Expo Errors

The joy of blogging is the ability to air your views in an unrestrained way.  No supervisors, lawyers, or editors to review your work.  On the other hand, this makes it easy to generate lots of misinterpretation as you opine on issues you don’t understand.  Others will, I am sure, ding me as I post along my merry way.  But from time to time I see something written by someone else that similarly calls out for a reality check:

Adam Minter writes a blog called “Shanghai Scrap”.  It’s pretty interesting overall. However, he has decided, mistakenly, that he understands the challenges of putting together a US pavilion for the Shanghai 2010 Expo well enough to have identified the culprits in the ongoing sad story of this effort.  The culprits, he tells us, are the key members (Ellen Eliasoph, Nick Winslow, and Frank Lavin) of the State Department approved non-profit entity working to raise funding for the Pavilion.  His most recent post on this is at:  http://shanghaiscrap.com/?p=2926

Full disclosure requires that I note that Ellen Eliasoph and her husband (Ira Kasoff (who gets a silly and totally gratuitous mention in Minter’s post)) and Frank Lavin are friends of mine (I don’t know Nick Winslow).  But I also hasten to note that, unlike Adam Minter, I know a lot about the process of approval and fundraising for a US pavilion based on my time in the US government and contacts I have had with a couple of groups vying to get State Dept. approval for the US Pavilion at the Shanghai Expo over the past two years.

None of us are perfect and I won’t argue that the approved group (Ellen, Nick, and Frank – all working pro-bono) have done everything perfectly.  But what Minter (and other outside critics) don’t know is the story of the almost impossible conditions that approved group has been working under.

The real problem lies in the bowels of the State Dept. where working level lawyers and some public diplomacy officers over the last couple of years have thrown up obstacle after obstacle to the US Pavilion effort.  It is as if some involved at the working level were pursuing their own foreign policy.

First was the long, long delay in approving a group to spearhead the effort.

After that, the challenge was fundraising:  Want to raise money from US companies?  We need an extensive government vetting process (which rejected a number of blue chip firms for reasons never made clear).  Want the support of major Chinese companies active in the US?  Nope, they are involved in nefarious activities or otherwise ineligible.  Want the Secretary of State to issue a letter to the US business community urging support for this high priority project?  Gosh, we (lawyers) need to think very, very long and hard about this since we don’t want to have it appear that our Secretary is trying to fundraise (even though such generic letters are common for other projects).  (Note:  this last hurdle has finally been overcome with issuance of a letter by Secretary Clinton.)

Secretary Clinton and her senior advisors understand the importance of the US Pavilion.  They are pushing back hard and making some progress.  But it bothers me to see Adam Minter (and some others who have been quoted in the press), knowing nothing about the legal, bureaucratic, and policy complexities the approved group is wrestling with, suggest that a different approach or set of actors could magically get the US Pavilion up and running.

One thing that impressed me over 25 years of working on China policy in the government was the huge number of experts not wrestling with a problem in the real world who had “brilliant” and “simple” solutions to that issue.  Turns out the less you understand a problem the easier it is to devise solutions to it (though not to succeed in implementing them).

Having been on the receiving end of such “brilliant” analysis, I just feel compelled to vent on behalf of Ellen, Nick, and Frank here.

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12 Comments on “Expo Errors”

  1. Bob Jacobson Says:

    An elegant apologia for the Bush Administration’s flawed Expo policy and the Faustian bargain that Ellen and Nick made in accepting its terms. I studied Adam’s account. It seems accurate to me. What exactly did you find objectionable that you can state in concrete terms and not platitudes?

    • levinehank Says:

      Bob: thanks for the interesting comment. A few thoughts in response:
      re the Bush Administration: I was a career Foreign Service Officer who served through republican and democrat administrations. Further, I made my position clear re Bush Administration failure on the Expo issue in the first post I did on this subject (Strategic Thinking?), in which I wrote, “…the Bush Administration lacked the vision to move decisively to get the ball rolling…”. Don’t think I can be accused of being an apologist for the Bush Administration. But I am perplexed by your reference to a “Faustian bargain”. Seems overly conspiratorial to me. Can you elaborate?

      Re my use of “platitudes” only: an odd comment. Thought I laid out in detail where I believe the problem lies: at the working level of the State Dept. (and not tied to any particular administration). As noted above, would be great to see you expand your very few sentences which assert that Adam’s account is accurate and that the approved group has made a “Faustian bargain” with the Bush Administration. Statements are intriguing, but would be great to get something to back them up.

      Finally, a quick Google search helped me understand that you are working with one of the groups that has not gotten State Dept. approval but continues to criticize the group that has. Might have been useful for you to mention that to help give some context to your comment.

      In fact, in one quote I saw you refer to your efforts to raise funds for the US Pavilion. Question: Doesn’t the fact that you have not been approved by the State Dept. to pursue the project call into question your ability to use funds you raise for the US Pavilion?

      As I noted in my post, it is easy for someone outside the process to declare they have an easy solution and can do it better than the approved organization. My 25 years of experience in the US government tell me that it ain’t so in this case.


      • Hank, thanks for the opportunity to clarify my responses. You have 25 years government experience. We have several multiples of 45 years of Expo experience. Between us, we should be able to suss out the situation.

        Let me supply a little history in the process, as you’ve been out of this particular loop. Before I do, however, let me amend my earlier statement in light of your clarification: your post was an unintentional apologia for the Bush Administration. Here’s why…

        In 2006, at a Bush Administration all-agency meeting, the hat was passed for funding to pay for the US pavilion at the Shanghai Expo. No one put up a dime. Evidently, according to my informant (who was there), the group collectively decided to put the full cost of funding a pavilion on (a) the producers, if any were foolish enough to accept that assignment – historically a non-starter; or (b) the Expo hosts, as the Bush Administration had successfully done in 2005 for the Aichi Expo (when Japan footed the bill, resulting in a mediocre pavilion and lots of embarrassment on everyone’s part). This became the Expo “action plan” that is still classified and the subject of a pending FOIA request (not mine). Interestingly, the secret Action Plan was prepared while Frank Lavin, the third member of the Eliasioph-Winslow group, was Under Secretary of Commerce for Pacific Asia and director of the International Trade Administration. Ironically, he has to work within its strictures.

        The Action Plan is cited in the RFP that issued from the State Department in late 2006. Among the claims made in the RFP is that the State Department is barred from funding US participation at Expos. This red herring is not in keeping with current law (which I have reproduced on Shanghai Scrap in the Comments section); it was a ruse to cover for the Bush Administration’s no-public-funding policy.

        The BH&L Group of which I’m a member – a nonprofit association of world-class Expo veterans — responded to the RFP. (The BH&L Group is named for its co-founders and long-time collaborators Barry Howard and Leonard Levitan who cut their Expo eye teeth at the New York 1964 World’s Fair.) We were the sole finalist, the last man standing at the end of the competition. However, since our members are Expo veterans (unlike all but one of the State Department staff with whom we regularly corresponded), we knew the find-your-own-funding scheme wouldn’t work; it never has. No modern US pavilion has been built exclusively with private contributions.

        Instead, we proposed a novel, free-market, for-profit funding scheme involving investors in a company able to acquire assets for future Expo efforts. The staff – we’re talking Assistant and Deputy Assistant Secretaries, hardly junior people – insisted on a philanthropic solution. This is the primary reason we were not granted State’s imprimatur to build the pavilion. Had we been, it would be almost done already.

        (A secondary reason was that the completely opaque RFP process did not provide any protections for the design and feature IP we were asked to disclose. When we insisted on knowing who would see our proposal, our request was refused. This impasse prevented further negotiations. In light of subsequent events, our concern was not misplaced; our position was reasonable.)

        I agree that State’s process was highly irregular, Hank. However, due to scandals and resignations in the Public Diplomacy division, there was no one left to fix it.

        The RFP expired in February 2008 with no “winner.” A few weeks later, in March 2008, Eliasoph and Winslow, where did not compete in the RFP, were privately sole-sourced a Letter of Intent that authorized them to raise money for a US pavilion. (The official State Department press release issued late in April 2008.) It was a license to fail. Why was it Faustian? Because, the LOI came at the cost of (a) acceding to the Bush Administration’s Action Plan and (b) forgoing the a competitive review that might have produced a stronger pavilion proposal. The weak proposal that resulted was too glitzy, too conventional, and too expensive ($85 million) to be fundable. In October 2008, Eliasoph and Winslow publicly resigned, arguing for public funding.

        Two months later, in December 2008, Eliasoph’s and Winslow’s group was resurrected, apparently by remnants of the Rice State Department (primarily in Shanghai). According to press accounts, a transfusion of Chinese money made it possible. (The first infusion allegedly took place at the inception of the group’s operations in early 2008.) The budget for the pavilion was reduced to a still considerable $61 million of which $1.25 million has been raised. Apparently an Aichi-type gambit was attempted, but the Chinese refused to play.

        Several deadlines have been missed and this week the Expo Hosts declared that pavilions not in process by the end of June will not be situated. That means there is a better than even chance that the US will lose its preferred location at the Expo and, with the two other holdouts – Colombia and Andorra – either relocate into a shared pavilion or miss the Expo entirely.

        To sum up, the Bush Administration did not ignore the issue of US participation in the Shanghai Expo or get off to a slow start, nor were junior staff responsible for the current debacle. In 2006, the Bush Administration at a high level implemented a policy that effectively sabotaged US participation in the Shanghai Expo. It then wasted two crucial years conducting an RFP process designed to fail and an LOI process of problematic propriety but even more importantly, without viability — a foregone conclusion.

        This doesn’t even get at issues of potential conflict of interest within the government that may have hurt the eventual effort.

        I’ve collected over 10 GB of documents and press accounts describing in detail the process as it has evolved beginning in 2006. The BH&L Group has 40 Expo pavilions to its credit. The other group is failing at its own goals and the Expo’s requirements. I leave it to your readers to decide whether I’m “out of the process” or an unfair critic. At the end of this comment, I refer your readers to articles addressing these issues that have very recently appeared in the national US and Chinese presses. Criticism of the current flawed process is much broader than Adam Minter’s well-informed comments on his blog. I believe it has even reached back to Washington, DC.

        Let me address three additional relevant points.

        First, the BH&L Group has never solicited a dime for a pavilion. When Eliasoph and Winslow first resigned the LOI in October 2008, we reenergized and polled potential corporate supporters to see whom we might count on if we were called upon after the default. Several indicated they would be inclined to work with us. So did many private citizens and public agencies. When Eliasoph and Winslow were shocked back to life, we left it at that. We have never discouraged anyone from contributing to Eliasoph and Winslow’s fundraising effort. We have done all our organizing, staying ready, pro bono.

        Second, there have been many opportunities for Eliasoph and Winslow to avail themselves of help from willing collaborators among the Shanghai expat American business community, BH&L Group, and other parties. Apparently advised by the Shanghai Consulate, which has been forced to improvise without an Under Secretary for Public Diplomacy or a US Ambassador in Beijing, they have refused every offer.

        Third, while the State Department can support US participation in Expos using funds appropriated by Congress or provided by other federal Departments, in fact it is the Secretary of Commerce who is charged with organizing federal participation in Expos. The BH&L Group has confidence in Secretary of Commerce Locke and Secretary of State Clinton. We look forward to the emergence of a new, workable strategy to replace the Bush Administration failed Action Plan (including federal funding in combination with private sponsorships). We further believe that a more cost-effective, state-of-the-art, and economical pavilion plan is needed, one that can be completed in six months or less. And a team that can make it happen.

        Here are links to the articles I mentioned earlier:

        “Pavilion Wars,” The Atlantic, April 9, 2009, by Adam Minter

        “Worlds Away,” The Architect’s Newspaper, April 15, 2009, Fred Bernstein

        “World Expo has plans for U.S. absence,” China Daily, April 28, 2009

        “U.S. Running Out of Time to Join Shanghai Expo,” Washington Post, May 7, 2009, Glenn Kessler

        “Oilman moves in to spur U.S. Expo saga,,” Shanghai Daily, May 11, 2009, David Maguire

        For further information about the situation, the BH&L Group, and me, readers can visit the BH&L Group Facebook Page or the BH&L Group website.

        I hope this account reassures your readers and you that my statements are well founded from close association with the process over more than two years. I’m reachable by clicking my name below. Thanks, Hank.

        Bob

        Robert Jacobson, PhD
        Core Team, Communications & Technology
        Santa Monica, California

      • levinehank Says:

        Bob: to be clear: I was the Deputy Assistant Secretary of Commerce for Asia from 2002 – August 2006. Frank Lavin was my boss for the final portion of that time. Ellen’s husband, Ira Kasoff, succeeded me in that position (on my recommendation). Here’s my problem with your analysis:

        By law the US can’t spend Congressionally appropriated funds for the Pavilion. Now, it may be that some tiny bits of money could be used by individual agencies to support travel, or printing of materials, etc. But USG money is not available to support construction and operation of the Pavilion on any scale that matters. Even if there was some technicality that some lawyer thought could be used to drive this through, it would create a political firestorm. So that approach is a non-starter. It is for this reason, as you correctly state, Toyota was a key factor in getting the Aichii Pavilion off the ground. No USG money available.

        Re a secret plan: Bob, this seems odd to me. The law is clear and no secret plan would have been necessary. Nor would the working level discussions of the Expo be “classified”. With all due respect, I think someone is selling you a bill of goods here.

        Your account ignores the fact that another group, composed of the folks who put the Aichi Pavilion together and knew the process exceptionally well, was very active in pursuing State Dept. approval, well before Ellen, et. al. were on the scene (I don’t know how the timeline relates to your involvement). I had detailed discussions with this group. They were frustrated (as was everyone) by the slow pace of the State Dept. process, but ultimately withdrew after they commissioned a study by a fundraising group that concluded they would not be able to raise the money they needed from the private sector. They knew and accepted the fact that USG money cannot be used to support the Pavilion (in any meaningful way).

        You talk about a “for profit” solution. At the same time you talk about using USG money for the project. Even if a tiny amount of USG money was available for the Pavilion, it would not be available to support a “for profit” venture.

        The basic problem here seems to be that Ellen and her group have been approved by State Dept. and your group has not. In a number of press articles, through Adam’s blog, and other channels you and supporters of your group have continued with great energy to attack the approved group, insist that USG money could be used for the Pavilion, claim that the approved group has the mandate because of a secret, political deal, etc.

        As I noted in my original post on this subject, I will not claim that the approved group has done everything perfectly. They have some strong personalities. But, the continued attacks on them, based on an elaborate explanation that involves “secret plans” and the assertion that USG money could be used for the Expo is not, to be honest, credible. Nor does it do anything at this stage to help the US put its best face forward in Shanghai at the Expo. I know it is a pipe-dream, but it would be great if all the folks who are interested in this goal could put their efforts into gaining the private sector funding needed to get the current plan (perfect or not) off the ground.


  2. […] God we have the insights of a former government insider to set us straight.  Whereas Adam is ignorant of the “legal, bureaucratic, and policy […]

    • levinehank Says:

      Yes; I have the experience to back up my comments and Adam, who may be for all I know otherwise a talented and intelligent person, does not know the legal, bureaucratic, and policy background. I stand by my comments.

  3. Foggy Says:

    Hank – the China Environmental Law Blog just wiped the floor with this post. Not your finest moment.

    • levinehank Says:

      Phil_BronxZoo: What I saw was a post from the author of the China Environmental Law Blog which dismisses all of my points in a mocking and sarcastic way. I stand by my comments. Most interesting is that I have done posts on my blog re human rights, trade policy, and other large issues. I’ve gotten some comments from folks that I know and don’t know, but all of a substantive nature. Daring to set the record straight re the current team backing the Expo (and yes, as I noted up front in my post, they are friends of mine) precipitates (for me) unprecedented pushback. Who is driving this with such great energy I wonder?


      • Dear Hank, since you won’t actually publish my comments on your blog, no one knows what you’re responding to.

        Let me just say, your “facts” are dead wrong based on several others’ accounts. You are also wrong on both your account of the RFP process — which you must have gotten second-hand from Doug West, who engineered the disappointing, Japanese-paid-for US pavilion at Aichi 2005 — and your reading of the law.

        It’s interesting that you spoke with one of the respondents to the RFP, because we only found out about their participation through a clerical error, never directly. The entire process was opaque. How were you so privy? There’s much about that process that was problematic, if not outright illegal.

        Nevertheless, we were the finalist and disqualified for exactly the reasons I specified in the comments you did not publish, i.e., we disagreed with the secret Action Plan — which is still secret — and its requirement for fully private funding. And don’t tell me about our process. We believed in public funding, but we attempted to come up with a scheme for private funding. It turned out the former was impossible and the latter — impossible. The State Department made both determinations.

        More to the point: here’s the law. You tell me how it supports your position:

        * * *

        The Law Governing US Government Funding for and Participation in Expo Activities

        1. According to U.S. Public Law, Title 22, Chapter 33, Section 2452b (International Expositions), Sub-Section (a), “[T]he Department of State may not obligate or expend any funds appropriated to the Department of State for a United States pavilion or other major exhibit at any international exposition or world’s fair registered by the Bureau of International Expositions in excess of amounts expressly authorized and appropriated for such purpose.

        Meaning: The State Department can expend funds appropriated for Expo activities.

        2. Sub-Section (c) states that, “No funds made available to the Department of State by any Federal agency to be used for a United States pavilion or other major exhibit at any international exposition or world’s fair registered by the Bureau of International Expositions may be obligated or expended unless the appropriate congressional committees are notified not less than 15 days prior to such obligation or expenditure.”

        Meaning: To spend funds provided to the State Department by another agency, Congressional committees must be notified. No further action is required.

        3. In U.S. Public Law, Title 22, Chapter 40, Section 2803 (Federal Participation), Sub-Section (c) [Authorization of Appropriations for Federal Pavilion], the Federal Government is permitted to participate in an international exposition with “the enactment of a specific authorization of appropriations” by Congress based on “a plan prepared by the Secretary of Commerce in cooperation with other interested departments and agencies of the Federal Government for Federal participation in the exposition.”

        Conclusion: The contention heard, read, and misleadingly repeated, that the US Government may not fund Expo activities, is unfounded. The Commerce Secretary has authority to lead and manage planning for US participation in Expos.

        Contrary to press accounts, existing U.S. law controls does not prevent the State Department, with Congressional support, from funding Expo activities Nor does it prevent other federal Departments (e.g., Commerce, Energy, etc.), from dedicating resources for this purpose. The Congress can appropriate funds for Expo activities at any time. Commerce is properly the lead agency.

        * * *

        You’re full of it, Hank. Publish my earlier comments verbatim, as an honest blog author, please. That’s the least you can do. If you additionally want to keep to your unique story, this isn’t a court of law. But everybody who was involved knows the score. State’s process was wholly flawed and the failing results were predictable. Why should we all get behind improprieties and failures?


      • To the readers: Hank later informed me that due to a technical glitch, some of my comments went unpublished. Now they are published. Please disregard my comments in this regard. I feel as if we are in a court of law rather than discussing policy and administrative matters. Well, perhaps that would have been more effective.

      • levinehank Says:

        Bob: all of your comments are up on this blog. Technical glitch delayed one for which I apologize. But I think I do understand the problem a little better:

        1) USG funding: the language you cite in your comment states the obvious. State can’t spend money for an Expo unless Congress says it can. That is always the case. A year ago Treasury did not have the authority to buy up shares of failing banks, until Congress said it could. Fact remains that since the passage of this legislation all Expos have been funded privately because that’s the way Congress wants it and especially in this current economic climate it is hard to see this changing. If you think you can get money from the Congress for the Expo, more power to you. But I don’t see it happening, and to say the legislation allows USG funding for the Pavilion, while technically accurate (if Congress approves), it is highly misleading.

        2) Commerce vs. State: I think Commerce is a better place for Expo than State and had Commerce been the lead from the beginning this project might be further along. But this has nothing to do with the approved group. Efforts were made to get Commerce to take the lead (in the Bush Administration) but without success. Even if shift to Commerce is made, it won’t change the funding situation (see above). Congress does not want USG funds used for a Pavilion. Unless someone can change some minds on the Hill, a plan has to succeed with private money only.

        3. I remain unconvinced about “the secret action plan”. Of course one of the benefits of relying on a secret plan as the reason for being rejected is that no one can ever prove it does not exist (see also: second gunman in Dallas; alien bodies in Area 51, etc.)

        But finally: Will leave to you to put up any further comments on this you want (note: per my settings on the blog, the first comment by someone needs my approval; subsequent comments from the same e-mail address go up automatically).

        I got into this debate because I wanted to correct what I thought were some inaccurate explanations in Adam’s blog. What I have gotten in response is a lot of over the top, angry, and ill-informed responses from you and one or two others (also posted). I can see we are well beyond the scope of rational debate (esp. appreciated your offline e-mail to me titled “Mendacity”.) For some reason you’ve personalized this beyond all necessity.

        I stand by my statements and my credibility with policymakers in Shanghai and Washington. Feel free to add your comments. I think they speak for themselves. I won’t be spending more time on this.


      • We are approaching comity, Hank, if not congruency. This will be my last reply, also. Per your comments:

        1. CONGRESSIONAL SUPPORT FOR THE U.S. AT THE EXPO. In 2005, a Congressional delegation to Shanghai expressed strong interest in the Expo. A Congressional appeal in 2006 persuaded Dep. Asst. Secretary of State Alina Romanowski to verbally commit to the Chinese that the U.S. would participate in the Expo.

        In 2007 and 2008, however, Congress did not express a position on the Shanghai Expo or U.S. participation — probably because no one in the Bush Administration asked it to or approached Congress for an appropriation. As stated in the State Department RFP issued on November 8, 2006:

        “The Department of State is not now authorized, and does not in the future intend to seek authorization from the U.S. Congress, to provide funding for any aspect of the U.S. pavilion/exhibition at the World Expo 2010 Shanghai China.”

        The many Congress people I have spoken with, including those responsible for foreign affairs and international trade policy, are seriously concerned that they weren’t briefed by the Bush Administration on the Shanghai Expo, U.S. participation, or State’s Action Plan. They’re also alarmed that as a result of current developments in Shanghai — or their lack — U.S. participation may be diminished or non-existent.

        2. COMMERCE AS THE LEAD AGENCY. You and I agree that the Department of Commerce is the right agency to lead U.S. Government participation in international Expos. That’s good! Also agreeing with us is the Congress: in 1991 it said as much, in law.

        You and I do not agree that the current Congress would not appropriate funds for U.S. participation, unless you know something special. We do not know because the Obama Administration is still formulating its Shanghai Expo policy and has not approached the Congress. I can make a strong case that the U.S. pavilion would be a valuable economic recovery instrument and thus a worthy investment of public funds, especially if matched by private interests. I’ve made this point publicly before, in one of our BH&L Group Bulletins.

        3. THE SECRET ACTION PLAN. The secret Expo Action Plan is cited in a State Department press release dated April 23, 2008. Here’s a link to an article that cites the release. The release itself has since been purged from the Internet:

        “U.S. Department of State Signs Letter of Intent for World Expo Shanghai 2010”, BlooLoop, April 23, 2008.

        This from the press release:

        The Action Plan adopted by the Department of State for U.S. participation in the Expo requires that it’s [sic] non-profit partner (Shanghai Expo 2010) have all necessary funding in hand before the Department signs a Memorandum of Agreement, and, in turn, a Participation Contract with the Chinese Expo organizers.” [emphasis added]

        When a third party (not BH&L Group) asked the Bureau of Educational and Cultural Affairs (ECA) for a copy of the Letter of Intent provided to Eliasoph and Winslow, and a copy of the Action Plan — both cited in the press release — he was provided with the LOI but not the Action Plan. ECA claimed the Action Plan was confidential (which to me means “secret”). The Action Plan has since become the subject of a pending formal FOIA request (not made by BH&L Group).

        The Action Plan is clearly embodied in the State Department “Expo” RFP, November 8, 2006 [PDF], which resulted in a year being wasted so that no one would be deemed qualified to do the job. The RFP’s contradictory conditions and opaque process I’ve noted in this and a prior comment. Would it be too cynical to suggest that the Action Plan predicated the RFP failing so that the “Aichi strategy” — having the Chinese fund the U.S. pavilion — would become the only solution? Press accounts in the U.S. and China seem to support this conclusion, because in them it is reported that the Chinese were asked to fund the U.S. pavilion and declined. Thus we have proceeded from low strategy to no strategy, which is where we are today.

        Believe what you may, Hank, but don’t ignore the facts. Personal and institutional loyalty is commendable, but not to the extent that it or your “insider” reputation — which may also come with “insider” baggage — blind you to the truth. That way be dragons, and not of the benevolent Chinese variety. In the case of the U.S. at the Expo, we are at last discovering how extensive this problem may be. Fortunately, it’s not difficult to fix.

        Thank you for this opportunity to share this knowledge with you. Open source. The wave of the future.


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