Slashdot Mirror
Pressure Is On IBM To Forgive Millions In IT Debt
coondoggie writes to tell us that several California state legislators are pressuring IBM to release the Costa school district from some $5 million of long-standing debt as a charitable donation. "The back story on this tale is that the school district owes IBM for computers ordered in the late 1980s and early 1990s. For one reason or another the computers were never used and no one now seems to be able to locate either the paperwork or the hardware. The school district experienced hard financial times and ultimately never paid Big Blue for the computers. In 1993 the district and IBM negotiated a long-term settlement that said the school district would pay the first of four $1.25 million installments beginning in 2008. Payments were deferred until then because 2008 was the year the district was scheduled to finish making state loan repayments under its previous loan plan, according to the Contra Costa story."
More likely the delivery was received by the staff, and then immediately returned.
The office I worked in as a intern had the exact same problem. They made out an order for 50 IBM PC's for a training room. Instead, they received 50 IBM PS/2's that came
in huge palette sized boxes of 25 each. These had to be dismantled inside the container before we could take them out. As soon as our boss found out what they were, they were immediately returned.
This article seems to suggest a similar thing happened.
Nobody seems to know how many or what type of computers Marks ordered, or even whether they ended up being used. Several former district officials called them "obsolete" and "useless."
Vintage computer adverts: http://www.vintageadbrowser.com/computers-and-software-ads
Well, "honorable" lawmakers, how many of your teacher's pensions are in IBM stock?
60.6% of IBM stock is held by institutions such as pension funds according to their latest report.
there is no reason that a resident of another state, or even another city (taxpayers, all), should bear the burden for a bad local decision.
"National Security is the chief cause of national insecurity." - Celine's First Law
as mentioned in the comment section of the network world article:
"of course, it's worth pointing out that Contra Costa County is the predominant county and tax base for the East Bay -- a sprawling set of towns/cities full of people that work in downtown San Francisco, Oakland, and Silicon Valley. It's the same county where median home prices for most of the towns are well north of $500,000.
To quote the Contra Costa website: "Due to the presence of relatively high-wage skilled jobs and relatively wealthy residents, the County achieves high rankings among all California counties on a variety of income measurements."
This isn't the story of an impoverish[ed] county begging for debt relief from an evil corporation. Move along."
You've obviously never worked for or with any part of the California goverment. Stuff like that happens all the time. I spent 18 months as the primary subcontractor for a large federally mandated quasi government agency working in the workers compensation field that will remain nameless. They did an internal audit and found 2 BILLION dollars of equipment missing.
The basic problem is, in 1992, they got a superintendant who was going to revolutionize everything. New schools, new ways of doing things, the works.
He turned out to be a corrupt bastard, but he disappeared without ever having to pay or atone for anything, and the people who use the schools have been paying for it ever since.
The school district is broke as hell, and quite honestly, will probably go bankrupt before they pay IBM (if by 'pay' you mean 'pay in the next 50 years').
All the other comments here seem to be going 'lol pay up already', but it's not that simple. IBM should forgive the debt, and everyone should learn a lesson from this:
Don't let public institutions pay with credit. The people who make decisions are not held responsible, and thus do not make responsible decisions. They will rip you off, and rip off the people they are supposed to be representing.
Whether or not anyone can find the equipment or the documentation of the original order and delivery now, presumably the time to raise any question of the validity of the underlying debt was at the time of the discussions which led to the 1993 "long-term settlement", not 15 years later.
Not entirely true. This *is* the story of an impoverished school district begging for debt relief from a corporation. (I won't comment if their request is justified or not).
Contra Costa County is broken up into Multiple School Districts. This story is about the West Contra Costa School District, which serves communities such as Richmond & San Pablo. I don't know specifics off the top of my head, but it is one of the poorest school districts in California.
Contra Costa County is a tale of two counties. Eastern Contra Costa County is as you described, with many wealthy suburbs, wealthy inhabitants and well-funded schools. This is the image that Contra Costa County would like to promote on it's website.
Western Contra Costa County is much poorer, with poorly funded schools & high crime rates. Richmond has a disturbing level of corruption in the government. Compare these two cities:
* RichmondWalnut CreekAbout 1.7% of families and 3.7% of the population were below the poverty line
I travel in both areas of Contra Costa Country regularly, and I'm always amazed at the difference. Walnut Creek has beautiful, clean schools located close to grass-covered golden hills. Many Richmond schools have a ton of graffiti, broken windows, boarded-up buildings, etc. Several times a year, schools in the parts of the Western Contra Costa County School district go into 'lockdown' mode due to leaks at the nearby chemical plants or oil refineries. Drive by shootings happen near the schools. In Richmond, you can hear gunshots just about every night.
"Can of worms? The can is open... the worms are everywhere."
What idiot modded this "Funny"? Some African economists have been begging for the West to stop funneling money into Africa for years. And the result is more "aid concerts". When you send a billion to Africa, you are sending a billion to the same corrupt governments that caused the appalling current conditions. Cut off the money and you cut off arms sales, payoffs, etc.
This is no joke - literally billions of people are endangered by well-meaning but ultimately foolish decisions like this.
More money is not the solution to any of the world's current problems. US public education is actually an incontrovertible proof of this - a prototypical example.
Brett
The should do that so they can get screwed again by a wealthy school district? Do you know where Contra Costa is? It's the land of $500,000 starter / fixer-upper shacks. They can afford to pay their bill.
If you want news from today, you have to come back tomorrow.
From this article it appears there was a real battle over the useability of the systems, and the district
did try and get the machines sent back.
Former school board member Frank Calton said he remembers the deal with IBM being touted by Marks as a mutually beneficial partnership.
"This was submitted to us as kind of a joint venture where IBM could showcase computers as learning tools for students," Calton said. "It was supposed to have a PR angle for IBM."
When asked by the Times last week, the district could not track down invoices for the purchases, so it is unclear how many and what type of computers were ordered. But administrators agree the computers already were outdated when the district got them.
"I think they were out of date before (Marks) even decided to buy them," Basalto said. "Every one of them was obsolete; they were absolutely useless."
Where the computers ended up also is a mystery. Basalto recalls that some were installed in schools, but some sat in warehouses, possibly never turned on.
The district tried to return some of the computers, said Ruth Vedovelli, West Contra Costa school district's current finance chief. IBM refused to take them back, leading to a years-long fight that also included battles over the actual cost.
Negotiations often got ugly, with Fred Stewart, the state trustee appointed to oversee the district's finances after it went into debt in 1990, often getting into shouting matches with IBM representatives, says Herb Cole, Marks' successor.
"He said, 'We can't pay you, so if you want them, come and get them,'" Cole said, adding that Stewart threatened to put the computers on the curb. "He was tough as nails with them at the time."
Stewart, who recently retired as the state trustee, declined to comment.
In late 1993 -- four years after the district agreed to buy the computers -- the parties reached a settlement that called for deferring the first major payment until 2008. That was the year the district, under its previous loan structure, was scheduled to be finished paying back $28.5 million it owed the state.
Vintage computer adverts: http://www.vintageadbrowser.com/computers-and-software-ads
The upshot is that the shipper has the right to unload the goods on your sidewalk and walk away if you are being difficult. Obviously, they'd do all sorts of CYA stuff to document their actions - and this sort of ultimate action is never good for business. But in the end, the innocent third party has the right to walk away without burden (providing the shipping order doesn't place restrictions on the delivery. "Must be kept frozen" overrides "I waited five whole minutes for them to empty the freezer and then dropped the goods on the burning sidewalk."
It may be that you legally have the right to return the goods. But, you need to be careful about who has possession the goods, and have proof of transfer of possession.
"The most sensible request of government we make is not, "Do something!" But "Quit it!"
It should also be clear that illegally using software you haven't paid for (and can't afford, or otherwise weren't going to buy) is different from stealing (or refusing to pay for) hardware. In particular, because the marginal cost of a pirated copy of software is essentially zero, "stealing" software you weren't going to buy is very nearly Pareto optimal. Hardware theft is not. That is, if I pirate Windows, and wouldn't have bought it, then I gain something and Microsoft loses nothing (though it is possible that Microsoft's competitors have lost a sale). If I steal a computer, whomever I stole it from is out a computer. If they're a vendor, they're out the revenue they'd get from selling it: since I stole it, they can't sell it to someone else.
I'm not saying here that copyright infringement should be legal, just that it's very different from theft, both legally and ethically.
I hereby place the above post in the public domain.