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Backgrounder #1069 on Federal Budget

March 4, 1996

Top Ten Political Slush Funds

By

INTRODUCTION

          The federal budget provides numerous slush funds that can be used to subsidize the lobbying and political activities of special-interest groups. The agendas of these tax-subsidized groups tend toward bigger government, more spending, and increased regulation. Every American is forced to finance this system that allows well-connected Washington-based groups to use taxpayer funds to advance political causes to which many Americans object. Congress can put a stop to subsidized politicking by refusing to fund the most egregiously abused programs.

Top Ten Federal Programs That Actively Subsidize Politics and Lobbying1

1. AmeriCorps $427 million

2. Sr. Community Service Employment Program $400 million

3. Legal Services Corporation $400 million

4. Title X Family Planning $189 million

5. National Endowment for the Humanities $180 million

6. Market Promotion Program $75 million

7. Senior Environmental Employment Program $45 million

8. Superfund Worker Training $32 million

9. HHS Discretionary Aging Projects $26 million

10. Telecomm. & Info. Infrastructure Assistance $25 million


Total          $1.8 billion

          In 1995, Congress attempted to address this problem by ending grants to groups that engage in lobbying. Unfortunately, the restriction Congress approved applies only to one category of lobbying organizations. Efforts to erect broader restrictions on taxpayer subsidies for lobbyists, principally the Istook-McIntosh-Ehrlich Amendment, were stymied. They should continue in 1996.

          While broad efforts to end "welfare for lobbyists" continue, Congress also should identify and eliminate those programs that serve most often to prop up special interests. The best way to do this is to shut off the largest spigots of funding for big-government activist groups. Ten programs stand out. Some have been slated for reform by one or both houses of Congress, but no changes have been enacted into law. All deserve to be eliminated outright.

1. AmeriCorps          $427 Million

          In 1993-1994, AmeriCorps employed about 20,000 "volunteers"described as "working all over America, helping people ­­ person to person."2 In reality, a significant number of these paid volunteers work in federal or state bureaucracies, government-funded programs, or political action organizations3. Moreover, ignoring the Corporation's mission statement to address the nation's problems through direct community service, several AmeriCorps programs have engaged in advocacy and direct partisan politics at the expense of the taxpayers.

          Section 132(a)(3) of the National and Community Service Trust Act of 1993 clearly states that "any approved national service position provided to an applicant will not be used to perform service that provides a direct benefit to any... partisan political organization.... " But in San Francisco, the AmeriCorps "Summer of Safety" program organized 40 groups to rally against a "three strikes and you're out" crime bill provision.4

          Elsewhere, one of the biggest abusers of AmeriCorps' mission was a nonprofit group located in Cole, Colorado, which was supposed to use its volunteers to help people in northeast Denver neighborhoods. Instead, according to state records, leaders of the Cole Coalition sent program participants to hand out political fliers directly attacking a local City Councilman, Hiawatha Davis. "The 'volunteers' had to draft campaign fliers and distribute them door-to-door in April and May [1995] when Davis and [Mayor Wellington] Webb were fighting for re-election."5 According to 21-year-old volunteer Joseph Taylor, "We realized there was something politically partisan. The more we began to pose a threat to blowing the whistle, the more they tried to pacify us. They kept saying... this was a great position we were in, making public officials accountable for their jobs."6 Although the Cole Coalition was stripped of its funding, the AmeriCorps program lives on ­­ as does the potential for abuse.

          In proposing the AmeriCorps program, President Clinton declared that "National service will be America at its best ­­ building community, offering opportunity, and rewarding responsibility. National service is a challenge for Americans from every background and way of life, and it values something far more than money."7 Like many other government programs, however, AmeriCorps has not lived up to its promise. Subsidizing political activism does not qualify as responsible behavior.

2. Senior Community Service Employment Program          $400 Million

          The Senior Community Service Employment Program (SCSEP) is operated by the Department of Labor. It provides more than $400 million in annual funding for senior citizen employment.8 The stated purpose of this program, authorized by Title V of the Older Americans Act of 1965, is "To provide, foster, and promote part-time work opportunities (usually 20 hours per week) in community service activities for low income persons who are 55 years of age and older. To the extent feasible, the program assists and promotes the transition of program enrollees into unsubsidized employment."9

          States, national nonprofits, and territories are eligible to receive grants. In reality, however, 78 percent (more than $320 million) of SCSEP grant money is segregated from state funding to subsidize nine national nonprofit organizations. The Catalog of Federal Domestic Assistance states explicitly that "The Department [of Labor] annually renews grant agreements. There are no plans to add additional organizations." Moreover, "Awards are not on a competitive basis."

          Fortunately, the FY 1996 House Appropriations Committee report begins to address this problem. Although the program's funding was reduced by only $50 million in the House proposal, the report states that "The Committee has funded the program under the basic law rather than continuing the past practice of earmarking 78% of the funds for national contractors and 22% for the states."

          Even under this reform, however, the nine recipient organizations are not prohibited from receiving funds. They simply are thrown into the same pot as the states, and federal bureaucrats might be able to award the grants in a similar fashion. To stop the potential for abuse, these organizations should be cut off entirely.

3. Legal Services Corporation          $400 Million

          The Legal Services Corporation (LSC) was established by the Legal Services Corporation Act of 1974 to provide free legal assistance to the indigent in civil, non-criminal matters. Its origins lie in President Lyndon Johnson's War on Poverty, specifically with the Office of Economic Opportunity (OEO), which in 1965 began making direct grants to local legal aid organizations.10

          The Corporation uses its budget (currently $400 million) to funnel federal tax dollars to 323 private groups around the country. These taxpayer-funded legal groups then engage in political and lobbying activities, often at the expense of the genuine legal services needed by poor people.

          Legal Services suffers from an institutionalized ideological bias. Its attorneys regularly promote racial preferences and illegal immigration. Its grantees are sufficiently politicized to become involved in congressional redistricting, litigation, and campaigning on ballot referendum questions. Over the past 30 years, the LSC has been the legal pillar of the welfare state. Through litigation, advocacy, and lobbying, it has helped to generate hundreds of billions of dollars in increased local, state, and federal welfare spending and the addition of millions of people to the welfare rolls11. It has sued to stop welfare reform in New Jersey and in other states. It even has engaged in actions ­­ litigating to prevent the eviction of drug dealers from public housing, for example ­­ that harm the poor.

          The LSC clearly has abandoned its mission to such a degree that no meaningful reform can be enacted. There is only one way to end this glaring abuse of the taxpayers' funds and trust: abolish the LSC.

4. Title X Family Planning          $189 Million

          Perhaps a more accurate name for these multiple slush funds would be "Planned Parenthood Planned Giving Programs." Despite the fact that much of Planned Parenthood's agenda is repulsive to large numbers of Americans, this high-profile political organization receives a substantial portion of its revenue each year through government "contributions." Planned Parenthood and its affiliates join with a handful of other active organizations in taking advantage of these costly grant programs.

The key components of Title X include:

Family Planning Services/Umbrella Councils ($183 Million)

          Among the organizations funded under this heading are Planned Parenthood of Wisconsin ($2.6 million), Planned Parenthood of Minnesota ($2.3 million), the New Jersey Family Planning League ($4.2 million), and the California Family Planning Council ($11.7 million).

          These nonprofit groups receive $62.6 million ­­ one-third of the total annual allocation. However, much of the remaining $120.4 million is likely to benefit similar nonprofits. According to the Catalog of Federal Domestic Assistance, "Projects include: (1) A State Health Department which subcontracts to service providers throughout an entire State; and (2) a service provider to serve several counties or a smaller geographical area."

          Accordingly, many states will subgrant or subcontract with nonprofits that engage in lobbying all levels of government.

Personnel Training ($5 Million)

          The stated purpose of this program is "To provide training to Title X project staffs; to improve utilization and career development of paraprofessional and paramedical manpower in family planning services, particularly in rural areas. "

          The notice in the Catalog of Federal Domestic Assistance states that "funds may not be used in programs where abortion is a method of family planning." This prohibition notwithstanding, at least 20 percent of these funds was allocated to Planned Parenthood chapters and family planning councils that typically deal with abortion and engage in legislative or political advocacy.

Service Delivery Improvement ($500,000)

          The stated purpose of this program is "To promote service delivery improvement through research studies, and application of knowledge."

          Examples of previous funding include studies of factors influencing women to discontinue attending family planning clinics and studies of particular family planning needs of underserved subgroups of low-income women. In other words, the principal purpose of this half-million dollar program is to discover why people are not demanding even more government-subsidized services.

5. National Endowment for the Humanities          $180 Million

          The National Endowment for the Humanities actively promotes a liberal political and ideological agenda. In recent years, it consistently has funded politically correct projects, including the highly controversial National History Standards that were denounced by former NEH Chair Lynne Cheney and other serious scholars. These so-called standards took political correctness to a new level by ignoring major events in American history that fail to bolster the liberal academic's world view. Simply put, the recent work of the NEH has served to undermine support for Western civilization.

          Abuse of federal grant dollars for political purposes is rampant in the NEH's most prominent current project, the so-called National Conversation. At the cost of millions of dollars, the endowment is subsidizing such special-interest groups as the National Council on Aging, American Bar Association, and American Library Association, none of which is any stranger to government grants. Once again, the "Beltway Bandits" have managed to manipulate the bureaucracy to tap the public purse.

          In creating the National Conversation, NEH Chairman Sheldon Hackney stated that he sought "a national conversation open to all Americans, a conversation in which all voices are heard in which we grapple seriously with the meaning of American pluralism." Apparently, Hackney believes that meaningful public dialogue is possible only if the government intervenes and pays for it to happen, and that the increasing number of Americans participating in talk radio ­­ a largely conservative phenomenon ­­ are not "serious."

          The fact of the matter is that these so-called conversations are simply a high-profile tool to promote a politically correct agenda. The NEH describes the National Council on the Aging's grant, for example, as directed partly toward financing "short film clips [that] will serve as a catalyst for discussion on topics such as... crossing ethnic boundaries, and practicing politics."12

          Scattered throughout NEH documents are references to ethnic diversity and "equality and commonality." For example, the description of the grant to the American Bar Association states that its purpose is to foster

more than one hundred nationwide conversations using legal cases to explore the meaning of "e pluribus unum" (out of many, one) through five topics: race, gender, affirmative action, and socioeconomic equality; the place of religion and religious expression in the "public square"; pluralism in public schools and curriculums; immigration and American identity; and controversial ideas and speech in a diverse society.

          The effect of establishing "discourse" based on such an agenda inevitably is to encourage the perpetuation of a liberal hegemony over American political life.

6. Market Promotion Program          $75 Million

          The stated purpose of the Market Promotion Program (MPP) is "to encourage the development, maintenance, and expansion of commercial export markets for U.S. agricultural commodities through cost-share assistance to eligible trade organizations that implement a foreign market development program."

          The funds from the MPP go to support some of the largest and most vocal special interests in the country. In 1995, for example, MPP grantees opposed bipartisan efforts to reform farm subsidies. They fought successfully against the effort to eliminate this program outright, and they also fought reforms designed to decrease taxpayer subsidies to farmers, particularly large corporate farms. Once again, all of these self-serving efforts were subsidized unwittingly by the American taxpayer.

          The few grantees under the Market Promotion Program that are not special-interest associations are large, profitable corporations benefiting from a slush fund that moonlights as corporate welfare.

7. Senior Environmental Employment Program          $45 Million

          The Senior Environmental Employment Program (SEE) purports to "use the talents of Americans 55 years of age or older [to] provide technical assistance to Federal, State, and local environmental agencies for projects of pollution prevention, abatement and control." Only private, nonprofit organizations designated by the Secretary of Labor and on the "approved list" pursuant to Title V of the Older Americans Act of 1965 may receive funding. The approvals read like a laundry list of special-interest groups.

          The annual appropriation for SEE is $45 million, spread out over approximately 250 grants per year. No matching funds are required. Funded projects often have provided senior citizens to EPA for "research and general administrative and clerical tasks," as well as for surveys and monitoring projects.

          This program provides a dual benefit to the promoters of big government and increased regulation: Numerous senior citizen groups receive subsidies for their lobbying and political activity, and the EPA benefits from additional troops to enforce its regulatory agenda. According to the Federal Assistance Awards Database System, virtually every regional EPA office and every division within the agency's headquarters receives support from these grants. This permits the agency to evade existing employment caps ­­ without anyone knowing.

          For example, internal EPA documents obtained by the Heritage Foundation indicate that in March 1995, the agency's Region 10 offices in Seattle had more than 50 employees from special-interest groups on staff, including seven from the National Council of Senior Citizens and six from the American Association of Retired Persons (AARP). There is every reason to believe similar situations exist in every other regional office, as well as at EPA headquarters in Washington.

8. Superfund Worker Training Program          $32 Million

          This program provides nothing short of direct payoffs to unions which, in turn, work with their allies in the environmental movement. Authorized by the Superfund law, these grants purport to provide "practical health and safety training programs [for those] who are engaged in activities related to hazardous materials."

          Much like its namesake, however, the Superfund Worker Training program is a failure. Despite the billions of dollars spent on Superfund itself, less than one-quarter of the most dangerous toxic waste sites have been cleaned up. Why, then, train people in failure? Millions of dollars are wasted preparing people to clean up waste sites that never get cleaned up.

          The nature of this program is demonstrated by its blatantly political selection of grantees, which include many of the nation's most powerful labor unions. (A selection of recent beneficiaries can be found in the appendix to this paper.) The Department is conducting a program evaluation that should be ready sometime this spring. It is hoped that this evaluation finally will note the potential pitfalls of providing more than $25 million of $32 million in total annual funding to organized labor.

9. HHS Discretionary Aging Projects          $26 Million

          This program, administered by the Administration on Aging, is one of three programs authorized under the Older Americans Act that serve to underwrite the activities of senior-oriented special-interest groups, such as the 96 percent federally funded National Council of Senior Citizens. The stated purpose of the Discretionary Aging Projects program is "to provide adequately trained personnel in the field of aging, improve knowledge of the problems and needs of the elderly, and to demonstrate better ways of improving the quality of life for the elderly."

          However benign its stated purpose, most of this program's funds flow to organizations that promote government interventionism. Grantees in 1994 included some of the major groups that opposed efforts to reform Medicare, including the American Association of Retired Persons, Families USA, and the National Committee to Preserve Social Security and Medicare. Other grantees (like the Child Welfare League of America) stand out not simply for their political advocacy activities, but also because there is no clear relationship between their missions and the field of aging.

10. Telecommunications and Information Infrastructure Assistance         $25 Million

          The Telecommunications and Information Infrastructure Assistance Program (TIIAP) is operated by the National Telecommunications and Information Administration (NTIA) in the U.S. Department of Commerce and is a key element of Vice President Al Gore's attempt to impose central planning on the "information superhighway." The program gave out $24.4 million in FY 1994 and was slated to dole out $36 million in 1995. In 1994, 92 grants were made. Last year, 120 subsidies were given out to help numerous liberal groups post propaganda on the information superhighway.

          According to NTIA documents, in 1994, Planned Parenthood Federation of America received $300,000 to set up a "nationwide on-line information system" for itself and all 164 of its affiliates. Likewise, in 1994, a California organization called LatinoNet received funding to "establish a network of regional field representatives" and "demonstrate a model for building a national grassroots information system," among other things.

          Organizations that filed proposals and applications for funding in the FY 1995 process include Families USA, lead lobbyists for Hillary Clinton's failed attempt at a government takeover of the U.S. health care system; ACORN, which led noisy demonstrations in Congress last year; the Congressional Black Caucus Foundation; and Citizens Fund, an affiliate of Citizen Action, an aggressive grassroots lobbying organization. While these groups did not receive funding last year, they clearly are interested in the program and no doubt will seek subsidies in the future.

          The most egregious abuse of the TIIAP program was discovered last fall. A $200,000 grant was provided to an online bulletin board called HandsNet to establish a training center and recruit additional advocacy organizations to its ranks.

          An examination of postings on the HandsNet Internet site, makes it clear that the group's principal purpose is political advocacy. The site has been used in recent months to fight welfare reform and the Istook-McIntosh-Ehrlich Amendment to end taxpayer-subsidized political corruption, among other issues. HandsNet offers three key information services: Action Alerts, a Weekly Digest that summarizes the Alerts, and daily updates on key issues. Members of HandsNet include such liberal special interests as the Children's Defense Fund, the Alliance for Justice, OMB Watch, and Families USA.

CONCLUSION

         Government funding of political activism is indefensible. Yet hundreds of groups now receive government grants which are used, and used effectively, to subsidize their political activities. Americans deserve better treatment of their hard-earned tax dollars. Funneling millions of dollars in public subsidies to special interests to subsidize political advocacy qualifies as a significant abuse of the public's money and the public trust.

         Congress should continue to consider ending all government grants. But in the meantime, it can reduce government-subsidized politicking significantly by eliminating funding for those programs most abused by political activists.

[This study uses material prepared by Ken Boehm and Peter Flaherty of the National Legal and Policy Center (for the Legal Services Corporation section) and James F. Hirni, Research Assistant at the Heritage Foundation (for the AmeriCorps section)].

APPENDIX

         The following tables list some of the recent grantees under some of the programs noted in this paper. The dollar amounts represent funding between July 1993 and June 1994 and should not be considered complete. Identification numbers shown correspond with those in the Catalog of Federal Domestic Assistance and are provided to permit readers to examine the programs in more detail.

         While the data shown are correct, actual amounts may well be larger due to inconsistent reporting by federal agencies. The organizations listed in these tables do not necessarily engage in legislative or political advocacy, but are shown to illustrate the types of grantees found in each program

Market Promotion Program          Catalog #10.600
Department of Agriculture

Organization Subsidy

U.S. Meat Export Federation          $7,200,000

Cotton Council International          6,440,000

USA Poultry and Egg Export Council          5,120,000

Wine Institute          4,950,000

Mid-America International Agri-Trade          4,470,000

Southern United States Trade Association          4,470,000

East U.S. Agricultural and Food Export          4,430,000

Alaska Seafood Marketing Institute          4,400,000

Western U.S. Agricultural Trade Association          4,020,000

State of Florida, Department of Citrus          3,800,000

USA Rice Council          3,660,000

U.S. Feed Grains Council          3,650,000

California Walnut Commission          2,890,000

Almond Board of California          2,810,000

California Table Grape Commission          2,520,000

Pillsbury Company          2,222,000

California Prune Board          2,180,000

U.S. Mink Export Development Council          1,940,000

California Pistachio Commission          1,150,000

Pet Food Institute          1,140,000

California Cling Peach/Pacific Coast Cannery          1,090,000

California Tree Fruit Agreement          950,000

National Peanut Council          870,000

USA Fresh Sweet Cherry Promotion          863,000

National Dry Bean Council          830,000

National Sunflower Association          620,000

California Strawberry Commission          520,000

Northwest Wine Promotion Coalition          470,000

USA Dry Pea and Lentil Council          400,000

California Avocado Commission          370,000

New York Wine and Grape Foundation          350,000

Catfish Institute          340,000

International Apple Institute          340,000

Asparagus USA          310,000

Ginseng Board of Wisconsin          260,000

National Honey Board          230,000

AGRIPAC, Inc.          205,000

U.S./South Africa Trade Association          150,000

Campbell Soup Company          40,000

Entenmann's, Inc.          40,000

Del Monte Foods, USA          20,000

Senior Community Service Employment Program          Catalog #17.235
Department of Labor: Employment and Training Administration

Organization Subsidy

Green Thumb, Inc.          $102,000,000

National Council of Senior Citizens          61,000,000

American Association of Retired Persons          48,000,000

National Council on Aging          38,000,000

Asociation Nacional Pro Personas Mayores          12,000,000

National Caucus and Center on Black Aged, Inc.          12,000,000

National Urban League          4,000,000

National Indian Council on Aging          2,000,000

National Pacific/Asian Resource Center          2,000,000

Senior Environmental Employment Program          Catalog #66.508
Environmental Protection Agency

Organization Subsidy

AARP          $20,000,000

National Caucus and Center on Black Aged, Inc.          1,500,000

Asociation Nacional Pro Personas Mayores          1,500,000

National Council on the Aging, Inc.          185,000

National Council of Senior Citizens          165,000

National Asian Pacific Center on Aging          150,000

National Association for Hispanic Elderly          150,000

Discretionary Aging Projects          Catalog #93.048
Department of Health and Human Services

Organization Subsidy

National Association of State Units on Aging          $1,132,000

National Academy of Sciences          733,000

National Association of Area Agencies on Aging           700,000

AARP          625,000

National Citizens Coalition for Nursing Home Reform          500,000

National Association of Nutrition Agencies          430,000

National Caucus and Center on Black Aged, Inc.          400,000

Three Feathers Associates          400,000

American Public Welfare Association          350,000

Pension Rights Center          320,000

Asociation Nacional Pro Personas Mayores          300,000

U.S. Department of Commerce          300,000

Washington Business Group on Health          300,000

National Hispanic Council on Aging          284,000

National Council of Negro Women, Inc.          280,000

Andrus Gerontology Center          250,000

Center for Social Gerontology          250,000

Community Transportation Association          250,000

Families USA Foundation          250,000

National Council on Aging, Inc.          250,000

National Indian Council on Aging          250,000

National Pacific/Asian Resource Center          212,000

American Bar Association          200,000

Child Welfare League of America, Inc.          200,000

National Senior Citizens Law Center          200,000

Senior Focus          200,000

Legal Services for the Elderly, Inc.          175,000

Association for Gerontology and Human Services          173,000

National Consumer Law Center, Inc.          150,000

National Title VI Directors Association          150,000

Alliance for Aging, Inc.          145,000

American Society on Aging          137,000

National Bar Association          120,000

U.S. DHHS, Office of the Secretary          117,000

American Institute of Architects          100,000

Easter Seal Society for Disabled Children          100,000

Legal Services of Northern California          100,000

Older Womens League          100,000

Research Foundation for Mental Hygiene          100,000

U.S. DHHS, Public Health Service          100,000

Sunshine Terrace Foundation, Inc.          98,000

Mental Health Law Project          90,000

National Clearinghouse for Legal Services          90,000

California Advocates for Nursing Home Reform          75,000

Housing Counseling Services, Inc.          75,000

Legal Assistance for Seniors          75,000

National Committee to Preserve Social Security and Medicare          75,000

National Senior Citizens Education and Research Center, Inc.          75,000

U.S. Department of Education          75,000

U.S. DHHS, National Institutes of Health          72,000

American Medical Association          50,000

Catholic Charities USA          50,000

National Committee for the Prevention of Alcoholism          50,000

Gerontological Society of America          30,000




Superfund Worker Training Program          Catalog #93.142
Department of Health and Human Services

Organization Subsidy

Laborers AGC Education Fund          $7,917,000

United Brotherhood of Carpenters          3,723,000

International Chemical Workers Union          3,319,000

Oil, Chemical and Atomic Workers Union          2,898,000

International Union of Operating Engineers          2,532,000

Teamsters          1,716,000

George Meany Center for Labor Studies          850,000

International Association of Firefighters          709,000

United Auto Workers          671,000

Service Employees International Union          628,000

Endnotes:

  1.  The funding levels shown reflect FY 1995 figures as reported in the Catalog of Federal Domestic Assistance or by program administrators.
  2.     President William J. Clinton, State of the Union Address, January 24, 1995.
  3.     For a more complete discussion of the problems with AmeriCorps, see James Hirni, "AmeriCorps: A $575 Million Boondoggle," Heritage Foundation Issue Bulletin No. 212, September 13, 1995.
  4.     Elizabeth Shogren, "Reviews Mixed for Trial Run of Youth Corps," The Los Angeles Times, September 11, 1994, Part A, p. 1.
  5.     Katie Kerwin, "Cole Loses AmeriCorps Funding," Rocky Mountain News, July 22, 1995, p. 14A.
  6.     Ibid.
  7.     Mark Pitsch, "Clinton Launches Sales Campaign for Service Plan," Education Week, Vol. 12, No. 24 (March 10, 1993), p.1.
  8.     See also Marshall Wittmann and Charles P. Griffin, "Federal Budget Targets Nine Seniors Groups for Subsidies," Heritage Foundation Government Integrity Project Report No. 7, November 7, 1995.
  9.     Catalog of Federal Domestic Assistance, program ID 17.235.
  10.     For a more complete discussion of the Legal Services Corporation, see Kenneth F. Boehm and Peter T. Flaherty, "Why the LSC Must Be Abolished," Heritage Foundation Backgrounder No. 1057, October 18, 1995.
  11.     See Howard Phillips and Peter H. Ferrara, "The Real Cost of the LSC: A Two Trillion Dollar Bypass of Electoral Accountability," Conservative Caucus Research, Analysis and Education Foundation, June 14, 1995.
  12.      From NEH World Wide Web site, January

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