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Internet Edition, April 24, 2002, Page 1


Miller Brewing Co. has consolidated its $1 million-plus PR account at Burson-Marsteller, according to Mike Hennick, marketing communications director at the Philip Morris unit.

B-M had been doing corporate work, while Ketchum was involved in marketing communications activities and Weber Shandwick Worldwide did some brand work. The three pitched for the entire business, said Hennick, as Miller saw consolidation as a way to boost PR efficiencies.

Miller's first-quarter revenues were up 9.4 percent to $1.2 billion, while operating income rose five percent to $130 million. PM says the unit was bolstered by the success of the Skyy Blue launch, a malt beverage with a citrus flavor.

Miller, however may soon be a unit of South African Breweries. PM and SAB have confirmed that they are talking about a deal that could be worth $5 billion in cash/stock for the New York-based conglomerate.

B-M Does Botox

Burson-Marsteller was behind the firestorm of publicity for Botox, the botulism treatment that was approved as a wrinkle remover by the Food and Drug Administration this week, according to Christine Cassiano, a spokesperson for Allergan.

B-M had been working for Botox maker Allergan prior to the FDA approval, said Cassiano, and will continue as the company positions the drug as an anti-wrinkle treatment. Media reports predict that Botox will generate an equal amount of awareness as Pfizer's Viagra, impotence drug.

Jeanann Morgan, in B-M's healthcare group, is responsible for Botox. B-M's Botox media team includes Pete Judice, Freeman Miller and Dave Schemelia. "The week was fun," said Morgan of the Botox coverage.


Tom Goff, who served as senior VP/corporate communications at embattled Global Crossing, has joined Edelman PR Worldwide as senior VP and head of the corporate reputation practice at the firm's Los Angeles office. Goff had worked with Edelman, which represented GC just after its IPO.

He also handled PR duties at Lockheed and Atlantic Richfield. Prior to his PR career, Goff worked as a reporter and editor at Fortune, Esquire and New York magazines.


WPP Group has reported a 12.8% decline in PR revenues in the first quarter while advertising revenues were down only 1.1%.

Information and consultancy grew by 6.2% and branding & identity, healthcare and specialist communications fell 2.1%.

WPP's PR and PA group consists mainly of Hill and Knowlton, Ogilvy PR Worldwide, Burson-Marsteller and Cohn & Wolfe.

Overall revenues were down 2.1 percent in the quarter to 945.8 British pounds ($1.36 billion at the current exchange rate of $1.44).

PR and PA income fell to 114 million pounds from 130.7M.

Net debt as of March 31 was $2.16 billion vs. $1.42B a year earlier and $35M as of Dec. 31, 2000.


The Home Depot selected Ketchum to promote its sponsorship of the Declaration of Independence Road Tour over finalists Porter Novelli and Manning, Selvage & Lee, Richard Marshall, VP-communications and external affairs, told this NL. Jerry Swerling, Malibu, Calif., handled the search.

HD wants to instill corporate pride in the hearts of its 265,000 "associates," customers, suppliers and shareholders. The Tour group wants to use the copy of the Declaration that was purchased by Hollywood's Norman Lear to encourage people aged 18-to-30 to vote.


The Pakistan Textile & Apparel Group turned to Fleishman-Hillard in an effort to win Congressional approval for tariff relief, but the project has been put on hold. Donna Rohrer, in F-H's Washington, D.C., office, said the campaign has been "caught up in the national vise of our war on terror." She said F-H has been told to "back off from the media."

Tariff relief is fiercely opposed by what is left of the U.S. apparel manufacturing base. Pakistan exports about $2 billion in apparel to the U.S.

Barry Leggetter has been named deputy managing director of Golin/Harris International's London office. He was EVP and global account leader at Porter Novelli/N.Y. before joining G/HI in February, and spent a dozen years at Countrywide Porter Novelli.

Internet Edition, April 24, 2002, Page 2


U.S. propaganda czar Charlotte Beers told 150 State Dept. PA staffers they must be masters of the art of "persuasive communications" while promoting American values to overseas audiences, reported Maria Elena Torano, a member of the U.S. Advisory Commission on Public Diplomacy. She attended the April 8-10 meetings in Washington, D.C., as the Commission's liaison to the symposium. Torano read from her notes while reviewing the proceedings with this newsletter.

"The Undersecretary was very impressive," Torano said of Beers. She credited Beers with bringing a "business mentality to the State Dept."

Beers urged the audience to communicate with "passion" and develop "emotional" pitches to promote the U.S. She also treated them to a reel of ads that she developed while at J. Walter Thompson and Ogilvy & Mather, said Torano. For instance, the PA staffers got to look at an ad from carmaker Jaguar.

Beers also urged the PA staffers to be "bold" and tailor their messages to fit with local cultures. Women and young people are key targets.

An overarching theme from Beers was that the U.S., "though a superpower, must project a kinder and gentler approach to the rest of the world," said Torano in paraphrasing the first President Bush.


The tremendous pressure to meet the demands of Wall Street is hurting advertising, Brendan Ryan, CEO of Interpublic's Foote Cone & Belding unit, told the American Assn. of Advertising Agencies April 18 at its national conference at Dana Point, Calif.

Ryan spoke bluntly, and said he wasn't making any excuses, but just presenting the reasons why advertising is not getting the respect it deserves from clients. Ryan specifically mentioned the "pressure for short-term earnings and the pressure of being part of publicly traded companies" among other reasons.

He railed against the current cutthroat nature of the business. Where agencies once went up against each other in friendly competition for accounts, there is now a "reckless disregard for rivals," said Ryan.

He talked about how agencies are signing away the rights to their creative ideas during pitches over to prospective clients in return for a small fee-or what Ryan called a "$5,000 tip" to cover expenses. It's vital that agencies regain control over the pitch process, said the 2001-02 AAAA chairman.


Bob McEwen, Fleishman-Hillard EVP, is joining Burson-Marsteller as Midwest president/CEO. He was responsible for F-H's Chicago, Minneapolis and Kansas City offices which handle clients such as SBC/Ameritech, Kellogg, Office Depot, Land's End and Harley Davidson. The 49-year-old executive will report to Chet Burchett, B-M's USA/CEO, and work closely with John LaSage, 64, who is B-M's Midwest chairman.


The O'Dwyer website is launching a "PR School," which will provide instruction in all areas of PR including corporate, investor relations, employee communications, marketing PR and community relations.

Thirty-four subject areas are currently posted on the website via the "PR School" listing on the "tool bar" at the left top of the page. The subjects include Advertising vs. PR; Annual Meetings; Annual Reports; Crisis PR; Internet IR; Media Training; Op-Ed Pieces; Publicity Basics; Speech Tips; Talk Radio, and Writing Tips.

Students will be able to post questions by e-mail and suggest areas that need covering.

"The web is the ideal place for such a fast-changing field like PR and IR," said publisher Jack O'Dwyer.

"There is no limit to the amount of material that can be presented although it must be organized for easy access," he said.

"Materials can be changed instantly to meeting the constantly changing nature of the field," he added. "Students can point out where instruction does not match reality and any problems they might encounter," he said. The web also provides research capabilities in the PR and related fields that were undreamt of by previous generations of PR students, said O'Dwyer.

Google, Yahoo! and the other search engines provide databases of enormous scope and there are 13 years of O'Dwyer articles from its newsletter and magazine in full text on Nexis that can be accessed without charge, he noted. Nexis charges $3.25 for printing out any one article, no matter what the length. All O'Dwyer web stories are searchable since Jan. 1, 2001, including illustrations.


Airbus hired Xenophon Strategies to handle crisis communications in North America following that firm's work with the European aircraft maker in the aftermath of the American Airlines Flight 587 crash in Queens, N.Y., Nov. 12, 2001, which killed 265 people aboard an Airbus plane.

Clay McConnell, VP of communications for Airbus North America, told this NL that the company wanted an outside firm to take a look at Airbus' overall crisis communications plan.

Xenophon, which is based in Washington, D.C., will continue its crisis work for the Flight 587 disaster, and adds responsibility for 24-hour crisis support, and communications planning and counsel for Airbus. The firm had handled projects for Airbus for about a year, McConnell said.

David Fuscus, a former VP of communications for the Air Transport Association who is president of Xenophon, heads the account. Fuscus was also a deputy chief of staff to former Pennsylvania Governor Tom Ridge, who now directs the Office of Homeland Security.

Other clients of the firm include Alaska Airlines, Midwest Express and the Aviation Safety Alliance.

Internet Edition, April 24, 2002, Page 3


The economy, the war on terrorism, and education were cited as the three most important news stories by a nationwide sample of 401 randomly picked journalists and media company executives.

The survey was commissioned by the Foundation for American Communications, a nonprofit journalism education organization funded by the Packard Found.

Asked to name the three most important issues facing the U.S., 71% listed the economy, 55% cited the war on terrorism, and 37% listed education.

Nearly three-fourths rate journalists' preparation for covering the most important national issues as a "three" or less on a scale where "five" means excellent and "one" means poor.


Senate Majority Leader Tom Daschle (D-S.D.) and House Minority Leader Dick Gephardt (D-Mo.) believe cable news coverage has tilted toward the Bush White House.

In a letter sent April 12 to the heads of three cable networks (Fox News chairman Roger Ailes, CNN chairman Walter Isaacson and MSNBC president Erik Sorenson), Daschle and Gephardt complained about the "lack of TV coverage of press events featuring elected leaders of the Democratic Party."

Their letter said the Bush Administration "has received an extraordinary level of attention and coverage of its events." The letter cited a Democratic National Committee study of CNN's coverage from Jan. 1 through March 21 that shows CNN carried 157 live events involving the Bush Administration, or 96%, and seven involving elected Democrats, or 4%.

They said there is evidence showing a similar pattern of coverage at Fox and MSNBC.


USA Today is starting a book club, with online chats and message board, and stories in the newspaper driving the discussion.

The first selection is Richard Russo's "Empire Falls," which won a Pulitzer Prize on April 8.

The book club follows last week's news that Oprah Winfrey was scaling back her club.

Starting May 23, readers can participate in an online chat with Russo. In the meantime, USA Today said readers can post comments at [email protected].

New questions will be posted every week. Some responses will be published in the newspaper, according to Bob Minzesheimer, who reviews books for the paper.

The "Today" show is also planning to start a book review segment in June.


Mary Spio, a 29-year-old rocket scientist, is planning to start a national magazine for singles this summer, called One2One.

Spio, who is a consulting engineer to Boeing Corp., said she decided to publish the magazine after seeing statistics that show 89% of U.S. singles went on less than five dates in the past year.

The magazine will contain articles about professional singles and personal ads, as well as reviews of movies/music/books/gadgets/fashion, and a section about travel and events.

Jacqui Jordan Events, a Los Angeles-based PR firm, is handling publicity for One2One.

Spio, who is editor, is located at 9903 Santa Monica blvd., #175, Beverly Hills, CA 90212. Her fax number is 310/388-5289.

"Berman and Berman: For Women Only" a daily talk and magazine show hosted by two doctors-and sisters-Laura Berman, a sex therapist and Jennifer Berman, a urologist-made its debut on April 15 on the Discovery Health Channel.

Taped in front of a live studio audience, the series embraces the subject of sexual health, examining its relationship between everyday topics including self-esteem and beauty, high blood pressure and diabetes, childbearing, stress, menopause and love relationships.

Monique Chenalt, who is supervising producer for the program, is also handling guest booking. She works for the producer-Wellerd-Grossman, based in Sherman Oaks, Calif., at 818/755-4800.

"The Bev Smith Show," a national talk show targeted to a Black audience, is scheduling more live debates on issues and topics that affect African-American listeners.

On April 10, Bev Smith moderated a debate between a representative from the American Arab Action Network and representatives from American Muslims on the Middle East situation.

The show airs weeknights from 10 p.m. until 2 a.m. nationwide on the American Urban Radio Networks.

Dawn Hill (212/883-2100) and Tene Croom (412/456-4000) are the program's publicists.

The first issue of Chicago Home will be published next month by Primedia's Chicago magazine.

The special interest magazine, which may become a quarterly next year, will feature articles about architects, interior designers and landscape designers in Chicago and the suburbs.

The magazine will hire writers on a freelance basis.

The New York Sun, which made its publishing debut on April 16, has published the phone and fax numbers of its news desk.

The news desk can be reached by phone at 212/406-2000 ext. 689. The fax number is 608-7348. The e-mail address is [email protected].

The mailing address for the Sun, which publishes Mondays through Fridays, is 105 Chambers st., New York, NY 10007.

Seth Lipsky is editor; Ira Stoll is managing editor.

(Media news continued on next page)

Internet Edition, April 24, 2002, Page 4


John Cunniff, a longtime reporter and business columnist for The Associated Press, is retiring at the end of June. He will be replaced by Rachel Beck.

Donna Weston will succeed Don Clements as assistant business editor. She will keep her previous duties as business writer/AM supervisor.

No replacement was named for Karen Schwartz, who was business features editor. Clements and Schwartz have left the AP. Also, Elisabeth Debourbon, who handled stories for the financial wire, and Peter Harper, who covered minority-owned businesses, have left, and have not been replaced.

Adam Geller, a general assignment business writer, has been assigned to cover the workplace beat until Maggie Jackson returns.

Geller can be reached at 212/621-6919.

Business writer Bruce Meyerson, who covers the telecom beat, went on leave. Michelle DeArmound, a Los Angeles-based political writer, also left.


Michael Bass, a veteran of NBC's "Today" show, was named senior executive producer of "The Early Show," replacing Steve Friedman, who is leaving at the end of May.

Gina Smith, former technology reporter for ABC News and CNET, has resigned as CEO of NIC Co.

Kelly Tagore, home editor; Anthea Leontos, beauty editor, and Barbara Jones, features editor, have left Real Simple magazine.

John Martin, 63, who is a national correspondent for ABC News, will retire April 30 after 26 years with the network.

Maria Celeste Arraras, former host of the Univision newsmagazine "Primer Impacto," will join Telemundo, the Spanish-language network which is being acquired by NBC.

The Puerto Rican journalist, who lives in Miami, will become managing editor and anchor of a new 5 p.m. news magazine, "Al Rojo Vivo." The bilingual journalist will also contribute to NBC News programs like "Dateline."

Patrick Tyler, Moscow bureau chief of The New York Times, was named the paper's chief correspondent, replacing R.W. Apple Jr., who is now an associate editor.

Matt Bai, a political writer for Newsweek, has joined Rolling Stone as national affairs correspondent. He will oversee political coverage.

Dave Parker, previously at WMAR-TV in Baltimore, joined NBC 10, Bala Cynwyd, Pa., as the assistant news director, reporting to Chris Blackman, who is VP/news.


Sixty-six percent of adults in the U.S., comprising 137 million people, are accessing the Internet, up from 127 million last fall, according to the latest results of a Harris Poll that was conducted in February and March of this year.

The survey shows more than half (55%) of all adults access the Internet from home; 30% access it from work, and one in five adults goes online from a school, library, cyber cafe or other location.

These numbers show a slight increase in Internet penetration since last fall.

The profile of Internet users still has a bias towards the more affluent, better educated consumers.

Harris surveyed 2,038 adults by phone.


"Louis Rukeyser's Wall Street" made its premier on April 19.

Full page newspaper ads heralded his return with large type headlines that said: "Same Night. Same Time. New Network. CNBC."

Rukeyser's new show will appear at 8:30 p.m. (ET), which means it will compete directly against his old show, "Wall $treet Week," which was renamed "Wall Street Week with Fortune."

The move is viewed by industry observers as a coup for CNBC because Rukeyser has a strong appeal among viewers who are approximately 55 years old, and CNBC has been reaching out to this demographic group in the past year.

Also, Rukeyser gives CNBC a stronger presence on primetime TV, which has been a goal of the network.

Rukeyser was dropped as host of "Wall $treet Week with Louis Rukeyser" by Maryland Public TV, which co-produces the show.

Rukeyser, 69, had done the show for 32 years.


PBS will expand its investigative series "Front- line" by premiering an international edition, "Front-line/World," on May 23.

The hour-long magazine-format program will offer a forum for reporting on global issues.

Stephen Talbot, a former producer with KQED in San Francisco, is editor of the series that will run through early 2003.

Frontline/World, headquartered at KQED, will air in Frontline's normal Thursday time period.

Fairchild Publications may start a new magazine for women approaching 40 as a spin-off to Jane, a magazine for teenage girls.

If economic and other conditions permit, the magazine, to be called Elizabeth, could begin publication in late 2003 or 2004.

It would compete with Meredith Corp.'s More magazine, whose ad revenue jumped 89.6% in 2001 to about $27.5 million.

Internet Edition, April 24, 2002, Page 7


Queries to NASDAQ by this NL about a complicated earnings report put out by the NASDAQ-listed company of one of its directors have gone unanswered for a month.

The hard-to-follow earnings report was put out in February by the WPP Group, whose CEO, Martin Sorrell, sits on the NASDAQ board.

A key statistic in the 26-page report, a 20% decline in per share earnings, was mentioned by only one other medium besides this NL-The Financial Times of London.

Nine other publications concentrated on earnings before taxes, investment gains, write-downs, etc., which were highlighted by the WPP report. The per-share figure was not mentioned in the text of the release. It only appears in a table on page 14.

A current ad campaign of NASDAQ, which has included full page ads in the Times and a double-truck ad in the April 9 Washington Post, says the exchange decries "obfuscation" and pledges "responsibility for providing complete and accurate information."

Says NASDAQ: "We believe the active management of quarterly earnings and obfuscation of risks and liabilities can lead to a slippery slope of overstatement of performance and understatement of risk."

Sorrell and other directors of NASDAQ are listed in the ads as well as numerous CEOs.

Key Statistics Missed

WPP, asked about its financial report that resulted in press coverage that missed some key statistics (such as debt rising from $35 million to $1.52 billion), has said it is in compliance with all financial reporting regulations of the United Kingdom.

Copy in the ad suggests that companies listed on NASDAQ are to follow U.S. accounting conventions.

The National IR Institute recently recommended that actual or GAAP earnings be placed ahead of "pro forma" results in an earnings release. GAAP stands for generally accepted accounting principles.
Another statement in the ad is: "We believe that corporate ethics take root in the corner office and with the board of directors."

Telephone conversations have been held with NASDAQ officials or their representatives about the WPP earnings report but NASDAQ has yet to craft a response to the situation.


Former Senate Majority Leader Bob Dole is lobbyist for Malawi, one of Africa's poorest nations.

His firm, Verner, Liipfert, Bernhard, McPherson and Hand, is receiving $300,000 in annual fees from the country, where the average life expectancy is 37 years for both men and women. Malawi's ten million people face an HIV/AIDS epidemic, deforestation and erosion, among other problems.

VLBM&H's contract calls for it to promote a "greater and deeper appreciation and recognition in the USA of Malawi's role as a friend and economic partner of the USA."

It will work "diligently to secure USA businesses and individuals to invest in and visit Malawi and purchase Malawian goods and services at favorable prices."


The April 22-29 New Yorker has a profile of former Securities & Exchange Commission Chairman Arthur Levitt, concentrating on his battles with the accounting industry.

The article, by Jane Mayer, says the accounting trade underwent a "cultural transformation," and that "instead of overseeing corporate America, it was joining forces with it."

Geoffrey Pickard, VP of communications and PR, American Institute of CPAs, said of the article: "It's old news and one person's opinion."

Levitt told Mayer: "The kind of greed that produced Enron and Arthur Andersen was symbolized by the way the companies dealt with stock options."
One of Levitt's early battles with the accounting industry was over options.

Critics, Mayer notes, claimed that the accounting convention that kept such expenses off the books was "deceptive."

The battle with CPAs over how options were to be treated turned out to be a "defining moment" for Levitt.

WSJ Hit CPAs March 14

A similar article on CPAs ran as the lead story in the March 14, 2002 Wall Street Journal.

A subhead said: "How Decade of Greed Undid The Proud Respectability of a Very Old Profession."

It called the prospects for Arthur Andersen, "Dim."

The article noted that the AICPA e-mailed its 340,000 members, urging them to contact their local lawmakers to lobby against any bills that could impose burdens on small CPA firms and the nonpublic companies they audit.

The AICPA also hired Qorvis Communications, Washington, D.C., grassroots lobbying firm, to seek support from other groups.


In a memo to Hewlett-Packard employees, Carly Fiorina, CEO of H-P, said the employee who admitted to leaking two company memos to The San Jose (Calif.) Mercury News was "terminated."

Fiorina, who did not identify the employee by name or position, said an internal investigation of the voicemail leak to the newspaper indicates the message was intercepted from Bob Wayman's home or cell phone, or through unauthorized access to and use of Wayman's voicemail password. Wayman is CFO of H-P.

"I find all of this reprehensible, as I know you do," Fiorina said in her April 17 memo, which was obtained by The Wall Street Journal and reprinted on the paper's website. "We will continue to investigate these instances fully," she wrote.

Internet Edition, April 24, 2002, Page 8



Students nearing graduation as well as recent grads have been writing us about their experiences in the PR job market and asking for advice. Several said PR firms told them they would be glad to provide jobs if only the students would bring in their own accounts.

The jobseekers have exhausted themselves sending letters to PR firms, companies and employment agencies and going on interview after interview that led nowhere. Many are working as waiters or in similar jobs to earn subsistence money while waiting to break into PR.

Our advice is that the agencies that told them to bring in business if they wanted a job were giving them an invaluable education in what the PR business is all about-contacts.

We advised the PR hopefuls to take a different tack. Visit your local business district, we said. Go store-by-store asking what communications help these businesses might need. Chat with the managers. Get to know their problems. Canvas office buildings the same way. Offer to help with any problem they may have.

That is the definition of PR at many firms: "We'll do anything the client wants." This could include many personal favors such as helping one of their children to get into college; planning a company anniversary, or learning their business by helping in the store. It may be far easier to start your own business than to land a job at someone else's business, we advised the neophytes.

Become active in a local charity such as the Red Cross or United Way, we said. Volunteer to help in any way. Go to the committee meetings and committee dinners (which will be much cheaper than the $500 or $1,000 banquets). Plan on doing this for many years. Some of the most successful PR pros spend a good number of their nights at one charity event or another. Examples include such PR greats as Washington, D.C.'s Bob Gray and New York's Benjamin Sonnenberg. Join clubs and groups of any type where businesspeople congregate, we advised.

The people at charity events are normally the business leaders of the community, state or nation. If one of them asks you to join his or her company or hires you as a counselor, you'll come in at the top. For many years CEOs hired the reporters covering them as their PR department heads. Build your own persona because that will pay off the most in the end, we said. The only secure people in PR are the "rainmakers."

If you join a PR firm or company you will enter arenas that are under intense pressures that can stunt your personal and professional growth.

Almost all the big PR firms have sold out to ad conglomerates and now have punishing financial goals to meet. Individualism is frowned upon. The PR firms have spent millions in recent years on ad campaigns, winning awards and starting their own trade group (at dues of up to $50,000 each annually!) because these activities "build the brand." But pennies are pinched if any PR pro asks for funds to build his or her press contacts. Another symptom of the erasure of individualism is that speeches by agency people have all but disappeared.

The same phenomenon can be seen in the ad world. AdWeek editor Alison Fahey complained March 18 that the colorful personalities of yesteryear seem to be gone. One adman said it's a "casualty of all the consolidation." Another said, "The agencies themselves don't have personalities." Brendan Ryan, CEO of the Foote Cone & Belding unit of Interpublic, said April 18 that the tremendous pressure to meet the demands of Wall Street, particularly the pressure for short term earnings, is hurting advertising.

PR hopefuls need to study today's political and business power landscape. An excellent place to start is the article in the April 22-29 New Yorker on former SEC chairman Arthur Levitt's battles with the "Big Five"accounting firms. "They waged a war against us, a total war," Levitt told the magazine. Companies form coalitions and get their way via the Congress by making hefty contributions, bypassing the regulators, the article says. "Professions," such as accounting, PR, security analysis, and IR, instead of putting the "brakes" on the business community, have made "keeping their customers happy" a prime goal. Companies expect their people in accounting, PR, etc., to be loyal to the company first and their professions second...the same New Yorker issue, in an article headlined "Tax Cheat, Inc.," noted that Ingersoll-Rand, Woodcliff Lake, N.J., is saving $40 million a year in taxes by having moved its h.q. to Bermuda last December. Other companies doing this include Tyco, Cooper Industries and Stanley Works. Tyco has two NIRI members-Kathy Manning and Sherry Richardson. Cooper also has two-Richard Bajenski and John Breed...recruiters said that in the wake of Enron/Arthur Andersen companies are looking more for external PR people and less for employee PR specialists. Don Sheppard, founder of Sheppard Assocs., 85-employee PR firm based in Glendale, Calif., that was purchased by Ketchum in 1999, has left the firm. Ketchum announced in 1999 that Sheppard would continue to head it.
--Jack O'Dwyer


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