Computer giant IBM will pay $100,000 and cover the cost of scouring hundreds of peace symbol graffiti stencils from city sidewalks after what miffed officials here call a misguided guerrilla street ploy this spring to promote the company’s new product line.

The world’s largest computer company has also apologized to officials for its campaign to spray-paint city streets with hundreds of cartoonish fist-sized symbols. IBM will also pay $18,000 to Chicago and is negotiating with Boston and New York--the three other cities targeted by its sidewalk campaign.

The tentative agreement, which must be approved by the Board of Supervisors, sends a message to companies that a city long associated with both free expression and the antiwar peace symbol will not tolerate its streets being used as advertising billboards, officials say.

“This was a very well thought-out, concerted effort to engage in a guerrilla marketing campaign,” said Supervisor Gavin Newsom, who helped negotiate the settlement. “After the stencils began appearing on city streets, billboards would soon pop up with the same images--but this time with the IBM logo.”


IBM spokeswoman Trink Guarino said the company looks forward to putting the matter behind it. “IBM was not happy about this whole episode either, and we’ve been cooperating with the city to reach this settlement.”

After receiving complaints in late April, San Francisco public works teams removed the goofy stencils of peace symbols, hearts and the smiling Linux penguin mascot that are part of a “Peace, Love & Linux” promotion that IBM hoped would jump-start sales of a new workstation using the Linux operating system.

Days earlier, the street campaign had taken another hit, when a 20-year-old man was arrested in Chicago for painting the IBM graffiti.

IBM officials said the ads were done in biodegradable chalk that would soon wear off under rain and foot traffic.


But officials said Tuesday the San Francisco stencils were not biodegradable and took city workers 200 hours to remove.

“They caused a lot of headaches,” said Christina Falvey, a public works department spokeswoman. “Our crews diverted resources from other areas just to deal with the IBM tags.”

In addition to the $100,000 settlement, IBM will pay the city $20,000 for the cleanup costs and city attorney fees. The settlement money will be used to remove trash and graffiti.

Officials had threatened fines of up to $500 per ad plus cleanup costs. And they asked the city attorney to seek felony charges against IBM for what they called a reckless gimmick.


Newsom said that San Francisco was probably hit with more graffiti than the other cities--which brought about the higher settlement. But what angered officials most was that IBM officials initially denied involvement with the campaign.

“They initially feigned ignorance,” Newsom said. “That’s what got us going to pass a Board of Supervisors resolution to condemn the act. Then they refused to give the name of the local ad agency. That’s when we parted ways about being amicable.”

Guarino denied that the company played any cat-and-mouse game. “Once we learned about this, we cooperated with the city fully,” she said.

The campaign was handled by the Ogilvy & Mather advertising agency.


Although he was confident the settlement would win support among city officials, Newsom said the city still feels a bit duped.

“IBM wins by losing here,” he said. “It’s a pretty sad statement, but the company got exactly what it hoped for--publicity and controversy. They would have had to pay a lot more than $100,000 for that kind of public attention.”