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American Morning

Texas Storms; U.K. Terror Report; Nightclub Sentence; Fuel Banks

Aired May 11, 2006 - 06:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


SOLEDAD O'BRIEN, CNN ANCHOR: Good morning, everybody. Welcome to Thursday. I'm Soledad O'Brien.
MILES O'BRIEN, CNN ANCHOR: And I'm Miles O'Brien.

Here's a look at what's happening this morning. It is Thursday, May 11.

And there's more violence in the troubled southwestern portion of Pakistan, a series of bombings this morning. At a police training school, six officers dead, a dozen more injured. Unclear who is responsible, but tribes there are pushing for more autonomy and a greater share of oil revenue.

A $70 billion tax cut package all but in the mail this morning. The Senate endorsement expected later today. The bill passed the House yesterday. It would extend the lower tax rate for capital gains and dividends for two more years and make changes to the alternative minimum tax.

S. O'BRIEN: An ethics investigation dropped. The Ethics Office of the Justice Department was looking into just who approved the National Security Agency's domestic surveillance program. Well that probe is now dropped because investigators were denied security clearances.

President Bush goes to Biloxi today. He's giving the commencement address at Mississippi Gulf Coast Community College. About 3,000 students left the college in the aftermath of Hurricane Katrina.

M. O'BRIEN: Another step in the long road home for thousands of homeowners in New Orleans. They could get more money to rebuild. Louisiana lawmakers have approved Governor Kathleen Blanco's $7.5 million hurricane aid program, but the plan relies on billions of dollars in federal assistance and that is still tied up in Congress.

An old-fashion posse is on the hunt for illegal immigrants southwest of Phoenix. The Maricopa County sheriff taking matters into his own hands. Typically, the federal Border Patrol has jurisdiction, but a new Arizona state law allows the sheriff and his posse to pick up border crossers on state smuggling charges.

S. O'BRIEN: A dusk until dawn curfew is in effect in Westminster, Texas. That's north of Dallas. The area, of course, devastated by tornadoes. Three people died. More than two dozen homes were destroyed. Westminster has been declared now a disaster area.

In Florida, a 12-mile stretch of Interstate 95 now closed indefinitely between Edgewater and Port Orange. Workers say they need time to clear the trees that were damaged by the brushfires that are starting to now fall across that highway.

Let's get right to a forecast this morning. Chad Myers is at the CNN Center.

Chad, where do you want to start, in Florida there?

CHAD MYERS, CNN METEOROLOGIST: Yes, we'll start in Florida, because there's just a big wave of rain that's headed to them and that's some help to stop the fires. But also with that wave of rain will also probably be a wave of wind.

(WEATHER REPORT)

Back to you guys.

M. O'BRIEN: Thanks, Chad, back with you in just a little bit.

Let's get back to the destruction in Texas. Some residents north of Dallas now have the daunting task of trying to rebuild after their homes were wiped out by those tornadoes we told you about yesterday first.

CNN's Rob Marciano takes a look at how some people rode out the storm.

(BEGIN VIDEOTAPE)

ROB MARCIANO, CNN METEOROLOGIST (on camera): Some of the survivors' stories coming out of Westminster, Texas are truly amazing. Here, in the pantry of their home, a couple huddled together as the storm rolled through. Look how this tornado ripped their entire home off its foundation and piled it up on the other end over top of their garage. Two by fours, studded walls here, I mean this is a newly- constructed home, a strong home.

To give you an essence of how strong this tornado was, here's the water heater. Now we're into the garage, which was obviously damaged, and the car here pretty much totaled. They had a pickup truck in the driveway. That's about 300 yards over into a ditch, did several barrel rolls.

Well the cleanup effort here continues. The good news here, obviously, that they survived miraculously, and there are several of those survival stories here out of this tornado.

But behind me, not only this home, but another home, completely wiped off its foundation. Friends and family gather and continue to pick up the pieces and at least pile up the rubble so that the people who live in these homes can come back and sift through some of their personal property. But the storms, at least for now, have moved on to the east. Reporting from Westminster, Texas, I'm Rob Marciano.

(END VIDEOTAPE)

S. O'BRIEN: Sad situation there.

Let's get to a CNN "Security Watch" this morning.

It is being described as the largest database ever assembled in the world and your phone number is probably on it. "USA Today" is reporting new details of the National Security Agency's program to secretly collect phone call records. The program has been up and running ever since 9/11. The spy agency says they are trying to detect terrorist activity.

Here are some details.

The report does say that the program doesn't involve listening to your calls, just keeping a log of who you are calling. AT&T, Verizon, BellSouth, they're all part of the program. Qwest refused to participate. The paper says the NSA program is far broader than even what the White House has ever acknowledged.

A new report out this morning finds that British intelligence may have missed a chance to stop the London transit bombings. It says British intelligence services were monitoring two of the bombers, decided, though, to focus their resources elsewhere. The July 7 bombings were Britain's largest terror attack. Fifty-two people were killed when suicide bombers targeted three subway cars and a bus.

Let's get right to Paula Hancocks this morning. She's live outside the King's Cross Station in London. That, of course, is the site of one of the bombings.

Hey, Paula, good morning.

PAULA HANCOCKS, CNN CORRESPONDENT: Hello, Soledad.

Well they have decided in this particular report that no single agency and no single individual was to blame. This is what we were expecting.

What the report does say to blame for not preventing the July 7 attacks was a lack of resources. The fact there weren't enough people to deal with the amount of threats that were coming through. They say that between 2003 and 2005 the amount of targets, potential threats and potential organizations trying to organize a terrorist activity had risen 300 percent. So they're basically saying that the sheer number of threats and the lack of people is why they couldn't stop this particular attack -- Soledad.

S. O'BRIEN: How much did British intelligence officials know about the suspects, if anything, before the attacks -- Paula?

HANCOCKS: They had been watching two of these suspects, the ringleader, Mohammed Sidique Khan, and also one of his fellow suicide bombers, Shahzad Tanweer. They say that they had watched them in relation to other operations. They thought they were on the periphery of a potential operation which they were focusing on. They claim that they did not know the identity of these two men before the attacks.

And also the fact that they were focusing on other operations, the committee, the report finds this understandable. They say there was such a sheer number of threats and they were prioritizing. The security services believed that other potential threats at that time were more important. They didn't think that these two men were a threat.

S. O'BRIEN: So what's the overall assessment, Paula? What -- does the report sort of give a final word on the terror alert system overall in Britain?

HANCOCKS: The terror alert system, certainly. It's very convoluted over here. Just before these attacks, the terror alert system had actually been lowered from severe general to substantial. Now it's very difficult to understand.

This report is saying it should be really more like the American system, the fact that it's easy for the public to understand, it's color-coded. But over here, it's very convoluted. Different security services and different agencies don't necessarily follow the same one. So they are saying that there should be a more coherent system and they should talk to each other more.

S. O'BRIEN: That's interesting that they think the one here is a little easier to understand than the one where you are, because I think a lot of people here aren't sure how the system really works, you know, but that's a debate for another day.

Paula Hancocks for us this morning.

Paula, thanks.

You want to stay tuned, of course, to CNN day and night for the most reliable news about your security -- Miles.

M. O'BRIEN: Still more questions than answers days after that rampage at the police station in the Virginia suburbs of D.C. On Monday, 18-year-old Michael Kennedy opened fire on police in a parking lot during a shift change. One officer critically injured, another killed. Flowers and stuffed animals surround the car of the dead officer and the stationhouse remains closed this week. Yesterday, police found an arsenal of weapons inside Kennedy's home. Kennedy was killed in the ensuing shootout there.

More emotion in a Rhode Island courtroom, not from the victims of that nightclub fire, but from the man held responsible. A judge sentenced the former band manager, Daniel Biechele, to four years in prison yesterday. He set off the pyrotechnics that sparked the fire at The Station nightclub in 2003.

CNN's Allan Chernoff at the courthouse in Providence.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN CORRESPONDENT (on camera): Family members of the victims poured out of court right after the sentence was announced, some deeply disappointed and others believing that indeed the sentence was fair.

Dan Biechele received a sentence of four years in prison. He was the band manager who lit the pyrotechnics that triggered the fire that burnt down the nightclub and killed 100 people. There is no question that Biechele was contrite. He had written apology letters to the families, and in court, he begged for mercy.

(BEGIN VIDEO CLIP)

DANIEL BIECHELE, FMR. GREAT WHITE TOUR MANAGER: I don't know that I'll ever forgive myself for what happened that night, so I can't expect anybody else to. I can only pray that they understand that I would do anything to undo what happened that night and give them back their loved ones.

(END VIDEO CLIP)

CHERNOFF: It was a very tough call for the judge. Under a plea deal, Biechele could have been sentenced to as much as 10 years in prison. He plead guilty to 100 counts of involuntary manslaughter. Minutes after Biechele's statement, the judge announced the sentence.

(BEGIN VIDEO CLIP)

JUDGE FRANCES DARIGAN, RHODE ISLAND SUPERIOR COURT: This court will therefore sentence you to 15 years at the ACI, 4 years of which to be served by you with 11 years suspended, and the court will place you on probation for a period of 3 years. This court does not believe that you pose a threat to society in the future. And the court believes that this is reasonably appropriate for the matters we have heard here today.

(END VIDEO CLIP)

CHERNOFF: Biechele is the only person in this case who has actually plead guilty. The club owners are expected to face trial later this year.

Allan Chernoff, CNN, Providence, Rhode Island.

(END VIDEOTAPE)

S. O'BRIEN: Happening in America now, police believe there is a killer alligator on the loose near Sunrise, Florida. The body of a woman was found in a canal. Police say it looks as if she was bitten by an alligator. Witnesses say they saw the woman dangling her feet in the canal during a bike-riding trip.

In California, still missing. Somebody stole 700 pounds of dynamite from a mining company eight days ago. About 200 pounds have been returned, left outside of a fire station in Riverside on Wednesday. No sign, though, of the rest of it yet. There's a $25,000 reward for any information about the explosives.

Noted journalist A.M. Rosenthal died. Rosenthal, who was more commonly known as Abe, was Executive Editor for "The New York Times" for nine years beginning in 1977. He began at the paper in 1943 as a part-timer. A.M. Rosenthal was 84 years old.

And a follow-up now on a story we told you about yesterday, the prom will go on, in fact, for six (ph) seniors in Massachusetts. Remember this story, the prom dates were originally denied after they had those criminal background checks. Well officials from the Dennis- Yarmouth Regional school district says they can't get the investigations finished before the prom on Saturday, so they're reversing course and they're going to allow the dates to attend.

And how about this one, coming soon on the Grand Canyon, take a look, a new way to see the canyon, but definitely not for the faint of heart. A horseshoe shaped Plexiglas bridge. Right there. That's the artist's rendition. It's going to extend from the canyon rim 4,000 feet above the Colorado River.

M. O'BRIEN: Wow!

S. O'BRIEN: I'm not sure I would -- no, yes, I...

M. O'BRIEN: I -- it's shaped like a U to stand for...

S. O'BRIEN: It's like a big horseshoe.

M. O'BRIEN: ... are you nuts...

S. O'BRIEN: Yes.

M. O'BRIEN: ... to be on this thing. Should be like a...

S. O'BRIEN: But it will be made of glass that you can look down and enjoy that beautiful view.

M. O'BRIEN: Should be a V for vertigo...

S. O'BRIEN: Yes.

M. O'BRIEN: ... is what it should be.

S. O'BRIEN: That sounds like a really bad idea.

M. O'BRIEN: Wow! All right. Another...

S. O'BRIEN: For me.

M. O'BRIEN: What?

S. O'BRIEN: I said for me. Maybe people would enjoy it.

M. O'BRIEN: No, I'm not going out there, no.

S. O'BRIEN: Yes. M. O'BRIEN: Another O for Barry Bonds last night, leaving him stuck one behind Babe Ruth for number two on the career home run list. So he's still number three now, just to get that straightened out here. He gets another shot tonight against the Cubbies.

Bonds is close to Ruth. He's still got a little ways to go for Henry Aaron, of course, with 755. Bonds is a year older than Babe Ruth was when he hit 714. A footnote, Henry Aaron was actually five days short of his 40th birthday when he passed Ruth. We're just doing ages this morning, I don't know. Just another little stat to throw in as we wait for him to catch up with the Bambino.

Still to come in the program, Russia growling back at the U.S. after recent criticism from Vice President Dick Cheney. We'll have more on President Putin's comments for you coming up.

S. O'BRIEN: And locking in the price of gas before it goes any higher. Carol Costello has a look at that story for us just ahead.

M. O'BRIEN: Plus, it's now down to the final three. Which of these four "Idol" wannabes got the boot? It was the wrong person, I'm telling you that right now. It was a big mistake. We're going to explain to you how a guy got robbed.

Stay with us.

(COMMERCIAL BREAK)

S. O'BRIEN: More trouble for Florida commuters this morning, falling trees caused by brushfires are covering part of Interstate 95, 12 miles in fact, from Port Orange to Edgewater closed. The crews are now clearing the debris.

The agency that oversees the Internet says no to creating an X- rated domain. An official at the Internet Corporation for Assigned Names and Numbers says creating a xxx domain might require the agency to enforce anti-porn laws.

And in New Zealand, Keith Richards of "Rolling Stone" -- the Rolling Stones, rather, he got out of the hospital today. You know he had to have surgery to relieve the pressure on his brain after he fell out of a tree. That happened when he was on the island of Fiji.

M. O'BRIEN: Wow!

S. O'BRIEN: Looks good.

M. O'BRIEN: And he is the survivor, isn't he?

Time for another high-octane look at the price of gas. Here's the latest CNN gas gauge for you. The national average -- where's the music? Jerry (ph), no music? All right.

S. O'BRIEN: Jerry, man, what's that about?

M. O'BRIEN: Two dollars eighty-nine cents for unleaded regular, down just slightly over yesterday. Imagine music and a graphic now. One month ago...

S. O'BRIEN: I'm trying to think of something to help you.

M. O'BRIEN: Can you put like $2.89 on a piece of paper for me? A year ago it was...

S. O'BRIEN: A year ago...

M. O'BRIEN: Put $2.18 now.

S. O'BRIEN: Two eighteen.

M. O'BRIEN: OK, $2.18. OK, there is the graphic support right there for you.

S. O'BRIEN: It's a graphic. You can hold it up...

(CROSSTALK)

M. O'BRIEN: You can't see it very well.

How would you -- the question I have for you is how would you like 99 cents a gallon?

S. O'BRIEN: All right. I'll take it.

CARRIE LEE, CNN CORRESPONDENT: Yes.

M. O'BRIEN: Bring it on, right? We told you about this the other day. There is one part of the world, St. Cloud, Minnesota, where they were smart enough. These people are good, smart people. They got a fuel bank going.

Carol Costello has more from the newsroom.

Hello, -- Carol.

CAROL COSTELLO, CNN CORRESPONDENT: I know. Imagine if you'd live in St. Cloud, you'd be in heaven when it came to gas prices, because really imagine paying 99 cents a gallon today. If only we all had access to a fuel bank.

(BEGIN VIDEOTAPE)

CAROL COSTELLO, CNN CORRESPONDENT (voice-over): It hurts to look, doesn't it, all that money going into your tank.

UNIDENTIFIED MALE: Gas prices are tough.

UNIDENTIFIED FEMALE: I think they're horrific.

UNIDENTIFIED FEMALE: We ordered a Prius today.

UNIDENTIFIED MALE: It cost me like 60 bucks just to fill my car up.

COSTELLO: So extreme. And if you're Bernice Gohl, so unnecessary.

BERNICE GOHL, FIRST FUEL BANKS CUSTOMER: A dollar twelve. I'm paying $1.12. It's great.

COSTELLO: No kidding, she did say $1.12.

GOHL: Hi.

COSTELLO: Gohl, like about 8,000 others, are tapping into a fuel bank. It saves Gohl roughly $1.77 off of AAA's national average.

ROGER PLOMBON, FIRST FUEL BANKS CUSTOMER: You've got gas in the bank, you've got -- you can put it in your tank.

COSTELLO: First Fuel Banks may be the best-kept secret in St. Cloud, Minnesota.

JIM FENEIS, FIRST FUEL BANKS PRESIDENT & CEO: Jason (ph), I'd like to visit, but I've got to run in.

COSTELLO: The family-owned business is 24 years old.

Roger Plombon has been a customer since the beginning.

PLOMBON: Same card, yes, since '82.

COSTELLO: He buys gas in bulk, sometimes years in advance, to lock into the price per gallon and hedge against rising prices.

PLOMBON: I am sub (ph) $2.

COSTELLO: Plombon purchased $2,000 worth last December. At $1.99 that's 1,000 gallons in his bank.

PLOMBON: If I don't have to pay that amount of money, $2.659. I'm paying $1.999, which suits me fine.

COSTELLO: But if you bought gas the day CNN visited St. Cloud, you'd lock in at $2.67 for a gallon of regular.

FENEIS: Well it gives the savvy buyer complete control. And of course the other person that wants to live hand to mouth, he can continue to trade at a convenience store.

COSTELLO: President and CEO Jim Feneis says about 300 customers locked in years ago at under a buck a gallon. Thousands pay under $2. Feneis is able to meet the demand because his tanks are six times the size of typical stations and his stations are totally automated, limiting overhead.

FENEIS: There is 5.33 piped here from Tulsa, Oklahoma to Minneapolis.

COSTELLO: Also, he is a savvy market player. Sales last year topped off at almost $14 million.

FENEIS: If you don't know what you're doing, one straight up market and you're gone.

COSTELLO: Cheaper gas leaves Plombon with more money to enjoy retirement.

PLOMBON: It means an extra trip going fishing or something, because I love to fish and hunt.

COSTELLO: And driving to his cabin at the price he pays at the pump won't break the bank.

(END VIDEOTAPE)

And as far as we know, St. Cloud, Minnesota is the only place where fuel banks thrive because it's a very, very tough business and you have to be one savvy businessman. In fact, Mr. Feneis buys gas futures contracts on the New York Mercantile Exchange to cover customers who buy a year's worth of gas or more because it's hard to get all of that gas like on your property, especially when gas supplies are in short supply. So there you have it.

M. O'BRIEN: This guy knows what he's doing. The question I have for you, Carol, is if you were in St. Cloud right now and part of that fuel bank, would you be a buyer today?

COSTELLO: You know I wouldn't be that forward thinking, I don't think. I wouldn't think about it.

M. O'BRIEN: Yes.

COSTELLO: Because how can you predict how much gas will be a year from now?

M. O'BRIEN: Yes, I'm just trying to get through 6.24. That's all I'm trying to get. I'm not a forward thinker at all.

All right, Carol, thank you very much.

S. O'BRIEN: I'd buy. I'd definitely buy.

M. O'BRIEN: I think buying...

S. O'BRIEN: It's low. Today you know was...

M. O'BRIEN: Yes. I think...

S. O'BRIEN: It's like $3.25 in Manhattan. I could buy it there and ship it and probably still make money on the deal.

M. O'BRIEN: Supply and demand would tell you it's going up.

S. O'BRIEN: Yes.

LEE: Right.

S. O'BRIEN: Let's talk business news, shall we? LEE: Yes, from gasoline to Federal Reserve hikes. We saw the 16th such hike, quarter-point hike yesterday from Ben Bernanke and team, the 16th hike in the last two years, putting the Federal Funds Rate at 5 percent. And as you can probably guess, commercial banks wasted no time raising their prime lending rate to 8 percent for certain credit card, home equity and lines of credit and other loans.

What about future rate hikes? The Fed next meets in late June, June 28 and 29. Well, that's still the big question mark. Bernanke and team said it's really going to depend on future economic data that comes out until then. The Fed said in a statement that some further policy firming may be needed to address inflation risks, but that the extent and timing is really going to depend on incoming information. So a lot of people thinking we might see a pause, might see another rate hike in June and then a pause after that. Still a big question mark.

The thing is energy prices, are they going to cause inflation, or are they going to cause an economic slowdown, and maybe both? So that's going to be the thing to watch going forward.

Meanwhile, oil prices yesterday rose $1.50 a barrel to above 92 bucks. A couple of things happening here, this, despite a government report showing both a rise in oil and gasoline inventories. Gas for two weeks in a row. There was a minor refinery problem in Texas. That's going to cut out and put there (ph) over the next few days. Also some more problems in Nigeria, an American worker there was shot and killed, so some negative sentiment there.

A quick check on stocks, yesterday a little bit of a choppy session. Markets were lower, then mixed, then traded -- I mean finished a little bit lower. Well you can see the Dow there up three points at the finish. And this morning it is looking like a solidly higher open for Wall Street. So now that we have interest rates out of the way, we'll focus on other things, at least for a couple of days.

S. O'BRIEN: So maybe we could have a new record.

LEE: Yes, we'll see. We're about 80 points away...

S. O'BRIEN: I know. Why am I so into this?

M. O'BRIEN: You are like a cheerleader.

LEE: ... from the all-time high.

S. O'BRIEN: I am. I don't know why.

LEE: January 14, 2000. We're getting a little tired of saying, right, that's the all-time high for the Dow. So maybe we need a new date for that record, 80 points away, not too bad.

M. O'BRIEN: All right.

S. O'BRIEN: Could happen. M. O'BRIEN: It's like watching Barry Bonds and home runs, you're going...

S. O'BRIEN: I know, you've got another opportunity tonight.

M. O'BRIEN: ... for the record. All right.

S. O'BRIEN: Thanks, Carrie.

M. O'BRIEN: Coming up on the program, an "American Idol" shocker. It left Paula Abdul in tears. Simon Cowell was speechless. The O'Brien household outraged. We'll tell you which contestant got the boot. Stay with us.

(COMMERCIAL BREAK)

S. O'BRIEN: Here are some of the most popular stories we're following for you on CNN.com right now.

More anxiety for the GOP, a CNN poll is showing Democrats with a 14-point lead over Republicans and questions about midterm elections.

Plus, an "American Idol" shocker, finalist Chris Daughtry was booted off last night, much to the absolute dismay of Miles O'Brien and his family. Judges even...

M. O'BRIEN: And others.

S. O'BRIEN: The other idol, the other idols, the other judges, too, absolutely speechless. He was himself shocked. There are now three contestants left.

And Tom Cruise's behavior might be costing him millions of dollars. A "USA Today"-Gallup Poll shows that his popularity is declining a bit, especially with women. His latest movie, "Mission Impossible 3," also opened to lower-than-expected domestic ticket sales. Some experts say the movie has suffered from Cruise's overexposure in the weeks leading up to its release.

M. O'BRIEN: Do you think he's overexposed, really?

S. O'BRIEN: Yes.

M. O'BRIEN: All right.

Chad Myers is in the Weather Center for us.

Good morning, -- Chad.

MYERS: Good morning.

S. O'BRIEN: I love that woman. I love that woman.

MYERS: All right, forgot that part.

Good morning, everybody. (WEATHER REPORT)

It is time for your Hurricane 101. Heard of the word contraflow? Contraflow is when they take the cars and they turn them around on the one side of the freeway and you all get -- video -- we all get the -- video -- we all get cars going in one direction away from the coast.

Don't have that video? OK. You get the idea.

You get four lanes of traffic. There is contraflow. That's sometimes how it works. Because, you know what, if you're on the left side of the freeway there, those exit ramps aren't really working like you want them to. You have to get on the entrance ramp and all that. But this is how they try to get people on and off islands in a hurry. But as you can see, sometimes no one is in a hurry.

Back to you guys.

S. O'BRIEN: Chad, I've got to tell you, you know this is hurricane season, which is now, what, how far away?

MYERS: Twenty days.

S. O'BRIEN: Twenty days, yes. You know what are they going to do when all the people in New Orleans and in Mississippi and there's a hurricane warning on its way and everybody has got a travel trailer and they've got that travel trailer hitched? You know you thought those were ugly pictures.

MYERS: Yes.

S. O'BRIEN: Imagine all those vehicles with a travel trailer hitched to the back.

MYERS: Yes, overheating,...

S. O'BRIEN: Yes.

MYERS: ... sitting in line,...

S. O'BRIEN: Yes.

MYERS: ... parked in line.

S. O'BRIEN: Yes.

MYERS: And, yes, I know.

S. O'BRIEN: I...

M. O'BRIEN: And you know they're going to bring the travel trailer that's with them.

S. O'BRIEN: Of course, that's the only thing you own.

M. O'BRIEN: Of course. It's the only thing -- they can't leave it, right?

S. O'BRIEN: I tell you, it's going to be ugly, I think.

MYERS: Well you're not going to evacuate all the way to Nebraska to find a hotel room, right? I mean you drive...

M. O'BRIEN: Yes.

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