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Archive for the ‘W.R. Grace’ Category

Operation Paperclip by Annie Jacobson. (Excerpts regarding Hitler’s Chemists – Otto Ambros)

Hitler’s Chemists

Otto Ambros

Otto Ambros was a fastidious man. His calculations were exact, his words carefully chosen, his fingernails always manicured. He wore his hair neatly oiled and parted. In addition to being Hitler’s favorite chemist, Ambros was the manager of IG Farben’s synthetic rubber and fuel factory at Aushwitz.

page 21

“The concentration camp already existing with approximately 7000 prisoners is to be expanded.” Santo noted in his official company report. For Ambros, Farben’s arrangement with the SS regarding slave laborers remained vague; Ambros sought clarity. “It is therefore necessary to open negotiations with the Reich Leader SS [Himmler] as soon as possible to discuss necessary measures with him,” Ambros wrote in his official company report. The two men had a decades-old relationship; Heinrich Himmler and Otto Ambros had known one another since grade school. Ambros could make Himmler see eye-to-eye with him on the benefits that Auschwitz offered to both Farben and the SS. – Operation Paperclip. page 153.

Otto Ambros was key to making the Buna factory a success. With his knowledge of synthetic rubber and his managerial experience–he also ran Farben’s secret nerve gas production facilities–there was no better man than Otto Ambros for the Auschwitz job….
Major Tilley waited at Dustin for the return of Tarr and Ambros. It was now clear to him that there was no single individual more important to Hitler’s chemical weapons program than Otto Ambros had been. Ambros was in charge of chemical weapons at Gendorf and Dyhernfurth, and he was the manager of the Buna factory at Auschwitz. From interviewing various Farben chemists held at Dustbin, Tilley had also learned that the gas used to murder millions of people at Auschwitz and other concentration camps, Zyklon B, and it was sold to the Reich by an IG Farben company. In one of these interviews, Tilley asked IG Farben board member Baron Georg von Schnitzler if Otto Ambros knew that Farben chemicals were being used to murder people.

“You said yesterday that a [Farben employee] ‘alluded’ to you that the poisonous gasses [sic] and the chemicals manufactured by IG Farben were being used for the murder of human beings held in concentration camps,” Major Tilley reminded von Schnitzler in their interview
“So I understood him,” von Schnitzler replied.
“Didn’t you question those employees of yours further in regard to the use of these gases?”
“They knew it was being used for this purpose,” von Schnitzler said
von Schnitzler confessed, “I asked [the Farben employee] is it known to you and Ambros and other directors in Auschwitz that the gases and chemicals are being used to murder people?”
“What did he say?” asked Major Tilley.
“Yes; it is known to all the IG directors in Auschwitz,” von Schnitzer said.

Few men were as important to IG Farben during the war than Otto Ambros had been. IG Farben began first producing synthetic rubber in 1935, naming it Buna after its primary component, butadiene…. Otto Ambros poured over maps of this region, called the Upper Silesia, in search of a Buna factory site, he found what he was looking for. The production of synthetic rubber required four things: water, flat land, good railway connections, and an abundance of laborers. Auschwitz had all four. Three rivers met in Auschwitz, the Sola, the Vistula, and the Przemsza, with a water flow of 525,000 cubic feet per hour. The land was flat and sixty-five feet above the waterline, making it safe from floodwaters. The railway connections were sound. But the most important was the labor issue. The concentration camp next door could provide an endless labor supply because the men were cheap and could be worked to death. For Farben, the use of slave labor supply could take the company to levels of economic prowess previously unexplored.

pages 151 – 155

It was only a matter of time before an American chemical company would learn of the army’s interest in a whole new field of chemical weapons. An American chemist, Dr. Wilhelm Hirschkind, was in Germany at this same time. Dr. Hirschkind was conducting a survey of the German chemical industry for the U.S. Chemical Warfare Service while on temporarily leave from Dow Chemical Company. Dr. Hirschkind had spent several months inspecting IG Farben plants in the U.S. and British zones and now he was in Heidelberg, hoping to meet Ambros. Lieutenant Colonel Tarr reached out to Colonel Weiss, the French commander in charge of IG Farben’s chemical plant in Ludwigshafen, and a meeting was arranged.

On July 28, 1945, Dr. Hirschkind met with Ambros and Lieutenant Colonel Tarr in Heidelberg. Ambros brought his wartime deputy with him to the meeting, the Farben chemist Jurgen von Klenck. It was von Klenck who, in the final months of the war, had helped Ambros destroy evidence, hide documents, and disguise the Farben factory in Gendorf so that it appeared to produce soap, not chemical weapons. Jurgen von Klenck was initially detained at Dustbin but later released. The Heidelberg meetings lasted several days. When Dr. Wilhelm Hirschkind left, he had these words for Ambros: “I would look forward after the conclusion of the peace treaty [to] continuing our relations [in my position] as a representative of Dow.”

Only later did FIAT interrogators learn about this meeting. Major Tilley’s suspicions were now confirmed. A group inside the U.S. Chemical Warfare Service, including his former partner, Lieutenant Colonel Tarr, did indeed have an ulterior motive that ran counter to the motives of CIOS, FIAT, and the United Nations War Crimes Commission. Tilley’s superior at Dustbin, Major Wilson, confirmed this dark and disturbing truth in a classified military intelligence report on the Ambros affair. “It is believed that the conflict between FIAT… and LT-Col Tarr was due to the latter’s wish to use Ambros for industrial chemical purposes” back in the United States.”

“All documents regarding the Ambros affair would remain classified for the next forty years, until August of 1985. That an officer of the U.S. Chemical Warfare Service, Lieutenant Colonel Tarr, had sheltered a wanted war criminal from capture in the aftermath of the German surrender was damning. That this officer was also participating in meetings with the fugitive and a representative from the Dow Chemical Company was scandalous.”

page 157 – 159

By 1964, Ambros had been a free man for thirteen years. He was an extremely wealthy, successful businessman. He socialized in Berlin among the captains of industry and the professional elite. When the Frankfurt Auschwitz trial started, he was a board member of numerous major corporations in Germany, including AEG (Allgemeine Elekrizitats Gesellschaft), Germany’s General Electric; Hibernia Mining Company; and SKW (Suddeutsche Kalkstickstoff-Werke AG), a chemical company.

page 415 – 416

In separate letters to Finance Minister Ludger Westrick and Deputy Finance Minister Dr. Dollinger, a new secret was revealed, though Ambros promised not to make public a piece of the information they shared. “Concerning the firms abroad where I am a permanent co-worker advisor,” Ambros wrote, “I won’t name them [publicly] because I don’t want to tip off any journalists who might cause trouble with my friends. You know about W.R. Grace in New York… and I hope I can stay with Hibernia Company. Concerning the firms in Israel,” Ambros wrote, “stating their names publicly would be very embarrassing because they are [run by] very public, well-respected persons in public positions that have actually been at my home and are aware of my position, how I behaved during the Reich, and they accept this.”

The “well-respected” public figures in Israel to whom Ambros referred have never been revealed. That Ambros also had worked for the American company W.R Grace would take decades to come to light. When it did, in the early 1980s, the public would also learn that Otto Ambros worked as a consultant for the U.S. Department of Energy, formerly the Atomic Energy Commission, “to develop and operate a plant for the hydrogenation of coal in a scale of 4 million tons/year at the former IG Farben industry.” That a convicted war criminal had been hired by the Department of Energy sparked indignation, and congressmen and journalists sought further details about Ambros’s U.S. government contract. In a statement to the press, the Department of Energy insisted that the paperwork had been lost…

Letters on White House stationary reveal that Deputy National Security Adviser James W. Nance briefed Reagan about how it was that the U.S. government could have hired Otto Ambros. Nance’s argument to the president was that many others hired him. “Dr. Ambros had contracts with numerous officials from Allied countries,” wrote Nance. “Dr. Ambros was a consultant to companies such as Distillers Limited of England; Pechiney, the French chemical giant; and Dow Europe of Switzerland. He was also the chairman of Knoll, a pharmaceutical subsidiary of the well known chemical corporation BASF.” President Reagan requested further information from the Department of Energy on its Ambros contract. Nance told the president, “The DOE and/or ERDA [The Energy Research and Development Administration] do not have records that would answer the questions you asked in the detail you requested. However, with Ambros’ involvement in the company shown and his special knowledge in hydrogenation of coal, we know there were productive contacts between Dr. Ambros and U.S. energy officials.” Even the president of the United States could not get complete information about an Operation Paperclip legacy.

In the midst of the scandal, a reporter for the San Francisco Chronicle telephoned Ambros at his home in Mannheim, Germany, and asked Ambros about his 1948 conviction at Nuremberg for mass murder and slavery.

“That happened a very long time ago,” Ambros told the reporter. “It involved Jews. We do not think about it anymore.”

Pages 418 – 419

In the decades since Operation Paperclip ended, new facts continue to come to light. In 2008, previously unreported information about Otto Ambros emerged, serving as a reminder that the story of what lies hidden behind America’s Nazi scientist program in to complete.

A group of medical doctors and researchers in England, working on behalf of an organization called the Thalidomide Trust, believe they have tied the wartime work of IG Farben and Otto Ambros to the thalidomide tragedy of the late 1950s and early 1960s. After Ambros was released from Landsberg Prison, he worked as an economic consultant to German chancellor Konrad Adenauer and to the industrial magnate Friedrich Flick, the richest person in Germany during the Cold War. Like Ambros, Flick had been tried and convicted at Nuremberg, then released early by John J. McCloy.

In the late 1950s, Ambros was also elected chairman of the advisory committee for a German company called Chemie Grunenthal. Grunenthal was about to market a new tranquilizer that promised pregnant women relief from morning sickness. The drug, called thalidomide, was going to be sold under the brand name Contergan. Otto Ambros served on the board of directors of Grunenthal. In the late 1950s, very few people knew that Grunenthal was a safe haven for many Nazis , including Dr. Ernst-Gunther Schenck, the inspector of nutrition for the SS, and Dr. HeinzBaumkotter, an SS captain (Hauptsturmfuhrer) and the chief concentration camp doctor in Mauthausen, Natweiler-Struthof, and Sachsenhausen concentration camps.

Ten months before Grunenthal’s public release of thalidomide, the wife of a Grunenthal employee, who took the drug to combat morning sickness, gave birth to a baby without ears. No one linked the birth defect to the drug, and thalidomide was released by the company. After several months on the market, 1959, Grunenthal received its first reports that thalidomide caused polyneuropathy, or nerve damage, in the hands and feet of elderly people who took the drug. The drug’s over-the-counter status was changed so that it now required a prescription. Still, thalidomide was marketed aggressively in forty-sex countries with a label that stated it could be “given with complete safety to pregnant women and nursing mothers without any adverse effect on mother and child.” Instead, the drug resulted in more than ten thousand mothers giving birth to babies with terrible deformities, creating the most horrific pharmaceutical disaster in the history of modern medicine. Many of the children were born without ears, arms, or legs and with reptilian, flipperlike appendages in place of healthy limbs.

The origins of thalidomide were never accounted for. Grunenthal had always maintained that it lost its documents that showed where and when the first human trials were conducted on the drug. Then, in 2008, the Thalidomide Trust, in England, headed by Dr. Martin Johnson, located a group of Nazi-era documents that produced a link between thalidomide and the drugs researched and developed by IG Farben chemists during the war. Dr. Johnson points out that Grunenthal’s 1954 patents for thalidomide cryptically state that human trials had already been completed, but the company says it cannot offer that data because it was lost, ostensibly during the war. “The patents suggest that thalidomide was probably one of a number of products developed at Dyhernfurth or Auschwitz-Monowitz under the leadership of Otto Ambros in the course of nerve gas research,” Dr. Johnson says.

The Thalidomide Trust also links Paperclip scientist Richard Kuhn to the medical tragedy, “Kuhn worked with a wide range of chemicals in his nerve gas research, and in his antidote research we know he used Antergan, which we are fairly sure was a ‘sister drug’ to Contergan,” the brand name for thalidomide, Dr. Johnson explains.

In 2005, Kuhn experienced a posthumous fall of grace when the society of German Chemists (Gesellschaft Deutscher Chemiker, GDCh) announced it would no longer award its once-prestigious Richard Kuhn Medal in his name. Nazi-era documents on Kuhn had been brought to the society’s attention, revealing that in “the spring of 1943 Kuhn asked the secretary-general of the KWS [Kaiser Wilhelm Society], Ernst Telschow, to support his search for the brains of ‘young and healthy men,’ presumably for nerve gas research.” The Society of German Chemists maintains that “the sources indicate that these brains were most likely taken from execution victims,” and that ‘[d]espite his scientific achievements, [Richard] Kuhn is not suitable to serve as a role model, and eponym for an important award, mainly due to his conduct towards Jewish colleagues.”

It seems that the legacy of Hitler’s chemists has yet to be fully unveiled. Because so many of these German scientists were seen as assets to the U.S. Army Chemical Corps’ nerve agent programs, and were thus wanted as participants in Operation Paperclip, secret deals were made, and the many documents pertaining to these arrangements were classified.

pages 431 – 433

Operation Paperclip

http://anniejacobsen.com/operation-paperclip/

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Documentary “Asbestos”

Dr. Irving J. Selikoff (1915-1992), a New York physician based at Mount Sinai Hospital, was the leading American medical expert on asbestos-related diseases between the 1960s and early 1990s. This is clipped from the 1982 documentary film – Asbestos : the way to dusty death – by ABC News. It was an updated version of an earlier ABC film from 1978. The film focuses on the dangers of asbestos, one of the biggest industrial killers in history. This is the final day of Global Asbestos Awareness Week (April 1-7), to raise public awareness about the dangers of asbestos exposure and to work towards a global asbestos ban. Support the Asbestos Disease Awareness Organization (ADAO), the largest independent asbestos victims’ organization in the U.S.

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Retirement Heist by Ellen E. Schultz.

Death Benefits: An Insurable Interest

Over time, life insurance began morphing from a tax shelter into a finance tool for executive pay. For decades, if an individual or company wanted to buy life insurance on someone, they had to have an “insurable interest in the person,” that is, the beneficiary of the policy would be directly affected by the insured’s death. This rule existed for obvious reasons: a skydiver, race car driver, or coal miner–and profit from his demise. And if he didn’t die soon enough, the policyholder would have an incentive to push him over a cliff.

Initially, companies bought policies to protect them from the deaths of certain executives, or “key” employees. It made sense for partners in law and accounting firms to buy life insurance on each other. But encouraged by insurance brokers, companies began buying it on broad swaths of their employees, because by insuring thousands of employees, not just “key men,” the companies can place greater sums in life insurance contracts.

Dow Chemical, the Midland, Michigan, company known for its manufacturing of napalm, breast implants, and Agent Orange, was initially skeptical. An internal memo noted that, except for top-paid executives, it was “doubtful that Dow has an insurable interest in any of its employees.” But it overcame its qualms and by 1992 had purchased life insurance policies on more than 20,000 employees.

Congress had no idea how widespread this practice had become until someone ratted on them. In 1995, a brown envelope was left on the desk of Ken Kies, chief of staff at the Joint Tax Committee. The envelope contained a list of companies that had bought life insurance on employees–along with the calculations showing that a company might take in $1.2 billion over ten years by insuring 50,000 of its employees. It also noted that from 1993 to 1995, Wal-Mart had taken out insurance on 350,000 workers.

Lawmakers did the math and were appalled. They weren’t concerned about whether Wal-Mart had an insurable interest in its stock clerks and store greeters, but they did care a lot about the loss of tax revenue. Companies were borrowing money from policies and deducting the interest. The IRS deemed that the leveraged COLI (corporate-owned life insurance) taken out by seven hundred companies were sham transactions with no business purpose other than to score tax breaks. It filed a flurry of tax court cases, and companies subsequently took big charges for the disallowed deductions for interest on policy loans; among them were American Greetings, the Brooklyn, Ohio, maker of Tender Thoughts brand greeting cards and owners of Holly Hobbie and Care Bears licenses, and W.R. Grace, the Columbia, Maryland, manufacturer of building materials, which took out life insurance policies on its workers while defending thousands of asbestos-related lawsuits.

Within minutes of the interest-deduction phase-out, companies found a way around it. Instead of borrowing money from insurance companies, they simply borrowed it elsewhere. This was called “indirect leverage.” The practice was especially appealing to banks, which can borrow money cheaply. Banks bought fresh policies on employees and in 1997 were floating the idea that they could buy life insurance on depositors and credit card holders as well. Fannie May, the giant mortgage buyer, proposed to insure the lives of home-mortgage holders, but the plan didn’t go far. Congress nixed those ideas and tried to plug the indirect-leverage loophole in 1998. The Joint Tax Committee’s Ken Kies, in classic revolving-door fashion, had quit his government job and was now lobbying for the COLI industry, which led a campaign that blanketed Congress with more than 170,000 letters and faxes and ran a radio and newspaper ads targeting lawmakers as anti-business. The effort to close the loophole failed. Former House Ways and Means chairman Bill Archer, who had criticized janitors insurance as a tax shelter in 1995, joined the board of Clark/Bardes, the most influential COLI provider, in 2001.

pages 123

If the investments weren’t wrapped in an insurance policy, the company would have to sell the investments, then pay taxes on the gains, if it wanted to be able to report the income. Bottom line: Even though companies aren’t supposed to get tax breaks for funding executive deferred comp and pensions, they get essentially the same tax breaks—and accounting benefits—by taking out life insurance on workers.

TO DIE FOR

Though the investments are essentially locked up in the insurance policies, companies receive tax-free cash when employees and former employees die whether in car accidents, in plane crashes, or from illness. Even people who are murdered or accidentally killed at work produce death benefits for their employers.

Companies report the death benefits as income, though they usually refer to them by opaque terms. The St. Louis–based Panera Bread Company calls them “mortality dividends” and refers to a death benefit as a “mortality income receivable” in its filings.

Banks have the largest obligations for executive pay and pensions, so it’s not surprising that they are also the biggest buyers of life insurance on workers, which they call “bank-owned life insurance,” or BOLI. Industry consultants estimate that over the coming decades, banks will receive more than $400 billion in death benefits as their retirees and former employees die. Financial filings occasionally disclose income triggered by deaths. Pacific State Bancorp, of Stockton, California, reported $2.6 million in income from a death benefit in 2008. A subsidiary of Conseco, Bankers Life and Casualty, bought life insurance on employees in 2006 and got an almost immediate payout of $2.7 million that year after an employee died.

Most families have no clue that their relatives are covered. Irma Johnson certainly didn’t. Her husband, Daniel, had been a credit-risk manager for Southwest Bank of Texas, which was a predecessor to Amegy Bank. He was diagnosed with two cancerous brain tumors in 1999 and underwent two surgeries and radiation treatment that initially impaired his speech and left him unable to walk. He eventually returned to work, but in 2000 the bank criticized his communication skills and job performance and demoted him.

Despite the demotion, in May 2001, a manager took Daniel aside and told him that the compensation committee of the board of directors had selected him to be eligible for supplemental life insurance of $150,000. All he had to do was sign an agreement to receive the coverage, and a consent form authorizing the bank to purchase an insurance policy on his life. Four months later, the bank fired him. When Daniel died in August 2008, his family received no life insurance death benefits, because the company had terminated the family’s policy when it fired him.

Irma Johnson says her husband didn’t have the “necessary capacity” to make financial decisions when he signed the agreement in 2001, and that the bank should have told him how much it would get when he died. She sued in state court in Houston in February 2009; under Texas law, material omissions can constitute a form of fraud. During the proceedings, Irma learned that the bank, which maintained that it had bought the policies to offset the cost of providing “employee benefits,” had received $4.7 million when her husband died…

DEATH AND TAXES

Initially, insurance agents touted the death benefits as the most appealing feature of their plans, and some employers were disappointed when employees didn’t die quickly enough to generate the anticipated “mortality dividends” for that year. In a confidential memo in 1991, an insurance agent wrote to Mutual Benefit Life Insurance Co. that American Electric Power (20,441 employees covered), American Greetings (4,000), R.R. Donnelley (15,624), and Procter & Gamble (14,987) were “acutely aware” that mortality was running at only 50 percent of projected rates.

The Procter & Gamble plan covered only white-collar employees, which might explain its poor death rate (34 percent of projected mortality), the memo noted. But the disappointing death rate at card maker American Greetings was a puzzle, since the plan covered only blue-collar employees, who are expected to have higher mortality rates. (The white-collar employees were covered by a separate policy with Provident.)

Diebold, the agent wrote, had been expecting $675,300 in death benefits since adopting the plan; so far, it was expecting only one “mortality dividend” of $98,000. “Do you think that a mortality dividend of that size relative to their current shortfall will give them comfort?” the memo said.

A company the agent called NCC had a better death rate, he noted: People were dying at 78 percent expected mortality. “However, this includes three suicides within the first year which is highly unusual”—NCC had not had one suicide in twenty-five years until 1990. “Without these suicides, NCC would be running at 33% expected mortality. This fact highly concerns me.”

To keep track of when employees and retirees die, employers regularly check the Social Security Administration’s database of deaths. That’s how CM Holdings monitored its dead former employees. Page after page of a 1990 document called a “Death Run” lays out the names, ages, and Social Security numbers of more than 1,400 who would be worth more dead than alive. Also included was the amount of money the company was to receive when each employee died, even if the death occurred long after he or she left the job. Older workers would bring the company about $120,000 to $200,000 each, while younger workers would generate $400,000 to almost $500,000 each, the document said. (Younger workers yield bigger payouts because, based on actuarial calculations, they are less likely to die soon, so the premium amount buys more coverage for them.)

One of these workers was Felipe M. Tillman. Born in 1963, Tillman was an unlikely source of revenue for CM Holdings. A music lover whose taste ran from opera to jazz and even country music, he played keyboards and drums, sang, and was choral director at his Tulsa, Oklahoma, church. To make ends meet, he took part-time jobs in record stores, including a brief stint at a Camelot Music outlet owned by CM Holdings. As a minimum-wage, part-time employee, he didn’t have health coverage or other benefits. But CM Holdings nonetheless took out a policy on his life. It didn’t have to wait long for a payoff. Tillman died in 1992, of complications from AIDS. He was twenty-nine years old.

CM Holdings used the $168,875 death benefit it received when Tillman died to pay for executive compensation, among other things. Company documents also show that $280 went to Star County Children’s Services to help cover child support payments owed by a nephew of Camelot Music’s founder, who was working at the company at the time.

Another name on the company’s “Death Run” was Margaret Reynolds, of Uniontown, Ohio, born in 1936. Margaret was an administrative assistant and buyer for CM Holdings, making $21,000 a year. In the 1990s, she began deteriorating from the effects of amyotrophic lateral sclerosis, or Lou Gehrig’s disease. In her final years, her adult children, who took turns caring for her, begged the company to provide $5,000 to pay for a special wheelchair so they could take their mother to church. “They said it wasn’t covered,” her son John Reynolds recalled bitterly. His mother died in 1998 at age sixty-two. Her family received a $21,000 benefit from a life insurance policy provided to employees by the company; CM Holdings received a death benefit payout of $180,000.

 

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Wasting Libby: The True Story of How the WR Grace Corporation Left a Montana Town to Die (and Got Away With It) by Andrea Peacock

Wasting Libby chronicles decades of neglect by state and federal agencies, which allowed the Grace corporation to reap millions in profits from the largest vermiculite mine in the world, while knowingly exposing generations of Montana residents to fatal levels of asbestos-contaminated dust. Libby’s story, which culminates in the 2009 criminal trial of the corporation’s executives, is ultimately the tale of the families who fought Grace for justice, who refused to sacrifice their dignity even as they lost their lives.

Introduction

We love Montana for its wide open spaces, for its pristine forests, clear water and clean air. Montana represents the last best place, a place where wild animals roam free and people can live in caring communities and enjoy individual freedoms.

It is a state where neighbors look after each other. It’s a state of mind. It is where I’ve been fortunate enough to hang my hat for thirty years.

What happened in the town of Libby, Montana is a tragedy.

Andrea Peacock’s insightful book tells the story of a small town in Montana that was contaminated and then discarded.

Libby is littered with the dead and the dying, poisoned by the corporation that employed them and ignored by a government it trusted to protect them. As she uncovers the layers of betrayal, she also discovers the resilience of the people of Libby.

Through her reporting we discover the many aspects of human nature. She illustrates man’s inhumanity to his fellow man, but also the pioneer spirit of a town in Montana that pulls itself up by its bootstraps and moves forward. – Jeff Bridges

For additional information on this book click on link below.

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