May a county supervisor serve as an advisory board member of a bank
that is the county depository when the advisory board meets quarterly
and its members are paid $75.00 for each meeting?

The pertinent conflict of interest laws to be considered here are:

Constitutional Section 109 states:

"No public officer or member of the legislature shall be interested, directly or indirectly, in any contract with the state, or any district, county, city, or town thereof authorized by any law passed or order made by any board of which he may be or may have been a member, during the term for which he shall have been chosen, or within one year after the expiration of such term."

Code Section 25-4-101 states:

"The legislature declares that elective and public office and employment is a public trust and any effort to realize personal gain through official conduct, other than as provided by law, or as a natural consequence of the employment or position, is a violation of that trust. Therefore, public servants shall endeavor to pursue a course of conduct which will not raise suspicion among the public that they are likely to be engaged in acts that are in violation of this trust and which will not reflect unfavorably upon the state and local governments."

Code Section 254-103(c), (d), (f)(i~ii), (g)(i), (h), (k)(i)(ii), (1) and (p)(i)(ii)(iii)

(d) 'Business with which he is associated' means any business of which a public servant or his relative is an officer, director, owner, partner, employee or is a holder of more than ten percent (10%) of the fair market value or from which he or his relative derives more than One Thousand Dollars ($1,000.00) in annual income or over which such public servant or his relative exercises control.

(f) 'Contract' means:

(i) Any agreement to which the government is a party; or

(ii) Any agreement on behalf of the government which involves the payment of public funds.

(i) Counties.

(k) 'Material financial interest' means a personal and pecuniary interest, direct or indirect, accruing to a public servant or spouse, either individually or in combination with each other. Notwithstanding the foregoing, the following shall not be deemed to be a material financial interest with respect to a business with which a public servant may be associated:

(i) Ownership of any interest of less than ten percent (10%) in a business where the aggregate annual net income to the public servant therefrom is less than One Thousand Dollars ($1,000.00);

(ii) Ownership of any interest of less than two percent (2%) in a business where the aggregate annual net income to the public servant therefrom is less than Five Thousand Dollars ($5,000.00).

(p) 'Public servant' means:

(i) Any elected or appointed official of the government;

(ii) Any officer, director, commissioner, supervisor, chief head, agent or employee of the government or any agency thereof or of any public entity created by or under the laws of the State of Mississippi or created by an agency or governmental entity thereof any of which is funded by public funds or which expends, authorizes or recommends the use of public funds; or

(iii) Any individual who receives a salary, per diem or expenses paid in whole or in part out of funds authorized to be expended by the government."

"(1) No public servant shall use his official position to obtain pecuniary benefit for himself other than that compensation provided for by law, or to obtain pecuniary benefit for any relative or any business with which he is associated.

(2) No public servant shall be interested, directly or indirectly, during the term for which he shall have been chosen, or within one (1) year after the expiration of such term, in any contract with the state, or any district, county, city or town thereof authorized by any law passed or order made by any board of which he may be or may have been a member.

(3) No public servant shall:

(a) Be a contractor, subcontractor or vendor with the governmental entity of which he is a member, officer, employee or agent, other than in his contract of employment, or have a material financial interest in any business which is a contractor, subcontractor or vendor with the governmental entity of which he is a member, officer, employee or agent.

(a) May be an officer or stockholder of banks or savings and loan associations or other such financial institutes bidding for bonds, notes or other evidences of debt or for the privilege of keeping as depositories the public funds of a governmental entity thereof or the editor or employee of any newspaper in which legal notices are required to be published in respect to the publication of said legal notices."

I represent the County Board of Supervisors, and the Board recently requested bids from all banks in the county to serve as the county depository of county funds.

After receipt of said bids, the Bank at City A submitted the highest and best bid for county ~ and ~t was sc~cted as the co'1~t~ depository.

One of our Board Members serves as a community advisory board member for the Bank at City B. From my investigation of the matter, I find that they have no governing authority whatsoever with said bank, but are merely community advisory members. They meet quarterly and are paid $75.00 for each meeting. They have no supervision or authority even on loans.

Since the Bank at City A was the one submitting the bid, I didn't feel there was any ethical question. However, after attending the Board Attorney's Seminar in Jackson, wherein one of the members of your office spoke to us on ethics matters, I was informed that it made no difference whether a board member was an advisory board member or not, that it might be an ethical violation.

Of course, I realize that the Bank is one bank and that the separate branches make no difference, therefore, I probably should get some type of ethical ruling from your commission as to whether or not this is considered an ethical violation. The board member did abstain from any voting on the bid, but as I understand your ruling, this would not make a difference if it is an ethical violation.

I would, therefore, like to request an opinion from the commission as to whether or not the facts presented above constitute an ethical violation on behalf of the member of the County Board of Supervisors, who serves as an advisory community board member for the Bank. if, for any reason, you find that it does, would his resigning from the advisory bank board suffice in the matter?

The supervisor would have no material financial interest in the bank, as defined in Miss. Code ~254-103(k) (1972). From Miss. Code §254-105(4)(a) (1972) it appears that although a public servant may be an officer of a bank, it makes as exception as to selecting said bank as a depository of public funds. However, we would defer to your opinion.

Based solely on the facts and circumstances presented by the requestor, the Commission's opinion is as follows.

Constitutional Section 109 and Code Section 25-4-105 (2), both cited above, prohibit a county supervisor from having an interest in a bank serving as the county's depository or contracting with the county for any other purpose. As set forth in the attached advisory opinions, a governmental entity's board member's service as an advisory board member of a bank qualifies as such a prohibited interest.

Notwithstanding the above, the Mississippi Supreme Court, in Frazier v. State , 504 So.2d 675 Miss. 1987), indicated that some prohibited interests may be "de minimis non curat lex." ¹ The Court set no thresholds for deciding when a governmental entity's board member has a "de minimis" interest.

The county supervisor's service as an advisory board member, without decision making authority on the bank's behalf and his having no financial interest in or compensation from the bank, other than $300.00 annually, may be a "de minimis" interest.

However, the Commission having no specific thresholds to use in determining when a governmental entity's board member has a "de minimis" interest can only opine that in this instance it is reasonable to conclude that a court of competent jurisdiction could find that the county supervisor has a "de minimis" interest.

Code Section 25-4-105 (3)(a), cited above, is not applicable in this instance as the county supervisor does not have a material financial interest in the bank as defined in the above cited Code Section 25-4-103 (k).

However, the requestor is advised that the exception in Code Section 25-4-1 05(4)(a) would not apply in this instance had Code Section 25-4-105 (3)(a) been applicable. As set forth in the attached Advisory Opinion No.89-3 1-E, an advisory board member does not come within the statutory exception of "officer" or "stockholder."

The requestor is cautioned to advise the county supervisor to not use his official position on the county board of supervisors to provide a pecuniary benefit to himself or the bank in violation of the above cited Code Section 25-4-105 (1).
 

¹ The term de minimis non curat lex means the law cares not for small things.

N The county supervisor can avoid violating Code Section 25-4-105 (1) by properly recusing himself from any action coming before the county board of supervisors that concerns the bank.

A proper recusal is not an abstention. An abstention is a vote with the majority of the governing entity's board and therefore does not qualify as a recusal.

A total and complete recusal requires that the public servant not only avoid debating, discussing or taking action on the subject matter during the official meeting, but also avoid discussing the subject matter with other board members, staff or any other person prior to and after the official meeting. This includes casual comments, as well as detailed discussions, made in person, by telephone or by any other means.

Also to properly recuse oneself from a matter, the public servant must leave the room or area where such discussions, considerations and/or actions take place. The minutes of the governing entity's board should state the public servant left the meeting by showing him or her absent for that matter.

The requestor is cautioned to advise the county supervisor that a recusal or an abstention will not prevent a violation of Constitutional Section 109 and Code Section 254-105(2). Even without the county supervisor's vote, the authorization by his board nonetheless results in a contract in which he has a prohibited interest.

The issue presented by the requestor also must be viewed as it relates to Code Section 25-4-101, set forth above. This code section sets the tone for the conflict of interest laws as the Legislature's "Declaration of Public Policy." This public policy can be summarized as any circumstance having the pole ntial of creating suspicion among the public and reflecting unfavorably upon the state or local government should be closely reviewed by public servants with the intent to reduce or eliminate any suspicion on the part of the public which detracts from the public's trust in state or local government.

Clearly, a county supervisor serving as an advisory board member of the county's depository has the potential of creating suspicion among the public and reflecting unfavorably upon the county government.

                                                                                                Ronald E. Crowe
                                                                                                Executive Director