Envío Digital
Central American University - UCA  
  Number 435 | Octubre 2017



The curtain’s up, the stage set and the script written

Only a year after so many voters abstained, they’re now invited to another election show. Will the script have any new surprises? Any new actors in the cast of characters? And what’s going on behind the scenes, where the producers are nervously waiting? There’s never been such tension in the wings …. or so little enthusiasm on stage.

Envío team

By unanimous voice vote, the US House of Representatives definitively approved the revised Nica Act on October 3, after Cuban-American Representatives Ileana Ros-Lehtinen (R-FL), former chair of the House Committee on Foreign Affairs, and Albio Sires (D-NJ), ranking member of the Subcommittee on the Western Hemisphere, shepherded the bill successfully through those respective committees. As with the original version a year ago, it was passed without debate. Presumably responding to critics warning that the act “poses a serious danger and could result in a humanitarian crisis for the people and waves of economic refugees that would flee toward the US border,” Ros-Lehtinen insisted in her speech urging colleagues to pass it that “this bill is intended to help the people of Nicaragua,” as it has “safeguards in place to ensure that humanitarian assistance continues to be provided to address basic human needs.”

Beware of doing business with Albanisa!

While counting the weeks until the elections, the Ortega-Murillo government’s calm began to fray in September. Its increasing nervousness has nothing to do with fear of losing the elections. And it has less to do with the possible cut-off of government loans resulting from congressional passage of the Nica Act than with the raft of new signs from Washington related to Venezuela and possible Nicaraguan collusion with corruption.

On September 7, the US Embassy in Managua invited members of the American Chamber of Commerce (AMCHAM Nicaragua), which represents more than a hundred US businesses in Nicaragua, to a gathering where the Embassy’s economic adviser, William Muntean, issued them a warning. He told the assembled businesspeople and invited representatives of the country’s private banks that they should consult the US Treasury Department’s Office of Foreign Assets Control (OFAC) about the risk of sanctions that could befall them if they continue to maintain relations with businesses created and owned by Albanisa, a joint venture set up to distribute Venezuelan oil inside Nicaragua and invest the proceeds. PDVSA, the Venezuelan state oil company, officially owns 51% of Albanisa and Nica¬ragua’s Petronic the other 49%.

Five days later Douglas Farah, a senior visiting fellow at the National Defense University’s Center for Complex Operations in Washington, DC, and president of IBI Consultants, which specializes in issues related to national security and organized crime in Latin America, let the cat out of the bag. Meeting with the Senate Caucus on International Narcotics Control, he told the senators about an investigation he has been conducting for the past four years. Farah said he has detected that the Revolutionary Armed Forces of Colombia (FARC), recently demobilized following that country’s peace agreement and now morphed into a political party whose new name uses the same acronym, has in recent years laundered nearly US$2 billion from its drug trafficking operations and other crimes through the structures of the PDVSA and its Central American affiliates. He named the affiliates as Albanisa and Alba Petróleos, the latter set up to manage the Venezuelan oil cooperation in El Salvador. Like Albanisa, Alba Petróleos has invested the profits in many “Alba-businesses.” Farah said this mechanism is used to transfer the laundered resources to a “safe door” abroad.

Already three months earlier, congressional members had requested the Treasury Department to investigate the activities of José Luis Merino, who has headed Alba Petróleos since its creation in 2006, and is also El Salvador’s deputy foreign minister and number three in the FMLN structures. They did so under the Foreign Narcotics Kingpin Designation Act.

Ros-Lehtinen was presumably referring to Farah’s revelations in her October 3 speech to push the House to vote for the Nica Act. Citing “congressional testimony,” she listed as one of Nicaraguan numerous alleged transgressions that “Venezuela’s PDVSA is also using its subsidiary in Nicaragua, Albanisa, to launder money.”

Tensions mount between US and Nicaraguan governments

All these messages from both Congress and the State Department/Embassy have brought tensions between the US and Nicaraguan governments to their highest level since the Daniel Ortega-Rosario Murillo team returned to the presidency ten years ago. They dwarfed the conclusions of the US State Depart¬ment’s annual Fiscal Transparency Report, published around the same time as the Senate Caucus hearing, which listed ours as one of virtually half of the 141 governments around the world found not to have met minimal fiscal transparency requirements. The Nicaraguan government was also one of 130 reported to have made no efforts to improve that finding this past year. Nicaragua is again questioned for its obscure management of the Venezuelan oil cooperation, which was never run through the national budget, an irregularity the report has been noting year after year.

The US Embassy’s warning to Nicaragua’s banking institutions and US businesses here to beware of doing business with Albanisa, followed by Farah’s disclosures to the Senate Caucus on International Narcotics Control, shook not only the government, but also the country’s business sector. The business elite had been banking on the electoral theater playing itself out with the fewest slip-ups possible so that “appearances could be maintained.” But suddenly appearances were in need of much more than a touch of stage makeup, with this new wedge threatening the corporative alliance between the private business elite and the government.

Nicaragua’s presidential family and party cronies administer the conglomerate of private businesses Albanisa created with Venezuelan oil money, through FSLN treasurer Francisco López, also Albanisa’s vice president. Although the full extent of the private sector’s business dealings with Alba¬nisa is unknown, the government has for years deposited the money from the Albanisa businesses in two national banks—Bancentro and Banpro. As a result of these new tremors, that money was quickly transferred to the vaults of Bancorp, an Albanisa-owned bank specially created by the Ortega-Murillo government in 2014 to capitalize the consortium’s businesses.

The OAS is coming to “accompany observing”

It is in the context of this increasingly strained national mood that the November 5 municipal elections will be held. The script for the play to be performed that Sunday is virtually identical to the one used in the 2012 municipal elections. But given that Nicaragua is one of many Latin American countries with a short memory, a number of people expect the presence of the Organization of American States to “guarantee electoral transparency,” forgetting that an OAS observer mission was present in 2012 as well. On that occasion, the electoral system—by then totally controlled by the governing party—organized and committed all manner of irregularities before the observers’ very eyes, which their timid report then omitted.

Ortega had invited the OAS to “accompany” those 2012 elections less than three months in advance in a superficial attempt at legitimization following widespread allegations of fraud in the previous year’s presidential elections, not to mention the proven fraud in the 2008 municipal ones. Its mission was originally to be made up of 65 observers, but was cut to 25 due to “lack of resources.” Upon arriving in Managua, mission chief Lázaro Cárdenas let it be known that OAS member countries had no interest in investing in that project, although the United States and Chile had finally covered its costs.

This year’s script has seen only some minor variations, starting with the timing. Ortega somewhat less than enthusiastically issued the “invitation,” if it can fairly be called that, way back last December following talks with OAS Secretary General Luis Almagro. The OAS, however, only confirmed its presence a month and a half before election day, amid mounting speculation about whether it would come at all. On September 18 it finally announced the mission would come “to accompany observing,” combining in this lexical symbiosis the government’s preferred word with the mission the OAS prefers to think it’s fulfilling.

The OAS cast was again cut back

In a visit to Nicaragua in May, an OAS technical mission had announced its election observation plan to the diplomatic corps in Managua. A first group of 5 experts would come on August 10 to tour the country while a second group of 120 would arrive on November 1 and break up into three equal groups to cover the elections in Managua, Mata¬galpa and León, the three cities with the greatest number of registered voters. They would also do a quick count in all three.

Their subsequent script rewrite has changed the language, the number of members and their role. The mission will now involve only 60 “specialists,” of whom an unspecified number making up a “mobile group” will be “deployed” starting on October 10. Then on October 29, the “base group” (chief, sub-chief and 22 others) will be deployed, followed by 11 “regional coordinators” arriving October 30, who, together with the mobile group, will deploy through 14 of the country’s departments. Finally, 24 “international observers” will arrive on November 1 to be distributed through the country as required for the preparation of a statistically representative sample.

What will the OAS contribute?

The OAS confirmation was particularly celebrated by the recently created Citizens for Liberty (CxL) party, the only option on the ballot with roots as a genuine opposition party. Its president, Kitty Monterrey, said the mere presence of the OAS mission will give voters “peace” and be “determinant” in their decision go cast their ballot.

Nicaragua’s big business elite unanimously celebrated the OAS confirmation, despite the increasingly visible fractures between those who unconditionally support Ortega and those who are starting to back off. They all hope the OAS presence will give these elections some legitimacy and thus lower the backstage political tension.

In contrast to the CxL’s optimism, the opposition Broad Front for Democracy (FAD) believes the OAS objective by coming now is just to get a foot in the door so it can revamp the electoral system over the three-year period specified in last February’s memorandum of understanding signed by Ortega and Almagro. If that is a correct take, the fact that its foot is now in may be the most positive outcome of the mission’s presence.

Wilfredo Penco insists there’s a “guarantee of transparency”

Two aspects of the OAS mission raised questions in virtually all other national sectors, with the levels of intensity ranging from doubt and suspicion to rejection and even indignation.

The first is that the OAS hasn’t reported who finally decided to finance its observer mission, particularly as it is known they delayed confirming their arrival because of trouble finding funds. There was speculation that the business elite themselves financed it, since the United States was known to be unwilling to contribute this time. But it was learned off the record that European countries including Luxembourg and Switzerland had solicited funds through the European Union.

The other aspect severely questioned by many people is the naming of Wilfredo Penco to head the mission, which seems to have been at Ortega’s suggestion or at least with his consent and Almagro’s agreement. Penco is the vice president of Uruguay’s Electoral Court, and is known in Nicaragua as a frequent member of missions organized by the left-leaning Latin American Council of Electoral Experts (CEELA) that have come at Ortega’s invitation to “accompany” every election held since he took office in 2007.

CEELA was created in Hugo Chávez’s Venezuela that same year as a counterweight to the rightwing OAS and US observer groups. Since then, it has accompanied elections in different Latin American countries, always adopting positions favorable to like-minded governments. Penco was present in three of Nicaragua’s four elections since that time. As an “electoral specialist” here during the preparation of the 2016 presidential elections, he said in an interview with the government’s Channel 4 television station that “Nicaragua’s electoral processes provide guarantees of transparency,” basing his remark on what he claimed to have seen in the 2008 and 2011 elections.

“The OAS is validating an illegitimate process”

Criticism of Penco’s naming wasn’t limited to Nicaragua, where some political sectors proposed recusing him or at least asking him to resign since he lacks credibility. He was also challenged in Washington. Five days after the OAS announcement, Nica Act promoters Ileana Ros-Lehtinen and Senator Ted Cruz (R-TX) issued a joint statement declaring that they were “extremely concerned” not only about Penco but also about the OAS decision to send an electoral observation mission to Nicaragua “just weeks before the scheduled municipal elections in November.”

They described Penco as “a well-known rubber stamp for Daniel Ortega’s electoral manipulation” and defined the OAS as an organization “meant to support democracy and the rule of law in the Americas, not enable despots like Ortega to dismantle a nation’s democratic institutions.” They added that “by sending down this flawed observer mission rather than take any real and meaningful action, the OAS is legitimizing this corrupt and illegitimate process.”

Like everyone in Nicaragua, they are aware that Ortega invited the OAS to scuttle or at least delay the Nica Act’s passage. It was thus no coincidence that they also announced they would continue pushing the bill through Congress. With it now passed in the House, Cruz and Senator Marco Rubio (R-FL), both of whom are also Cuban-Americans, will take up the task in the Senate. The general view is that the process there will be slower, but few doubt that the Nicaragua Act will soon be law.

The private sector is “very worried”

From its typical short-sighted and self-interested perspective, the Ortega government isn’t worried about the economic consequences of the Nica Act’s requirement that US representatives on the international financing institutions vote against any loans requested by Nicaragua. As economist Néstor Avendaño explained in last month’s issue of envío, the government has already stockpiled loans with them to cover any gap that could be opened in the coming years, assuming the US can parley its no vote into a veto with the help of other countries. It has also negotiated loans with individual countries, one of the most recent being US$300 million with South Korea.

“Ortega appears very laid back,” said Avendaño, “but my impression is that the private sector is quite worried, although it’s not saying so publicly in order to maintain the calm. The private sector’s concern is quite logical, given that it generates 90% of Nica¬ragua’s gross domestic product.”

The concern the representatives of the upper business echelons hid for months finally led some of them to contract lobbyists to try to lessen the tension between the Ortega and Trump governments. Business magnate Carlos Pellas and various AMCHAM members flew to Washington in September to convince top government officials of the damage the law would do to Nica¬ragua’s economy and stability. It also hired a lobbying firm for US$200,000 to push for a shift in Washington’s politics. “We already consider the Nica Act a done deal,” explained Bosco Noguera, secretary of the AMCHAM board of directors. “We hired the lobbying firm to avoid sanctions that go even beyond the Nica Act, such as those applied in Venezuela. They have told us directly in the United States that sanctions stronger than you can believe are still to come.”

A “negative” initiative for Nicaragua

Francisco Aguirre Sacasa, first Nicaraguan ambassador to the US and then foreign minister during the government of Arnoldo Alemán, expressed satisfaction at seeing the private sector finally getting worried. He said the OAS “shield” hasn’t worked and added that even if the business elite were to spend a million dollars on lobbying, they “won’t get anything” for their money. Like many others, he insists that if the businesspeople want changes in Washington, the only person they need to lobby is Daniel Ortega to get him to change his anti-democratic model.

Noguera agrees: “If there are no effective changes in Nicaragua everything we’re doing will be useless, and we’ve said so openly to the government.”

North Korea…

In an effort to somewhat improve its deteriorated international image, and help reduce tensions with Washington, the Ortega-Murillo government has made some switches in its international relations. After daringly reaching out to the North Korean government last year by inviting Choe Ryong-hae, the third man in that country’s power hierarchy, to the July 19 celebrations, the government issued a September 15 communique categorically condemning Kim Jong-un’s nuclear testing, although without specifically naming the supreme leader himself.

Issued after that country’s sixth nuclear test in a row, the communique expresses the government’s “profound concern about and condemnation of the incessant launching of ballistic missiles” by the North Korean government recently. Bearing Murillo’s distinctive hand, it adds that “We condemn any type of Nuclear Testing by any State possessing Nuclear Armaments and make an urgent call to denuclearize the Korean Peninsula and abandon Nuclear Programs in a complete, verifiable and irreversible manner in conformity with the pertinent United Nations Security Council Resolutions. We urge the involved Parties to once more take up the path of Dialogue and Negotiation that will permit distension and the finding of a peaceful solution as quickly as possible to contribute to the Peace, Stability, Security, Wellbeing, Development and Reunification of the Great Korean Peninsula.”

…the Paris Agreement…

After refusing to sign the December 2015 Paris Climate Agreement because Nicaragua considered it insufficient, Ortega announced to 11 World Bank executive directors in Nicaragua for a visit on September 18 that Nicaragua will “soon” sign and adhere to that agreement. “We have already held meetings addressing the issue and have now programmed Nicaragua’s adhesion.” He added that he would do it out of “solidarity with that large number of African, Asian, Latin American and Caribbean countries that are already victims and are in highly vulnerable zones.”

Vice President Murillo did not accompany her husband during the meeting with the bankers or ratify the news in her daily noontime talks, nor did she include her husband’s words in “El19digital,” the official government web page. Nonetheless, Nicaragua is expected to sign as this will permit it to access foreign cooperation resources, and also, of course, will also improve Ortega’s image. A quick Google check shows that his new announcement has been the subject of dozens of mainstream US media articles whereas only Venezuela’s Telesur, Cuba’s Havana Times and of course the Nicaraguan media covered the House’s passage of the Nica Act.

If President Trump makes good on his announcement to pull out of the agreement, this will leave the United States in the exclusive company of Syria, the only other country beside Nicaragua that didn’t originally sign it, and in fact didn’t even participate in the Paris negotiations as it is under sanctions making it difficult for its leaders to travel abroad. It was also busy dealing with a civil war some lay at the feet of the country’s widespread drought, caused, ironically, by anthropogenic climate change.

…and Russia

Only in its relations with Putin’s Russia, which has established important satellite operations in Nicaragua and increased military ties with our country, has there been no shift whatsoever. With US-Russia relations currently so fraught, these ties are crucial in the crisis between Ortega and Washington. US Ambassador in Nicaragua Laura Dogu has repeatedly mentioned this as one of the thorniest issues for both Republicans and Democrats when discussing the issue of Nicaragua.

Calculated 2012 obstacles come home to roost in 2017

Only the cbusiness elite are privy to all these behind-the-scenes tensions, which aren’t part of the general backdrop to the November 5 elections. Elsewhere, there’s enthusiasm in some municipalities but merely apathy in most.

Nicaraguan voters are again being asked to vote for the governments of 153 municipalities. Those who do so will cast ballots for mayors and deputy mayors, one from each sex in the 50/50 formula ordered by Ortega in 2012 “in honor of Nicaraguan women.” They will also vote for their Municipal Council, whose numbers are roughly proportional to each municipality’s population size, but were disproportionately and arbitrarily jacked up by Ortega that same year.

In addition to the FSLN, seven other parties will appear on the ballet, four of which—Alliance for the Republic (APRE), Nicaraguan Liberal Alliance (ALN), Independent Liberal Party (PLI) and the age-old Conservative Party (PC)—have been gutted of their structures for some time now. The new Evangelical party, which calls itself the Democratic Restoration Party (PRD), was granted legal status by the Supreme Electoral Council (CSE) in record time despite also being short on structures and members to fill them. The only competitors shown to have a solid base are the once front-running Constitutionalist Liberal Party (PLC) and Citizens for Liberty (CxL), a new party made up of Liberals who defected from the PLC and PLI after the former began sliding face first down the corruption hill and the Supreme Court stripped the latter of its legal status months before the 2016 general elections as punishment for coming in a strong second in the 2011 presidential race. The Court awarded the PLI’s official status to a small fraction of the party that sold out to the FSLN. For reasons yet to become clear, the CxL also received its new legal status from the CSE in record time.

Even the CxL, however, has admitted to difficulties in getting enough party monitors for all the voting centers and filling the bloated list of candidates for mayor and Municipal Council. There have been reports of lists including the names of non-existing individuals or departed emigrates; people who weren’t consulted and don’t belong to the party claiming to run them; or people who were inscribed then decided they didn’t want to run. There are also reports of people “on loan” from the governing party to help several opposition parties fill their list. It’s part of the old, familiar script that the participation of multiple parties is needed to make political pluralism look alive and well in Nicaragua.

This difficulty and how the parties are resolving it is barely a footnote compared to the 2012 municipal elections, when the new laws first required all parties to run an equal number of men and women as candidates and inflated the number of Municipal Council seats. Both requisites managed—and surely were designed—to impede many parties from meeting them, but they also more than doubled the number of elected municipal posts suddenly up for grabs with a fixed salary and little work. This is very attractive in a country where unemployment and underemployment—with its hard work for precarious income—have been the population’s most serious problem for years.

Same stage, same script

This year’s electoral conditions are identical to those of 2012. The voter roll still hasn’t been cleaned of deceased voters or people who emigrated, and ID/voter cards are still being issued or denied by the governing party at its own discretion. The national observation consortium called Panorama Electoral says it has even seen these cards being given to underage youths in 45 of the 151 municipalities it has observed.

The municipal and departmental electoral councils (CEMs and DEMs, respectively), which are the structures that decide everything, are under the virtually total control of the FSLN and the PLC, which acts as an FSLN ally. After what befell the PLI, the PLC recovered second place in 2016 and thus the right to the second largest number of CEM and DEM presidents. And if some still think a glimmer of freedom remains because there are CxL representatives in some of those councils and/or at some voting center tables where a lot is also decided, it’s only wishful thinking. What is called a “center coordinator,” who takes orders from the FSLN, will also be there in an illegal post to make sure everything goes as scripted, as happened in both 2011 and 2012.

Will they keep up appearances?

The government’s greatest election-related concern is that the massive abstention observed in last year’s presidential elections will be repeated. It motivated the President to request an urgent Electoral Law reform on August 30 allowing any voters whose name doesn’t appear on the list in their normal voting center to vote in any center(s) just by presenting their voter/ID card. Since there is no comparative review of the ballots afterward, nothing prevents a voter from voting in as many centers as he/she can get to… if endorsed by the FSLN’s coordinator, of course. It’s also why the electoral branch eliminated 1,513 of the country’s 14,582 voting tables. Between these two moves, the voter queues in a large number of centers should look less desolate and many more ballots will probably actually be cast than last year.

There are still a few unknowns regarding the results the CSE will offer, validated or not by actual ballots. These include how many and which mayoral seats it will assign to the CxL or the PLC, and which of the two parties Ortega will decide to assign second place in the number of mayoralties “won.” It’s also still an open question whether the FSLN will increase the number of mayoral seats it gives itself. Its most nervous allies are hoping against hope that the government will “keep up appearances” and limit itself to the 134 seats it gave itself or actually won in 2012, divvying up the other 17 among them.

Elections are just to “feel more united”

“There’s only one rule in democracy,” said electoral observation expert Alejandra Barrios in Managua recently; “clear rules for uncertain results.” She has long experience observing elections in her own country, Colombia.

In Nicaragua’s elections, in contrast, the rules aren’t clear but the results are certain from the outset, save a few secondary unknowns. There are no authentic antagonists to the governing party, even the CxL, and although this lack of competition generates apathy and disinterest, the government isn’t try to hide it; in fact, it’s reveling in it.

Electoral campaigns are supposedly a dispute for power among political parties and the platforms they offer. But Nicaragua’s Vice President defined it differently when she announced the kick-off of the new electoral campaign on September 21. “Today we are opening the campaign in all municipalities of Nicaragua and are doing it very simply, because it has to do with a simple campaign, a campaign of humility, a campaign to listen to each other, to recognize ourselves as family, as fellow human beings, a campaign to identify ourselves and each other as Christians.” To make sure she got her point across, she added: “This is a campaign of the family, with the family, to be close, to feel one another close, ever more united.” Murillo’s words implicitly acknowledge that the governing party isn’t competing because it has effectively become the only party, transforming the elections into a theatrical performance, albeit one that at times seems like comedy, at others like drama and most often like tragedy.

Some municipalities are bracing for a race

Things are slightly different in some areas of the country, however. One of the most interesting unknowns of November 5 is what will happen in some municipalities of rural Nicaragua that experienced the eighties’ war firsthand, sympathized with and supported the Contra, and were always Liberal strongholds even well before then.

In Pantasma, Jinotega, for example, where the FSLN didn’t impose itself by fraud in 2012, the Liberal mayor Óscar Gadea is running for reelection, this time as the CxL candidate, convinced that it’s his duty to defend that territory from any attempt by the FSLN to snatch it away. Sources from Pantasma told envo that the governing party’s political secretary in the municipality has said that “the FSLN will win that mayoral seat” even if it’s “in ashes.” Not exactly the portrait of family closeness Murillo painted.

Another municipality where there will be real competition is Rancho Grande, Matagalpa, where the population not only united as family but in so doing succeeded in halting the open-pit project the Canadian mining company B2Gold had initiated in Cerro Pavón. In these elections, Carlos Siles, a founder of Guardians of Yaoska, the tightknit social and environmental movement of multiple ideological and religious stripes that successfully stood up to B2Gold and the Ortega government, is running for mayor on the PLC ticket.

In yet another of its ubiquitous divide-and-conquer maneuvers, the FSLN tried to persuade another founder of that organization to run as its candidate, but it couldn’t persuade him or even buy him off. The FSLN finally had to put the current mayor, María Isabel González, up for reelection. As a teacher, she once taught Rancho Grande’s children to value their environment, so she makes a very unwilling, not to mention unconvincing, B2Gold ally. The Ortega government has granted the mining company seven more concessions in the same municipality, but it’s up against a strong and united opposition that has proven its tensile strength against all temptations offered by both the government and B2Gold. Yet another issue makes the people there want to get out the vote: the determination to recover the municipal government they are convinced the FSLN usurped by fraud in 2012.

Something similar is happening in Nueva Guinea, where the most documented fraud of the 2012 elections was implemented. The Liberals want to recover the mayor’s office in that municipality, birthplace of the anti-canal movement, while the FSLN, for obvious reasons, is determined to hold on to it at all costs.

It seems there will also be competition in El Ayote, Chontales, and surely in a number of other municipalities in rural Nicaragua. Whether the task for FSLN is to recover those municipalities, win them for the first time or retain them, it’s up against some tough races. At least in those municipalities that feel defrauded by this government, some from as far back as 2008, this isn’t about recognizing each other as family; there will definitely be serious competition… and there could also be violence, particularly if the FSLN resorts to fraud again.

2021 is already appearing on the horizon

Without the government giving any signs of change, and with the OAS giving only signs of condescension, both Ortega’s followers and his opponents, as well as many people who are neither, see the municipal elections as a mere formality because municipal autonomy is a dead letter in any case. What really matters is the 2021 presidential election.

Will it also be a remake of the same script or will there be a new competitive, democratic one? What actor (or actress) will the FSLN decide to put in the lead role? Will it take a full four years to know the answers?

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