The $3 million message: D.C. spin-doctors go to work on health care exchange

Gov. Peter Shumlin address participants in a Vermont Health Connect forum held at Capitol Plaza  Hotel in Montpelier last month. Photo by Roger Crowley/for VTDigger

Gov. Peter Shumlin addressed participants in a Vermont Health Connect forum held at Capitol Plaza Hotel in Montpelier last month. Photo by Roger Crowley/for VTDigger

The Shumlin administration’s decision to spend $2.8 million on messaging for the Vermont health exchange is unprecedented and unnecessary, politicians and observers said Tuesday.

The $2.8 million contract with GMMB, a Washington, D.C. firm, is about a third of the $9 million in federal dollars the state has for outreach and education: $2.3 million is going to Richmond-based HMC Advertising for media buys, and another $2 million is for so-called “navigators” to provide one-on-one assistance. In all, the state has roughly $170 million from the federal government to launch Vermont Health Connect.

GMMB is spending $500,000 to solicit “earned media,” or positive stories and op-eds in local news outlets. Most of the money is for developing messages for speeches, talking points, news releases, editorial boards and reporters.

Though big businesses and advocacy groups commonly hire media relations firms to audit media companies and spin stories to the press, sources interviewed for this story say state government has not previously spent such prodigious sums on media relations.

The scale of the project, however, is also unprecedented: The state is mandating that 100,000 Vermonters buy insurance on the exchange over a six-month period.

Whatever the public relations strategy, the online enrollment program for Vermont Health Connect simply hasn’t worked very well. The state website hasn’t functioned properly since it was launched on Oct. 1. As of the end of last week, only 141 people had fully enrolled. In the aftermath, state officials have had to deflect a torrent of bad publicity. As of Tuesday, 631 Vermonters had signed up, according to a report from WCAX. The deadline for enrollments is Dec. 21 in order for coverage to be effective Jan.1. Vermonters can sign up for the exchange until March 31.

A survey conducted at the end of September showed that the 43 percent of Vermonters who have heard of Vermont Health Connect, less than half knew what it was.

The “earned media” buy

Vermont Press Bureau reporter Peter Hirschfeld first reported that the state contract with GMMB, which is famous for its media campaigns for President Barack Obama, includes an audit of the media in Vermont.

Politicians, media observers and public relations experts say this is the first time a state agency has employed a media relations firm to audit coverage by local media outlets. GMMB researchers gave news organizations a thumbs-up or thumbs-down for positive or negative coverage, and used the information to shape messages for news reporters.

Mark Larson, the commissioner of the Department of Vermont Health Access (DVHA), described the $500,000 “earned media” project as “a very small piece of a multifaceted public outreach effort.”

GMMB was paid $18,235 for a brief analysis of six months of media coverage about Vermont Health Connect. GMMB codes articles as having a positive, negative or neutral tone, and it spotlights certain reporters, such as VPR’s Bob Kinzel, whose coverage, by their estimation, has exhibited a negative bent.

Former Gov. Jim Douglas, Gov. Peter Shumlin’s Republican predecessor, said the need to spend hundreds of thousands of dollars to influence press coverage of his initiatives never arose.

“I’ve never heard of it being done before, and I certainly didn’t do it,” Douglas said. “I generally had a good relationship with the press that covered me. The working press who I dealt with I thought were fair and professional.”

Douglas said he presided over a much smaller public information campaign, consisting of advertisements when the state rolled out the Catamount Health Plan. His administration contracted the work out to GMMB.

“I never had any concerns about how it was portrayed when I signed the bill. … It was a bipartisan initiative,” Douglas said. “This is bigger and more politically charged, but I can assure you I never spent money to audit the press. All governors from time to time express some exasperation about coverage, but that’s the process. Whatever level of frustration I may have experienced, I dealt with that.”

Though most of the $500,000 in the “earned media” category of the $2.8 million contract is for honing messages, certain line items in the Shumlin administration’s contract with GMMB raised eyebrows among political bystanders.

GMMB spent $8,600 for a contact list of the state’s dozen or so statewide reporters and media outlets that cover health care. The firm’s earned media plan, dated April 2013, recommends that Vermont Health Connect set up “introductory meetings” with 10 reporters, including: Bob Kinzel, WBTN/Vermont Public Radio; Nancy Remsen, Burlington Free Press; Andrew Stein, VTDigger.com (sic); Peter Hirschfield (sic), Rutland Herald/Times Argus; Joe Gullo, Fox News 44/ABC 22; Pat Bradley, Northeast Public Radio/WAMC.com; Dave Gram, Associated Press; Olga Peters, The Commons; Chris Fleisher, Valley News; and Jennifer Brandt, Vermont Business Magazine. The firm also suggests that state officials reach out to “mom bloggers with niche audiences” such as NEK Moms and Burlington VT Moms Blog Vermont.

The contract sets aside $12,600 for GMMB to schedule meetings between editorial boards and Vermont Health Connect officials, but that fee doesn’t include materials, such as talking points, or managing the calendar for the meetings. Those services cost an additional $49,000.

In its earned media plan, GMMB targets seven editorial boards for outreach: the Burlington Free Press, VTDigger.com (sic), Rutland Herald/Times Argus, Valley News, The Bennington Banner, The Caledonian-Record, Vermont Business Magazine.

Robin Lunge, director of Health Care Reform for the Shumlin administration, speaks at a Vermont Health Connect forum in Montpelier last month. Photo by Roger Crowley/for VTDigger

Robin Lunge, director of Health Care Reform for the Shumlin administration, speaks at a Vermont Health Connect forum in Montpelier last month. Photo by Roger Crowley/for VTDigger

The plan supplies the department with generic advice such as: “Using a wide range of tactics will offer many bites at the apple.” It offers the following tips for developing relationships with reporters, editorial writers and columnists: “Relationships should be built on an informal and introductory basis. These should be off-the-record discussions over coffee, lunch, email or an in-person meeting.”

The contract allocates $37,267 to GMMB to create a stockpile of success stories, dubbed a “story bank,” related to the exchange. As part of the arrangement, GMMB is supposed to provide media coaching to the individuals at the center of these stories, offering “speaking tips and tricks to put them at ease” and working with them to “ensure the story to be genuine.”

Eric Davis, a retired Middlebury College political science professor, questioned the cost and the need to contract out for such services.

“The amount of money being spent for some of these services was pretty high,” Davis said. “I think previous administrations would have been able to research this information using in-house staff and wouldn’t need to pay thousands of dollars to get that information.”

Lt. Gov. Phil Scott said he was “underwhelmed” by GMMB’s ad campaign. He is concerned that not enough Vermonters are going to get the basic information they need to sign up for the state’s exchange.

“I have to be honest, when I heard the ads I wasn’t that impressed,” Scott said. “I wanted more factual information rather than sales and marketing. I felt as though I was getting the sales pitch.”

As for the size of GMMB’s expenditures? “I’d have assembled that list (of media contacts) for a lot less money … all they had to do was call me,” Scott said.

“I think the governor is fiscally prudent, but if this was state money I wonder: Would we be doing the same thing, or is it because we look at this as being free we see it as a windfall and utilize it in that manner,” Scott said. “I’m guessing probably not. If the dollars were more limited … I don’t think we’d be doing this this way.”

Davis said he was also surprised DVHA chose to rely on a firm with political roots.

“What did surprise me a bit when I read the story was that this contract for advertising was given to a firm that does mostly political work rather than a firm that does mostly advertising work,” he said.

Governor’s office directs inquiries to Larson

The governor’s office distanced itself from the contract with GMMB Tuesday. Shumlin did not take phone calls from reporters, and he is not holding a press conference this week. All inquiries were directed to Larson.

“We did not have anything to do with that contract,” Sue Allen, the governor’s  press secretary, said.

Asked whether Shumlin had seen the contract before it was approved, Allen said she wasn’t sure, but would check. At the time of publication, she had not responded. Allen said she personally had no recollection of seeing the contract.

Allen handles media duties for Shumlin — collating press lists, distributing news releases, referring reporters to public officials, and reaching out to editorial boards — but she said her work is confined to the governor’s office.

When asked if she could have supplied DVHA with some of the information that GMMB was paid to provide — for example, a list of relevant reporters and editorial boards — Allen said that question never came up.

“I was never asked for anything like that,” she said. “I have never even looked at the contract. That’s not part of my job to assist with a contract.”

On some occasions, Allen’s work does dovetail with that DVHA, she said. “I have reached out to editorial boards and said if you need information, call Robin [Lunge] and Mark [Larson],” Allen said, but that wasn’t the case with this contract.

“I don’t work for DVHA. I work for the governor,” Allen said. “And this was a special contract where things were kind of spelled out. This clearly would not have been in my domain.”

Larson said the rollout of Vermont Health Connect required more resources than the administration could provide.

“It was a constant message we were getting that we needed to do more to get information out to Vermonters and the usual resources within the administration to engage in this ongoing education process were not adequate,” Larson said. “We had a competitive bid process where GMMB was the winning bidder in supporting that project. It wasn’t an either or between Sue Allen, Louis Porter and others, it was always thought of as strengthening the resources internally.”

GMMB was one of six bidders for the original contract with the state. The Shumlin administration has twice amended the contract and increased the maximum expenditures. The first bid amount, $670,000, was upped 171 percent to $1.8 million. On Aug. 30, officials signed off on another 57 percent increase, raising the amended contract to $2.8 million.

Jeb Spaulding, secretary of the Agency of Administration, says, “It’s very common for the contract for be to amended and for the scope of work to be changed.” Spaulding couldn’t say whether the administration had asked contractors to conduct media audits in the past.

GMMB did not return a request for comment before press time on Tuesday.

Anne Galloway and Andrew Stein contributed to this report.

Alicia Freese

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48 Comments on "The $3 million message: D.C. spin-doctors go to work on health care exchange"

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Avram Patt
2 years 3 months ago

Methinks the Vermont press, vtdigger included, are being awfully self-rightous in their umbrage. “Shocked, SHOCKED” that a pile of money is spent to influence a successful roll out of a historic event. (Whether you agree with the program or not, it is historic.) The money spent to spin this the OTHER WAY is of course far greater, but the press can’t get at that through FOIA requests, so this is an easier bit of investigative journalism. It’s a story, OK, but please, can we be a little bit less BREATHLESS!!!! about it?

Tom Pelham
2 years 3 months ago

I can think back on major “historic” and controversial changes affecting well more than 100,000 taxpayers and businesses, such as the implementation of Act 60 during the Dean Adminsitration when I was Finance Commissioner and the implementation of Act 68 in 2003 when I was Tax Commissioner. We had no budgets – none – for media oversight but relied on doing a good job of implementation, on the relationships developed with the media over the years, and the Governor’s ability to communicate. In both the above situations, state government delivered the outcome as mandated by law. Even though I voted… Read more »

Craig Powers
2 years 3 months ago

Wasting millions upon millions on Exchange websites that really do not work sure is “historic”.

That $$$ could have been used to actually provide coverage…instead it has been wasted by an “elitist” super majority that thinks it has all the answers.

Keith Stern
2 years 3 months ago

You are talking tongue in cheek, right? That is money being wasted, pure and simple, money that comes from those of us who pay taxes.

Dave Bellini
2 years 3 months ago

Did anyone in the administration consider just presenting Vermonters with facts? Without spin? This is getting to be like the drug company commercials.
.
It doesn’t build trust when the state resorts to hiring a political spin machine to try convincing people the product is good.

Keith Stern
2 years 3 months ago

It has to be spun like that because the facts are that it is completely unaffordable and taxes will be raised much higher, and that it is unwarranted because there is a better, more affordable way to help people with health insurance costs.

2 years 3 months ago

Googling the search terms “GMMB vermont” (without quote marks), I came across this item from 2007:
http://www.vermontguardian.com/dailies/042007/041107.shtml
via the now defunct Vermont Guardian

As a point of reference, particularly given the context of the comments made by former Governor Jim Douglas on the subject, it would be rather interesting to also be able to read as well as examine the contract the state made with GMMB as well as related documents back then as well.

Fred Woogmaster
2 years 3 months ago

This is a most informative article. Thank you.

Insiders, like Mr. Patt, view this differently – a threat to the process by which this administration does its business. Given the substance and the specifics of this piece, I understand why.

Every administration has its apologists; that is to be expected. Apologists, however, tend to myopically obscure the truth.

What DOES this contract represent – beyond the obvious? Is our esteemed Vermont Press Corps for sale? I think not!

Fred Woogmaster
2 years 3 months ago

addendum: Although I would prefer national health insurance, like Medicare, for all – I am generally supportive of ”The plan”.

2 years 3 months ago

I thought that one of the efficiencies (and savings that could be diverted to actual care) government run health care was supposed to bring was eliminating wasteful advertising and marketing. This is the most wasteful advertising campaign imaginable. Double the projected cost! I think the $8600 Vermont press list has now replaced the $600 Pentagon toilet seat as the symbol of government incompetence and profligacy.

Rep. Jim Condon
2 years 3 months ago

It’s no wonder our state exchange has the highest administrative costs of any exchange in the nation. Paying a DC consulting firm to give VHC a list of ten reporters and a poorly conceived “earned media plan” is a shameful waste of money.

The “media plan” timetable calls for VHC to tell “the story of success” between April and November of 2014. So I guess that’s something we can look forward to!

Josh Fitzhugh
2 years 3 months ago

One can disagree with the Tea Party tactics in Washington, but when you see how the federal government throws around our money you do have to ask whether this is going to end in some place good. Bring back Calvin Coolidge! I agree with Phil Scott: if these had not been federal dollars we wouldn’t be spending them. And therein lies the problem…

Kathy Callaghan
2 years 3 months ago

In today’s Times -Argus there is an ad for a “Health Care Forum” to be held at the Barre Elks Club tonight at 6:30. Earlier ads for this Vermont Health Connect presentation indicated that it was an opportunity to ask questions and get answers. This ad, however, says there will be an “Audio-Visual Presentation” with presenters being Robin Lunge and Peter Sterling. Two observations: (1) the last time I attended one of these at the Barre library, Robin Lunge et al would only take written questions, even though it was a small room and we were all face to face!… Read more »

rosemarie jackowski
2 years 3 months ago

A while back I attended one of these meetings held by the GMCB. It was a total waste of effort for the citizens who attended. There was no real time allotted for asking questions or having meaningful discussion. When the meeting ended, some of us left with the feeling that we had attended a ‘spin and scam’ session.

Unfortunately those who ‘call’ the meeting control the time and agenda. The best way to get around this is for citizen groups to call the meeting and invite those who are in power.

Peter Liston
2 years 3 months ago

I attended one of these forums.

I (and everyone there) was able to ask Robin Lunge questions verbally. There was plenty of time for follow up.

There was a lot of time for questions. She answered every question clearly and openly. And stayed until every question was answered. She stayed after the presentation to talk to people 1 on 1.

It was very informative.

Keith Stern
2 years 3 months ago

Next year is the year to replace an historically bad governor and replace him with a fiscally responsible, well reasoned person.
I just hope we can get enough people to pay attention to his record before they vote next time.

Elinor Osborn
2 years 3 months ago

My criticism is based on one ad so I hope others are better. There were no facts in it. It took awhile to even know what the ad was about and even then it was not very clear. This kind of spin is like all other ads and causes one to distrust the product knowing that it is all hype and half truths- if that. What a waste of taxpayer money. People need reputable facts, clear and serious from the agency involved, not spin.

Keith Stern
2 years 3 months ago

It has to be spun because it is a bad product. That is what advertising it is for.

2 years 3 months ago

With all respect, Keith, as a former ad man, that is NOT what advertising is for. Advertising Guru Bill Bernbach once said a great ad campaign will make a bad product fail faster because it would make more people aware that it’s bad. An effective advertising campaign is “the truth well told.” I’m not sure what Bernbach would say about this — a bad campaign for a bad product.

David Dempsey
2 years 3 months ago

You said it Elinor. The ads were useless. The governors office could have done a better job if they would have done a press release to be aired and written in every media source in Vermont that told people who buy their own insurance, work for a company with less than 50 people, currently have Catamount Health insurance will lose that coverage January 1st and must sign up on the health exchange. For more information, call 1-800-Shumlins -folly. Currently uninsured Vermonters can also buy insurance on the exchange and should contact the number provided also. Then they could have recruited… Read more »

2 years 3 months ago

Yet another Shumlin “Ready, Fire, Aim” management moment.

However, this time the Gov claims to know nothing about the development of the World War II German style propaganda program designed to keep the people confused and in the dark about what’s really happening, while his trusty assistant Sue Allen does not recall seeing the contract.

Please, how stupid do the people on the 5th floor think Vermonters are?

2 years 3 months ago

I the spirit of transparency, I would love to know who bid on the RFP for this project, and the specifics of those bids. Were there no Vermont firms bidding? I would think HMC (and numerous other VT firms) would be more than capable of executing the entire project. Considering these are Federal dollars, I wonder if we would all be less ‘offended’ by the pricing and cost if a Vermont firm had been awarded the contract, and we knew the dollars were essentially getting injected into our local economy. There continues to be an interesting stream of data on… Read more »

Fred Woogmaster
2 years 3 months ago

“I wonder if we would all be less ‘offended’ by the pricing and cost if a Vermont firm had been awarded the contract, and we knew the dollars were essentially getting injected into our local economy.”

YES!

Matt Fisken
2 years 3 months ago

Vermont Health Connect should have followed the eEnergy Vermont model. Sign everyone up automatically and require registering and paying a penalty to opt out. Have a couple extra million lying around?Spend it on advertising anyway to get the media on your good side.

2 years 3 months ago

In case it is of interest, in order to begin to better understand how many contracts as well as how much funding is at play regarding these matters, fyi: Department of Vermont Health Access Contracts: http://dvha.vermont.gov/administration/contracts/ Executed contracts, contract amendments and proposals received in response to requests for proposals (RFP) To find contracts between the state and its contractors relating to the state’s health exchange, scroll about halfway down the page “Health Benefit Exchange” and other “Health” related items. In addition, scrolling toward the bottom of the page one finds items under “Vermont Health Connect” related items. The middle column… Read more »

2 years 3 months ago

Great resource. Thanks Morgan.

Keith Vance
2 years 3 months ago

The people’s business?

Elinor Osborn
2 years 3 months ago

VT Digger gives Vermont citizens valuable information about government in articles like these. Keep up the good work.

Bob Orleck
2 years 3 months ago

Good grief!

2 years 3 months ago

It boggles the mind when one thinks about how much federal and state taxpayer dollars are being wasted er, spent to set as well as prop up the state’s overly complex health care exchange; including the Vermont Health Connect Website, which is functioning so well that paper applications are having to be used instead. How much has been wasted thus far doing so and how much more will be required to be spent in order to get it right (this and all following questions are posed rhetorically)? Yet, still, we are told by state officials and others that everything will… Read more »

David Usher
2 years 3 months ago

Money provides a fragile shield for incompetence.

Jon Corrigan
2 years 3 months ago

And the exception to that rule is politicians – they need no shield because the worst that can happen is they’re voted out of office. Then they get appointed to a better position. We’re too often stuck with these incompetent nincompoops until the day they take their last ride, but their bad policies endure long after they’ve gone.

2 years 3 months ago

An afterthought: If Vermont Health Connect were to indeed fail at some point (as some appear to be hoping and also are working towards) and, potentially the state’s future attempts at tackling universal health care fails along with it (one truly hopes not), the epitaph might possibly read something along the following lines: Another brilliant idea, conceived with only the best of intentions, yet having been overly hyped and rather poorly executed, once the support as well as money for it eventually ran out and much like so many of its predecessors., it was unceremoniously abandoned. (this will of course… Read more »

Dave Bellini
2 years 3 months ago

The State Employees Health Plan should be the model being used. Last January 1 we had NO PREMIUM INCREASE and some premium Holidays in Dec. of 2012. I expect the plan will do pretty well this year too. If state employees health care costs are decreasing both employees and tax payers save money. This plan should be used as the model. It is far ahead of anything that the GMCB has created. It costs less and provides more. . So, instead of using a proven, cost saving, model, the Administration is buying millions of dollars of LIPSTICK to put on… Read more »

Lee Russ
2 years 3 months ago

You realize that the exchanges are part of the federal health care law, rather than the state’s, right? What has been the premium history prior to January of this year? What is the amount of the premium? How much of the premium, if any, is paid by the state? Are state employees representative of the entire state population, so that all Vermonters could expect similar treatment by the insurer? I have no doubt that the ACA has its problems, and the function of the exchanges leaves a lot to be desired, but lets get serious. Conservatives in the federal government… Read more »

David Dempsey
2 years 3 months ago

I’m not opposed to any of the things you mentioned. What I am opposed to is that Vermont is the only state to mandate that all Vermont individuals and businesses have to buy health insurance through the exchange, except for businesses like the State of Vermont who are self insured under the federal ERISA law. The exemption for businesses with over 50 employees will be phased out over time. If the exchange isn’t working isn’t up and running by 1-1-14, 100,000 people will not have health insurance effective that day. Vermont could have saved all the fedral money spent on… Read more »

Kathy Callaghan
2 years 3 months ago

David Dempsey, the state employees health plan is not an ERISA plan. It is a self-funded plan and sometimes confused with an ERISA plan. But the ERISA law specifically exempts governmental and church plans from its requirements, even if these plans are self funded.

David Dempsey
2 years 3 months ago

Kathy,
Thanks for setting me straightt on that. You are absolutely right as I found out when I looked up the law. Like the companies with ERISA plans, government and church entities that are self insured can keep their current plans until the implementation of Vermonts proposed single payer insurance plan.

andew nemethy
2 years 3 months ago

Geez. For a mere, I dunno, $20,000, I could have provided information on influential media in Vermont and how to get their attention (donuts, pizza, and maybe a coffee and muffin at the local co-op, or sip of Barre Hill gin works too…) It might have taken a while, maybe a couple days? But someone has to do the hard work, right? Meanwhile all of us dubbed non influential have an incentive to prove this firm wrong! But seriously, this is an example of how the world works, unfortunately and how those who cater to govt. can throw around huge… Read more »

Wendy Wilton
2 years 3 months ago

Supporters of free speech and free press ought to think about this marketing plan and disclosure very carefully. Like everything else with this governor it’s a bit unseemly, there’s a ulterior motive and the taxpayers are footing the bill.

Fred Woogmaster
2 years 3 months ago

“We had a competitive bid process where GMMB was the winning bidder in supporting that project. ”
“GMMB was one of six bidders for the original contract with the state.”

Peter Hirschfeld, I believe, reported that there was no bidding process. I must have missed something. Who were the other bidders? Any from Vermont?

Fred Woogmaster
2 years 3 months ago

Hirschfeld actually reported that there was no bidding process for the additions to the original contract.
Who WERE the unsuccessful bidders?

2 years 3 months ago

Good question, Fred. I wish I knew, too. But the state’s public records laws exempts bids from disclosure to the public. A lawmaker can subpoena the bids, but members of the general public and the press, as I understand it, do not have the right to request the documents under state law.
Anne Galloway
Editor, VTDigger

Annette Smith
2 years 3 months ago

For all the money that’s been spent, it’s still way too confusing. I took my first trip to the health exchange website a couple days prior to its launch, and could not get to the cheapest plan to see what my payment would be. Today I tried again, and it’s even worse. It appears I have to log in or sign up before I can get any information other than the .pdf files with general rates but nothing specific. I looked at the paper form, and it is pretty general, nothing specific. And I don’t want to watch videos, I… Read more »

MJ FARMER
2 years 3 months ago

Annette, The reason you need your SS# is so the IRS can deposit $ into your account (routing and checking # also needed) to help you pay for the average $350/mo premiums. This is called Advanced Tax Credit. At the end of next year, when you do your 2014 taxes, you will either get to keep the subsidy or you will have to pay it back. All this, will require proof that you actually spent the $ on health care and that you actually made less than the $49,000 for individual and $94,000 for family of 4. When I played… Read more »

rosemarie jackowski
2 years 3 months ago

Million$ spent on propaganda….Zero spent on dental care. That really hurts.

John Perry
2 years 3 months ago

I remember during the Douglas administration, when the press was not all that positive (when is it not negative?) that Governor Jim “reorganized” all of the major state agencies to include a Media Manager for each Agency Secretary. That didn’t play well then, and this doesn’t play well now. Douglas is being a little disingenuous.

Eileen Foster
2 years 3 months ago

This extraordinary expense for a media campaign is ironic considering Governor Shumlin’s well-known dislike of Spin Doctors.

In 2012, Shumlin nixed several advertised State communications positions. Administration Secretary Jeb Spaulding stated the reason, “He [Shumlin] has a total dislike for taxpayer dollars being spent on p.r.”

http://blogs.burlingtonfreepress.com/politics/2012/01/16/vermont-governor-doesnt-like-sound-of-these-jobs-2/

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