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Bush Administration Awards China No-Bid Contract To Scan For Nukes

Old 03-24-06, 12:33 PM
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Bush Administration Awards China No-Bid Contract To Scan For Nukes

From Yahoo News:
WASHINGTON - In the aftermath of the Dubai ports dispute, the Bush administration is hiring a Hong Kong conglomerate to help detect nuclear materials inside cargo passing through the Bahamas to the United States and elsewhere.

The administration acknowledges the no-bid contract with Hutchison Whampoa Ltd. represents the first time a foreign company will be involved in running a sophisticated U.S. radiation detector at an overseas port without American customs agents present.

Freeport in the Bahamas is 65 miles from the U.S. coast, where cargo would be likely to be inspected again. The contract is currently being finalized.

The administration is negotiating a second no-bid contract for a Philippine company to install radiation detectors in its home country, according to documents obtained by The Associated Press. At dozens of other overseas ports, foreign governments are primarily responsible for scanning cargo.

While President Bush recently reassured Congress that foreigners would not manage security at U.S. ports, the Hutchison deal in the Bahamas illustrates how the administration is relying on foreign companies at overseas ports to safeguard cargo headed to the United States.

Hutchison Whampoa is the world's largest ports operator and among the industry's most-respected companies. It was an early adopter of U.S. anti-terror measures. But its billionaire chairman, Li Ka-Shing, also has substantial business ties to China's government that have raised U.S. concerns over the years.

"Li Ka-Shing is pretty close to a lot of senior leaders of the Chinese government and the Chinese Communist Party," said Larry M. Wortzel, head of a U.S. government commission that studies China security and economic issues. But Wortzel said Hutchison operates independently from Beijing, and he described Li as "a very legitimate international businessman."

"One can conceive legitimate security concerns and would hope either the Homeland Security Department or the intelligence services of the United States work very hard to satisfy those concerns," Wortzel said.

Three years ago, the Bush administration effectively blocked a Hutchison subsidiary from buying part of a bankrupt U.S. telecommunications company, Global Crossing Ltd., on national security grounds.

And a U.S. military intelligence report, once marked "secret," cited Hutchison in 1999 as a potential risk for smuggling arms and other prohibited materials into the United States from the Bahamas.

Hutchison's port operations in the Bahamas and Panama "could provide a conduit for illegal shipments of technology or prohibited items from the West to the PRC (People's Republic of China), or facilitate the movement of arms and other prohibited items into the Americas," the now-declassified assessment said.

The CIA currently has no security concerns about Hutchison's port operations, and the administration believes the pending deal with the foreign company would be safe, officials said.

Supervised by Bahamian customs officials, Hutchison employees will drive the towering, truck-like radiation scanner that moves slowly over large cargo containers and scans them for radiation that might be emitted by plutonium or a radiological weapon.

Any positive reading would set off alarms monitored simultaneously by Bahamian customs inspectors at Freeport and by U.S. Customs and Border Protection officials working at an anti-terrorism center 800 miles away in northern Virginia. Any alarm would prompt a closer inspection of the cargo, and there are multiple layers of security to prevent tampering, officials said.

"The equipment operates itself," said Bryan Wilkes, a spokesman for the U.S. National Nuclear Security Administration, the agency negotiating the contract. "It's not going to be someone standing at the controls pressing buttons and flipping switches."

A lawmaker who helped lead the opposition to the Dubai ports deal isn't so confident. Neither are some security experts. They question whether the U.S. should pay a foreign company with ties to China to keep radioactive material out of the United States.

"Giving a no-bid contract to a foreign company to carry out the most sensitive security screening for radioactive materials at ports abroad raises many questions," said Sen. Charles Schumer (news, bio, voting record), D-N.Y.

A low-paid employee with access to the screening equipment could frustrate international security by studying how the equipment works and which materials set off its alarms, warned a retired U.S. Customs investigator who specialized in smuggling cases.

"Money buys a lot of things," Robert Sheridan said. "The fact that foreign workers would have access to how the United States screens various containers for nuclear material and how this technology scrutinizes the containers all those things allow someone with a nefarious intention to thwart the screening."

Other experts discounted concerns. They cited Hutchison's reputation as a leading ports company and said the United States inevitably must rely for some security on large commercial operators in the global maritime industry.

"We must not allow an unwarranted fear of foreign ownership or involvement in offshore operations to impair our ability to protect against nuclear weapons being smuggled into this country," said Sen. Norm Coleman (news, bio, voting record), R-Minn., a member of the Senate Committee on Homeland Security and Governmental Affairs. "We must work with these foreign companies."

A former Coast Guard commander, Stephen Flynn, said foreign companies sometimes prove more trustworthy and susceptible to U.S. influence than governments.

"It's a very fragile system," Flynn said. Foreign companies "recognize the U.S. has the capacity and willingness to exercise a kill switch if something goes wrong."

A spokesman for Hutchison's ports subsidiary, Anthony Tam, said the company "is a strong supporter in port security initiatives."

"In the case of the Bahamas, our local personnel are working alongside with U.S. customs officials to identify and inspect U.S.-bound containers that could be carrying radioactive materials," Tam said.

However, there are no U.S. customs agents checking any cargo containers at the Hutchison port in Freeport. Under the contract, no U.S. officials would be stationed permanently in the Bahamas with the radiation scanner.

The administration is finalizing the contract amid a national debate over maritime security sparked by the furor over now-abandoned plans by Dubai-owned DP World to take over significant operations at major U.S. ports.

Hutchison operates the sprawling Freeport Container Port on Grand Bahama Island. Its subsidiary, Hutchison Port Holdings, has operations in more than 20 countries but none in the United States.

Contract documents, obtained by The Associated Press, indicate Hutchison will be paid roughly $6 million. The contract is for one year with options for three years.

The Energy Department's National Nuclear Security Administration is negotiating the Bahamas contract under a $121 million security program it calls the "second line of defense." Wilkes, the NNSA spokesman, said the Bahamian government dictated that the U.S. give the contract to Hutchison.

"It's their country, their port. The driver of the mobile carrier is the contractor selected by their government. We had no say or no choice," he said. "We are fortunate to have allies who are signing these agreements with us."

Some security experts said that is a weak explanation in the Bahamas, with its close reliance on the United States. The administration could insist that the Bahamas permit U.S. Customs agents to operate at the port, said Albert Santoli, an expert on national security issues in Asia and the Pacific.

"Why would they not accept that?" said Santoli, a former national security aide to Rep. Dana Rohrabacher (news, bio, voting record), R-Calif. "There is an interest in the Bahamas and every other country in the region to make sure the U.S. stays safe and strong. That's how this should be negotiated."

Flynn, the former Coast Guard commander, agreed the Bahamas would readily accept such a proposal but said the U.S. is short of trained customs agents to send overseas.

Contract documents obtained by the AP show at least one other foreign company is involved in the U.S. radiation-detection program.

A separate, no-bid $4 million contract the Bush administration is negotiating would pay a Manila-based company, International Container Terminal Services Inc., to install radiation detectors at the Philippines' largest port.

The U.S. says the Manila company is not being paid to operate the radiation monitors once they are installed. But two International Container executives and a senior official at the government's Philippine Nuclear Research Institute said the company will run the detectors on behalf of the institute and the country's customs bureau. U.S. officials said they will investigate further how the Filipinos plan to use the equipment.

___

Associated Press writers Bill Foreman in Hong Kong and Jim Gomez in Manila contributed to this story.
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Old 03-24-06, 12:36 PM
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Probably figured they were in the best position given all the technology Clinton sold them.


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Old 03-24-06, 12:43 PM
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We generally like the poster of an article to provide some discussion as to why they posted the article instead of just throwing it out there. We all are capable of reading the news.
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Old 03-24-06, 12:52 PM
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So we're hiring a foreign company to run a U.S. radiation detector at a port in the Bahamas. And U.S. customs agents aren't even permanently stationed there to make cargo inspections.

Okay.

Why can't we run the detector ourselves?
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Old 03-24-06, 12:55 PM
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The Energy Department's National Nuclear Security Administration is negotiating the Bahamas contract under a $121 million security program it calls the "second line of defense." Wilkes, the NNSA spokesman, said the Bahamian government dictated that the U.S. give the contract to Hutchison.

"It's their country, their port. The driver of the mobile carrier is the contractor selected by their government. We had no say or no choice," he said. "We are fortunate to have allies who are signing these agreements with us."

Some security experts said that is a weak explanation in the Bahamas, with its close reliance on the United States. The administration could insist that the Bahamas permit U.S. Customs agents to operate at the port, said Albert Santoli, an expert on national security issues in Asia and the Pacific.
Some "expert." Where did they say that the Bahamas wouldn't "permit U.S. Customs agents to operate at the port?"

That's right, they didn't.
Flynn, the former Coast Guard commander, agreed the Bahamas would readily accept such a proposal but said the U.S. is short of trained customs agents to send overseas.
So there won't be any agents "stationed permanently" at this port. Does that mean they'll never be on site? Besides the only thing U.S. customs agents are allowed to do in foreign ports is suggest which containers to inspect. It's up to the locals to actually do the inspections or not.
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Old 03-24-06, 12:56 PM
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We generally don't fix stuff in this country until something bad happens. I think it's great that we're willing to roll the dice on this one.

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Old 03-24-06, 01:08 PM
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Originally Posted by SeekOnce
Why can't we run the detector ourselves?
They call it U.S. Customs for a reason. Inspecting containers overseas is a relatively new idea and it requires the cooperation of the customs officials of the host country (who perform the actual inspections).

From what I've read the detection equipment is paid for, operated, and maintained by the host country (although from this article it looks like we may be paying for one in the Phillippines ).
The administration is negotiating a second no-bid contract for a Philippine company to install radiation detectors in its home country, according to documents obtained by The Associated Press. At dozens of other overseas ports, foreign governments are primarily responsible for scanning cargo.
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Old 03-24-06, 01:19 PM
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I picked post 7 as the over/under for when someone would try to turn the discussion to Clinton. I shouldn't have underestimated you, Dave.
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Old 03-24-06, 01:21 PM
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Can people get it clear that a Hong Kong company does not equate to a country called China? Geez, get the facts straight.
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Old 03-24-06, 01:28 PM
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Originally Posted by Grimfarrow
Can people get it clear that a Hong Kong company does not equate to a country called China? Geez, get the facts straight.
Last time I checked, Beijing took over Hong Kong.
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Old 03-24-06, 01:34 PM
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I like the honkanease.
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Old 03-24-06, 02:17 PM
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They put up a tough fight against the Chinese trying to take over Unocal, but allow them to scan for potential nukes coming to this country?
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Old 03-24-06, 02:24 PM
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Originally Posted by Grimfarrow
Can people get it clear that a Hong Kong company does not equate to a country called China? Geez, get the facts straight.
Also, can they get it clear that a Hong Kong company does not equate to a country called Dubai?
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Old 03-24-06, 02:35 PM
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Originally Posted by VinVega
Last time I checked, Beijing took over Hong Kong.
Too bad you didn't check that they still function like two separate countries, albeit with meddlings at times by the Beijing overlords. But Hong Kong companies are a far, far cry from Chinese ones - like the fact that Hong Kong's 100% capitalistic, for one.

And the Chinese taking over UNOCAL is once again totally different - that was a CHINESE company which is partly controlled by the state. Hutchision Whampoa is not government-owned in any way, shape or form. And it's a Hong Kong company.

I resent that HK is getting lumped in as China when in reality it's far from the same. I moved to Hong Kong for work, but I would never, ever live in China.
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Old 03-24-06, 02:44 PM
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Is it correct to say that Hong Kong has limited autonomy - except in the areas of defense and foreign policy?
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Old 03-24-06, 02:50 PM
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Hong Kong leaders are puppets and installed by mainland.
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Old 03-24-06, 02:59 PM
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Like the puppets installed by the British before 1997?

So why is it that the current puppet is a knight of the British Empire?
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Old 03-24-06, 03:12 PM
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Chinese. Good. Arabs. Bad.
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Old 03-24-06, 04:02 PM
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And now laptops...

State Department computer purchase from China draws fire
By Keith Bradsher The New York Times

FRIDAY, MARCH 24, 2006

HONG KONG A U.S. State Department purchase of more than 15,000 computers produced by Lenovo Group, a company controlled by the Chinese government, is starting to draw criticism in the latest sign of American unease about the role of foreign companies in the American economy.

The computers, worth more than $13 million, are coming from factories in Raleigh, North Carolina, and Monterrey, Mexico, that were part of the personal computer division that Lenovo purchased from International Business Machines last May.

Sean McCormack, a State Department spokesman, said at the department's daily media briefing on Wednesday that the computers were intended for unclassified systems and would be serviced by the former IBM division.

The cost of the contracts was carefully scrutinized, he said, without discussing security issues in any detail.

"The United States takes its responsibilities seriously in terms of getting the best value for the dollar whenever we spend American taxpayer dollars," he said. [IBM laptops are the best value for the dollar? ]

The computer contracts are nonetheless drawing criticism from the diverse group of liberal and conservative critics who have been warning about China's growing power for years. These critics have been encouraged by the congressional scrutiny given to a plan by a company controlled by the royal family of Dubai in the United Arab Emirates to acquire operations at six American ports; the company has since agreed to relinquish those operations.

The critics warn that the computer deal could help China spy on American embassies and intelligence-gathering activities by planting extra hardware and software in the computers.

"The opportunities for intelligence gains by the Chinese are phenomenal," said Michael Wessel, a member of the U.S.-China Economic & Security Review Commission, which was created by Congress to monitor and report on the bilateral relationship.

Larry Wortzel, the panel's chairman, said in an interview two weeks ago that while he would not be concerned if Airbus moved an aircraft production line to China, he would be worried if Lenovo ever started to sell computers to U.S. government agencies involved in foreign affairs. Responding Thursday to the Lenovo deal, he said, "Members of Congress, I think, will react very strongly when they see a deal like this come through."

Lenovo has been combining the former IBM operations with its own, and the company announced on March 16 that it would eliminate 1,000 jobs in North America, Europe and Asia.

Lenovo is a publicly traded subsidiary of Legend Holdings, which was started by the Chinese government in 1984 and is still controlled by the government. Lenovo declined on Thursday to comment on the computer sales to the State Department.

Word of the deal began to trickle out Monday when a Lenovo distributor, CDW Government, a wholly owned subsidiary of CDW Corp., sent a press release to business media announcing its success in winning contracts to help the State Department modernize its information technology systems.

CDW, based in Vernon Hills, Illinois, said that it had been carrying out an $11.65 million contract to supply more than 15,000 Lenovo ThinkCentre M51 desktop computers, plus a $1.35 million contract to provide nearly 1,000 Lenovo ThinkCentre M51 minitower computers.

Max Peterson, vice president of federal sales at CDW Government, said that the State Department had approved a list of specific computer models, including the Lenovo models, and had asked computer systems integrators to bid for contracts to meet the department's needs and make their own choices among approved models. CDW won the contracts and chose to begin delivering Lenovo computers at a pace of 500 a week starting in November, he said.

Chinese ownership of Lenovo was never discussed with the State Department through the contract process and the computer deliveries, Peterson said. He noted that the Committee on Foreign Investment in the United States, led by the Treasury Department, had approved the Lenovo acquisition of the IBM division more than a year ago.

The same committee cleared the Dubai ports deal, Wessel said, adding that the panel had no procedures for following up on acquisitions later to see if they had affected national security.

Peterson said that with $1.8 billion in annual public procurement contracts to supply information technology to the federal government and other public bodies, CDW Government was supplying Lenovo computers to a wide range of federal agencies every day. He declined to provide examples of these agencies.

David Barboza in Shanghai contributed reporting for this story.

HONG KONG A U.S. State Department purchase of more than 15,000 computers produced by Lenovo Group, a company controlled by the Chinese government, is starting to draw criticism in the latest sign of American unease about the role of foreign companies in the American economy.

The computers, worth more than $13 million, are coming from factories in Raleigh, North Carolina, and Monterrey, Mexico, that were part of the personal computer division that Lenovo purchased from International Business Machines last May.

Sean McCormack, a State Department spokesman, said at the department's daily media briefing on Wednesday that the computers were intended for unclassified systems and would be serviced by the former IBM division.

The cost of the contracts was carefully scrutinized, he said, without discussing security issues in any detail.

"The United States takes its responsibilities seriously in terms of getting the best value for the dollar whenever we spend American taxpayer dollars," he said.

The computer contracts are nonetheless drawing criticism from the diverse group of liberal and conservative critics who have been warning about China's growing power for years. These critics have been encouraged by the congressional scrutiny given to a plan by a company controlled by the royal family of Dubai in the United Arab Emirates to acquire operations at six American ports; the company has since agreed to relinquish those operations.

The critics warn that the computer deal could help China spy on American embassies and intelligence-gathering activities by planting extra hardware and software in the computers.

"The opportunities for intelligence gains by the Chinese are phenomenal," said Michael Wessel, a member of the U.S.-China Economic & Security Review Commission, which was created by Congress to monitor and report on the bilateral relationship.

Larry Wortzel, the panel's chairman, said in an interview two weeks ago that while he would not be concerned if Airbus moved an aircraft production line to China, he would be worried if Lenovo ever started to sell computers to U.S. government agencies involved in foreign affairs. Responding Thursday to the Lenovo deal, he said, "Members of Congress, I think, will react very strongly when they see a deal like this come through."

Lenovo has been combining the former IBM operations with its own, and the company announced on March 16 that it would eliminate 1,000 jobs in North America, Europe and Asia.

Lenovo is a publicly traded subsidiary of Legend Holdings, which was started by the Chinese government in 1984 and is still controlled by the government. Lenovo declined on Thursday to comment on the computer sales to the State Department.

Word of the deal began to trickle out Monday when a Lenovo distributor, CDW Government, a wholly owned subsidiary of CDW Corp., sent a press release to business media announcing its success in winning contracts to help the State Department modernize its information technology systems.

CDW, based in Vernon Hills, Illinois, said that it had been carrying out an $11.65 million contract to supply more than 15,000 Lenovo ThinkCentre M51 desktop computers, plus a $1.35 million contract to provide nearly 1,000 Lenovo ThinkCentre M51 minitower computers.

Max Peterson, vice president of federal sales at CDW Government, said that the State Department had approved a list of specific computer models, including the Lenovo models, and had asked computer systems integrators to bid for contracts to meet the department's needs and make their own choices among approved models. CDW won the contracts and chose to begin delivering Lenovo computers at a pace of 500 a week starting in November, he said.

Chinese ownership of Lenovo was never discussed with the State Department through the contract process and the computer deliveries, Peterson said. He noted that the Committee on Foreign Investment in the United States, led by the Treasury Department, had approved the Lenovo acquisition of the IBM division more than a year ago.

The same committee cleared the Dubai ports deal, Wessel said, adding that the panel had no procedures for following up on acquisitions later to see if they had affected national security.

Peterson said that with $1.8 billion in annual public procurement contracts to supply information technology to the federal government and other public bodies, CDW Government was supplying Lenovo computers to a wide range of federal agencies every day. He declined to provide examples of these agencies.

http://www.iht.com/articles/2006/03/...ess/lenovo.php
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Old 03-24-06, 06:19 PM
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They could implement a chip of some sort in the laptop and transmit the data back to China.
I heard the US did something similar to the Soviet Union during the Cold War by hiding mini camera inside a Xerox copier in Soviet embassy. Everytime they copied something, the camera automatically takes a snapshot. Copier goes down, agent masking as repairman goes in fix the copier and remove the old film.
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Old 03-24-06, 06:42 PM
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except the compturs are made in the u.s. and its on unclasified systems
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Old 03-24-06, 07:10 PM
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I think you mean: The computers are put together in the US. Parts are from China.
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Old 03-24-06, 07:18 PM
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parts are probably from taiwan. isn't that where most ram comes from?
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Old 03-24-06, 07:19 PM
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Yeah probably. Down With Taiwan!

Seriously though, I wonder if the Bush Administration is setting this deal up, so then they can come back to the Arab deal later this year.
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Old 03-24-06, 07:43 PM
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RAM is the least component to worry about. It does nothing other than hold data to be processed by other components.

Support chips are very much made in China and support chips such as ASICs in particular are prime for being programmed to perform "unexpected" tasks.
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