations with several dozen companies and we’re doing work for a number of these,” said Peter Frank, who advises corporate treasurers as a principal at Pricewaterhouse. “Almost all of that has come in over the transom in the last 90 days.”
He added: “Companies are asking some very granular questions, like ‘If a news release comes out on a Friday night announcing that Greece has pulled out of the euro, what do we do?’ In some cases, companies have contingency plans in place, such as having someone take a train to Athens with 50,000 euros to pay employees.”
The recent wave of preparations by American companies for a Greek exit from the euro signals a stark switch from their stance in the past, said Carole Berndt, head of global transaction services in Europe, the Middle East and Africa for Bank of America Merrill Lynch.
“When we started giving advice, they came for the free sandwiches and chocolate cookies,” she said jokingly. “Now that has changed, and contingency planning is focused on three primary scenarios — a single-country exit, a multicountry exit and a breakup of the euro zone in its entirety.”
Banks and consulting firms are reluctant to name clients, and many big companies also declined to discuss their contingency plans, fearing it could anger customers in Europe if it became known they were contemplating the euro’s demise. Central banks, as well as Germany’s finance ministry, have also been considering the implications of a Greek exit but have been even more secretive about specific plans.
But some corporations are beginning to acknowledge they are ready if Greece or even additional countries leave the euro zone, making sure systems can handle a quick transition to a new currency. In Europe, the holding company for Iberia Airlines and British Airways has acknowledged it is preparing plans in the event of a euro exit by Spain.
Statistics: Posted by yoda — Sun Sep 02, 2012 10:03 pm
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Chinese companies pull out of US stock markets
Chinese firms leave US stock markets amid complaints about price, accounting scrutiny
By Joe Mcdonald, AP Business Writer
Just a few years after Chinese companies lined up to sell shares on Wall Street, a growing number are reversing course and pulling out of U.S. exchanges. This week, Focus Media Holding Ltd., announced its chairman and private equity firms want to buy back its U.S.-traded shares and take the Shanghai-based advertising company private. The deal would value Focus Media at $3.5 billion, according to financial information firm Dealogic. (AP Photo/Andy Wong)
BEIJING (AP) — Just a few years after Chinese companies lined up to sell shares on Wall Street, a growing number are reversing course and pulling out of U.S. exchanges.
This week, Focus Media Holding Ltd., announced its chairman and private equity firms want to buy back its U.S.-traded shares and take the Shanghai-based advertising company private. The deal would value Focus Media at $3.5 billion, according to financial information firm Dealogic.
Smaller companies also are withdrawing from U.S. exchanges. In a sign of official encouragement, a Chinese business magazine said a state bank has provided $1 billion in loans to help companies with listings abroad move them to domestic exchanges.
The withdrawals follow accusations of improper accounting by some companies and a deadlock between Beijing and Washington over whether U.S. regulators can oversee their China-based auditors.
Some Chinese companies say they are pulling out of U.S. markets because a low share price fails to reflect the strength of their business. Withdrawing also eliminates the cost of complying with American financial reporting rules.
Focus Media "has been seriously undervalued on U.S. stock markets" and being taken private will help to promote its "long-term strategic development," said a company spokeswoman, Lu Jing.
The company, formed in 2003, operates electronic advertising displays in elevators, grocery stores and other locations.
"We haven’t considered whether to list the company on Chinese markets but that possibility has not been excluded," Lu said.
U.S.-traded Chinese companies faced scrutiny after auditors for several quit and others were accused of accounting irregularities. Concerns about company finances have caused share prices to tumble, costing investors several billion dollars.
"Probably all these companies have some questionable accounting, so they may prefer to move out of the U.S., not to come under too much scrutiny," said Marc Faber, managing director of Hong Kong fund management company Marc Faber Ltd.
A financial firm, Muddy Waters Research, accused Focus Media last year of overstating the number of its display panels and questioned acquisitions reported by the company. Focus Media denied the allegations and said independent auditors confirmed the size of its network.
This week, Muddy Waters founder Carson Block said in a statement: "The markets are far better off if a few deep pocketed investors own Focus Media instead of mutual funds and other public shareholders."
The group proposing to take the company private includes its chairman, Jason Nanchun Jiang, and private equity firms Carlyle Group, CITIC Capital Partners, CDH Investments and China Everbright Ltd.
The status of Chinese companies in the United States could be complicated by a dispute between U.S. and Chinese regulators over whether American inspectors will be allowed to examine the work of their China-based audit firms.
Washington wants auditors to hand over documentation on companies that are under investigation but Chinese authorities have barred the release of some information. If a settlement is not reached, the SEC could reject audits by China-based firms, forcing companies to find new auditors.
In May, Beijing took steps to tighten control of local affiliates of major accounting firms by issuing a requirement for Chinese citizens to head those offices.
Dozens of Chinese companies issued shares on Wall Street over the past decade, raising billions of dollars from investors who wanted a stake in the country’s booming economy.
Many were private companies that could not raise money on Chinese exchanges that were created to finance state industry or wanted the higher public profile.
Chinese regulators encouraged the move as a way for entrepreneurs to raise money and speed the development of China’s economy. But in recent years Beijing has encouraged private companies to issue shares in China to help develop its markets and give Chinese households better investment options.
Regulators have made it easier for private companies to join China’s two exchanges in Shanghai and the southern city of Shenzhen, though most listings still are for state enterprises. The Shenzhen exchange created a second board for small companies, imitating the U.S.-based Nasdaq market.
Major state companies such as oil giant PetroChina Ltd. and China Mobile Ltd., the world’s biggest phone company by subscribers, also have issued shares abroad. None has indicated it plans to withdraw from foreign stock exchanges.
The economics also are shifting in China’s favor.
U.S.-traded companies saw share prices plunge following the 2008 global crisis, while economic growth at home, even after a recent decline, is still forecast at about 8 percent this year. Rising Chinese incomes are creating a bigger pool of money for investment.
"Generally speaking, a company’s shares are sold at a higher premium in initial public offerings on Chinese stock markets than on U.S. markets," said Mao Sheng, a market strategist for Huaxi Securities in the western city of Chengdu.
Also, he said, "If the company’s business is mainly in China, it will be good for its brand promotion."
Another U.S.-traded company, Fushi Copperweld Inc., announced plans in June by its chairman, Li Fu, and a Hong Kong firm, Abax Global Capital, to take the maker of metallic conductors private.
Muddy Waters cited Fushi Copperweld in April as one of several companies it said dealt with an investment bank that helped enterprises seeking U.S. stock market listings to conceal problems and misrepresent financial information.
Fushi Copperweld denied Muddy Waters’ "vague and nonspecific" claims.
The company said its privatization will be financed with loans from the China Development Bank.
Created to support construction of highways and other public works in China, CDB plays a growing role in its corporate expansion abroad. The bank provides credit to buyers of Chinese telecoms gear and other big-ticket goods and has financed building projects in Africa, Latin America and Asia.
CDB has lent $1 billion "to help Chinese public companies leave the U.S. stock market to return to domestic markets," the business magazine Caixin said last month.
Employees who answered the phone at Fushi Copperweld said no one was available to comment.
Also in June, China TransInfo Technology Corp., a provider of traffic management technology, announced privatization plans to be financed by CDB’s Hong Kong branch. A company spokeswoman said she could not comment because the plan is not finalized.
In October, Harbin Pacific Electric Co. withdrew from Nasdaq in a share buyback financed by $400 million in loans from the CDB.
Statistics: Posted by yoda — Tue Aug 14, 2012 8:42 am
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Top 10 Most Profitable Companies Paid ~9% Tax Rate
By Barry Ritholtz – August 4th, 2012
SAN FRANCISCO, CA – A new NerdWallet study found the 10 most profitable U.S. companies paid an average of 9% in federal taxes last year. These low rates are particularly shocking given that the official tax rate is 35%. The study also revealed more than half of the 500 largest U.S. companies paid a lower tax rate than the average American.
To give the public easy access to this information, NerdWallet built a tax rate transparency tool. The tool allows users to select any of the 500 largest corporations in America and instantly see the tax rate that company paid. The tool also provides the name and compensation of the highest paid executive.
#1 Exxon Mobil (XOM)
Pre-tax earnings: $73.3 Billion
Tax Provision: $31.1 Billion (42%)
Actual Taxes Paid to U.S. federal government: $1.5 Billion (2%)
Exxon paid $1.5 billion to the U.S. federal government in 2011 and deferred paying an additional $1.6 billion. It paid the majority of its taxes to foreign governments where it operates ($28.8 billion).
#2 Chevron (CVX)
Pre-tax earnings: $47.6 Billion
Tax Provision: $20.6 Billion (43%)
Actual Taxes Paid to U.S. federal government: $1.9 Billion (4%)
Chevron paid $1.9 billion to the U.S. federal government in 2011 and deferred paying an additional $877 million. It paid the majority of its taxes to foreign governments where it operates ($16.5 billion). Chevron also paid $596 million to state and local government.
#3 Apple (AAPL)
Pre-tax earnings: $34.2 Billion
Tax Provision: $8.3 Billion (24%)
Actual Taxes Paid to U.S. federal government: $3.9 Billion (11%)
Apple paid $3.9 billion to the U.S. federal government in 2011 and deferred paying an additional $3.0 billion. It paid $762 million to state and local government, $769 million to foreign governments.
#4 Microsoft (MSFT)
Pre-tax earnings: $28.1 Billion
Tax Provision: $4.9 Billion (18%)
Actual Taxes Paid to U.S. federal government: $3.1 Billion (11%)
Microsoft paid $3.1 billion to the U.S. federal government in 2011. It paid $209 million to state and local government, $1.6 billion to foreign governments.
#5 JPMorgan Chase & Co (JPM)
Pre-tax earnings: $26.7 Billion
Tax Provision: $7.8 Billion (29%)
Actual Taxes Paid to U.S. federal government: $3.7 Billion (14%)
JPMorgan paid $3.7 billion to the U.S. federal government in 2011 and deferred paying an additional $2.1 billion. It paid $1.2 billion to state and local government, $1.2 billion to foreign governments.
#6 Wal-Mart (WMT)
Pre-tax earnings: $24.4 Billion
Tax Provision: $7.9 Billion (33%)
Actual Taxes Paid to U.S. federal government: $4.6 Billion (19%)
Wal-Mart paid $4.6 billion to the U.S. federal government in 2011 and deferred paying an additional $1.4 billion. It paid $743 million to state and local government, $1.4 billion to foreign governments.
#7 Wells Fargo & Co (WFC)
Pre-tax earnings: $23.7 Billion
Tax Provision: $7.4 Billion (31%)
Actual Taxes Paid to U.S. federal government: $3.4 Billion (14%)
Wells Fargo paid $3.4 billion to the U.S. federal government in 2011 and deferred paying an additional $3.1 billion. It paid $468 million to state and local government, $52 million to foreign governments.
#8 ConocoPhillips (COP)
Pre-tax earnings: $23.0 Billion
Tax Provision: $10.5 Billion (46%)
Actual Taxes Paid to U.S. federal government: $1.9 Billion (8%)
ConocoPhillips paid $1.9 billion to the U.S. federal government in 2011 and deferred paying an additional $943 million. It paid $413 million to state and local government, $7.1 billion to foreign governments.
#9 International Business Machines (IBM)
Pre-tax earnings: $21.0 Billion
Tax Provision: $5.1 Billion (25%)
Actual Taxes Paid to U.S. federal government: $0.268 Billion (1%)
IBM paid $268 million to the U.S. federal government in 2011 and deferred paying an additional $909 million. It paid $429 million to state and local government, $3.2 billion to foreign governments.
#10 General Electric (GE)
Pre-tax earnings: $20.1 Billion
Tax Provision: $5.7 Billion (29%)
Actual Taxes Paid to U.S. federal government: $1.0 Billion (5%)
GE paid $1.0 billion to the U.S. federal government in 2011 and deferred paying an additional $1.5 billion. It paid $4.7 billion to foreign governments.
“Corporate tax rates and CEO compensation are controversial issues and finding this information can be difficult,” says Joanna Pratt, VP of Financial Markets at NerdWallet. “We think it’s important for every American to have access to this information.”
About NerdWallet Financial Markets: NerdWallet Financial Markets is designed to empower investors by providing unbiased and transparent access to financial markets information.
Statistics: Posted by yoda — Sat Aug 04, 2012 10:07 pm
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