Packer’s Crown Casino Gamble: A tale of big money, lobbying and political influence | Four Corners

Packer’s Crown Casino Gamble: A tale of big money, lobbying and political influence | Four Corners

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this is a story about power and influence and what can go wrong when private gain triumphs over public interest everything has been done behind closed doors it reeks of secrecy it reeks of private interests undue influence and cosy relationships a culture of mateship on a grand the shining monolith that is crowned sydney the city's tallest building has become a landmark symbol of the power of great wealth money was speaking and money was getting whatever it wanted it's the product of billionaire casino magnate james packers grand plan this is a great idea this will be great for sydney and there is no one anywhere who's going to try harder than our company to build something special it seemed to be a political steamroller it did seem that it had a momentum and having had james packer behind it and knowing his powerful friends it seemed to me at the time that this was going to happen james packer's promise was for a luxury hotel and casino to lure the wealthiest chinese gamblers to spend their millions in australia now his dreams and reputation are in ruins and his casino empire is under siege you accepted your conduct in these communications was shameful do you i do i think he expressed the view that he was shocked and embarrassed and he should be i think this is the end of the packers and the packers influence in this country this is the great tragedy and all this we're left with you know this gigantic block of flats we look at it scratch our heads and wonder how in the first place and what might have been if things had been done properly just how this building came to be is an extraordinary story of big money backroom lobbying and political influence tonight on four corners we investigate how james packer pursued his dream of the sydney casino to the bitter end and we exposed the wheeling and dealing behind closed doors that helped him do it [Music] the story begins in a luxury harbourside apartment building known as the toaster it's the home of one of australia's most powerful men broadcaster alan jones right this is where it all happened so we go in here it's very easy up there drop the table around here and i say premiere you're here james you're over there in february 2012 jones hosted a lunch his guests were his close friend billionaire james packer and the premier of new south wales barry o'farrell and so what do you feed a premier and a billionaire and mash james loves his pies the premier was sort of trying to loosen the waistline so i'm not too sure whether he accepted the pies but look it's very simple very unpretentious james packer had a grandiose plan that he'd already shared with alan jones he had this vision for sydney and he said look everyone knows the opera house everyone knows the harbour bridge today in the world of the technology today they can get all that so that we've got to do more than that and i want to do something for sydney that was basically the premise and he said i wanted to be a destination i wanted to be a significant place like no other destination sydney to be identified with this particular project and that was it packer had asked jones to set up the meeting he said he'd like to meet barry o'farrell and that was my recollection so i just invited the premier to lunch and we had lunch here and they met and why it went but to be clear he outlined his idea to have a hotel casino well yes in a very vague and general way because it was vague in general to me but he he he's always drawing things so he had some diagrams and whatever whatever and showed barry and of course barry farrell as i remember quite rightly indicated uh because we're that kind of city everything's got to go through about 155 000 regulatory bodies so barry made the point that it wouldn't be all that easy but he embraced the vision if i could use that cliched word packers pitch was for a hotel and vip casino on the harbour aimed at wealthy international gamblers as i remember one of the keys i think that james was determined to establish early on that the casino would be and i'm using my words here now a passport oriented casino so there would only be people who are overseas people who'd come to the destination who would use the casino that also appealed to to barry o'farrell and barry was impressed by this is the new premier inside that he was someone who was wanting to do something and i guess sort of leave a legacy in a way in a little over an hour the stage was set for a massive deal what does that tell you about how things work in new south wales well i think it it really reeks of very cosy relationships and potentially undue influence between the private sector influencer influential broadcasters and also the government when you have meetings behind closed doors around large-scale developments like this then the public really never gets to know what's being discussed what deals maybe are being offered whether or not preferential treatment is going to be granted and whether in fact there are advices given as to how to potentially sidestep due process and broad transparency and accountability the way in which this process operated was always 180 degrees in the wrong direction effectively a political decision had been made with some key political players and then after that it was just going through whatever process was necessary to ensure that it happened literally as i read it the decision was made in that room and then we went through a public fast for the next 6 to 12 months to make sure it happened these sorts of things should be dealt with at arm's length and in full public view when you've got premiers and officials dealing with applicants who are getting a rails run behind closed doors who knows what was said who knows what was promised or offered now i'm not suggesting for a minute that anything corrupt went on but this is a very very poor way for the leader of a government and for a government to conduct itself in a first world country like australia the packers had dreamed for decades of owning a casino in their home town of sydney let's not be insulting of course we would love to build the sydney casino and of course we would love to operate james had learned the industry at the knee of his father kerry i spent a lot of time in casinos as a kid with my dad and i ended up thinking this must be a good business [Applause] [Music] packers casino empire already stretched from melbourne to perth and the booming asian gambling hub of macau so he was playing in a number of ponds but at the same time trying to link them because i mean the idea behind behind these particularly big gamblers is that they move from casino to casino and if you have a network of casinos that's how you actually in a sense um make a lot of money out of one individual you take them to all your casinos and then they're all linked they're all marketed in one it's almost like a sort of frequent flyer sort of situation so sydney really at that point was the missing piece of the puzzle yeah it was the it was the part of the network that he hadn't filled shortly after the lunch at allen jones apartment packer unveiled his plan to the public with a strategic leak to the daily telegraph newspaper the start of a relentless media blitz in february 2012 the first plans by james packer and crown were leaked to the media do you recall what your first reaction was well i mean having represented sydney for a while um i'm used to being taken by surprise but i think that took the breath away and and then when you interrogated what was what was going on it was quite shocking i mean the fact that packer had decided he wanted to have a casino in sydney um and he he was able to say you know i have a great reputation for running a casino in melbourne and if you want to have a second casino license here i'm i'm the one to do it certainly convinced the premier the premier has strongly backed a proposal by james packer to build a casino at the barangaroo development on sydney harbour i think this development could add life to barangaroo not only a world-class hotel but extra jobs and a boost to tourism farrow was then the premier and this was seen i think he came in with the idea of getting sydney moving i think the previous governments were talking about sydney was locked up and this new government was going to do the opposite and we were largely behind in all our infrastructure so under that mantra of getting sydney going this this idea that um the o'farrell government could start delivering these big public projects where there's been there had been a stasis on it was really um something that he thought was quite seductive to the people you're listening to alan jones on 2gb 873. [Music] james packer hit the airwaves on his friend allen jones top rating radio show james packer is on the line james good morning good morning ellen barrier farrell's quoted today as saying that he embraces the plans for the hotel and the second casino at bahrain group have you spoken to him about this no i haven't i sent him i i have not spoken to him about this and i haven't seen him uh i saw him late last year and and did not discuss this packer conveniently forgot the lunch he'd had with barrio farrell to discuss his plans just weeks earlier he told jones the hotel would only stack up financially if he was allowed to open a casino there as well all of a sudden you had one of the most connected billionaires in the country suddenly coming out and saying they wanted to put a billion dollar casino on the shores of sydney harbour now that came out of nowhere in the eyes of the general public and you know that was a really aggressive pitch from him and then that was the messaging that was being taken on by the government of the day at the time you know almost kind of oh ignore the casino over here what we're getting is a six star luxury hotel and that's what sydney needs packers tower was shocking in its scope more than five times the height limit for the area and on land reserved for public open space the plans were located on the area that had been dedicated for public park land it was public park land for the public on public land on on the harbour foreshore and that was where he wanted his casino to go and that was about getting those views to the opera house and to the um the harbour bridge and so he wanted it right on the foreshore and he wanted to go as high as possible to maximize the the the views for that that development packers proposal completely blindsided the chairman of the new south wales casino regulator chris sidoti there was already a casino in sydney the star that had paid a hundred million dollars to the new south wales government for an exclusive license until 2019. so far as we were concerned it came out of blue we'd not heard of any suggestions that there should be a second casino in new south wales uh in fact there still seemed to be a very strong consensus that one casino was enough and then all of a sudden we get this proposal and uh and it seemed from the beginning that that it had legs that it was going to run uh from the the rumors we were picking up behind the scenes um so it was quite a surprise that this thing seemed to be going so quickly uh in the circumstances where new south wales had had a firm commitment to one casino only at that stage chris sidoti says the authority was never even consulted we waited um we we followed what was happening we sought information from the government but essentially at that early stage there was no role for us this was being decided at the at the political level we were not asked for our opinion we were certainly not asked to conduct an independent inquiry and to report to the government on the desirability of a casino days after the alan jones interview james packer and premier o'farrell met at parliament house advice was prepared by the premier's department pointing out that the proposal breached height limits encroached on public land and departed from the plan to not have high rise in that location development over hotel and casino is not permissible within the open space and public recreation zone the proposal is totally inconsistent with the approved concept plan you look all around sydney and sydney's got these wonderful public parks that sit on the harbour and they're much loved by the people to suddenly change a master plan and put a big private building on a public park is really quite outrageous we're done james packer hates doing interviews as he worked on the new south wales government behind the scenes james packer stepped up his campaign granting a tv interview to another close media pal i am hugely proud of our business our business made in 2011 340 million dollars after tax we paid 680 million dollars in tax so we paid twice as much taxes we made in profit the cynical view might be that he was trying to humanize himself a little bit in order to win over the public what do you think about that well i think it i i yeah i think he was mindful of the fact that the public should if he wanted to be involved in sydney he had to be seen to be able to explain to people what this was about basically and and that's what he sought to do yes he he was sensitive about unnecessary criticism and an invasion but he accepted also also that that's the price he had to pay i don't think he's not the sort of bloke he'd sit down and say i better do this because this is going to help me get people on side with packers project still facing significant opposition premier barrio farrell came up with a novel solution which he proposed at another private meeting in his office the solution was to use an obscure government policy called the unsolicited proposals process the unsolicited proposals policy is basically an opportunity for someone with a bunch of money and an idea to come straight to the government and avoid messy things like tenders or public uh consultation they literally go straight to the government um with a what's meant to be a unique one-off proposal it also meant the deal could be done without a tender shutting out competitors if it's a project that is considered to be unique and on such a large scale then it should be going to an open tender process that's that's what's going to help protect and guard against the risks of of corruption and misconduct if there is an open clear and competitive tender process the government cleared the way further for james packer when it watered down its own rules the rule itself the unsolicited proposals rules were actually amended to do away with the requirement for an independent evaluation of the deal to in fact see whether or not it did qualify for uh if you like an exemption from an open tender process barry o'farrell insisted the changes were minor and the timing a coincidence it seemed to be a political steamroller there was very strong support in influential sections of the media and this was being promoted very heavily throughout the period where supposedly this proposal was under consideration it did seem that it had a momentum and having had james packer behind it and knowing his powerful friends it seemed to me at the time that this was going to happen what do you think the government should have done at that point when it received the unsolicited proposal from mr packer it should have announced an independent judicial inquiry into firstly whether new south wales desirably should have a second casino or not and then second if the inquiry had recommended a second casino and if the government had accepted that advice there should have been a public tender process simply to test whether what mr packer was proposing was giving new south wales the best deal it was extraordinary and it's something that i you know would not have expected to see in australia the first thing that struck me was the lack of an open tender process for what is essentially a dopalistic license in sydney a license to print money a license to print money [Music] as crown formally lodged its proposal it embarked on a massive lobbying campaign james packer had hired two former labour party power brokers marco bibb and carl batar and set about lobbying their former colleagues in the opposition if the government agreed to a casino license labour's support would guarantee it would be approved by the parliament mark abib is the consummate labour numbers man it's always been his job to get the numbers whatever faction he was throwing his weight behind within the labor party when he was working as an official and literally he was poached no no doubt it's a smart political play but poached by james backer to do that to get his casino through i mean marco beef is this kind of political animal who literally works one side of the aisle one day works the other side of the aisle the next day but he's good at getting the numbers and that's what he was paid to do [Music] packer also directly lobbied the then new south wales labour leader john robertson and environment spokesman luke foley shadow treasurer at the time michael daley remembers being briefed by crown executives crown walk in the front door they made an appointment and we want to see you to give you the sales pitch if you like give you the details about uh about the casino we had a meeting in the boardroom with several shadow ministers that was it as far as i was concerned so i've been told that um within shadow cabinet only one maybe two people really spoke out against this proposal it's nearly a decade ago um so i don't recall the gory details of what was discussed in shadow cabinet the one feature i do remember that was discussed heavily was was poker machines and we came to a pretty quick conclusion that they were off the table labour backed crown's plan after being assured there would be no poker machines [Music] james packer also tried to win over the puritanical upper house mp fred nile who'd spent several decades railing against the evils of gambling mr sindh mr vice all operate from sydney sydney is the center of organised crime to have a casino in this area was playing right under the hands of these men i distinctly remember being in my office and looking out in the corridor and i saw this this posse heading down the corridor to fred niles office now fred and i was meant to be an anti-gambling anti-smoking anti-drinking advocate and i remember the posse going down james packer and two others with him and they went into fred nile's room they were very polite and they certainly weren't doing anything to sound like they were pushing me around because i knew on my previous record that would not get them very far with me they'd have to convince me that this casino had some positive value to the people of new south wales and i couldn't see any value at all at sydney town hall james packer even lobbied one of his most vocal critics independent lord mayor clover moore and he was traveling around with two labour party heavies probably to get the others on side you know mark uh kalpitar and mark habib they sat at the end of that table quietly well well he told me about his fantastic proposal but i was really concerned about it and he said to me lord mayor i am so grateful both the government of the opposition support my casino and i said to him well they shouldn't have because that's public land and the public haven't been consulted he didn't stay long after that the government decided to move the proposal to the next stage the night before the announcement it prepared a press release with the news documents obtained under freedom of information show the head of the premier's department chris eckles sent the draft release to crown's chief executive rowan craigie for approval draft release yet to be finally cleared with the premier thanks chris could you please call me read the attached suggested amendments most of crown's changes were included in the final release issued to the media sharing of the media release before it was published is not unusual that does happen what is i think alarming is that uh crown was able to edit the media release as has has been reported and it raises questions as to whether or not really packer was putting words into the premier's mouth that i think is the alarming aspect of it and is another indication of these cosy relationships the culture of mateship that exists between powerful individuals and and and government the premier made the announcement the next day this has moved to the next stage it is about trying to ensure that sydney attracts investment it is about trying to ensure that we get value for money for the taxpayers it's about the creation of jobs it's about growing the tourism sector that night at the museum of contemporary art in sydney james packer was the guest of honor at a flashy business dinner in the crowd were his loyal left tenants mark r and rowan craigie the crown chief executive who'd polished the premier's media release the night before if you'll take your seats understandably james packer's mood was victorious my great pleasure to introduce james packer tonight this is a great idea this will be great for sydney and there is no one anywhere who's going to try harder than our company to build something special this is more than economic for our company we are going to try and build something special and there's been a lot of attention given to the obviously highly efficient lobbying that crown has has done you personally have been very involved according to reports how much political muscle has crown have to flex to pull this off i think that that's one of those things that's you know easy to say and people might imagine that that there's some reality to that what has achieved the outcome today and i'm incredibly grateful to the labour party for not playing party politics and i'm incredibly grateful to to to premiere parallel to the liberal party for for doing what he did today but what has got us where we got to today is not lobbying it's the strength of a really good idea james packer admitted a casino without poker machines was a risk there has never been a casino in the world built for a billion dollars without slot machine so you know we're entering virgin territory [Music] on sydney harbour james packer tried to neutralize one more opponent during a lunch on his 50 million dollar super yacht star casino chairman john o'neal was james packer's bitter rival he'd been lobbying the new south wales government hard to reject crown's plan for barangaroo crown and the star were also going head-to-head in queensland for a casino license there according to o'neal james packer proposed a deal to carve up the australian casino market between them potentially illegal behaviour so the way the story goes or the way it's been told by o'neill was that the deal would be that o'neal and and star wouldn't make any trouble for packer and his attempts to get the second casino licence so basically hands off in sydney and when the queensland license comes up for which they would both be eligible to to bid we won't go into queensland we'll let you have queensland so we'll basically do a territorial carve-up as i understand mr o'neal rejected it as being inappropriate and was couldn't believe his ears i think something like that was said what was the essential problem though oh the potential for basically cartel behaviour by players in the market controlling the market in an agreed way that wasn't transparent or in effect regulated by the authorities and coming to private agreements about how they would in effect rig the market or manage the market and that's potentially illegal well that is absolutely illegal yes crown denies packer proposed such a deal but o'neil told a journalist whose story caught the attention of the corporate watchdog it then led to an investigation by the australian competition and consumer commission who ultimately found they didn't have enough evidence to go on basically it was you know his word against his and it didn't go anywhere in the end in july 2013 the government announced it intended to give packer his casino license 34 billion dollars that's estimated to be the worth of the high roller asian vip gaming market and at this stage australia has just one percent of that market crown was offering to pay the new south wales government at least a billion dollars in taxes over the first 15 years the premier was later questioned about the deal premier uh can we talk about the casino for a minute can i ask you when did mr packer first raise with you the idea of a casino of barangaroo i'm pretty sure that first that i saw it was when it was the front page of the sydney morning herald and i then made uh the comments uh that i did that then caused some controversy you've changed my question i asked you when did he first raise it with you you then answered me the first that i saw it was well i i know i i'm just trying to recollect uh i'm not trying to dissemble here uh dr k uh i've had two meetings with uh with uh mr packer uh i think the first was after uh the newspaper report and the second was in september of last year o'farrell had apparently forgotten about the lunch at allen jones apartment check the time frame while we're talking so we'll come back to the next section so within a year o'farrell would resign as premier over another memory lapse the gift of a three thousand dollar bottle of wine from a lobbyist new laws allowing pakis casinos sailed through parliament with labour's support there was probably going to be some pockets of resistance in the labour party about a casino because of the social harm that comes with a casino and mark our bib was critical for ensuring those pockets of principal resistance were overrun by the labor machine that's what he does he gets the labor machine to drive in a particular direction and in this case the labor machine locked in and rolled in favour of james packers casino james packer still needed approval for the building that would house his hotel and casino the design was for a 275 meter tower sydney's tallest and dozens of luxury apartments it had now grown even taller than packers original proposal by about an extra 20 stories the building was too large it was too far north it it was the buildings were supposed to scale down to the north and to the public spaces and this was scaling up the podium it was huge i tried to explain to the board that you know it's sort of like bigger than the opera house and the uh the the height the bulk overshadowing you know all of those sort of impacts that it had were it was like a building that was far too big for the site architect kerry clare was the sydney city council's representative on the board of the barangaroo delivery authority the government agency responsible for development at the site she opposed the design and said it should be independently reviewed it was proposed for a clear public park area so therefore um you know the 270 meters height and none of that had been contemplated or or previously approved so it was a major change to to the barangaroo approvals it's not an iconic building it's an iconic representation of a bad process when her comments appeared in a newspaper she received a furious call from a senior bureaucrat basically he was very angry and spoke to me quite forcefully for about 25 minutes he was threatening definitely and um i was made to feel like i had actually done something very wrong kerry clare says she was even threatened with possible criminal charges how did that make you feel well i i i thought it was strange that i was threatened with something that was um a criminal offence uh for such something that was quite innocuous how did that change your willingness or ability to speak out on issues well it certainly changed my ability because they added a clause to the code of conduct saying that no board member could speak to the press everything had to be directed to to the chair or the ceo so they really gagged the entire board basically they closed down any discussion construction on james packer's crowning glory at barangaroo began in 2016. just as it got underway disaster struck 19 crown employees in china were arrested and 16 eventually jailed for illegally promoting gambling some chinese staff members already on bail walk free from the court others will spend another month behind bars it was devastating for crown's core strategy of luring chinese high rollers to australia it wasn't a good story and given the business model for barangaroo was going to be high rollers and a big link to the chinese community the alarm bells started to sort of start to tingle so including about what the potential viability well if if the company was being accused by the chinese government of doing um acting illegally in china and that was part of its plank in terms of its business plan then that would obviously be of concern to us it was a phenomenal crisis for crown it was a real problem firstly it exposed what they were doing and secondly and for them probably more importantly it blew up that strategy mr james parker the scandal led to the collapse of crown's lucrative joint venture in macau with gambling tycoon lawrence ho the ability to have an outlet in macau means that players could deposit funds into the casino macau and be able to play in australia so it was a huge part of the business and so having to withdraw or pull out of macau means that they lost that huge important weapon or tool in the armory his empire under pressure and battling serious mental health problems james packer began looking for a way out of the casino business altogether i think james was hoping that when the arrests in china settled that was 2016 that over time that the asian players would come back and they did to some extent but it was never like it was so i think that it was when he came to that realisation that he thought why am i even here i could make more money somewhere else packer tried to sell just over half of his crown shares to his old friend and business partner lawrence ho but lawrence was the son of stanley ho a notorious casino kingpin linked to organize crime and banned from any involvement with crown so there was an uproar about that and there was a regulatory issue around that and it was clearly set off alarm bells with the new south wales gambling regulator our concerns were that mr lawrence hoe was involved with that company so alarm bell started to ring because nobody consulted us crown didn't consult us about the transaction the gambling watchdog appointed former supreme court judge patricia bergen to conduct an inquiry after media allegations of criminality at crown melbourne and perth the inquiry also examined whether crown was suitable to keep its sydney casino license so i called james packer yes mr packer can you hear me james packer gave evidence via video link from his super yacht somewhere in the south pacific mr packer would you please state your full name james douglas mr packet do you agree that the grant of a license to operate a casino is a privilege and do you accept that with the grant of that privilege come a number of important obligations on the part of the casino operator yes michelle a lot of the things that i've seen or heard in this inquiry have been a total shock to me i thought that james's evidence was really quite sad and he personally expressed his upset and remorse over what the bergen inquiry was uncovering and i think he found it very embarrassing but it needed to be done i don't think he's very well man so i think he expressed the view that he was shocked and embarrassed and he should be just after christmas crown sydney finally opened but with no casino in february the inquiry handed down its findings it said crown had facilitated money laundering and partnered with companies linked to organize crime crown resorts was today dealt its biggest blow its gaming rooms in sydney will remain empty for now after the company was deemed not fit to hold the license for its third australian casino it seemed to be at times profit at any cost and so there was probably a certain area of arrogance about it and used the company used to getting its own way and not only in its how it conducted its business but how it dealt with governments it was very adversarial right through the inquiry and as matters transpired they looked like they had things to hide and they did crown is now fighting to salvage its licence it has restructured its management and james packers influence has been vastly diminished he's given up his right to appoint directors until 2024. the company is nothing like it looked a year ago and a lot of the people who were there making key decisions and managing have gone and it's all about the quality of the people they're replacing them with and i've not got no complaints about any of the people that they've engaged or employed or appointed they looked pretty good and we've neutralized a big issue which was the packer influence on this company there are now royal commissions into crown in victoria and western australia the company's accounts and culture are also being audited the new south wales regulator is watching closely to the extent that something comes out that's a big issue for us in new south wales our rights are preserved under our regulatory powers anyway if we need to we'll serve another notice so right now what chance do you give crown of being able to open its casino in sydney oh hi chance um you know i'm seeing a company that's quite different but i do need i do need these audit tick-offs first if and when the casino does open crown sydney's high roller business model is now in serious doubt it's a total mess there is that enormous building sitting there yes it's got a six star hotel in it and lots of uh luxury apartments presumably crown as the developer is making some money out of it i don't know whether it's um it's operating at a loss or not with the collapse of international travel and particularly the chinese gambling market which predates covert it has to be said i would have having seen none of the figures i would have real doubts about the financial viability of barangaroo crown says it has sold more than 870 million dollars worth of luxury apartments at barangaroo including a 60 million dollar penthouse bought by james packer so this is the finished development what could have been here well this is the area that was earmarked for a wonderful community park and a large expanse of area where workers in the city buildings could come down at lunch time much as they do on the western side of the city in the domain where they go down and they run around and kick a ball so it could have been a beautiful park for the people and what have we ended up with well an international hotel apartments for the mega rich and perhaps a casino this is the great tragedy in all this we're left with you know this gigantic block of flats we look at it scratch our heads and wonder how in the first place and what might have been if things had been done properly james packer is considering selling out of the company he founded altogether a bitter final chapter in what was meant to be his crowning glory the crown saga is basically the end of the packers in australia and i would say that that is the most significant thing that's probably happened in sort of business stroke society for a long time it's australia australia is a very different country without a packer somewhere in the center of its epicentre of its influence james will be back the kids are growing up and so on you know he hasn't abandoned sydney but i think until this is resolved he he will be he won't be coming back [Music] what's concerning is not just the development itself it's the process or the lack of process that sits behind it the fact that this could be given the green light without adequate community consultation really sends alarm bells that if it could happen on sydney harbour it could happen anywhere that building should stand as a warning to every government to everybody in every town and every city in this country of what happens when you give up the public good the public interest for private gain [Music] and we should look at that building and forever know that we should never let that happen again [Music] [Applause] [Music] you

2021-06-04 23:35

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