A school district in the San Francisco Bay Area has put IBM Corp. in a tough spot by asking the company to forgive a $5 million debt that began when educators bought computers from Big Blue way back in 1989.

Because the Richmond Unified School District was a financial disaster at the time, it paid only a fraction of what it owed IBM. The district got by with the help of $28.5 million in loans from the state.

In 1993, IBM and the district reached an agreement that trimmed the debt slightly to an even $5 million and called for the schools to repay it in four annual installments of $1.25 million. But IBM let the schools — now called West Contra Costa Unified — resolve their debt to the state first. That repayment plan ended this year, so IBM was supposed to begin getting its money in 2008.

Now, however, school officials and four state legislators have asked IBM’s top executives to rip up the debt as a charitable contribution.

The district, which has a $293 million budget but faces lower revenues because of declining enrollment, says its annual obligation to IBM could cover the salaries of 20 teachers or its entire library program.

In pleading to IBM, the California lawmakers contended the computers that Richmond bought were obsolete even at the time. It’s unclear whether that complaint was ever aired back then; a 1991 article in Computer Reseller News said the district had gotten Model 30 PCs, which were released in the late 1980s.

Here’s IBM’s bind: If it rejects the request, it risks being portrayed as heartless — in 2006, IBM earned $5 million every 4 1/2 hours — even though district spokesman Paul Ehara acknowledges the company was generous to defer its IOU for so long, without interest. But if IBM relents, the company might be inviting similar requests from other customers.

An IBM spokeswoman declined to comment until the company responds to the California lawmakers.

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