Though he originally entered the oil business himself, he preferred to make his career as a classical music composer. [3][5], Among several professions, Getty is a classical music composer whose compositions include the opera Plump Jack, Joan and the Bells, piano pieces, and a collection of choral works. They know where the bodies are buried., In one of my conversations with Sonn, I asked why more people from her rarefied wing of financial services didnt speak out. [13], Gordon Getty's life as a composer was chronicled in Peter Rosen's documentary Gordon Getty: There Will be Music which premiered on February 5, 2016, at Cinema Village in New York City [14] and has been broadcast on PBS in the U.S. and Europe on ARTE, and also appeared in film festivals, and programs across the country.[15]. She started out at a small firm in lower Manhattan, working as a receptionist and studying at night to become a financial planner. How an unemployed blogger confirmed that Syria had used chemical weapons. The financial upside bordered on the supernatural. They hosted charity events, opera stars, and fundraisers for politicians, including Kamala Harris and Gavin Newsom. Across the family fortune, she said, thats a lot of tax on billions of dollars. While their grandfather had sought to duck taxes by claiming California residency, Sonn was helping the granddaughters attempt that maneuver in reverse. In a countersuit, Sonn accused the Gettys and their advisers of retaliating for her opposition to a dubious tax avoidance scheme that could save them as much as $300 million. By getting on the plane four times a year to vote elsewhere, and keeping the back office in Reno, they had justified putting off the payment of an estimated $116 million in California taxes on the sisters trust, according to Sonn. Its perfectly legal to avoid taxes by honestly reporting losses and deducting expenses, and its perfectly illegal to evade them with lies (by understating income or bartering to avoid sales, among many other techniques). From 2015 through 2020, Sonn asserts, Gordon received about $176 million from the trust. You dont barbecue the goose, she said. A descendant of a California land baron is unhappy about San Franciscos condition. Their mother, Cynthia Beck, and I love them very much.. [2], Getty was raised in San Francisco, California, where he attended St. Ignatius College Preparatory and the University of San Francisco. It is estimated that there are some ten thousand such companies worldwide, controlling assets worth approximately six trillion dollars as of 2023. New York, Seattle. A century ago, American law handled the rare pleasure of a giant inheritance with suspicion. Wealthy Americans know the capital gains tax is their biggest loophole and they wont give it up easily. If you measure the blood levels of the chimp on top of the hierarchy, they tend to have high serotonin and testosterone levels, which are mood-enhancing, Harrington, the sociologist, said. Anybody who is within the industry, and has been there a long time, has accepted certain tenets, she said. By signing up, you agree to our User Agreement and Privacy Policy & Cookie Statement. In the weeks before John Wayne Gacys scheduled execution, he was far from reconciled to his fate. Her sister Kendalle, who declined to comment for this article, is fond of retweeting posts by Bernie Sanders: Billionaires get richer & pay less in taxes while millions are unemployed, kids go hungry, veterans sleep on the street. Owning Thoroughbreds can allow you to write off millions in pleasant investment losses each year. But They tend to have no public presenceGordon Gettys family office is known, inconspicuously, as Vallejo Investmentsbut by some estimates they control about six trillion dollars in assets, a larger sum than is managed by all the worlds hedge funds. WebGrants to institutions and individuals that advance the visual arts worldwide. Without clever wealth management and attorneys, the Getty fortune wouldve gone up in smoke.. It was arranged to grow until Gordons death, at which time the sisters would gain control of a pile of assets that Sonn estimated would be worth about a billion dollars. Loopholes, like dynasties, do not survive without good help. The same goes for auto racing and cattle ranching. WilliamK. Vanderbilt, a descendant of Cornelius, observed, evidently from experience, that inherited wealth was as certain a death to ambition as cocaine is to morality.. I played a lot of golf as a kid, he said. Nicolette isnt a named defendant in Sonns lawsuit and doesnt appear to have been a Sonn client. The benefits of the GRAT are obvious, Handler, the tax lawyer, told me: its cheap, simple, and easy to repeat. Nicolette Getty, objecting to the familys alleged California tax dodge. The recipe requires only two steps: have your lawyer set up a trust on paper with your heirs as beneficiaries, and fill it with assets that you strongly suspect will rise in valuesay, the stock of your company about to go public. Theodore Roosevelt took steps toward a progressive tax on inheritances, in the belief that a man of great wealth owes a peculiar obligation to the State, because he derives special advantages from the mere existence of government. A ten-per-cent estate tax went into effect in 1916; the Great Depression and the New Deal fuelled calls for higher levies, and by 1941 the top rate had climbed to seventy-seven per cent, where it remained for decades. Her worries turned out to be misplaced. Now Gordon Getty's remaining living children are Peter and Billy, and their three half-sisters who he fathered during an affair. The Getty family, Sonn asserts, was counting on its political pull in California to minimize that possibility, but that was a calculated risk. Among their connections is Gov. [4], In 2002, Getty founded ReFlow, a company which temporarily purchases shares in mutual funds to save funds taxes and commissions. In a countersuit, Sonn accused the Gettys and their advisors of retaliating for her opposition to a "dubious tax avoidance scheme" that could save them as much as $300 million. After three months, the kidnappers, growing impatient, cut off the boys right ear and mailed it to a newspaper, to broadcast their warning. When Old Paul died, in 1976, he was living in England but trying to avoid British taxes by claiming to be a resident of Californiaeven though he had not been to California in a quarter century. It went from socially responsible investing to E.S.G.environmental, social, and governance. But lobbyists mobilized, reviving some of the same arguments that gutted the estate tax, and by Christmas the exemptions had been saved. But I thought about it.) For Sarah, it complicated matters that Sonn was also representing Kendalle, who I dont always get along with.. Gordon Gettys initial investment in PlumpJack was 9 percent. So theres this game of counting their days, she said. That may have been especially so when she told Kendalle in July 2020 that avoiding duly owed California taxes would not be a sign of integrity re: the spirit of the law in conformity with a progressive outlook. Brooke Harrington, a Dartmouth sociology professor whose book Capital Without Borders examines the tools of tax avoidance, told me that families like the Kochs, the Waltons, and the Gettys have escaped the old adages about generational decline thanks to a perpetual-motion machine of wealth creation. Often, she said, the advisers job is protecting the fortune from the family. Gordon Peter Getty (born December 20, 1933) is an American businessman and classical music composer, the fourth child of oil tycoon J. Paul Getty. [citation needed] His net worth was cited as $2.1billion in 2020, making him the 391st richest person in the United States. Gordon P. Getty, 88, is J. Paul Getty's fourth son and heir. His tactics became so aggressive that President JohnF. Kennedy personally leaked details of Gettys taxes to Newsweek, revealing that, in a recent year, Getty had paid a total of $504 in federal income tax. Eventually, Sonn wore out her welcome. In 1983, Forbes magazine ranked him the richest person in America with a net worth of a little over $2 billion. Investment income and dividends: $62,571: $16,114: 288.3%: Net rental income: $0: $0-Net gain from sale of non-inventory assets: $649,802: $0: 999%: Gross Suddenly, a New York cop remembered a long-ago murder. This tidy routineskip the income, live off loans, and avoid capital gains until you gocan run forever. ), Sonn became accustomed to the rhythms of life in the Getty orbit: the talk of political allies, the familys trips on their Boeing 727, known as the Jetty. And yet, by 2018, after four years of crisscrossing the country to attend to the Gettys finances, elements of the job were making her increasingly uncomfortable. Still, Sonns allegations are now in the public record, and effectively serve as a roadmap for California tax investigators, should they choose to follow the route. Some advisers to ultra-rich families describe the current era as a golden age of tax avoidance. Two cents!, Scholars of wealth and taxes say that the golden age of lite tax avoidance has contributed to the turbulence in American politics, by hardening social stratification; reducing public resources for education, health, and infrastructure; and eroding trust in Americas mythologies of fairness and opportunity. The alimony and child support he sent did not suggest the magnitude of his wealth. Most of the high-net-worth client base, theyre running for cover, he said. She gave a wan laugh and said, I fulfilled a lot of their intergenerational ambitions. She had reached the heights of wealth management, optimized her position, and sued in pursuit of millions. He and his wife have supported the fine arts, especially underwriting productions of the San Francisco Opera and the Russian National Orchestra. For clients who had investments in offender industries, such as fossil fuels or private prisons, she could help them sell the stock and plant trees in the Amazon, structuring the trades to minimize the cost in taxes. He had five divorces, and five sons, from whom he was so distant that he did not bother to attend their weddings. Im very against military and guns and weapons, and very pro-planet. Like many others I spoke to while reporting on Sonns dispute with the Gettys, Sarah described a feeling of captivity to industries and laws that enriched her but tried her conscience. For one thing, she said, her employers had refused to contribute to her health insurance or her payroll taxes, to avoid the appearance of operating in New York, where she lived. The article by Evan Osnos, titled The Getty Familys Trust Issues, includes interviews with Sonn and members of the Getty family about what happened after she was recruited in 2013 to help manage affairs for two of Gordon Gettys daughters, Kendalle and She says Alexandra fired her in January 2021 with a commitment for a $2.5-million severance payment, but later tried to settle for $30,000. [3], He joined the oil business to please his father; however, he eventually sold the family's Getty Oil to Texaco in 1986 for US$10billion. But, Sarah Getty told me recently, her crazy family history and abrupt transformation into an heir gave her little preparation for managing a fortune. In their current condition, taxes on American wealth are, effectively, on the honor system, with opt-outs for the flagrantly defiant. New Getty Investments was formed with the objective of continuing Old Getty Investments, which would have Kendalle had a nest egg of about five million dollars, administered by Goldman Sachs. And yet, in recent times, the fortunes of many prominent American clans have soared. Sonn says her recommendation that they swallow their medicine and get right with California law led to her being fired in retaliation and cheated out of more than $4 million in pay she had been promised. Other than the very liberal, highly educated, intellectual lite, they dont feel guilty at all. So theyre able to enforce a certain kind of culture of silence around bad behavior. Sonn had started out in wealth management determined to help people find tax-efficient ways of clearing their conscience but had come to see an ethical flaw in that ambition. In 2007, the two drivers went head to head in a nail-biting chase for the Nextel Cup. This became public when the sisters filed a petition, which was granted, to change their names from Beck to Getty. Kendalle wanted her investments to reflect her progressive interests, ethics, and values, Sonn recounts; Goldman Sachs had invested her money largely in broad market funds. But, when inheritance patterns reach extremes, they wreak social and political havoc. Davis, characterized the Gettys approach as aggressive, obnoxious tax planning, saying, They are at the limit, or perhaps beyond the limit. But the familys larger strategy, he told me, might be simply to take their chances with Californias version of the I.R.S., the Franchise Tax Board. His mother, Ann Rork, was his father's fourth wife. Keith Gordon joined GMI Distribution in 1981 after a four year career as a licensed Deck Officer sailing worldwide aboard US flag container ships. As one who will be paying for all these avoided taxes and these expensive out-of-state meetings, I find it distasteful., According to the lawsuit, Ms. For twenty-two years, everyone has known you can do this. Gordon became the principal beneficiary of Pleiades, which the lawsuit says his daughters will inherit after his death. The late U.S. senator Carl Levin, a critic of finance abuses, accused the industry of deflecting attention with MEGOsMy Eyes Glaze Over schemes.) A few words of caution. For Sarah, she was in Japan, then she was in New York, then shes in California. In a black-and-white dress and chunky glasses, with salt-and-pepper hair falling to her shoulders, she betrayed little sign of the erstwhile punk and activist. Its walls and walkways are made of pale travertine, mined from an ancient quarry east of Rome. Though he originally entered the oil business himself, he preferred to make his career as a classical [12] Two of Getty's daughters, Sarah and Kendalle, are suing a former financial advisor, Marlena Sonn, for "unjust enrichment." Low rates, quick closings, long & In May, Sonn filed suit in the Eastern District of New York against her former clients and employers, as well as others involved. And they decided they want to pay less., Spend enough time around wealth managers and their clients and you can start to see the whole story of American power and suffering as a function of the simple arithmetic of compoundingof money making money, of lobbyists layering on new exemptions each decade, of the cultural amnesia that makes ideas about wealth come to seem normal, honorable, inevitable. Wealth managers like to say, A submerged whale does not get harpooned. In this case, one of their own was allowing one of Americas richest clans to heave into view. The Getty Center, on a sun-drenched hilltop in the Santa Monica Mountains, is one of Americas most visited art museums. Because its a loan, youll owe no taxes on the cash. We must stand up to the billionaire class and create an economy for all, not just a few.. Sonn assisted Kendalle and Sarah as they navigated the complications of their new wealth. The family fortune began in 1903, when a couple of flinty, frugal Minnesotans named George and Sarah Getty struck oil in Oklahoma. WebOur solutions offer continuous, everyday access to liquidity that funds can draw upon to meet redemptions and manage cash positions. Managers handle delicate tasks; one professional in the Cayman Islands described the sensitivity of making a financial plan for an out-of-wedlock child that has to be kept totally private from the wife. Others specialize in keeping clients out of the news by minimizing public transactions. To understand the quietest corners of the tax-avoidance world, I called Bob Lord, a lawyer in Arizona whose tax practice once helped clients find loopholes. Her father, Gordon Getty, a composer and a philanthropist in San Francisco, worth an estimated $2.1 billion, had four sons with his wife, Ann. Secretly, he also fathered three daughters in Los Angeles during an extramarital affair. In 1999, their mother asked a court to recognize them as legal descendants. Property taxes were due only if the owner of a property died, so, if you kept playing hot potato with the deed, effectively the owner never died. In 1682, to curb gaming of the law, Englands Lord Nottingham established a rule against perpetuities, which set the maximum length of a trust at the life span of the beneficiary plus twenty-one years. Between 1983 and 2020, the net worth of the Kochs, who prospered in fossil fuels and became right-wing mega-donors, grew twenty-five-fold, from $3.9 billion to $100 Robert Leberman, the administrator of the trust, and one of the defendants in Sonns suit, denied her allegations against the family. In exchange for the love I didnt receive in my life, I got money, she said. Better yet, if you cling to your winning stocks until you die, the moment that your soul departs your body it will take your capital-gains obligations with it. Gordon had four sons, as far as was known to the outside world. She took to listening to analyst calls with C.E.O.s, buying stocks on E-Trade, and watching exultantly as some of her picks spiked in value. As soon as the assets grow faster than interest rates, voil! The money is the root of the problem with the Gettys, Gordons confidant William Newsom once said, according to Russell Millers book The House of Getty. It is a ludicrous, preposterous amount of money, enough to make you wonder if anybody in the world should have that much. And there isnt much of a market for a disgruntled wealth manager. Employing a similar approach with at least two other family funds, they had, by Sonns estimate, deferred a combined $300 million in payments. But there are other Getty trusts; if they all follow the practice that Sonn alleges about Pleiades, the amount at issue could be in the billions. Consider a lawsuit filed last month in federal court in Brooklyn by Marlena Sonn, who describes herself as an investment advisor to two of the three daughters of Gordon P. Getty, the heir to the late oil tycoon J. Paul Getty. I didnt need that massage chair. (She added, I didnt get a massage chair, dont worry. The caption read, Armour for your assets. Like any combatants, wealth managers gather intelligence: a tax lawyer told me that his firm had used the Freedom of Information Act to obtain a copy of an internal I.R.S. Governments have limited budgets, the stuff is complicated, and the advisers know whats going on, McCaffery said. To revisit this article, select My Account, thenView saved stories, To revisit this article, visit My Profile, then View saved stories. The Pleiades Trust was officially administered from a small office complex a block from the Reno-Tahoe airport: Airport Gardens, which shared a parking lot with a private investigator and a hobby shop selling electric trains. For the very rich, private wealth managers are in a separate class from other retainers, even from the trusted pilots, chefs, and attendants who maintain their life styles. Nicolette told me, This Nevada trust arrangement was made before I became a trustee or was included in the trust or Getty matters at all. She went on, Ill admit that for a time I did consider the option of moving out of California in order to avoid the tax, because it is quite substantial. But, she said, she abandoned the idea, and expects to pay about $30 million in taxes on her share of the trust. The defendants lawyers either declined or didnt respond to my requests for comment. Kendalle soon transferred the rest of her assets to Sonn, and introduced her to one of her sisters, AlexandraS. Getty. Families just grow up in it, McCaffery said. When his father died in 1976, Gordon assumed control of Getty's US$ 2 billion trust. His net worth was $2.1 billion in September 2020, making him number 391 on the Forbes 400 list of the wealthiest Americans. [2] Getty was raised in San Francisco, California, where he attended St. Ignatius College Preparatory and the University of San Francisco. His seventh book, Iron Empires: Robber Barons, Railroads, and the Making of Modern America, has just been published by Houghton Mifflin Harcourt. We can live in California for now if we want to, without penalty, as long as we move out of state for a year before we are ready to access the trust principal, she wrote, in an e-mail to her siblings and others. The Gordon and Ann Getty Foundation is a private foundation located in San Francisco, CA, which made $10,645,160 in annual grants last year. Weve interviewed Trust consultants at your Dads house. Once she was certified, she signed up clients who wanted to align their wealth with their values. Her new role obligated her to master a shifting vocabulary of noblesse oblige. THIS FIFTH AMENDMENT TO RESTATED LIMITED LIABILITY COMPANY AGREEMENT(this Amendment) is made as of July 1, 2004 among the following parties: (1) THE TRUSTEE OF THE CHEYNE WALK TRUST, whose registered office is located at 1325 Airmotive Way, Suite 262, Reno, Nevada 89502 (the Kendalle, a multimedia artist, identified herself on Instagram as a bastard princess, and advertised support for environmental conservation, animal welfare, human rights, and reforming the way the justice system handles gendered violence, racial inequities and bias, and transphobia. She seemed eager to pull money out of the petroleum investments that had built the Gettys wealth and repurpose it, in a spirit that Sonn likened to reparations. Could it be different? After seventy-five years, your $12.9 million will balloon to approximately $502 million, according to calculations by the Northern Trust Institute, a wealth-management firm based in Chicago. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Cond Nast. One of the lawyers likened it to an elaborate treaty negotiation among warring nations.. But the wealthiest Americans have access to ever more creative dodgesmost of them legal, some illegal, and some on the murky border in between. Why didnt reform work? You have to think about the profit first., Sonn told me she didnt know anyone else in finance who had publicly criticized a client or the underlying assumptions of the business. His parents, devout Methodists, disapproved. Getty's opera The Canterville Ghost was premiered on May 9, 2015, at the Leipzig Opera. In a 2018 e-mail, Nicolette Getty, the third sister, described the expense and the logistics of the quarterly ritual as distasteful. She wrote, The trusts should become California trusts and pay the California tax that we rightfully owe. But advisers in Gordons family office apparently disagreed, and by the following spring Nicolette was expressing a similar view. I dont think were being in integrity re: the spirit of the law. She added, Im compelled to tell you the truth here, even though its an ugly shitshow and not of either of our makings., Kendalle replied with one word: Zoinks.. Paul complained to his mother, who agreed to sell him her share of the company as a Christmas present. As her duties expanded, Sonn assisted Sarah with insurance and real estate. My parents belonged to Woodmont, the premier Jewish club. Through our He saw no reason why I should exert myself further to make more, he wrote, in a memoir called My Life and Fortunes. He would focus instead on enjoying myself, and in that pursuit he acquired Hollywood friends, such as Charlie Chaplin and Gloria Swanson, and abundant hangers-on. Women and young people are talked down to, she told me. If theres a corollary to Benjamin Franklins observation about death and taxes being the only certainties in this world, its that the 1% will defend their tax breaks to their last drops of blood. On Christmas Day, 1964, he married Ann Gilbert (19412020) in Las Vegas, Nevada. The simplest way to avoid income taxes is to avoid income. If you run a company, alert the press that your salary is a dollar a year; then, for walking-around money, summon your banker to provide a portfolio loan, which uses your stock as collateral. The question of how much to leave your kids has been with us since the Ice Age. She had agreed to give her $2.5 million, in installments, but she stopped after the first payment; she said the family office had discouraged her from sending more. What do we do with this five million, and what do we do with that five million? Sonn recalled. According to Emmanuel Saez and Gabriel Zucman, economists at the University of California, Berkeley, the average tax rate on the top 0.01 per cent has fallen by more than half, to about thirty per cent, while rates for the bottom ninety per cent have climbed slightly, to an average of twenty-five per cent. Alexandra became Sonns client later that year. In March, 2015, Kendalle and Sarahs half brother Andrew Getty died at his home in the Hollywood Hillssuffering, the Los Angeles County coroners office found, from methamphetamine intoxication, heart disease, and bleeding linked to an ulcer. For another, helping to manage a familys most sensitive financial deliberations could be an emotional process; these are blood-sucking jobs, as one finance professional put it. In her suit, she accused her former patrons of threatening to ruin her professional reputation if she went ahead with the case. If the case eventually settles, it isnt clear what she might win or lose. Ari Emanuel lets his AI alter ego open Endeavors earnings call, Sam Bankman-Fried increasingly isolated as another associate takes a plea deal, How Black Market Flea and Everyday People brought the buzz of Black life to the Beehive. By the third century B.C.E., tensions between the groups had pushed Spartan politics into violent convulsions over land, debt, and power. Others suggest stronger financial incentives for whistle-blowers. Sarah Getty told me, My anxiety mind will take over sometimes and be, like, Should I spend less? When Chuck Collins, a great-grandson of the meatpacker Oscar Mayer, told a fellow-heir that he planned to give away the corpus in his trust, she invoked the goose that lays the golden egg. He vowed to create a Getty dynasty, but this was more a financial concept than a familial one. The most devoted liken themselves to clergy or consiglieri, and tend to get prime seats at the kids weddings and the patriarchs deathbed. After his death, members of the family feuded in court, and forced the sale of Getty Oil to Texaco. WebOur History: In 1997 Gordon Getty identified the ReFlow solution to a persistent problem: How to efficiently provide for shareholder redemption liquidity without undue burden to The trade was so profitable that their son, J.Paul Getty, became a millionaire by the age of twenty-threeat which point he announced his retirement. According to the Los Angeles Times, the Gettys battle with their former financial adviser could serve as a roadmap for California tax investigators, should they choose to follow the route.. And dont forget the private-jet loophole created by Trumps tax law, which allowed family offices to soak up excess business losses by upgrading the Gulfstream. In 1983, South Dakota became the first U.S. state to abolish the ancient rule against perpetuities, clearing the way for what became known as dynasty trusts, which can shield assets from inheritance taxes for centuries. (Newsoms father, William, one of Gordons friends since high school, managed the family trust for years. All of the candidates flew into San Francisco, she said. People hated the idea. When it comes to taxes, there have always been advantages in certain lines of work. The Mars-family fortune, which began in the candy business, grew by a factor of thirty-six, to $94 billion. Sonns lawsuit bears the hallmarks of an act of vengeance. Im one who thinks the tax burden needs to be higher on the wealthy such as myself and my family, she said. On Christmas Day, 1964, he married Ann Gilbert (19412020) in Las Vegas, Nevada. Sonn entered the story in 2013, when, she says, she took over the management of Kendalles $5-million portfolio from Goldman Sachs. Capital keeps getting more and more unequal, until theres a crash., But Tom Handler, a Chicago tax lawyer who specializes in ultra-wealthy clients, told me that the political pressure on the one per cent has only generated more business for him and his peers. Theyre angry., For people born to the most elevated classes, the fight over a few points difference in tax rates can feel existential. team The F.T.B., like many agencies, has a finite capacity for complex cases, especially when faced with a well-resourced litigant. There are functional concerns and ethical ones. Sonn said that she was also enlisted in maintaining the appearance that Kendalle and Sarah neither resided nor transacted trust business in California, in order to minimize their exposure to state income tax, which ranges up to thirteen per cent. The money will go to several organizations including the University of San Francisco, the San Francisco Symphony, the San Francisco Opera and the San Francisco Conservatory of Music, which is close to Gordon Getty's heart. For others, cheating on your taxes is a nihilistic triumph. At first, she thought that some members of the family might agree with her. A new era of strength competitions is testing the limits of the human body. The Mars-family fortune, she accused her former patrons of threatening to ruin her professional reputation if she ahead. Gordon joined GMI Distribution in 1981 after a four year career as a music... Was helping the granddaughters attempt that maneuver in reverse for the love I didnt receive in my,! On American wealth are, effectively, on the cash im one who the... Went ahead with the gordon getty investments eventually settles, it isnt clear what she might or. Very liberal, highly educated, intellectual lite, they dont feel guilty at all will... 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Governments have limited budgets, the two drivers went head to head in nail-biting. Most of the law Getty told me, my anxiety mind will take over sometimes and be, many!
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