Cisco’s dealings with the Chinese secret police

Jeremy Goldkorn of Danwei takes issue with a blistering post by Rebecca MacKinnon that once again slams Cisco for selling technology to China’s secret police, knowing it would be used to censor and police the Internet. Jeremy’s points raise some real ethical dilemmas that make this a maddeningly difficult issue to resolve. [He includes Rebecca’s entire Typepad post, which can’t be accessed in China, ironically.]

This writer is very happy to have the Internet at all — I remember the days when it was a struggle to get hold of a copy of Time magazine in Beijing. Whereas in China today today, you have access to almost as much information online as anyone in America, although it is slightly more difficult to find out about certain topics that the Communist Party would rather no one talked about.

If Cisco is blamed for filtering the Chinese Internet, they should also be praised for being a part of building it in the first place.

How to argue this? Maybe I can’t, especially since my skills as ethicist and attorney are sorely limited. But I know part of me is uncomfortable with the argument that we should be happy with what Cisco gave China even if it came with a hidden price tag in terms of censorship and, on more than one occasion, outright repression.

But let’s move the conversation away from the benefits the Internet has brought to China, even with the censorship. What about the implications of the deal for America? It makes a strong statement about US businesses, which seem unaffected by our great president’s clarion call for freedom and liberty and democracy. It’s the cornerstone of our so-called foreign policy, and yet it seems businesses — which reap 99.999 percent of the benefits of Bush’s laissez-faire policies and tax cuts — are allowed to operate in a shadowy parallel universe where such notions as freedom and liberty are considered quaint and anti-productive because they might result in lower sales. China’s secret police are exactly the type of freedom supressors Bush is railing against. Should US companies that do business with them be receiving the largesse of lucrative tax cuts?

This brings up huge ethical questions about business in general, from selling cigarettes, toxic fast food and Thunderbird “wine.” In a world where businesses exist only to make profits for shareholders at any price — at the expense of customer’s health and safety — Cisco is only doing what everybody else does.

So what do we do, nationalize all the companies, run them by the state and regulate every deal they make to be sure they’re in the public interest? I think it’s been done before, with less than stellar success. I have no answers.

Anyway, be sure to read MacKinnon’s excellent if somewhat dreamy post about her rather scary phone call with Cisco, and don’t miss the comments, including Jeremy’s. Then tell me if this isn’t one of the business world’s most mind-numbing dilemmas.

The Discussion: 29 Comments

Richard: The Forbes story link.

Need another reason to go for Linux?

July 22, 2005 @ 6:52 pm | Comment

Great link bellevue (requires free registration). Really low behavior.

July 22, 2005 @ 7:10 pm | Comment

I’m sorry, only yesterday that link was still OK. It’s the capitalism served fresh daily.

July 22, 2005 @ 7:14 pm | Comment

This writer is very happy to have the Internet at all

I can’t agree more with this point. What exactly is MacKinnon advocating? Stop Cisco from selling its products to China? Does anyone else find it ironic that her solution to internet censorship in China is to completely cut off all internet access to the Chinese?

July 22, 2005 @ 7:14 pm | Comment

Somehow I got in without registration (not using Chinese spyware):

The Middle Kingdom isn’t just trying to buy American companies on the open market. It’s also stealing industrial secrets by taking over corporate computers.
China’s swipe at such U.S. assets as Unocal’s oil wells and Maytag’s trade name are very much in view. Less obvious: a far more insidious grab for industrial secrets. This electronic theft is taking place with the tacit okay, or at least the nonintervention, of the Beijing government.

The latest attack is a so-called Trojan horse, code used to swipe information from compromised PCs, named Myfip. It first emerged last August in the theft of PDF documents. At least 11 other versions of Myfip were widely circulated from September to April, seeking to gather sensitive documents, like CAD/CAM files used to store, say, mechanical designs, electronic circuit board schematics and layouts. Myfip is sent via spam and can navigate a corporate network once a user clicks on the attachment.

Details of such espionage came to light after Joseph Stewart, senior researcher at Myrtle Beach, S.C. security firm Lurhq, reverse engineered Myfip’s code in May on behalf of clients. He discovered it was sending stolen data to an Internet user in Tianjin, China’s third-largest city and the second-biggest hub for manufacturing, particularly electronics. Some Internet protocol addresses were linked to an Internet domain name registered to someone called Si Wen in Tianjin. The thieves were so flippant about law enforcement that they didn’t even bother to conceal the origin of their mailings, a common practice for international hackers. “This seems to be an attempt at intellectual property theft,” says Stewart. He believes Myfip is just the start of a wave of China-sponsored cybercrime that will seek out vital trade secrets. “Nothing suggests that Chinese authorities are vigilantly prosecuting those who are attacking foreign interests,” says John Watters, chief of Idefense, the Reston, Va. intelligence firm. “They turn a blind eye to it as long as it doesn’t oppose national interests.”

“This is a serious, huge issue,” says David Jevans, chairman of the Antiphishing Working Group, a consortium of banks, software vendors and law enforcement agencies that keeps an eye on identity theft. “The risk of losing credit card numbers can be managed, but there are some things you can’t ever afford to have compromised.”

There have already been large-scale attacks in Britain. Last month the U.K.’s National Infrastructure Security Co-ordination Centre issued a major call for vigilance, noting 17 targeted Trojan horse attacks sent by e-mail that “appear to be covert gathering and transmitting of commercially or economically valuable information” from British companies and the government. The attacks have been going on for a “significant period of time with a recent increase in sophistication.” It seems the IP addresses used to send the e-mails and control the malicious code are linked to the Far East; at least one Trojan in play, Netthief, has been traced to a Chinese source.

Israel, too, has had its share of such cyberspying, stemming from a case dubbed the Trojan Affair. In May, Michael Haephrati, a computer consultant, was detained in London and is now awaiting an extradition hearing for allegedly selling a rogue program to Israeli private investigators who used it to spy on their clients’ competitors. Eighteen Israeli executives have reportedly been arrested for trying to steal information from rivals; the victims include Israeli affiliates of Hewlett-Packard and Ace Hardware. Police suspect that cell phone carriers, an importer of Volvos and a mineral water supplier, among others, spied on the competition. Israel’s central bank governor warned that the scandal might scare off foreign investors.

Catching crooks is a matter of luck. The Israeli case came to light only because Haephrati’s former mother-in-law, a writer and radio psychologist, suspected him and notified police after passages from her then-unpublished book–L For Lies, in which a Haephrati-like character is a crime suspect–suddenly surfaced on the Web. Myfip, like some phishing attempts, still requires clicking on an attachment, tough for technology to prevent. One tip-off: clumsy English instructions like “Plain table please you download.” Once the Myfip gang gets grammatical, watch out.

July 22, 2005 @ 7:18 pm | Comment

I don’t think she said that at all Hui Mao. Cisco isn’t the only company that can provide networking technolopgy. She is saying American companies shouldn’t sell potentially repressive technology to the secret police of dictatorships.

I’m still not sure if I fully agree. I think she makes a very thought-provoking argument.

July 22, 2005 @ 7:20 pm | Comment

And I agree with Jeremy, China is better off with the Internet it now has, even with all its pitfalls. But should American firms receiving heft breaks from Lord Bush be facilitating those pitfalls?

July 22, 2005 @ 7:26 pm | Comment

What’s all this talk of secret police? the article published on Danwei that I read yesterday said quite clearly that Cisco was selling its routers and what not to the Public Security Bureau. Hardly secret, these guys, I was in their office just the day before yesterday. Perfectly ordinary police, they are, who wander around in full uniform and drive very clearly marked cars. Not only that, but Cisco pointed out that the equipment sold had many perfectly legitimate uses in the field of communications. Would Ms MacKinnon have the Chinese police struggling to communicate with each other? What would happen then? Does she really want to see criminals getting away scot free because the police are stuck using antiquated communications technology?

I’m sorry, but I see the article as it was published on Danwei as more of an own goal than any kind of prinicpled stand.

Yes, repression and censorship are bad. And yes, a morally upright company really should consider the possible end uses of its products before it sells to governments or organisations likely to misuse them. But as Jeremy wrote, it’s far better to have the internet, even with its rather over-rated (although sadly developing) Great Firewall, than to have nothing but China Daily.

And I don’t see how the receipt of tax breaks from the US government complicates this issue at all. That’s a whole different moral dilemma. You know as well as I do corporate welfare existed long before either Bush inhabited the White House. The issue here is that the US government should stop handing out vast wads of cash to people who have no need of it and spend the money on those who do need it instead.

July 22, 2005 @ 7:57 pm | Comment

Repeat, Chris, I think there are two arguments:

1. Is China better off with the Internet even with the censorship. YES.

2. Should companies given huge breaks by the freedom-espousing US provide filtering/censoring technology to the very systems Bush rails against? Questionable – I am not sure.

Rebecca is the one who refers several times to “secret police.” Call them what you will, but I don’t see that as a misrepresentation. If they aren’t overseen and controlled by (and accountable to) the public, are they not secret?

July 22, 2005 @ 8:26 pm | Comment

I hate to break the news to you guys, but taxes are not a benefit, they are a burden. High taxes are a heavy burden. It is difficult to associate, but countries with high tax rates have moribund economies.

I am not sure that banning or blocking or interferring in trade with other countries on ethical grounds is in itself ethical. Just look at Iraq. On ethical grounds a trade embargo was imposed and immense suffering become the lot of the Iraqis, with a resulting death toll far greater than has occured from the American invasion and occupation. it also appears to be rather selective, almost faddish in applying such ethical principles. The Indonesian Moslem massacre of the Chinese Christian minority, the Cambodian massacre of one third of its population by Pol Pot, the slaughter that occurred in Rwanda, etc. being what I am thinking right now.

The use of censorship by the Chinese government is not good, it will be a hindrance in their devleopment and will cause bitterness within its population. Such action and more will come home to roost for the government. We can tell them, we can advise them, but it is not our role as policeman or ethicist to force and restrict the Chinese government in this matter, either directly or indirectly.

I see a problem with the direction that you are taking ethics. I had a friend, he had a serious liver problem and the doctors told him he had to quit drinking. But he was dying for a drink, in his case literally. Am I under some ethical requirement to take him behind the barn and beat the crap out of him. Am I to hold him prisoner? Freedom carries not only priviliedges and responsiblities, but also accountability. I know in modern America and Europe we want to remove accountability from everyone and leave it give that to “big business”. China and the Chinese people are responsible for their own conduct.

July 22, 2005 @ 9:00 pm | Comment

Should American companies sell chemical weapons to Kim Jong Il if he asks, since he is responsible and not the companies that sell to him?

What does our rhetoric about freedom mean? Is it empty sloganeering or do we put our money where our mouth is?

And I’m sorry, there is enough evidence of blind corporate greed and lying to make we wonder, do we give them carte blanche under the mantra of “freedom”? Is it in keeping with the American rhetoric on freedom to allow companies to sell chemical weapons to North Korea — or does that fly in the face of that rhetoric, given what North Korea is all about? Was it okay for IBM to sell machines to Nazi Germany that allowed the SS to process the Jews in Auschwitz — knowing that was their purpose and customizing them for it? Should the attitude be, “We just sell them the bombs, where they come down isn’t our business?”

July 22, 2005 @ 9:06 pm | Comment

I don’t think she said that at all Hui Mao. Cisco isn’t the only company that can provide networking technolopgy.

Sure, there are other providers of networking equipment, but I don’t see why MacKinnon would be happier if it’s Juniper making the profits instead of Cisco.

She is saying American companies shouldn’t sell potentially repressive technology to the secret police of dictatorships.
It’s not possible to keep communication equipment out of the hands of the police while continuing to sell them to private entities and other government agencies in China. Also, is it still wrong to provide communication equipment to the Chinese police if they help to prevent crimes like murder, rape, robberies, etc?

July 22, 2005 @ 9:21 pm | Comment

A strange bit of reasoning there. If they sold the technology to the police believing it was to help capture rapists I might applaud them. But like IBM and their holocaust software, they knew exactly what it was for. Exactly.

It wasn’t a matter of keeping it out of the hands of the police. It was sold directly to the secret police, knowing what it was to be used for.

July 22, 2005 @ 9:40 pm | Comment

another bullshit from a ma-lie-lao-tai mentality

another bullshit from a ma-lie-lao-tai mentality

July 22, 2005 @ 9:42 pm | Comment

It was not only sold directly to the secret police or not, but it was intended to work for secret police’s secefic purpose by CISCO (with a republican CEO donating heavily to Bush campaign). The IBM punchcard machine / Nazi Germany analogue is exactly the right one.

If you still think CISCO is innocent about who their customer is, then someone testifies:

Cisco’s booth dwarfed the others. An entrance ringed by video screens showed dramatizations of American police frisking suspects, brandishing Cisco mobile handsets that linked directly to databases and surveillance footage from stores, waiting rooms, bathrooms and other public places.

This presentation of America as an efficient police state (with no pesky search warrants required to access confidential databases or private surveillance) were juxtaposed with optimistic sound bites by John Chambers. Cisco’s PowerPoint presentation, “The CISCO Network Solution for the ‘Gold Shield Project’” contained phrases such as “Telephone solutions for Police Surveillance,” and “Video Surveillance Solutions for the Increase of Social Stability.”

A systems engineer from Cisco’s Shanghai Branch, Mr. Zhou Li, gave me an enthusiastic sales pitch for the launch of Cisco’s “policenet” technology. Cisco’s brochure diagram of the policeman linked back to information nodes is technically accurate, he explained, but “we are not just talking about accessing a suspect’s driving record here.”

Cisco provides a secure connection to provincial security databases – cross-checking and movement tracing. A Chinese policeman or PSB agent using Cisco equipment can remotely access the suspect’s “danwei,” or work unit; access reports on the individual’s political behavior and family history; access fingerprints, photographs and other imaging information; access the suspect’s surfing history, and read their email.

This is not just a sales pitch: Cisco has built a structure for a national PSB database, with real-time updating and mobile-ready capabilities, and as of June 2003, it is already resident in every province of China, except Sichuan.

So they’ve only achieved less than 1% of CISCO’s vision.

In fact, CISCO could have made their practice less infamous, by selling to a front company or lower their marketing profile a little bit. The very fact that they chose the alternative reveals not only Corporate America’s inscrupulousness, but also their final recognition of the Beijing regime as a legitimate (or even best) partner for profit, insdead of a Communist pariah, all at Chinese people’s expenses.

July 22, 2005 @ 10:54 pm | Comment

Richard, you are starting to step out on the deep end with some of your comparisons. For instance, I am not familar with the IBM Nazi connection. What you are hinting at is that IBM sold typewriters and other data machines to Nazi Germany who used that equipment in processing the Jews in the concentration camps. When did this happen, 1941, 42, 43, 44? Did IBM run the blockades? And the way you worded you comment, it appears that IBM was asked to by an advisor to the camps themselves and they provided the best information on how to exterminate six million jews and seven million others. I may be in error here, but I believe the first camps were created in 1940, right after WWII began for the Europeans.

The real problem is attempting to make specific restrictions on the use of material and technology. This is not new, and I an not aware of anyone able to make specific restrictions on economic flow. As an example. During the great depression, Hubert Hoover, who thought the whole thing was due to speculation on the stock market, and so made restrictions on loans for stock speculation. Unfortunately, economic flow cannot be restricted in that way, not because of ethical or legal reasons, but because economic flow moves in a fashion that supply meets demand, either directly or indirectly.

What I find rather amazing is that the arguements the right used before in attempting to restrict support of those whom right hated are now used by the left for the same reasoning, and with probably the same result.

Also, Richard, to equate Chinese censorship with German Nazi policy of extermination of human life on a grand scale trivializes the horror of what the Germans did. What the Nazis did, what Pol Pot did, what people do when they butcher other human beings is savage and utterly horrid. What the Chinese are doing is terrible in its own right, but it is not in the same order as what the Nazis did.

Concerning North Korea. Arming missiles by the North can be considered a direct threat to ourselves. That is the reason we have the right to stop them, that threat to our liberty. Chinese censorship is not a direct threat to our liberty, it may be a threat to Chinese liberty, but we have not received authorization by anyone to provide police power to enforce Chinese liberty.

I cannot figure if you are on the left or the right. I am rather an optimist. I think the Chinese people can take care of themselves and will do so in the future. Censorship and all other means of human oppression carry within themselves their own seeds of destruction.

July 22, 2005 @ 11:29 pm | Comment

I suppose some of the argument is that by allowing Cisco to engage in this activity, it is a danger to the U.S.A., China and Japan, because it limits access to information regarding those three countries and can in some sense be said to further foster the nationalism and hate that some people in China hold against Japan and the U.S.A., while denying China’s own history.

This nationalism could come up to demand military action against Japan or the U.S.A., possibly, which would certainly qualify Cisco’s activities as a sort of threat, as the Firewall creates the environment for this Nationalism and historical revisionism to breed.

To make myself clear on one point: I am NOT saying that Japan didn’t do horrible, inhumane things during WWII. And I’m not saying that they haven’t done enough to make up for those events. But I do think that the attitudes toward Japan are strangely uninformed, and that China has quite a few of its own atrocities to own up to as well.

July 23, 2005 @ 2:44 am | Comment

That’s the old dual-use technology problem. Sometimes you just can use a michine for both good and bad things. No solution as I see it.

From Wiki on IBM and the Nazis:
“Dehomag was a German business, effectively a franchisee and subcompany of International Business Machines. The word was an acronym for Deutsche Hollerith-Maschinen Gesellschaft mbH – “German Hollerith Machine Works Company.” “Hollerith” refers to the technology of punched cards.

Under Nazi Germany, DeHoMag was the company that leased and maintained the Nazis’ collection of punch card machines. The use of this technology increased the efficiency of the Final Solution greatly.”

July 23, 2005 @ 3:49 am | Comment

Hui Mao,

You either didn’t read the article properly or you’re just trying to confuse the subject. It is quite clear that there is nothing wrong with providing the Chinese with internet services, but selling equipment to the PSB when Cisco KNOWS what’s being done with their technology is clearly wrong. Can you explain to me why the whole Chinese internet system relies on the PSB having access? The less access they have the better for the rights of all Chinese people.

Laowai is correct. If nations allow their companies to help in the censorship of information in China, they’re shooting themselves in the foot. I’ve said it before, and I’m sure everyone else has experienced it, but it’s already impossible to have a fair debate with someone on a Chinese forum because they can rattle off irrelevant, erronious slander against your country/point of view. Even if your points are well researched and considered, they can be removed if they are too “controversial”. So many Chinese people are getting a squeued view of the world because certain kinds of crucial information are denied to them. Most Chinese still think America started the Korean War and know very little of the UN mandate. I dread to think what the next generation of Chinese (the current youth) would be like if things got tense between China and other countries.

Cisco obviously has no morals and is just greedy. They have a right to sell their products but with that comes RESPONSIBILITY. Perhaps they might change their tune if victims of Chinese police brutality sued them for helping the PSB.

July 23, 2005 @ 5:49 am | Comment

Cisco, along with all other corporations, are not created to enforce moral standard or respond to anything other than stock quote. That’s fine, but even in this sense Cisco has crossed line of basic ethics. Remember, Cisco is not merely making products to orders. It actively engages in designing, inventing technologies to facilitate the crackdown of dissents and supression of free speech, to satisfy its customer (in this case = gross human rights violator) to the degree beyond its customer’s expectation.

It’s too early to say whether or not the US interests is compromised by Cisco’s conduct. True, no American’s liberty is at stake, but also true is, when the news breaks to the Chinese public, they will not perceive America in the way America wants to be, to say the very least.

July 23, 2005 @ 7:13 am | Comment

What it appears to me is that you are attempting to have a private company determine American foreign policy. If you believe that the United States should not allow this technology to be transferred to China, then the Federal government should restrict such action. To attempt to pass the onus on to a private company is rather cowardly. And the basis of your position is ethics or morality-this is pretty evangelical based thinking. I have no problem with moral and ethical positions, but that is a personal action. If we want collective action that represents American foreign policy, then make it American foreign policy. Why is Cisco or any other American company suppose to be bound to your moral or ethical positions. If we go that route, then let us choose someone who has better creditentials for ethics and morals; let us choose the Pope, for instance (I am not Catholic for the record).

July 23, 2005 @ 8:08 am | Comment

I’d rather sell missile technology to a country with freedom of press and information than let cisco help suppress information in China. I’m obviously not in control, but it seems short sighted of me to get worked up about Chinese military expansion when the the Great Firewall is more the threat by allowing the hate to expand in an uncritical and uninformed environment.

July 23, 2005 @ 8:09 am | Comment

Haha, but to think about it, I have to say that the US has its own share of uninformed and uncritical environs…. like the Senate, for instance.

July 23, 2005 @ 8:25 am | Comment

What it appears to me is that you are attempting to have a private company determine American foreign policy.

To be accurate, I run the risk of having a private company carry out American foreign policy. Yes, some friends of mine have already warned me against such thinking. And there is merit in it. I certainly can’t enforce my own personal moral standard onto other, just like I’m not supposed to blow up an abortion clinic.

But I do believe Cisco is harming this country. There must be something wrong. However I haven’t sort it out – how to deal with it.

The China threat is unconventional. So you’ve got to be original. To re-think our strategy is the first step. One probably can’t be too complacent with our success story winning the Cold War. Just my 2 cents.

July 23, 2005 @ 8:33 am | Comment

… the US has its own share of uninformed and uncritical environs…. like the Senate, for instance.

So you didn’t vote for Barbara Boxer?

July 23, 2005 @ 8:35 am | Comment

Thank you for drawing the connection between Cisco-PSB and IBM-Nazis. Perfectly true. From a review of IBM and the Holocaust:

“As the Third Reich embarked upon its plan of conquest and genocide, IBM and its subsidiaries helped create enabling technologies, step-by-step, from the identification and cataloging programs of the 1930s to the selections of the 1940s.

Only after Jews were identified — a massive and complex task that Hitler wanted done immediately — could they be targeted for efficient asset confiscation, ghettoization, deportation, enslaved labor, and, ultimately, annihilation. It was a cross-tabulation and organizational challenge so monumental, it called for a computer. Of course, in the 1930s no computer existed.

But IBM’s Hollerith punch card technology did exist. Aided by the company’s custom-designed and constantly updated Hollerith systems, Hitler was able to automate his persecution of the Jews. Historians have always been amazed at the speed and accuracy with which the Nazis were able to identify and locate European Jewry. Until now, the pieces of this puzzle have never been fully assembled. The fact is, IBM technology was used to organize nearly everything in Germany and then Nazi Europe, from the identification of the Jews in censuses, registrations, and ancestral tracing programs to the running of railroads and organizing of concentration camp slave labor.

IBM and its German subsidiary custom-designed complex solutions, one by one, anticipating the Reich’s needs. They did not merely sell the machines and walk away. Instead, IBM leased these machines for high fees and became the sole source of the billions of punch cards Hitler needed.

IBM and the Holocaust takes you through the carefully crafted corporate collusion with the Third Reich, as well as the structured deniability of oral agreements, undated letters, and the Geneva intermediaries — all undertaken as the newspapers blazed with accounts of persecution and destruction.

Just as compelling is the human drama of one of our century’s greatest minds, IBM founder Thomas Watson, who cooperated with the Nazis for the sake of profit.

Only with IBM’s technologic assistance was Hitler able to achieve the staggering numbers of the Holocaust. Edwin Black has now uncovered one of the last great mysteries of Germany’s war against the Jews — how did Hitler get the names?”

July 23, 2005 @ 10:18 am | Comment

Holocaust survivor – you might be interested to know that my Grandpa was half responsible for IBM’s monopoly break-up, and that he is half-jewish (the half that doesn’t make you fully jewish – his dad).

Sweet justice.

July 23, 2005 @ 11:17 am | Comment

It makes no difference to me whether you are a holocaust survivor or not, bull shit is bull shit.

The holocaust was (and as they seem to continually reappear, also is) a terrible and evil deed. But attempting to transfer the guilt of evil deeds to companies or technologies is to trivialize the real cuprits, the people that plan and execute the deeds.

I had a friend here in China (Chinese) that was killed by some thugs, they used a brick. In American and Europe the gun has been demonized, as if killing someone with a gun is unbelievably evil. It is not. It is the killing that is unbelievably evil.

July 24, 2005 @ 2:20 am | Comment

For sure JFS the killing is the evil bit but what at what degree of seperation do you become guilty?

I sell an insane man a knife, he uses it to kill a guy.
I didn’t know he was going to, it is just a higher probability right?
There was no law saying I can’t sell it so why should I impose my moral standards upon him?
Can’t he buy it from somebody else?

The dillemma is that the consequences of selling tech are not clear enough, plus private companies do not have ethics. So it’s up to the government to legislate.

Personally I think Cisco gear is pretty shitty and even if they refused to sell it somebody else certainly would have, perhaps at a slightly higher price.

July 24, 2005 @ 6:04 am | Comment

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