Speech in the House of Commons, June 17th 2008. Liddell-Grainger spills the beans on Alan Jones, Colin Port and IBM
I am grateful for the chance to introduce this debate. Before I go into detail, it is my duty to declare two specific and important interests in this matter. First and foremost, I am obviously a Conservative, and it was the last Conservative Government who introduced the private finance initiative in 1992. I have absolutely no objections whatsoever to well-planned PFIs. They make good financial sense, the risk capital comes from the private sector and a decent cut of any reward is designed to end up in the public purse. The Treasury measures success by the simple yardstick that PFIs must be fair, and above all, accountable. They have a highly detailed standard contract procedure, which is understood by all parties. Private finance initiatives have their critics, and things can go wrong, but they are the most tried and trusted example of private partnerships.
My second declaration of interest is much more important. I have a financial stake in the private partnership that we are considering. I live in Somerset and pay taxes to Somerset county council. I have thus become a small shareholder in a huge new joint venture, brokered by the county and run by the global computer giant, IBM. The company is called Southwest One.
The Under-Secretary of State for Communities and Local Government, the hon. Member for Gloucester (Mr. Dhanda), will be familiar with many of my concerns because we have discussed the matter privately and in this place. He listened to my speech in Westminster Hall on 26 March on the subject, and I thank him for his response to it. During that debate, I clearly expressed my anxieties about the way in which the company came into being. I feared corruption, and I made that clear at the time. I can prove that lies have been told and, tonight, I will produce fresh evidence.
I should like to make one thing crystal clear. Some have wrongly accused me of sheltering behind the protection of parliamentary privilege. That is incorrect. I have repeated outside everything that I have ever said about Southwest One here. My website and my blog—modesty forbids, but it is called Mogg the Blog—bear ample testimony to that. I have laid myself open to any legal challenge and, as yet, no one has dared challenge me.
Southwest One is formed of two councils—Somerset county and Taunton Deane borough—plus one police authority, Avon and Somerset constabulary. I remind the House that its business partner is IBM. Hon. Members will be surprised to learn that IBM owns 75 per cent. of the company. That means that, if Southwest One ever makes a profit, the “Big Blue” will pocket three quarters of it. It is a 10-year venture, which was supposed to save money. Somerset council claims that it will save it £200 million—£20 million a year. Yet the county offers no logical explanation or business realisation plan. Why? There is not one.
There is a document, which falsely describes itself as the business realisation plan, but it contains not one single fact or figure. Instead, it is an exercise in vivid imagination, probably written by—dare I say it, and show my venerable age—Andy Pandy. Let me give an example. The document states:
“Improved supplier service levels will result in authorities delivering higher performance.”
Excuse me—what is the precise predicted improvement year after year? We do not have any numbers—but there are no numbers. It is all aspirational garbage.
When did the document appear? Only the other day, after persistent demands under the Freedom of Information Act 2000 from angry trade unionists. I pay tribute to Unison, which has not stopped its campaign. As a taxpayer and Somerset Member of Parliament, I share its anger and frustration. I gently say that I hope that the Minister does, too. It is no way in which to conduct intelligent business.
The Government already rightly publish excellent advice on how to do things. Business Link describes best practice thus:
“Success in a joint venture depends on thorough research and analysis of aims and objectives. This should be followed up with effective communication of the business plan to everyone involved.”
However, the architects of the joint venture company have strangled information to such a tiny trickle that nobody outside the magic inner circle knows what is going on.
Not one elected councillor of any persuasion has been given unrestricted access to the 3,000 page contract, which was signed last September. Most of it stays hidden. Councillors, the unions and the public who, like me, pay for all that, have been treated like mushrooms. We have been left in the dark and, every now and then, some smug soul chucks a bucket of manure over us. The last big bucket of dung was delivered yesterday by the very man who boasted that not a single job would be put at risk by the deal.
As the Under-Secretary knows, I am talking about the chief executive of Somerset county council—a man who has lied consistently to everyone at all stages. Yesterday, he calmly told an audience of more than 200 councillors, almost in a throwaway line, that restructuring services throughout Somerset would probably mean a 30 per cent. cut in the total work force. That would mean Somerset county shedding 5,000 jobs in front-line services and almost 200 each for the five district councils. However, some of those councils do not employ 200 people directly.
Mr. Jones was not authorised or expected to say what he did; it just slipped from his lips like a blob of saliva. He is a man who claims to be guaranteeing the jobs in Southwest One, but he has now told us that thousands of other jobs will be sacrificed by the people of Somerset. That is the ultimate betrayal, and the unions and others now call him Alan “Judas” Jones. The current leader of the council, Jill Shortland, is trying tonight to explain away his words, by claiming that any job losses can be achieved by natural wastage. But the only natural wastage that most people want to see is the immediate departure of that incredibly dangerous man, who has cocked up and covered up for far too long.
We do not even know for sure who is on the board of Southwest One. There are quite a few bods from IBM, naturally, and a couple of harmless councillors who would not say boo to a goose or recognise a balance sheet if it bit them, like a goose, on the bottom, as wellas the chief constable of Avon and Somerset police force, who apparently has the right to sit on a public board. I do not think that I have heard of an arrangement quite as dodgy as that. I am also reliably informed that the chief executive of Somerset county council is another regular attendee at board meetings, but that is hearsay. Mr. Jones has always sworn blind that he plays no active part in Southwest One. I am afraid that that now looks like another whopping lie.
I intend to dwell on Mr. Jones for quite a while. He more than any other public official has been involved in the formation of the company, and it is his ruthless tactics that we must expose. Mr. Jones has a habit of falling out with people and then covering it up. The first effective manager of ISiS—the improving services in Somerset programme, which was the precursor to Southwest One—was a bright and attractive young lady called Jenny Hastings, a constituent. She and Mr. Jones worked effectively and closely, but then there was the falling-out.
All councils have a procedure for resolving grievances—we all know that; we are Members of this place—but in that case there must have been something extremely difficult to resolve. The timing was uncomfortable. The Audit Commission was about to examine the county’s books. Somerset’s quest for five shining stars would have fallen flat on its face if the chief executive had been embroiled in a tacky public industrial tribunal. It took the services of ACAS to thrash out an agreement, under which Mrs. Hastings departed amicably—and silently.
The process also cost an awful lot of public money. I would like to know how much. I made a request under the Freedom of Information Act 2000 more than a year ago, but the council is still dragging its feet and delaying a response.
Mr. Jones’s reputation in county hall is a legend—a remarkable achievement. I am told by the unions that anthrax is more popular than Alan Jones, but I would not know personally. I am no friend of the Liberal Democrats—the Minister knows that, and you certainly do, Mr. Speaker—who hold political control, but I am appalled and horrified by the manner in which Alan Jones manipulates them. There is no better example of that than what happened to one councillor, who was the deputy leader of the Liberal Democrats on the county council.
Chris Ruane (Vale of Clwyd) (Lab): Name him!
Mr. Liddell-Grainger: I thank the hon. Gentleman—that councillor’s name is Paul Buchanan. As Liberal Democrats go, he has the sharpest of brains. He was on the ISiS project, he worked with Jenny Hastings and he knows where all the bodies are buried. He has made no secret of the fact that Alan Jones would be out if he became leader, which he was destined to do. Unfortunately, that claim may have been a bit of an error. Last April, Alan Jones reported Paul Buchanan to the Standards Board for England—no fewer than 50 different trumped-up charges were made against the man.
I sit on the Select Committee on Public Administration, but I am afraid that I do not have a high opinion of the Standards Board for England. The Government’s motives for creating it were sound, and rightly so. After all, we must expect high standards of all our elected councillors and elected representatives. However, the Standards Board system allows injustice.
Alan Jones was able to make those absurd complaints, and because of the way the board is set up, it is obliged to take them seriously, regardless of their nature. As a direct result, Jones silenced his most powerful internal critic. Suddenly, anything and everything that Councillor Paul Buchanan might have been able to say fell under the cloak of sub judice. That scuppered his political chances as well—conveniently. Irrespective of political persuasion, nobody wants a new leader with a shadow of an investigation hanging over him, so the Liberal Democrats ditched their best man, and little Mr. Jones must have relished every second of it.
The original 50 charges, incidentally, were rejected very quickly indeed, but Jones, as usual, came back with fresh new charges. Inexcusably, the Standards Board is still wading through them. This dreadful system has permitted a brutal injustice in order to protect a dangerous unelected megalomaniac as he pursues the goal of a high-risk and very dangerous private partnership.
I am now in a position to prove that one high-level official in county hall acted in support of the chief executive and gave false testimony to the Standards Board. The Secretary of State said in March, and the Minister repeated it in my Westminster Hall debate, that I should take up my concerns with the district auditor. I thank the Minister for that advice; I have done so. However, I am sad to report that the district auditor considers my evidence outside the strict remit of his accountancy, so I have no option other than to call in the Serious Fraud Office.
I am also concerned about the involvement of the Avon and Somerset police in all this. Alan Jones hired the wife of the chief constable to negotiate directly with the preferred bidder, IBM. Now the chief constable himself has the right to sit on the board. I believe that that is too close for comfort and sets a dangerous precedent. Mr. Jones is now beginning to admit some of the ghastly truth about this deal. It will lead to job cuts. Even the police—Avon and Somerset constabulary—are talking seriously of shunting and shredding the front-line office staff in 19 police stations across the force area. The Minister is based in Gloucestershire and I am sure that he would have something to say if his police force were affected.
Southwest One is currently trying to drum up extra trade in Essex, Torbay, Plymouth and Cornwall. Cornwall is becoming a unitary authority and I would say to that council, “Please look carefully at what you are doing; you are being led by the nose; if you go down this line, your expenses, accounts and accountability will be given to IBM based in Southampton”. The same goes for Plymouth. They are both good councils; both need, dare I say it, guidance away from this mad scheme. I think that they should be afraid; they should be very, very afraid.
The ethos of Southwest One is cut-price. The figures do not add up because there are no figures to see. If the other authorities sign up, they will be recklessly risking public money, but this is the way that IBM likes to do business: cutting margins, cheeseparing, getting less for more. The more it makes, the more it takes. Remember that IBM owns 75 per cent. of the action. New software arrives soon; it is called “SAP”, but everywhere SAP has been sold to local government, there have been huge operational problems and big costly overspends. That has happened in Bradford, it is about to happen in Somerset and we are going to pay through the nose for it as taxpayers and as local people.
IBM put in the Rural Payments Agency computers, but we would have been better off with a bag of kiddies’ counting beans than with the mess that was made there. I do not blame the Government; I blame the systems. IBM lost the Department for Transport £970 million—do not take my word for it; the National Audit Office nailed it a couple of weeks ago. IBM cares about only one client—IBM—but that is business, is it not? One has to be tough to flourish and picking a global partner requires similar expertise to be able to counter and understand what is happening. That is what is missing, and that is what I want to address.
Councillors in Somerset have had to rely on reports from a small group of officers, unaccountable to anyone, whose future careers are entwined with Southwest One. Councillors have found it incredibly difficult to represent the public interest because they are not getting impartial advice.
I have a handful of positive suggestions for the Minister to consider. When it comes to Government projects, it is mandatory for the 4Ps agency to do regular reviews. Why not extend that to local government? Just an idea. How about beefing up the Audit Commission so that it can handle these highly complex deals? Either that or allow the National Audit Office to do the job, which would of course come under the Select Committees of this House. Specialist training for councillors on scrutiny committees would be welcome. They could learn about, and hopefully understand, what they ought to be looking for. Please, can we have clear Government guidance on the use of the magical cover-up phrase “commercial confidentiality”? In Somerset, that phrase has been used time and time again to explain away unnecessary secrecy. It is the motto of the county now. It has dropped whatever it used to be and it is now “Commercial confidentiality”. It is used at every turn. Finally, a good deal is only as good as the cost and benefit realisation plan. We must have a mandatory standard.
I am trying to be constructive for the future because I believe that, in Somerset at least, the project has been a complete disaster. Wool has been pulled over the eyes of the elected councillors and Alan Jones is clicking away with his knitting needles. I have been challenged to go and look at the contract. I have offered to take two forensic accountants, one business lawyer, Sir John Banham if he will come—I hope that he will—and possibly a couple of other people to help me. It will take six to seven days to go through it. However, I will not be allowed to see the whole contract or the whole business plan. I will not be allowed to see the correspondence on what made the deal possible and why the group was chosen over British Telecom and Capita. It is joke. It is a sham. The group is hiding. Why?
The unions have been ignored and a cover-up has been the order of the day. It is, I am afraid—I say this gently—no good for the Minister to say that this is a matter for the councils concerned. It has moved on from there. I am afraid that it is no good telling me anymore that the district auditor is the person to go to. We have brought the matter up with the Minister and in business questions already.
Somerset’s crisis today is going to be someone else’s tomorrow, without a shadow of a doubt. We need ministerial intervention, and I am afraid, to put it crudely, we need it pretty darn quick before the disaster gets worse.
My second declaration of interest is much more important. I have a financial stake in the private partnership that we are considering. I live in Somerset and pay taxes to Somerset county council. I have thus become a small shareholder in a huge new joint venture, brokered by the county and run by the global computer giant, IBM. The company is called Southwest One.
The Under-Secretary of State for Communities and Local Government, the hon. Member for Gloucester (Mr. Dhanda), will be familiar with many of my concerns because we have discussed the matter privately and in this place. He listened to my speech in Westminster Hall on 26 March on the subject, and I thank him for his response to it. During that debate, I clearly expressed my anxieties about the way in which the company came into being. I feared corruption, and I made that clear at the time. I can prove that lies have been told and, tonight, I will produce fresh evidence.
I should like to make one thing crystal clear. Some have wrongly accused me of sheltering behind the protection of parliamentary privilege. That is incorrect. I have repeated outside everything that I have ever said about Southwest One here. My website and my blog—modesty forbids, but it is called Mogg the Blog—bear ample testimony to that. I have laid myself open to any legal challenge and, as yet, no one has dared challenge me.
Southwest One is formed of two councils—Somerset county and Taunton Deane borough—plus one police authority, Avon and Somerset constabulary. I remind the House that its business partner is IBM. Hon. Members will be surprised to learn that IBM owns 75 per cent. of the company. That means that, if Southwest One ever makes a profit, the “Big Blue” will pocket three quarters of it. It is a 10-year venture, which was supposed to save money. Somerset council claims that it will save it £200 million—£20 million a year. Yet the county offers no logical explanation or business realisation plan. Why? There is not one.
There is a document, which falsely describes itself as the business realisation plan, but it contains not one single fact or figure. Instead, it is an exercise in vivid imagination, probably written by—dare I say it, and show my venerable age—Andy Pandy. Let me give an example. The document states:
“Improved supplier service levels will result in authorities delivering higher performance.”
Excuse me—what is the precise predicted improvement year after year? We do not have any numbers—but there are no numbers. It is all aspirational garbage.
When did the document appear? Only the other day, after persistent demands under the Freedom of Information Act 2000 from angry trade unionists. I pay tribute to Unison, which has not stopped its campaign. As a taxpayer and Somerset Member of Parliament, I share its anger and frustration. I gently say that I hope that the Minister does, too. It is no way in which to conduct intelligent business.
The Government already rightly publish excellent advice on how to do things. Business Link describes best practice thus:
“Success in a joint venture depends on thorough research and analysis of aims and objectives. This should be followed up with effective communication of the business plan to everyone involved.”
However, the architects of the joint venture company have strangled information to such a tiny trickle that nobody outside the magic inner circle knows what is going on.
Not one elected councillor of any persuasion has been given unrestricted access to the 3,000 page contract, which was signed last September. Most of it stays hidden. Councillors, the unions and the public who, like me, pay for all that, have been treated like mushrooms. We have been left in the dark and, every now and then, some smug soul chucks a bucket of manure over us. The last big bucket of dung was delivered yesterday by the very man who boasted that not a single job would be put at risk by the deal.
As the Under-Secretary knows, I am talking about the chief executive of Somerset county council—a man who has lied consistently to everyone at all stages. Yesterday, he calmly told an audience of more than 200 councillors, almost in a throwaway line, that restructuring services throughout Somerset would probably mean a 30 per cent. cut in the total work force. That would mean Somerset county shedding 5,000 jobs in front-line services and almost 200 each for the five district councils. However, some of those councils do not employ 200 people directly.
Mr. Jones was not authorised or expected to say what he did; it just slipped from his lips like a blob of saliva. He is a man who claims to be guaranteeing the jobs in Southwest One, but he has now told us that thousands of other jobs will be sacrificed by the people of Somerset. That is the ultimate betrayal, and the unions and others now call him Alan “Judas” Jones. The current leader of the council, Jill Shortland, is trying tonight to explain away his words, by claiming that any job losses can be achieved by natural wastage. But the only natural wastage that most people want to see is the immediate departure of that incredibly dangerous man, who has cocked up and covered up for far too long.
We do not even know for sure who is on the board of Southwest One. There are quite a few bods from IBM, naturally, and a couple of harmless councillors who would not say boo to a goose or recognise a balance sheet if it bit them, like a goose, on the bottom, as wellas the chief constable of Avon and Somerset police force, who apparently has the right to sit on a public board. I do not think that I have heard of an arrangement quite as dodgy as that. I am also reliably informed that the chief executive of Somerset county council is another regular attendee at board meetings, but that is hearsay. Mr. Jones has always sworn blind that he plays no active part in Southwest One. I am afraid that that now looks like another whopping lie.
I intend to dwell on Mr. Jones for quite a while. He more than any other public official has been involved in the formation of the company, and it is his ruthless tactics that we must expose. Mr. Jones has a habit of falling out with people and then covering it up. The first effective manager of ISiS—the improving services in Somerset programme, which was the precursor to Southwest One—was a bright and attractive young lady called Jenny Hastings, a constituent. She and Mr. Jones worked effectively and closely, but then there was the falling-out.
All councils have a procedure for resolving grievances—we all know that; we are Members of this place—but in that case there must have been something extremely difficult to resolve. The timing was uncomfortable. The Audit Commission was about to examine the county’s books. Somerset’s quest for five shining stars would have fallen flat on its face if the chief executive had been embroiled in a tacky public industrial tribunal. It took the services of ACAS to thrash out an agreement, under which Mrs. Hastings departed amicably—and silently.
The process also cost an awful lot of public money. I would like to know how much. I made a request under the Freedom of Information Act 2000 more than a year ago, but the council is still dragging its feet and delaying a response.
Mr. Jones’s reputation in county hall is a legend—a remarkable achievement. I am told by the unions that anthrax is more popular than Alan Jones, but I would not know personally. I am no friend of the Liberal Democrats—the Minister knows that, and you certainly do, Mr. Speaker—who hold political control, but I am appalled and horrified by the manner in which Alan Jones manipulates them. There is no better example of that than what happened to one councillor, who was the deputy leader of the Liberal Democrats on the county council.
Chris Ruane (Vale of Clwyd) (Lab): Name him!
Mr. Liddell-Grainger: I thank the hon. Gentleman—that councillor’s name is Paul Buchanan. As Liberal Democrats go, he has the sharpest of brains. He was on the ISiS project, he worked with Jenny Hastings and he knows where all the bodies are buried. He has made no secret of the fact that Alan Jones would be out if he became leader, which he was destined to do. Unfortunately, that claim may have been a bit of an error. Last April, Alan Jones reported Paul Buchanan to the Standards Board for England—no fewer than 50 different trumped-up charges were made against the man.
I sit on the Select Committee on Public Administration, but I am afraid that I do not have a high opinion of the Standards Board for England. The Government’s motives for creating it were sound, and rightly so. After all, we must expect high standards of all our elected councillors and elected representatives. However, the Standards Board system allows injustice.
Alan Jones was able to make those absurd complaints, and because of the way the board is set up, it is obliged to take them seriously, regardless of their nature. As a direct result, Jones silenced his most powerful internal critic. Suddenly, anything and everything that Councillor Paul Buchanan might have been able to say fell under the cloak of sub judice. That scuppered his political chances as well—conveniently. Irrespective of political persuasion, nobody wants a new leader with a shadow of an investigation hanging over him, so the Liberal Democrats ditched their best man, and little Mr. Jones must have relished every second of it.
The original 50 charges, incidentally, were rejected very quickly indeed, but Jones, as usual, came back with fresh new charges. Inexcusably, the Standards Board is still wading through them. This dreadful system has permitted a brutal injustice in order to protect a dangerous unelected megalomaniac as he pursues the goal of a high-risk and very dangerous private partnership.
I am now in a position to prove that one high-level official in county hall acted in support of the chief executive and gave false testimony to the Standards Board. The Secretary of State said in March, and the Minister repeated it in my Westminster Hall debate, that I should take up my concerns with the district auditor. I thank the Minister for that advice; I have done so. However, I am sad to report that the district auditor considers my evidence outside the strict remit of his accountancy, so I have no option other than to call in the Serious Fraud Office.
I am also concerned about the involvement of the Avon and Somerset police in all this. Alan Jones hired the wife of the chief constable to negotiate directly with the preferred bidder, IBM. Now the chief constable himself has the right to sit on the board. I believe that that is too close for comfort and sets a dangerous precedent. Mr. Jones is now beginning to admit some of the ghastly truth about this deal. It will lead to job cuts. Even the police—Avon and Somerset constabulary—are talking seriously of shunting and shredding the front-line office staff in 19 police stations across the force area. The Minister is based in Gloucestershire and I am sure that he would have something to say if his police force were affected.
Southwest One is currently trying to drum up extra trade in Essex, Torbay, Plymouth and Cornwall. Cornwall is becoming a unitary authority and I would say to that council, “Please look carefully at what you are doing; you are being led by the nose; if you go down this line, your expenses, accounts and accountability will be given to IBM based in Southampton”. The same goes for Plymouth. They are both good councils; both need, dare I say it, guidance away from this mad scheme. I think that they should be afraid; they should be very, very afraid.
The ethos of Southwest One is cut-price. The figures do not add up because there are no figures to see. If the other authorities sign up, they will be recklessly risking public money, but this is the way that IBM likes to do business: cutting margins, cheeseparing, getting less for more. The more it makes, the more it takes. Remember that IBM owns 75 per cent. of the action. New software arrives soon; it is called “SAP”, but everywhere SAP has been sold to local government, there have been huge operational problems and big costly overspends. That has happened in Bradford, it is about to happen in Somerset and we are going to pay through the nose for it as taxpayers and as local people.
IBM put in the Rural Payments Agency computers, but we would have been better off with a bag of kiddies’ counting beans than with the mess that was made there. I do not blame the Government; I blame the systems. IBM lost the Department for Transport £970 million—do not take my word for it; the National Audit Office nailed it a couple of weeks ago. IBM cares about only one client—IBM—but that is business, is it not? One has to be tough to flourish and picking a global partner requires similar expertise to be able to counter and understand what is happening. That is what is missing, and that is what I want to address.
Councillors in Somerset have had to rely on reports from a small group of officers, unaccountable to anyone, whose future careers are entwined with Southwest One. Councillors have found it incredibly difficult to represent the public interest because they are not getting impartial advice.
I have a handful of positive suggestions for the Minister to consider. When it comes to Government projects, it is mandatory for the 4Ps agency to do regular reviews. Why not extend that to local government? Just an idea. How about beefing up the Audit Commission so that it can handle these highly complex deals? Either that or allow the National Audit Office to do the job, which would of course come under the Select Committees of this House. Specialist training for councillors on scrutiny committees would be welcome. They could learn about, and hopefully understand, what they ought to be looking for. Please, can we have clear Government guidance on the use of the magical cover-up phrase “commercial confidentiality”? In Somerset, that phrase has been used time and time again to explain away unnecessary secrecy. It is the motto of the county now. It has dropped whatever it used to be and it is now “Commercial confidentiality”. It is used at every turn. Finally, a good deal is only as good as the cost and benefit realisation plan. We must have a mandatory standard.
I am trying to be constructive for the future because I believe that, in Somerset at least, the project has been a complete disaster. Wool has been pulled over the eyes of the elected councillors and Alan Jones is clicking away with his knitting needles. I have been challenged to go and look at the contract. I have offered to take two forensic accountants, one business lawyer, Sir John Banham if he will come—I hope that he will—and possibly a couple of other people to help me. It will take six to seven days to go through it. However, I will not be allowed to see the whole contract or the whole business plan. I will not be allowed to see the correspondence on what made the deal possible and why the group was chosen over British Telecom and Capita. It is joke. It is a sham. The group is hiding. Why?
The unions have been ignored and a cover-up has been the order of the day. It is, I am afraid—I say this gently—no good for the Minister to say that this is a matter for the councils concerned. It has moved on from there. I am afraid that it is no good telling me anymore that the district auditor is the person to go to. We have brought the matter up with the Minister and in business questions already.
Somerset’s crisis today is going to be someone else’s tomorrow, without a shadow of a doubt. We need ministerial intervention, and I am afraid, to put it crudely, we need it pretty darn quick before the disaster gets worse.
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