This Advisory Opinion concerns the following issues as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on December 4, 1998, basing its approval solely on the facts and circumstances stated herein.

ISSUE 1. May a city council member participate in discussions and decisions related to a nonprofit entity that his spouse serves as a board member?

ISSUE 2. May a city council member's stepdaughter be employed by the city and, if so, may the city council member participate in discussions and decisions pertaining to the city department employing his stepdaughter?

State law restricts the Mississippi Ethics Commission to interpreting and issuing opinions on Sections 25-4-101 through 25-4-119, 1972 Mississippi Code Annotated and Article IV, Section 109, Mississippi Constitution of 1890. Therefore, this opinion does not address the Mississippi laws outside the Commission's jurisdiction nor the governmental entity's internal rules and regulations.

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 25-4-103 (c), (d), (f)(i)(ii), (g)(ii), (h), (l), (p)(i)(ii)(iii) and (q) states:

"(c) 'Business' means any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, holding company, self-employed individual, joint stock company, receivership, trust or other legal entity or undertaking organized for economic gain, a nonprofit corporation or other such entity, association or organization receiving public funds.

(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.

(g) 'Governmental' means the state and all political entities thereof, both collectively and separately, including but not limited to:

(ii) Municipalities.

(h) 'Governmental entity' means the state, a county, a municipality or any other separate political subdivision authorized by law to exercise a part of the sovereign power of the state.

(l) 'Pecuniary benefit' means benefit in the form of money, property, commercial interests or anything else the primary significance of which is economic gain. Expenses associated with social occasions afforded public servants shall not be deemed a pecuniary benefit.

(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.

(q) 'Relative' means the spouse, child or parent."

Code Section 25-4-105 (1) and (2) states:

"(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."

Pertinent facts and circumstances provided by the requestor, absent identifying data, are set forth as follows and considered a part of this opinion.

I would like to request the legal procedure of the following questions:

1. Should a city council member recuse himself from discussions and decisions related to a nonprofit entity that meets the needs of the community, due to the fact his spouse is a board member?

2. Is this a violation for a council member to act on such matters, if so what would remove the violation?

3. Should a city council member recuse himself from Council proceedings with police department decisions, due to the fact his stepdaughter is a police officer? Is there any conflict for that council member participating in discussions and decisions?

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

ISSUE 1. Code Section 25-4-105 (1), cited above, prohibits a public servant from using his official position to obtain a pecuniary benefit for himself, his relatives or a business with which he is associated.

A nonprofit entity under the definition set forth in Code Section 25-4-013 (c), cited above, is a business for purposes of the state conflict of interest laws if it receives public funds. Also, Code Section 25-4-103 (d), cited above, defines a business with which a public servant is associated as one that the public servant's relative is an officer. A relative as defined in Code Section 25-4-103 (q), cited above, includes a spouse.

Therefore, the council member should totally and completely recuse himself from actions before the city council concerning the nonprofit entity his spouse serves as a board member to be certain to avoid a violation of Code Section 25-4-105 (1).

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.

Should the city and the nonprofit entity enter into a contract, a further consideration must be made. Constitutional Section 109 and Code Section 25-4-105 (2), both cited above, prohibit a public board member from having an interest, direct or indirect, in a contract authorized by the board of which he is a member during his term or for one year thereafter.

The council member's spouse has a fiduciary interest in the nonprofit entity as its board member. Due to her fiduciary interest, it can be said that the council member has an indirect interest in the nonprofit entity through his spouse's fiduciary interest.

Therefore if the city's involvement with the nonprofit entity results in a contract between the city and the nonprofit entity, then the council member could be in violation of Constitutional Section 109 and Code Section 25-4-105 (2) if the contract is entered into during his term or within one year thereafter. The requestor is advised that the city's funding of the nonprofit entity is part of the contract authorization process prohibited by Constitutional Section 109 and Code Section 25-4-105 (2).

The requestor is advised that a recusal or an abstention will not prevent a violation of Constitutional Section 109 and Code Section 25-4-105 (2). Even without the board member's vote, the authorization by the member's board nonetheless results in a contract in which the board member has a prohibited interest.

ISSUE 2. As stated above, Constitutional Section 109 and Code Section 25-4-105 (2) prohibit a council member from having an interest, direct or indirect, in a contract authorized by the city council during his term or for one year thereafter.

Therefore, Constitutional Section 109 and Code Section 25-4-105 (2) would prohibit the city's employment of the council member's stepdaughter if the council member was directly or indirectly interested in the stepdaughter's employment contract. In order for the council member to avoid a violation of Constitutional Section 109 and Code Section 25-4-105 (2), the council member's stepdaughter must be totally and completely financially independent from the council member and the council member must have no interest, direct or indirect, in the stepdaughter's employment contract with the city.

The stepdaughter would be financially dependent on the council member should she live in his household or be receiving other financial assistance from him.

The facts submitted by the requestor are not sufficient to determine if the council member would have an interest, direct or indirect, in his stepdaughter's employment contract with the city in violation of Constitutional Section 109 and Code Section 25-4-105 (2). However, the following are some examples that could result in the council member having an interest, direct or indirect, in his stepdaughter's employment contract with the city. The stepdaughter leased or rented property from the council member; was a debtor of the council member; lived on property owned by the council member; or, co-owned a business with the council member. The above examples should not be considered as a complete list of circumstances that could result in the council member having an interest, direct or indirect, in his stepdaughter's employment contract with the city.

As stated above, Code Section 25-4-105 (1) prohibits a council member from using his position to obtain a pecuniary benefit for a relative. A relative as defined in Code Section 25-4-103 (q) includes children.

Therefore, the council member may not participate in employment matters concerning his stepdaughter, as well as matters concerning pay raises or the increasing of other benefits that would benefit the council member's stepdaughter, should it be determined that the council member's stepdaughter is financially independent from him and that the council member would have no interest, direct or indirect, in the stepdaughter's employment contract with the city.

As stated above, to avoid using his official position to obtain a pecuniary benefit for his relative, the council member must totally and completely recuse himself from all subject matters providing a pecuniary benefit to his stepdaughter.

Again, a total and complete recusal requires a 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 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, a 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.

Again, the requestor is advised that a recusal or an abstention will not prevent a violation of Constitutional Section 109 and Code Section 25-4-105 (2).

Both ISSUE 1 and ISSUE 2 also must be viewed as they relate 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 potential 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.

First, a council member's involvement in discussions and decisions related to a nonprofit entity that his spouse serves as a board member has the potential of creating suspicion among the public and reflecting unfavorably upon the city. Therefore to comply with the public policy set forth in Code Section 25-4-101, the council member should totally and completely recuse himself from such discussions and decisions.

Secondly, a council member's participation in discussions and decisions concerning a city department in which his child works clearly has the potential of creating suspicion among the public and reflecting unfavorably upon the city. Therefore to comply with the public policy set forth in Code Section 25-4-101, such situations should be avoided.
 
 
 
 
 
 

Ronald E. Crowe

Executive Director