I think this litigation will create jobs in the private sector

Now that Mitch Daniels has blocked access to basic health care for 20,000 people in Indiana on orders from a powerful constituency within the GOP, he’s heading out to launch his national career.

While he’s doing that, I’d like to go back to Indiana for a moment and look at some uncomfortable facts that contradict the national narrative this campaign trip is intended to create.

Specifically, I’d like to look at one instance of his alleged competence and responsible stewardship of taxpayer money.

Daniels is currently, right now, embroiled in a lawsuit related to his failed privatization of the administrative services end of food stamp and Medicaid programs. Daniels outsourced the work to IBM. It was abundantly clear the privatization plan was a disaster right from the start for the people who receive food stamps and Medicaid, but Daniels waited two years to stop the statewide roll-out, because the conservative ideology behind the plan was pure and infallible.

IBM sued on the contract Daniels had negotiated and signed on behalf of the people of Indiana, when Daniels (eventually) fired them. That all by itself is amusing, because Daniels stripped middle class public employees of their bargaining rights with a stroke of his mighty executive pen shortly after assuming office. Sadly, Mitch found out IBM doesn’t go down as easy as teachers or firefighters do. They hauled his ass right into court, rather than having their lawyers march on the statehouse and sing solidarity songs.

You have to love the giant corporation versus the conservative governor who hired the giant corporation angle of this whole thing. Nary a union thug in sight, yet here we are bickering over terms of a contract to deliver public services. Why aren’t there any calls for IBM to be reasonable and preemptively surrender all contract rights? That’s what conservatives and media are insisting public employees do. The math demands it! Well, only if you’re a teacher, apparently.

In any event, Daniels won a round this week. He is refusing to be deposed by IBM on his personal involvement in this scheme. An Indiana court said that was okay by them.

Here’s an interesting crony capitalism sideshow to the bigger story:

Indiana’s human services agency has a $5.25 million contract with a private law firm, including the brother of a key aide to Gov. Mitch Daniels, to represent the state in its fight over a canceled IBM Corp. welfare outsourcing deal.

Barnes & Thornburg of Indianapolis was hired despite several conflicts of interest arising from the fact that it also represents former IBM partners involved in the welfare deal, according to a copy of the law firm’s contract obtained by The Associated Press. Bryan Corbin, a spokesman for the state attorney general’s office, said in an e-mail to the AP that “hiring this firm was a specific request of the Governor’s Office.”

Indiana House Speaker Patrick Bauer, however, called it foolish for the agency to hire outside counsel when the Indiana attorney general’s office could represent it for no cost in attorneys’ fees.”To spend another $5 million is bad money after bad money, and the taxpayers are the losers,” said Bauer, a Democrat from South Bend.

Daniels, a Republican, fired Armonk, N.Y.-based IBM last October from a 10-year, $1.37 billion contract to introduce call centers, document imaging and other automation to the process of applying for food stamps, Medicaid and other benefits. IBM and Indiana sued each other in state court last May.

67 replies
  1. 1
    Gin & Tonic says:

    IBM has a shitload of very good and very expensive lawyers, and they do not give up. They are not called the Borg for nothing.

  2. 2
    Mark S. says:

    a 10-year, $1.37 billion contract to introduce call centers, document imaging and other automation to the process of applying for food stamps, Medicaid and other benefits

    That sounds like a great deal you got there, Mitch. Jesus.

  3. 3
    Just Some Fuckhead says:

    Great post!

    You have to love the giant corporation versus the conservative governor who hired the giant corporation angle of this whole thing. Nary a union thug in sight, yet here we are bickering over terms of a contract to deliver public services. Why aren’t there any calls for IBM to be reasonable and preemptively surrender all contract rights? That’s what conservatives and media are insisting public employees do. The math demands it! Well, only if you’re a teacher, apparently.

  4. 4
    dollared says:

    Oh Kay, you are such a goo-goo. And that whole concept that law should apply equally to all – how quaint!

  5. 5
    Foxhunter says:

    But Hertzberg said he was an amiable fellow and the least of all evils.

    New Yorker.

    Dutifully blogged by our friend, Sully.

    *Edited to add the /snark/ tag. Apologies.

  6. 6
    Valdivia says:

    Just wanted to say: more of this Kay. You do excellent godly work shining a light on this. Specially after all the swooning going on about this guy being the second coming of a nice, good, sane, responsible republican. I forwarded your work to Bennen hopefully he’ll link.

  7. 7
    Valdivia says:


    and The New Republic. Also. Too.

  8. 8
    Jay in Oregon says:

    @Gin & Tonic:

    I thought the IBM lawyers were referred to as the Nazgul…

  9. 9
    JCT says:

    Thanks for this, kay — this guy is a putz.

    And just today he visited the Upper East Side in Manhattan to be vetted by a nice crowd of “luminaries” like Peggy Noonan. They are desperately looking for a “grownup” to run for the Republican nomination.

    Hmmmm, I wonder what old Peggy uses as a litmus test?

    Daniels is seriously damaged goods and very disingenuous — his “explanations” for his disastrous run as GWBs OMB are farcical. Instead of “Where’s the beef” we should ask him “where’s the surplus” since he squandered it.

  10. 10
    Foxhunter says:

    @Valdivia: Had not seen that one yet. Ususal suspects I see….

  11. 11
    Ash Can says:

    So Mitch Daniels has the state hand $5.25 million over to his aide’s brother’s law firm instead of letting the attorney general’s office, which is already getting paid to do this sort of thing, handle this. Creating private sector jobs indeed.

  12. 12
    Emma says:

    I’m turning into a bitter, nasty person, but I hope they drag each other through the mud and all of Daniels’s wash is set out to dry in full public view.

  13. 13
    Kay says:

    @Just Some Fuckhead:

    Thank you. Daniels met with the conservative public intellectuals at an event last night, so we can expect a barrage of drooling propaganda in all of major media. Peggy Noonan was there. She’s cranking out some lyrical garbage right now, I bet.

  14. 14
    Gin & Tonic says:

    @Jay in Oregon: I think you’re right. I knew it was something in that general (fantasy) area.

  15. 15
    Jay in Oregon says:


    conservative public intellectuals

    I know what those words mean individually, but when you string them together like that it don’t make sense…

  16. 16
    Kay says:

    @Ash Can:

    I think that could be coincidental. The bigger issue (to me) is a. the conflict, and b. the free lawyers at the AG’s office.
    Is it wise for the people of Indiana to hire the law firm with a huge, glaring conflict?
    Why do that? How about we just skip that potential problem?

  17. 17
    Foxhunter says:


    Daniels met with the conservative public intellectuals at an event last night, so we can expect a barrage of drooling propaganda in all of major media

    The ‘crew’ as it were:

    “On Tuesday, at the Gilded Age Upper East Side mansion that houses the nascent Bloomberg View, Daniels lunched with a baker’s dozen of journo-pundits ranging politics-wise from rightish (Peggy Noonan, Ramesh Ponnuru) and leftish (Michael Kinsley, Josh Marshall) to neitherish (Mark Halperin), and outlet-wise from mass market (George Stephanopoulos) to niche market.”


  18. 18
    Valdivia says:


    here you go.

  19. 19
    Valdivia says:

    I see I’m going to be ready for hara kiri very soon if the pimping of this guy keeps up. ugh.

  20. 20
    JCT says:

    @Foxhunter: Mark Halperin = “neitherish”? Yikes, this is the guy who’s biggest decision everyday is whether to blow McCain or GWB.

    One question is how we explain obvious issues like hiring law firms with big conflicts of interest to an electorate that seems to have very basic deficiencies in judging character? Kind of subtle to them, right?

    At least the debate visuals will be amusing.

  21. 21
    kay says:


    to neitherish (Mark Halperin),

    “Neitherish”, here, means “completely compromised soul-dead hack”.

    He’s the worst of the bunch, because his ideological position consists of “what will get me invited onto Morning Joe next week?”.

  22. 22
    Foxhunter says:


    Halperin as “neitherish”?

    That certainly had to be 4tehlulz. I mean, SRSLY.

    I expected better from the proprietor at the New Yorker, but it appears that peddling of CW for 2012 is beginning in earnerst from the insider circle.

  23. 23
    Mr. Long Form says:

    I am a Hoosier, and every time the national media dorks start touting Mitch Daniels as a reasonable, non-crazy, good-old Republican, I want to puke. He’s a standard-issue corporate shill. He’d appoint four more corporate shills to the Supreme Court to complement the five they already have. Does anyone ever mention that he sold (to a bunch of Spanish-speaking foreigners no less!) the Indiana Toll Road for $4 billion, and that’s the only reason he hasn’t run up the huge deficits other states have (that and the fact that we don’t actually have any state services to spend money on.)

    Also, too: Obama’s case against Mitch “fiscally conservative” Daniels should be these four words: George Bush’s Budget Director.

  24. 24
    kay says:


    The key will be Indiana. Remember when national pundits kept whining “no one knows” Obama’s record? Anyone who wanted to know Obama’s record had only to pick up a Chicago newspaper, and start reading, which is what I did. They followed him constantly (of course), for years. The same is true for Daniels, in Indiana.

  25. 25
    Foxhunter says:


    “Neitherish”, here, means “completely compromised soul-dead hack”.

    His mention on this fine blog (of late) seems to be with increasing frequency not seen since his master fellating of the Decider.

    I guess we should expect more in the coming months now that silly season is upon us.

  26. 26
    dmsilev says:


    neitherish (Mark Halperin)

    I think ‘netherish’ would be a more accurate description of which regions Halperin draws his opinions from.

  27. 27
    Captain Goto says:

    Doghouse Riley has been all over this asshole from the get-go.

    Once more, tell me why Sully gets paid to peddle his tripe, instead of Doghouse, Roy Edroso and our illustrious host?

    Never mind, I know…

  28. 28
    Valdivia says:


    Exactly. But for some reason these people (read the Village, with the exception of Bennen and Dana Goldstein) are just pimping this guy for all they’re worth. That’s fine for a day or two, I guess the question is if they’ll follow up and be hard hitting on all the lies and obfuscations of his record and what he stands for, cause you know, he is mild mannered instead of rabid. Who cares if he is soft-voiced if his polices are 100% octane wingnut? We have to start pushing these folks to look at the record. Instead of the soft focused well light portrait they’re giving right now.

    your work is invaluable in this.

  29. 29
    SenyorDave says:

    @Foxhunter: I just barely was able to stop the vomit forming as I read through the illustrious cast of douchebags. But where was Will, or Krauthammer? They would have rounded out the field of asshats.

    Daniels should automatically be disqualified as a serious person, since he was GWB’s budget director when he had the Iraq and Afghanistan wars as “off-budget”. If a stock company ever tried that, the CEO and CFO would be sitting in a jail cell (not a bad thought for GWB and his people).

    If Daniels runs, every ad should reference his time as Bush’ budget director, and his fiscal irresponsiblity.

  30. 30
    freelancer says:

    Benen just kills in this post:

    What’s striking, though, is how far standards have fallen. Mitch Daniels is presented as the thinking voter’s Republican because (a) he speaks in complete sentences; (b) right or wrong, he seems to take policy more seriously than Romney, Pawlenty, & Co.; (c) he’s the “non-threatening” Republican who doesn’t behave like a “public clown”; and (d) one can listen to his speeches without reaching for the Maalox bottle.
    Is now a good time to note that the bar should be set much higher?
    Mitch Daniels claims to care primarily about fiscal issues, but his record as Bush’s budget director is utterly humiliating. He claims to have no use for hot-button social issues and prefers a culture war “truce,” but just announced his support to cut off funding for Planned Parenthood clinics in Indiana, leaving untold thousands of Hoosier families without access to preventive health care.
    Maybe none of this matters. Republican primary voters probably won’t care much that Daniels is loved by D.C. pundits and was deemed acceptably charming at a luncheon on the Upper East Side. Indeed, just the opposite is true — the GOP base seems likely to resent him for this sort of thing.

  31. 31
    kay says:


    I’m sort of up for a Daniels candidacy, because he’s the ideological daddy of Scott Walker and my own governor, John Kasich. I think it’d be easy to tie him to them. It’s all the same shit, across the board, they’re just not as good at sliding it past people.

  32. 32
    Ken says:

    Some article, thanks. This seems to be an interesting case of racketeering public monies to a crony’s firm. Obviously, I’m not an attorney but I’m only partially kidding.

    So, for next election cycle, does Daniels cozy up to IBM for a contribution?

  33. 33
    NonyNony says:


    But for some reason these people (read the Village, with the exception of Bennen and Dana Goldstein) are just pimping this guy for all they’re worth.

    This early on, the “some reason” would be the horse race. The Village needs to report on the horse race – without it most of these guys wouldn’t know what to talk about.

    Why do you think we’ve REALLY moved into seemingly perpetual campaign mode? Because all of those Village reporters need something to write about to fill copy – and talking about the horse race fills copy fast. Write up a horse race story, file it and be out in time to hit the cocktail party circuit.

  34. 34
    kay says:


    I honestly think it’s a misguided sense of “fairness” (in otherwise rational people, so not the hacks.
    If they see Obama as serious, and they do, there has to be a serious conservative, or it’s not even-steven. We just saw it with Ryan. The announced he was serious. Why? Hell if I know. Because he furrows his brow?
    I don’t agree with it, I think even-steven reporting is ridiculous and patronizing and childish, but that sometimes seems to be what they’re attempting to do.

  35. 35
    MikeJ says:

    Was the IBM plan to fix welfare to swap out each person randomly until it worked?

  36. 36
    Valdivia says:


    I think that’s partly it, and partly a deep desire not to acknowledge that the Republican party is now a fevered swamp of wingnuts and oligarchs. The Hertzeberg piece–I like reading him generally–was vomit inducing. The affect is what counts, who cares about the policies and what they would cause? This is how we got Bush as President because all that mattered was affect. Fucking hell.

  37. 37
    JCT says:


    This is how we got Bush as President because all that mattered was affect. Fucking hell.

    I was just thinking that this felt like Bush redux. The tiny little collection of even pseudo-reasonable Republicans must be losing their cookies over their Presidential options.

  38. 38
    Just Some Fuckhead says:


    Was the IBM plan to fix welfare to swap out each person randomly until it worked?

    Haha. No, IBM’s plan was to manage the welfare program which means do the same thing the state did except with $profit$.

  39. 39
    Anoniminous says:

    Find it vastly entertaining to watch the GOP antics. The GOP party bosses are running around trying to find a candidate their whack-a-loon, moronic, bigoted – granted there is some overlap of the preceding list – base will vote for in the primaries that also has some vague chance of appealing to the average voter.

    Right now, they got dick.

  40. 40
    Valdivia says:

    @JCT: @JCT:

    It’s really too bad they don’t take comments at that particular New Yorker blog cause I would tell him what I think in a short few words. Just wow. If this is how they’re going to treat Daniels we’re royally fucked.

  41. 41
    mk3872 says:

    This whole set of efforts by Republican governors has one real purpose in mind: to pin high unemployment and uninsured on Obama.

    They realize that they now have the control over state-level numbers and no one will ever blame them.

    Just like no one will blame Congress for lack of jobs policies. Only Obama will get the blame for bad #s due to states slashing their budgets.

  42. 42
    danimal says:

    I have several years experience in the public assistance field, and I am ever grateful for Mitch Daniels (and Rick Perry in Texas) for demonstrating the capability and cost-effectiveness of having the almighty private sector run their states public assistance programs. The complete flusterclucks that occurred on their watches have led to increased job security for me and my cohorts.

    Thank you, Mitch Daniels and IBM, Rick Perry and Accenture, for showing the way. You have my gratitude.

  43. 43
    Muley Graves says:

    Two and only two companies have fought the US Justice Department to a draw. One is At&T, back in the old monopoly days. Guess who the other one is?

    They’ll have Mitch’s head mounted to a wall by the time they’re through with him. IBM does not like people who back out of contracts.

  44. 44
    SiubhanDuinne says:

    Daniels is launching his national career with a big juicy fluffing from the Dick Whisperer http://www.washingtonpost.com/.....story.html

    Although his last paragraph could be taken either way:

    So funny, so folksy, and so friendly to the disadvantaged: It is eerily similar to how another Republican governor presented himself to America a dozen springs ago.

  45. 45
    Josie says:

    Kay – Your research and reporting are top notch. I have a feeling that the contents of your filing cabinet will be an invaluable resource in the 2012 campaign.

  46. 46
    JCT says:


    So funny, so folksy, and so friendly to the disadvantaged: It is eerily similar to how another Republican governor presented himself to America a dozen springs ago.


  47. 47
    catclub says:

    @Jay in Oregon: Do I detect a reader of Groklaw? SCO and lessons in self immolation with an assist from the Nazgul.
    Good times.

  48. 48
    kay says:


    I love that he sent older Medicaid recipients off to a call center. That must have gone well.

    Mitch Daniels doesn’t know any old people :)

  49. 49
    Hal says:

    Heard him on NPR today, and he sounded clueless. One reporter asked him to expand on some comment he made about fighting terrorism, and he asked the reporter to remind him what he said; much to the laughter of the press assembled.

    In fact, they seemed to think he was hil-harry-ho-ous, so I’m waiting for the crowning of the next great GOP savior.

  50. 50
    Valdivia says:

    May I suggest Kay assemble all her Daniels posts in one-forwardable-post so we can spread far and wide? It will be sorely needed this week. Specially about health care and other programs.

  51. 51
    feebog says:

    The timing for the trial is interesting:

    In separate orders issued today, Dreyer postponed the trial to Feb. 6, 2012. It had been scheduled for October.

    Right about the time the Primaries start heating up. Be a shame if Daniels had to cancel a few campaign stops to testify in this clusterfuck.

  52. 52
    Calouste says:


    Mitch Daniels doesn’t know any poor old people :)

    Minor detail added.

  53. 53
    Lancelot Link says:

    You know who else outsourced to IBM…
    (apologies to Mike Godwin)

  54. 54
    DanielX says:

    Well, yes….”our man Mitch”, as the saying goes here in the great Hoosier state (not MY man Mitch, you understand) is pretty much a standard issue corporate Republican, which is why the wingnut/teatard/nutcase Repubs here don’t especially like him. His recent move to eliminate funding for Planned Parenthood from the state budget was done to try to shore up his support from that side of the party, who are lukewarm at best about him and in some cases detest him. Repeat after me: Mitch Daniels does not personally give a shit about abortion, immigration or a host of other wingnut issues. His support from the good ole boy/corporate types is rock solid, precisely because he is a corporate/business Republican. And yes, he should be automatically disqualified because of his history as W’s budget director, among other things – he’s got some history, does Mitch, and I don’t care if he rides a Harley or not. He does have some brains, as witness his foresight in getting out of W’s administration before the roof fell in, but he’s as much of a sleaze as any of the R’s other potential candidates. You just KNOW what to expect if he’s being pimped by George Will, God help us.

    In other news from our fair state, one of his potential successors announced his candidacy for governor today – none other than Representative Mike Pence (R-asshole). Those who think that Scott Walker, governor/asshat-in-chief of Wisconsin is on the right track are gonna love them some Mike Pence, you betcha. Hell, he might even win – trust me when I say that there are a lot of profoundly ignorant voters here. Hell, we’re still (unsuccessfully) trying to get free textbooks for schoolchildren here – ain’t happened yet.

  55. 55
    Valdivia says:


    so does the Pence-Daniels combo mean Obama has no go in 2012 of winning the State?

  56. 56
    Robert Waldmann says:

    Noooooooo. I don’t care about capital letters. Do not type “right now they got dick.” I automatically read “right now they got dick Cheney.” Please please use decent language like “penis” or “cock” or “putz”. I can’t stand Dick in the context of Republicans and the Presidency.

    Notice I wouldn’t mind Dick Nixon so much.

  57. 57
    timb says:

    @Ash Can: As a Hoosier and a lawyer, let me help you there. B&T IS the biggest firm in Indiana and hiring them makes perfect sense if you decide the AG’s office is unsuitable, which, of course it is not. B&T is also very connected to the powers that be in this city and state and that means it’s VERY Republican.

    Soooo, I’ve been waiting for someone to take up this issue. I find it especially ironic that the governor is getting an educational aware, since it his main contribution to education has been gutting it, so rich people stay rich. This is a guy who refused to live the Governor’s Mansion, because he wanted to live in his giant mansion in the suburbs (he’s an average Joe!) and he leased a public entity to a private company for less than half of the total value (he’s fiscally responsible!) and my taxes have gone up thrice. He’s a fraud, whose sole attraction seems to be Democrats and Limbaugh hate him

  58. 58
    timb says:

    @Emma: What Emma said. There are also sorts of Daniels clones in this state and I need them to go down with the ship

  59. 59
    Wick says:

    @timb B & T is just not connected to republicans. Susan Bayh used to be there, as did Judge Hamilton. They are well connected on both sides of the aisle.

  60. 60
    Malron says:

    Sadly, a lot of people in Northwestern Indiana probably won’t care because they work in Illinois. On the other hand, I bet the Hoosiers who commute to their jobs in the Land of Lincoln aren’t complaining as much about Illinois Governor Pat Quinn’s tax hikes anymore, are they?

  61. 61
    timb says:

    good point, Wick

  62. 62
    timb says:

    @Valdivia: I don’t think he ever could have won us again

  63. 63
    Valdivia says:


    really? why?

  64. 64
    Xenos says:

    @danimal: IBM was running the public welfare programs? As in staffing the jobs in addition to providing the technical support? And this was supposed to save money?

    I would love to see the business plan that explains how this should actually happen.

  65. 65
    DanielX says:

    @Valdivia: Not likely – in 2008 the Repubs here were sort of dazed and confused after eight years of W, who just about everybody here (Rs and Ds alike) could perceive was an incompetent at best and a dictator in the making at worst. (Yeah, yeah, Obama’s no better on the dictatorial point, yada yada yada.) McCain seemed like more of the same, and Snowbilly Snooki (to steal from Tbogg) was just the cherry on the sundae….so to speak. But then, THEN, the Kenyan interloper blackislamosocialistfacist (did I mention he’s black?) got elected, and all of the sudden the Repubs were revitalized and indeed up on their hind legs howling with rage. Particularly among older voters in the state, the election of a BLACKblackBLACK president was viewed as heralding the end of the world, and bigod they weren’t going to take it lying down. Nay, they weren’t going to take it while sitting on their Medicare-provided electric scooters either! Not to mention that the business community (remember that Barnes & Thornburg thing – those guys are connected; I mean SERIOUSLY connected) generally hates Obama with a passion.

    Right now the Republican base, in Indiana anyway, is a lot more fired up than the Democratic base, and they’re going to stay that way while that black guy with the funny name is in the Oval Office. You gotta remember that the Dems’ base feels very let down by Obama – God knows why, anybody could see what kind of Pres he was going to be when he named Geithner and Summers as leading members of his economic team. (The day we have publically financed elections in this country, THEN come talk to me about Obama’s various betrayals of progressive ideals and all that good shit. Meantime the dude has to get funds from somewhere to get reelected and $10 individual donations ain’t gonna do it. Wtf did you expect?) On the Republican side, a lot of people simply don’t regard Obama as a legimate President, democratically elected or not – because he’s a Democrat, black or both. (This tendency is not limited to the Hoosier state, amazingly enough.) If a Repub wins, it’s because he’s got great ideas, charm, charisma and just flat out deserves it – if a Dem wins it’s because of voter fraud/intimidation and/or some other form of dirty politics – talk about a redundant phrase. However, Mitch is popular with a lot of people, no matter what – got to up the 27% crazification factor in this state to at least 35%. Daniels would probably take the state, although there are a lot of people here who think President Palin and Vice PResident Bachman sound like really good ideas. Pence on the other hand looks but is a known dumb fuck/twit, and while people can and do vote for dumb fucks for President, they usually but not always prefer at least a minimal level of competence from the guv. On the other hand he’ll pull the teabag vote, so who knows? To complete the circle, I think Obama has about as much chance on winning the state in 2012 as I do of winning this year’s Indianapolis 500, or Tunch has of passing a food bowl.

  66. 66
    timb says:

    @DanielX: So well done….I will add that Indiana is the home of, and has been since the 1850’s of a particularly rancid sort of conservatism. Long before national Republicans became anti-intellectual crazies, Hoosiers were sending Homer Capehart to make a fool of himself. Almost 50% of Hoosier Republicans and, certainly, the only Hoosiers to ever speak about politics on TV, call themselves Tea Partiers.

    These people and their religious nutball brethren distrusted McCain and they did not vote in 2008. They will next time.

    Meanwhile, those people are old and are being replaced in the state by younger and more Hispanic voters (which is why you would never see a liberal on an Indianapolis TV station; those people ONLY care about the suburban white Republicans. Those new voters is how Obama won this state and in the years to come, they will prove more decisive, but not in 2012

  67. 67
    DanielX says:

    @timb: True dat….it’s not for nothing that Indiana has been called the most northern southern state. For a lot of folks here, ignorance truly is bliss.

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